From the Frontline: News & Commentary on the "format war"
January 4th, 2007
Update - April 14th 2007: We have now witnessed the arrival of the Samsung Universal Player this week. I do love it when we're right :) See our article on the Samsung, here. However, please read this article, too, as it outlines our thoughts on how we see Universal HD Players affecting the market.
(LATE NEWS - Jan 8th 2007: We have gotten news that the LG player does not have full support for HDi, the interactive language of the HD DVD format, and as such cannot use the HD DVD logo, nor qualify as a full HD DVD player. LG seem to have stated that they are bringing out another Hybrid player shortly that will replace this one and have full HDi support. So for the time being, it seems that this player is a better Bluray player than most of the Bluray players currently on the market, since it has advanced audio decoding. So it is a good choice for Bluray buyers looking for HD DVD compatibility, but NOT a good choice yet for HD DVD buyers. This does fall right in line with what is written below.)
The Impact of Universal HD Players
Welcome to another HD NOW commentary piece - Today we are writing on the heels of some long-expected and very happy news. LG has just announced (again) that they are going to release a dual-format HD DVD and Bluray disc player in "early 2007" (their brief statement) .
You may be asking: What does all this mean? How does that affect HD DVD? Should I wait to buy a hybrid player? Allow me to help answer some of those questions.
First of all, for those of you who don't know the history, the "saga" of the universal player has been rather twisty. LG started started the talk of Universal players early last year, when a memo to their dealers was picked up by the press. They then made an announcement to the press promising just such a player, but later retracted the statement and put their previous plans for a Bluray-only player back on.
They were followed by Samsung, first with a passing comment in an interview, then an official announcement, as well as a statement in an interview with CIO magazine. But within days, they retracted the announcement, also, without much explanation.
There has been lots of speculation in the online forums that Sony and/or the BDA were responsible for these retractions. You see, Samsung and LG are officially part of the Bluray association and perhaps it would look bad for Bluray if they started adopting HD DVD. In addition, perhaps it would hurt sales of Bluray players if they made hybrid players (I'll get to that key point in a moment).
Regardless, there was a lot of evidence to suggest that LG and Samsung were working quite hard behind the scenes on hybrid players. Long after their retractions were published, I and others, were quite confident that they would arrive in the first half of 2007. Even Panasonic, another Bluray member, has been reported to have plans for a hybrid player. Personally, I think hints that Sony would also produce a Hybrid player were just empty threats to keep other manufacturers out. In addition, chipmakers such as NEC Electronics (and here),Ricoh and Broadcom have also made announcements regarding their developement of the parts and tools required for other manufacturers to bring dual-format players to market. EE Times has some coverage here.
So how will this all affect the market? The surprising answer, in my opinion, is two-fold: (1) It won't really, but on the other hand, (2) it will have a big impact on one side of the battle. Here's why I believe so.
Why it won't have a big impact: The hybrid players are not going to be a mass-market CE appliance for a while, because it will not be cheap. It is likely that it will sell for $1,000 to $1,200, and as such will go head to head with players in that price bracket. So to those folks who are spending $200 on Xbox 360 HD DVD players for their PC or Xbox 360, or even those people spending $400 to $500 on Toshiba A1 and A2 players or second-hand Samsung Bluray players, or even $600 for PS3s, there will not be much of an impact. The mass market will continue to grow on the merits of the cheaper entry paths into the high-def disc market. So their's no reason to panic about the market coming to a grinding halt as some panic-mongers on the Bluray side are saying.
Why it will have a huge impact: The appeal of buying a player with BOTH formats will be very strong to many buyers who are looking. Also, since hybrid players must meet more stringent HD DVD minimum player specifications, they will ship with Dolby Digital Plus and TruHD decoders, and, possibly, even DTS-HD, as well as Ethernet networking ports for the Internet. However, they will probably not have a lot of custom presentation and tuning tools, or other fancy features, as the makers will have a lot of work just to get the two different presentation systems of HD DVD and Bluray to function together in one machine.
My assesment is that sales of players of either format that are expensive (ie $1,000) and lacking in features (such as advanced audio decoders) will be hurt badly by hybrid players. Coincidentally, it is mostly the Bluray players which are occupying this position in the market. The first gen Bluray players on the market typically do not have features like networking ports or advanced audio decoders and mostly retail for $1,000 and above. To be able to buy a player in the same price range that outperforms them on features AND has the benefit of letting the owner play HD DVDs as well, seems like a no-brainer.
