HD DVD: We're Not at War with Blu-ray

As I sat in a Washington, D.C. hotel suite earlier this month demoing and discussing the first network-enabled movie titles with the HD DVD group, one remark struck me: HD DVD says it is not at war with Blu-ray and seemingly has little concern over Sony’s format.

It’s hard to miss the ping pong game of rhetoric between the promotion groups pushing HD DVD and Blu-ray. From sales figures to exclusive deals, press releases are churned out almost daily. The so-called “format war” is Betamax and VHS redux - at least that’s what the media wants you to think.

But the real competition is with standard-definition DVDs and convincing the masses of the merits of hi-def. And that’s the crux of why HD DVD just doesn’t care that Blu-ray has more studio deals or the PS3: none of this matters yet until more people start upgrading.

Unfortunately, you won’t hear either side say that publicly, because it’s important to make consumers feel like they are missing out by not becoming early adopters. The advantages aren’t as clear as they were with first-generation DVDs, and a format war helps garner critical media attention.

Now don’t get me wrong; I like a good, heated debate and a little zealotry as much as the next person, but at some point it’s important to understand the realities of the situation. It’s easy to get carried away arguing the value of one side versus the other and miss the forest from the trees: HD sales currently amount to barely 1% of DVD sales.

In fact, the HD DVD group was open to the idea of working jointly with Blu-ray to help convince more consumers to join the high-definition bandwagon, and welcomed the arrival of hybrid HD DVD/Blu-ray players from LG and Samsung.

Each time BetaNews has met with Microsoft’s Kevin Collins, who heads up the company’s Consumer Media Technology Group and has active duties promoting HD DVD (more on Microsoft’s connection to HD DVD later), he is happy to show off -- and demo -- his collection of every single Blu-ray title as well. The same cannot be said about our meetings with the Blu-ray promotional group.

A little confidence can explain why: HD DVD believes its format is simply that much better in terms of features (video and audio quality is identical, as both use the same codecs). When placed side-by-side with Blu-ray versions of films, it will be a no-brainer for buyers to choose HD DVD, the group says, enumerating a number of reasons why.

Foremost is compatibility. All new movie titles from Universal and soon Warner will be combination (or twin-format) discs - HD DVD on one side and standard DVD on the other. This means that HD DVD discs will also play on older DVD players, which is crucial for portability. Collins noted that Blu-ray owners will end up buying two discs to watch the movie on their laptop or in the car on a road trip.

Beyond that are features such as picture-in-picture and network capabilities. For example, both the HD DVD and Blu-ray version of “300” include a “blue screen” extra that allows the viewer to see how the complex battle scenes were actually filmed. But only the HD DVD version lets you watch the blue screen version alongside the actual movie, and the comparison is what makes the extra actually interesting to watch.

HD DVD’s networking (Blu-ray is network capable, but it’s not required) opens the door to quite a few possibilities. On 300, one of the first films with such capability, viewers can set bookmarks and upload their favorite scenes to a central location, where other 300 owners can watch them. Ringtone and wallpaper downloads are available as well, which get sent to a cell phone automatically.

However, the network-enabled features are not all gimmicky; HD DVD owners will eventually be able to download new subtitle languages, trailers, and other extended content for films, keeping them fresh well past their sell date. Downloads are kept on the player's built-in storage, another requirement of HD DVD.

The problem, of course, is how you explain those differences to potential buyers. This is where HD DVD has struggled since day one. Sony is nothing short of a marketing powerhouse, while Toshiba and Microsoft -- the two dominate companies behind HD DVD -- don’t have such experience.

This has enabled Sony to secure exclusive movie studio deals (Sony itself has a studio), as well as recent promotional agreements with Blockbuster and Target. But the HD DVD group has surprisingly little concern about the matter, claiming that when the customers are there, both formats will be supported equally.

So when will those Blu-ray-only studios coming running to HD DVD? The answer, if history is any indicator, is the magic $199 price point. DVD didn’t take off until the Chinese manufacturers were able to bring the cost down to that level, and we’ll likely see that happen with HD DVD players this holiday season.

Microsoft’s Collins noted that once HD DVD hits 1 million set top players sold, which could happen before the end of the year, none of the exclusivity will matter, because the studios will go where the money is. Currently, sold players total over 500,000 - largely due to recent price drops and free movie deals.

On Monday, both Paramount Pictures and DreamWorks Animation announced support for HD DVD, citing the lower cost and better features available to customers. This decision apparently stemmed from the studios evaluating both formats for a year, and Collins expects more studios to follow this route.

For at least a little while longer, however, confusion is likely to continue for consumers contemplating a leap to high-definition movies. Trade-offs are still required, like deciding whether “Spider-Man 3” or “Shrek the Third” is more important for your HD collection. And as long as that's the case, the real winner of the format war -- real or imagined -- will be standard DVD.