The Digital Bits presents... The Soapbox

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Site created 12/15/97.

page created: 2/1/08
originally posted: 1/25/08

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Stick a Fork in HD-DVD. It's Time to End the Format War.

As long as we've been reporting on DVD and high-definition here at The Bits (for the last decade now), we've known two key print journalists that have covered DVD and the home video industry at least as long as we have - T.K. Arnold and Scott Hettrick. Arnold is currently the publisher and editorial director of Home Media Retailing, and is also a regular contributor to The Hollywood Reporter. For years, Hettrick was the home entertainment editor for Daily Variety, and served as editor-in-chief of Video Business. To get a pretty fair reading on which way the wind is blowing in this industry, you need only read their thoughts on the format war of late. So what do they have to say? Well... among other things, Scott Hettrick is now the editorial director for Hollywood in Hi-Def.com, which is both sponsored by and dedicated to coverage of the Blu-ray Disc format. Anyone who has read that site in recent months will know that Hettrick's position in this format war is clear. Meanwhile, Arnold has just posted a pair of strong editorials calling for an end to the high-def format war. The first was published at Home Media last week - A Plea for a Unified, Blu Future. The second - HD DVD Backers Should Call It A Day - appears in next week's issue (you'll find the digital version here - the piece is on page 7), and it's even more direct that the first. To quote Arnold in this latest column:

"Toshiba and Microsoft, by stubbornly continuing to back HD DVD at a point where it is clear that the format cannot longer win, are threatening to derail the entire home entertainment packaged-media business - Hollywood's primary cash cow, and as such, a vital bloodline to the creation of new movies."

He goes on to say...

"Toshiba needs to swallow its pride and do the right thing for our industry - and, in the long term if not the short term, its own corporate shareholders."

While we respectfully acknowledge those of differing opinions, particularly a select few of our peers in the online enthusiast media, it should go without saying that we agree with Arnold's argument and his overall sentiment.

Way back in 2004 and 2005, before these formats were launched, The Digital Bits was strongly urging the industry to resolve its differences and unite behind a single high-definition format, knowing that a format war would get ugly and divide not only the industry as a whole, but also enthusiasts. That, of course, did not happen. Based upon the technical specs, as well as the various companies and studios backing each format, we said in early 2006 that Blu-ray Disc seemed to have the advantage on paper, but much would depend on the actual launch of each format. In April 2006, the first HD-DVD players were delivered to retail here in the States, with Blu-ray following in June. As we acknowledged then, both formats were a user's mess upon arrival, but both quickly made strides in working out their respective bugs. HD-DVD made sales gains as the year progressed, but we believed that the real competition would begin in the 4th quarter of 2006, when the Blu-ray format began to deliver a fuller complement of hardware (including the PlayStation 3) and software from its many supporting companies. By January of 2007, Blu-ray Disc software began outselling HD-DVD software on a week to week basis, and Blu-ray Disc hardware held its own in sales numbers in spite of a $200 or more cost premium over HD-DVD hardware. The Bits continued to remain neutral, but throughout the first half of 2007, we watched as various predictions made by the HD-DVD camp failed to materialize: Low priced players would win the format war for HD, porn would win the format war for HD, cheap Chinese players were the answer for HD, combo players and discs would be the deciding factor, etc. All have fallen by the wayside. Finally, by mid-2007, it became clear to us at The Bits that it was extremely unlikely that HD-DVD could ever actually win the format war - the best they could hope for was to stay in the game. We heard continued exclamations of "Let the consumer decide!" But the simple fact was, most consumers were deciding to sit on the sidelines, afraid of purchasing the losing format. And of those few consumers who WERE actually buying high-def players and discs - the early adopters - most of them weren't deciding either! They were buying both. The result was an on-going stalemate, which we believed then as now is bad for this industry - the home video equivalent of endless trench warfare. And in the actual trenches - the many home theater discussion groups online - things were getting very, very ugly, just as we predicted. Enthusiasts were bitterly attacking one another with sad regularity, and paid PR representatives for both high-def camps were using enthusiasts to wage nasty spin and disinformation campaigns. Enough was enough.