However, the Toshiba XA2, their second generation high-end HD DVD player, will be less affected by the entrance of the LG hybrid player. Why? The XA2 has a couple of "specialised" benefits (or Unique Selling Points) that are unlikely to be present in the Hybrid players we will see this year, benefits that some owners will value highly. Namely, these are 1080p24 output, HDMI 1.3 Deep Color support and superior HQV upscaling technology.
Although the XA2 already supports 1080p, it is, like most of the Bluray players, actually 1080p60. However, due to pressure from videophile HD DVD fans, Toshiba will be releasing a firmware update in late January or early February which will allow the player to output the pure 1080p24 video straight from the HD DVD disc. And in addition to HDMI 1.3 Deep Color support, the XA2 has sophistacted color management and picture tuning tools which allow the player to take advantage of the larger color space and be tuned to fit the true videophile's Home Theater environment. Third, the XA2 uses Silicon Optix's class leading HQV upscaling technology, which is a very big deal to those potential owners with large SD DVD collections.
So my position is that the hybrid players will hurt the expensive, feature-poor standalone CE players on the Bluray side, while leaving the growth of low priced HD DVD players almost completely untouched.
What will that mean for disc sales? Various polls of early adopters in online forums have shown that HD DVD is the preferred disc for HD purchases. Even owners of players from both formats have chosen to make most of their purchases in the HD DVD format over Bluray, citing better codecs, more audio options, or just plain personal preference to support the format. Also, while some movie buyers are buying PS3s, most PS3s seem to be being bought by those looking to play games on them, therefore having less of an impact in the growth of the Bluray format, than the less expensive Xbox HD DVD drives being bought by users for their Xbox 360s and their PCs.
And THIS, funnily enough, is where I get to the ultimate conclusion of this story.
What about the Studios? If the low-end of the market is dominated by HD DVD players and the mid- to high-end of the market is dominated by HD DVD players and Hybrid players, then it is not inconceivable that some studios will decide that it makes more sense to publish in the HD DVD format. So if they are not already doing so, they may see good business reasons for adding HD DVD support to their arsenal. 2007 will be the year that Hi Definition disc sales "explode" into life, and the studios will want to be best positioned to take advantage of that growth and not be caught out by a format decision they made earlier when the facts seemed very much different to how they are today.
So three cheers for the Hybrid players! And let the games begin...
Recent News and Links
Other Articles and Online Discussions
Home Theater Blog - "HD DVD vs. Bluray: Fact vs. Fiction"
One of AVS Forum's biggest Bluray fans, converts to HD DVD...
Projector Central - "Bluray: Can it survive?"
Home Theater Forum: "Reasonable cost of upgrading to HD DVD absolutely worth it"
AVS Forum - "Home Theater Mag gives the Toshiba a 98!"
Engadget HD - "Why HD DVD will prevail: My opinion 3 months later"
Projector Central - recommendation on the formats
Digital Media Thoughts - "At Last: A True Bluray vs. HD DVD Comparison"
Playfuls.com - "Playstation 3 - the killer Iceberg. Sony - the Titanic"
News Stories in the Press
Silicon Valley - "Sony mulls recall of exploding fact sheet" - Sony caught in sales lie
Engadget - "Sony claims Xbox 360 requires etc, etc., thus costs $700"
International Herald Tribune - "EU's DVD inquiry goes to Hollywood"
Reuters - "Sony Hits Stumbling Blocks on Road to recovery"
IT Wire - "Universal Studios deals Bluray death-blow"
Tom's Hardware - "Will Bluray sink the PS3?"
Video Business - "HD DVD owners petition Bluray backers" - :)
Ultimate AV - Joe Kane (Digital Video Essentials) talks about Mpeg2 and VC1
BBC - "LOTR Director Jackson signs Xbox deal"
Video Interview of Joe Kane on the Battle of the Formats
Polls and Surveys
98% of HD owners on AV Forums went with HD DVD
91% of HD DVD player buyers happy with purchase
75% of Bluray Player buyers RETURNED the player!
86% of buyers of First Gen Hi Def players will buy HD DVD
85% Support for Studio petitions - the birth of this petition Drive
69% of respondents feel that HD DVD will "win" format war
92% say HD DVD will dominate Bluray this Christmas
83% say that Toshiba A1/XA1 HD DVD players beats their old player at upscaling
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