HD-DVD debut ups ante in high-stakes game

First player and discs for Toshiba's new format arrive in stores; Blu-ray offerings set to arrive in June.

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With today's launch of two HD-DVD players from Toshiba, the public gets its chance to decide whether that format or its rival, Blu-ray, is the rightful heir to the DVD. In the public relations battle between the warring technologies, HD-DVD scored a victory by getting to market first. Toshiba's HD-A1 ($500) and higher-end HD-XA1 ($800) players hit store shelves this week, two months before the first Blu-ray player is scheduled to go on sale.

This is a high-stakes game, and not just for the movie studios, electronics manufacturers, or software companies with a piece of the $24 billion home video market. Sony has built a Blu-ray drive into its upcoming PlayStation 3, while Microsoft has announced an HD-DVD attachment for its Xbox 360. Consumers could lose big by betting on the wrong technology.

As the VHS-Betamax battle showed three decades ago, such confrontations are usually a winner-take-all affair. In that instance, VHS triumphed and studios quickly abandoned the Betamax format. Betamax owners were left with no films to watch and thousands of dollars invested in worthless video equipment.

At this early stage, some analysts believe that casual movie fans should wait for a winner to emerge. Technologies are always fraught with glitches and setbacks and typically are more expensive when they're launched than after they've been on the market for a while. At a time when a low-end DVD player costs $50, the price for an HD-DVD machine starts at $500. A top-end Blu-ray player may run as much as $1,800.

"These aren't products for cost-conscious consumers yet," said IDC analyst Josh Martin. For TV aficionados who like owning the top tube on the block, there are a few things to consider before buying. Neither HD-DVD nor Blu-ray can offer movie titles from all seven of the top movie studios. That means buyers of one disc player may be prevented from watching a movie from a studio that doesn't support the format. Seven studios currently back Blu-ray, while three support HD-DVD, and two of those also support Blu-ray. Only Universal Studios supports HD-DVD exclusively.

For Andy Parsons, chairman of the Blu-ray Disc Promotion Committee in the US, the deciding factor for consumers should be "content, content, content," Parsons said. "It's as important as location is when buying a house," Parsons said. "Remember, you're not buying this equipment because it looks good with your furniture. You're buying it because you want to watch movies. We have a fairly significant leg up because we've brought to market a wider array of (movie studios)."

The HD-DVD camp has promised that nearly 200 movie titles will be available on that format by the end of the year. Coinciding with the launch of Toshiba's new disc players, Warner Bros. Entertainment is releasing three film titles on the HD-DVD format: Million Dollar Baby, The Last Samurai, and Phantom of the Opera. Warner Bros. is also set to release titles for Blu-ray players when the first one (Samsung's BD-P1000) goes on sale in June, said Stephen Nickerson, Warner Home Video's senior vice president of market management.

When it comes to price, HD-DVD wins out at least in the early stages. Initial estimates peg the cost of building blue-laser disc players at more than $400, according to In-Stat. The research firm predicted that the costs should fall considerably by 2010. While Toshiba's players range from $500 to $800, the least expensive Blu-ray machine is $999. Blu-ray, however, will be available on a bigger selection of players.

While Toshiba's is the only HD-DVD player expected to go on sale this summer, Blu-ray will have a handful available, including Sony's BDP-S1, which will retail for about $1,000 when it reaches store shelves in July. That's the same month that Pioneer's high-end model, the BDP-HD1 player, is scheduled to retail for $1,800. Panasonic has said its DMP-BD10 will cost less than $1,500 when it rolls out in September.

In June, Fujitsu said it will become the first company to ship computers featuring Blu-ray disc drives when it launches a $5,063 notebook in Japan. The company also said it intends to manufacture HD-DVD-ready PCs, joining electronics giants LG Electronics and Hewlett-Packard in deciding to support both formats. Sony is due to release a Blu-ray-equipped desktop, the Vaio RC, and charge about $2,300. And sometime this spring, Toshiba is scheduled to release the first HD-DVD notebook: the Qosmio G30. Acer has said that the Aspire 9800 notebook also will feature an HD-DVD drive. Prices were not available.

Buying discs can also set movie buffs back. The suggested retail price for Warner Bros. films on HD-DVD and Blu-ray is $34.99 for newer titles and $28.99 for catalog films. Commercial Blu-ray titles are scheduled to launch in June, while blank discs for recording will run between $17.99 and $59.99.

A civil war in the home-video market is unlikely to spur consumers to go on a shopping spree. Many are expected to stick with DVDs for a while. In-Stat predicts that DVD players and recorders will combine for 176.6 million units sold worldwide in 2010. That's a 25 percent increase from the 140.8 million units sold in 2005.

Not surprisingly, both Blu-ray and HD-DVD proponents claim their technologies are far superior to DVD. While many analysts agree that the quality of high-definition video is superior, it's not as dramatic as the difference between DVDs and VHS. IDC's Martin recalled that the public was awed by DVD players, which let them jump around to any part of a disk they wanted, instead of fast-forwarding or rewinding on VHS.

"There are certain advantages with the new formats, including additional interactive features," said IDC's Martin. "They've got games and higher-quality recordings, but it's not DVD to VHS."

That opinion was echoed by Laura Behrens, an analyst with research firm Gartner. "The picture quality isn't necessarily as breathtaking this time around as last time," she said.

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