So in June of 2007, we decided it was time for The Bits to get off the fence. We looked at all the data, all the sales history and all the predictions for the coming months, and decided to support Blu-ray Disc. This was no reflection upon the video and audio quality delivered to enthusiasts by HD-DVD, which we have long acknowledged is equal to that of Blu-ray. However, Blu-ray had greater data storage capacity, greater software sales and strong stand-alone hardware sales in spite of cost premiums, as well as strong support via PlayStation 3 sales (which despite its initial high cost as a game platform only, is a significant value for those who want both a high-def player AND a gaming device - and it's also future proof thanks to its ability to be firmware updated all the way to BD profile 2.0). We believed that BD-Java, as an actual programming language, might take longer to fully reach its potential but was more robust in the long term that HDi, which is basically a browser extension. We believed the fact that the vast majority of CE manufacturers were backing Blu-ray over HD-DVD gave it a strong market advantage and a better business model, where as Toshiba remained the only major manufacturer supporting HD-DVD and was having to drastically discount its hardware to move significant numbers - a tactic that would only serve as a disincentive to other CE manufacturers from joining them. Blu-ray already had the edge in many markets around the world (Japan, Australia, etc), and we believed that its built-in support as video recording and data storage format would eventually make it popular with independent filmmakers and the CE industry. And even back in June of last year, Blu-ray had a clear advantage in Hollywood studio support over HD-DVD, much of it exclusive. We believed then that backing Blu-ray was the right decision, both for us and for our readers. Our advice to them was simple: Either stay on the sidelines (the recommended option) or, if you were going to risk getting into high-def, Blu-ray seemed to us the better option. That continues to be our advice.

We've received some criticism in certain quarters online for our move, but the response of the overwhelming majority of our readers - especially those who have followed our advice - has been positive, as has the response of our many friends and contacts within the home video industry itself. Since then, our belief that we made the right choice has only grown. While Paramount and DreamWorks abandoned Blu-ray in August, their decision has had little effect on the overall software sales numbers - Blu-ray software continued outsell HD-DVD for the ENTIRE year of 2007. Blu-ray hardware prices have grown more affordable, and stand-alone sales for Blu-ray have increased accordingly. The PlayStation 3 has sold better in recent months, and significant evidence supports the fact that many PS3 owners are watching and buying Blu-ray movies. More recently, Blu-ray hardware and software outsold HD-DVD during the critical holiday shopping season. Now Warner has announced its plans to abandon HD-DVD in May, giving Blu-ray the exclusive support of 75% of the Hollywood studios. Accordingly, we believe that both consumer spending and retailer support decisions are likely to reflect a continued and growing preference for Blu-ray in the months ahead, and we'll be watching the situation closely to see if this comes to pass. There's already ample evidence that consumers and retailers are starting to abandon HD-DVD in 2008, including large declines in HD-DVD software sales in recent Nielsen VideoScan weekly reports, a decline in HD-DVD player sales in recent NPD Group market data, and widespread reports of HD-DVD player clearance sales at retailers around the country.

In any case, it seems abundantly clear to us at The Digital Bits that while the format war isn't technically over yet, the writing is on the wall. HD-DVD is now even more unlikely to win than it was in June of 2007. Given that, the continuation of the format war serves no one's best interests, aside perhaps from the short term interests of Toshiba and others in the HD-DVD camp. As such, we echo T.K. Arnold's call for Toshiba and Microsoft, as well as Paramount and Universal, to end this format war once and for all. The Hollywood studios and retailers simply cannot afford to let another year's worth of mixed messages about high-def packaged media be sent to consumers.

Meanwhile, in the online enthusiast community, things have actually gotten so absurd in the last couple of weeks that there are now dueling petitions to alternately save or kill HD-DVD (complete with thousands of signatures real and fake, genuine and mocking), and one discussion forum recently hosted a thread in which its members were casting the actors who might star in a hypothetical Format War: The Movie (predictably, what started in good humor quickly became contentious and the thread was locked, like so many others before it).

Bottom line: Ending this format war now is the right thing to do for this industry and for consumers overall. It's time to stop all the bitterness and the hostility, both real world and virtual, and it's time to put this unnecessary and damaging dispute behind us.

It's just time.

Bill Hunt, Editor
The Digital Bits
billhunt@thedigitalbits.com