The Format That Won and Lost

The HD-XA1, priced at $799, is now the first high-definition disc player available to American consumers. HD DVD has officially beaten Blu-ray to market. Pop the champagne, cue the victory press release, start printing the "We Were First" banners.

Now look at the calendar. Samsung's first Blu-ray player arrives in about two months. Sony's PlayStation 3 — announced with a built-in Blu-ray drive — is expected before the end of the year. Toshiba's head start is measured in weeks, not years.

This is the format war, and if you lived through VHS versus Betamax, the script feels uncomfortably familiar. Two incompatible standards, each backed by a consortium of studios and electronics manufacturers, each promising to be the definitive future of home entertainment. Both deliver 1080p video. Both play on shiny discs. Neither can play the other's media. The consumer gets to choose which expensive bet to place while praying they don't pick the next LaserDisc.

Toshiba's pitch is price. The upcoming HD-A1 model will retail at $499 — roughly half what early Blu-ray players are expected to cost. Price won the VHS war. Toshiba is betting it wins this one too.

But Sony has a strategy Toshiba can't match: the PlayStation 3.

When Sony ships the PS3 later this year, every console becomes a Blu-ray player whether its owner wanted one or not. The PlayStation 2 has moved over 100 million units worldwide. Even if the PS3 captures a fraction of that installed base, it puts Blu-ray drives in millions of living rooms belonging to people who never intended to buy a disc player. They wanted a game console. They got the future of home video bundled in.

Toshiba doesn't have a gaming platform. They have a disc player. That distinction could matter more than being first.

The VHS/Betamax parallel is instructive but not comforting. Betamax launched first. Betamax had arguably better picture quality in its early iterations. JVC's VHS won anyway — longer recording time, cheaper licensing, and critically, broader ecosystem support. The format with the most content, the most hardware partners, and the most living rooms wins. First to market is a press release. First to ubiquity is a standard.

There's a deeper pattern here that neither camp seems eager to discuss. The industry is asking consumers to replace their DVD collections. Again. DVDs replaced VHS barely a decade ago. Now we're being told those DVDs aren't good enough either, and by the way, there are two competing versions of "good enough" and nobody can tell you which one will still be supported in five years.

Consumers aren't stupid. They've been through this before. The format war itself is the product's biggest competitor. Every month the industry spends fighting over which disc wins is a month consumers spend waiting to buy either one. Uncertainty is the only guaranteed loser's tax, and the consumer is paying it.

Meanwhile, the studios are hedging. Warner Bros., Paramount, and Universal back HD DVD. Sony Pictures, Disney, and Fox back Blu-ray. Some studios are already planning to release on both formats — the universal sign that nobody actually believes in their own standard enough to go exclusive.

Toshiba won the sprint. The HD-XA1 sits on store shelves today, playing high-definition movies while Blu-ray exists only in press releases and trade show demos. That's real. That matters.

But format wars aren't sprints. They're wars of attrition, fought in living rooms and retail aisles and studio boardrooms. The first player on the shelf is a footnote. The last format standing is history.

Toshiba just fired the opening shot in a war that could take years to resolve. The disc is spinning. Whether it's playing a victory anthem or a swan song — well, ask again in 2008.

Sources:

• Toshiba to roll out HD-XA1, HD-A1 HD-DVD players in March — Engadget, 2006-01-04
• Flashback 2006: Toshiba Launches HD DVD — Sound & Vision, 2006-03-31
• HD DVD — Wikipedia