Next-Generation DVD Deal May Be Near

A prominent Japanese business newspaper reported Thursday that a deal may be close between Toshiba and Sony over the next-generation format of DVDs. The news comes a little over one week after a Sony Media Group official said publicly that one high-definition format would be in the best interests of the consumer.

The two companies appear increasingly wary of a 21st Century version of the Betamax and VHS format wars of the 1980s. Each format has their strengths: HD-DVD has backward compatibility with most current DVD players, while Blu-ray offers nearly twice the space of HD-DVD.

Until recently, however, neither group made any indication that they were willing to negotiate with the other.

According to the Nihon Keizai Shimbun, the two sides may be close enough to announce a deal as early as this month. However, both companies played down the report, saying only that meetings are taking place and will continue to do so.

Sony has proposed to use its own Blu-ray disc structure while using HD-DVD's software. Toshiba, on the other hand, wants to use the HD-DVD disc structure while incorporating the multi-layer recording capabilities of Blu-ray, the paper reported.

Whether a deal occurs or not, time is running short for a decision. Both sides have publicly stated that they would like to have players on the market by the 2005 holiday season. But if a deal is struck, it could mean players may not be available until early next year.

Another possible casualty of a unified high-definition DVD format could be PlayStation 3, due in early 2006. Sony's new gaming console is slated to utilize Blu-ray disc, and a deal could delay the launch.