Why is Blu-Ray going to fail?

The reason is simple: I got a Blu-Ray and not an HD-DVD player, and I always have the impression that the technology I go for will be the one that won’t be the standard a few years later… but right now, all indications are going into the other way. While HD-DVD had an initial “first-to-market” advantage, Sony’s decision to include a Blu-Ray player in the Playstation 3 has dramatically shifted the game and enabled this format to overtake the former within a few weeks.

As for any new technology introduced, being the choice of the early adopters and the market leader while adoption hasn’t reached the mainstream users is in no way a guarantee for success. Offering the best or most advanced feature set is also a no indication of becoming the long term leader. We’ve seen this over and over again, from Apple Macintosh to the Palm. Being backed by Microsoft can help in the long term, but the iPod / iTunes offering is (so far) a proof of the opposite.

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Quick summary of the situation. Over the past few years, HD TVs has started to become mainstream in North America while Europe has been lagging behind on this. Satellite and cable providers west coast of the Atlantic have progressively increased their offering of High-Definition channels to make it an interesting choice when replacing existing so-called “Standard-Definition” televisions. While you could get HD content, the DVD format needed a replacement to be able to support the vast amount of data movies in 1080p require. To answer this need, two challengers are fighting for the domination of the High-Def off-line content (e.g. movies). On one side, HD-DVD backed by Toshiba, Intel and Microsoft (strange that www.thelookandsoundofperfect.com is the official HD-DVD web site… they should try tinyurl.com). On the other side, Blu-Ray, backed by Hewlett-Packard, Apple, Sony and most of the movie studios to mention a few. Looking at the specs, Blu-Ray seems better (50Gb of storage for a double layer compared to 30Gb, 9 hours of High-Def content vs. 5.4, 54 Mbit/s maximum transfer rate compared to 36.55 Mbit/s, …), but as mentioned before, having the best feature list is yet to be a guarantee for success.

The HD-DVD was able to be the first to market and there where a few players in the $1000 range by middle 2006. This gave this format a head-start and until November 17, 2006 when all indications pointed to the fact that they where outselling Blu-Ray players by a very healthy margin… But then came Sony with the new Playstation 3. While this console is the most expensive one at about US$ 600, it was also one of the cheapest High-Def media player available. While a lot of the focus at launch was about comparing the PS3 with a Wii or an Xbox 360 and comparing the sales figures of the gaming consoles, looking at it from an High Definition content player made Sony the clear Winner, with their latest device outselling HD-DVD players. Microsoft’s XBox 360 also introduced an HD-DVD add-on shortly after the launch of the new console from Sony. According to an article in ArsTechnica in mid-January, 270,000 HD-DVD Players had been sold since its launch (150,000 of which where the HD-DVD add-on for the XBox 360), while 425,000 Blu-Ray players found their way into consumers hands… but the most interesting part is that out of these players, 400,000 where actually Playstation 3s!

Early February, articles in ArsTechnica and in High-Def Digest pointed to research done by Nielsen VideoScan showing that the Blu-Ray content is catching-up very quickly with the first-to-market High-Def solution and is now outselling HD-DVD medias by a factor of 2:1. According to The Register, Sony has shipped way over 2 million Playstation 3s since its launch… pushing the number of Blu-Ray players in the hands of consumers way above the other format.

As both formats have been hacked in recent weeks, the movie industry won’t have a tendency to back one format over the other… and the adult entertainment industry seems to progressively support both formats as well, even with initial claims made around the fact that they would not be allowed to publish their content in Blu-Ray format…

So, to paraphrase Highlander, the question is: will there be only one? Or are we going to a world where both formats will co-exist, just like the DVD-R and DVD+R formats? LG has a High-Def player that will support both formats, Corel’s WinDVD supports both (if you have a compatible drive in your computer)… My living room will only have a Blu-Ray player for the foreseeable future, and the Online DVD renting company I use in Canada is having more and more of the format I can watch available. But in the end, when unlimited and always-on bandwidth becomes available, won’t the question of physical medias become irrelevant? Won’t the answer be a High-Def AppleTV?

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