Blue-ray's next battle is against standard DVDs

For Blu-ray, the format war has turned into one of those epic quests you see in badly dubbed martial arts movies.

Sure, its kung fu was too good for rival HD DVD to overcome. But hold on to those nunchaku — Blu-ray still has to overcome an army’s worth of fierce competition before it can officially crown itself the master of the global homevid village.

And that next battle starts with the entrenched format Blu-ray is trying to usurp, good-old 480p-resolution DVD, which may not be the “it” product it was back in the early days of the Bush administration, but overwhelmingly remains the go-to platform for delivering recorded movies and TV shows into the home.

“You will now see more of a comparison towards standard DVDs and less about the difference between Blu-ray and HD DVD,” says Sony Pictures Home Entertainment topper David Bishop, summing up Blu-ray’s next major marketing push.

Buoyed by obvious advantages, including a better, nondegradable picture, menu-driven nonlinear playback, not to mention sheer product-design elegance — and, best of all, unanimous studio adoption from the very start — DVD quickly caught big-box-store fire and was able to usurp the once-very-established VHS format and make gobs of money for almost everyone involved with it.

Now that HD DVD is going away and the DVD biz is undeniably in recession — despite a boffo summer theatrical season, North American homevid sales declined 3.1% in 2007, according to Variety sister publicationVideo Business — the studios would love it if Blu-ray became even half as trendy as DVD was just a few years ago.

And there is at least some wind at their backs on this. For one, the federal government is mandating that all over-the-air TV broadcasts go digital next February. In the practical sense, this won’t actually affect that many people, since so many Americans get their TV through a cable or satellite box that will automatically convert digital TV signals for their old analog cathode ray tube-based sets.

But emotionally, having a stodgy government body like the FCC think they’re technologically uncool might be enough to convince many of the 50 million or so American households without high-definition sets that it’s time to take the bewildering plunge into the digital world this coming fourth quarter.

For Blu-ray, that amounts to go time.

In explaining the rationale behind the decision that ultimately doomed HD DVD — that is, homevid market share leader Warner Bros.’ choice in early January to forge exclusive ties with Blu-ray — Warner officials agreed that the long-awaited mass adoption of a high-definition TV was nearly at hand, and that now would be a good time for the industry to cut out this confusing dual-format stuff.

“The window of opportunity for high-definition DVD could be missed if format confusion continues to linger,” Warner chairman and CEO Barry Meyer said in January.

Indeed, confusion is the operative word. Where DVD’s proposition was entirely straightforward — take this box home, hook it up to your TV with cheap, widely available RCA cables, and feast your eyes — the whole HD thing remains a conundrum wrapped around an $80 HDMI cable to many consumers, who have to navigate a gauntlet of tricky decisionmaking (LCD, plasma or DLP? 720p or 1080p? Forty-two inches or tap the home equity line for a 60-inch set? Pay a carpenter to mount this thing on the wall or find something to stand it on?) before they get to the part about what disc player they should buy.

Certainly, once they do get that far in the process, having the Blu-ray-vs.-HD DVD fight taken off the table helps clear the mind. At least, in the consumer consciousness, that crystallizes the discussion into, “Do I really need a new format?” as opposed to “Do I really need a new format, and if so, which one?”

Unhappily for Blu-ray denizens, while they were engaged in their death match with HD DVD, another low-cost rival took root. Priced at less than a quarter of the typical Blu-ray drive, so-called upconverting DVD players scale the standard 480p DVD picture to a 1080p quality that looks — at least, to the non-pro — almost as good as the real thing.

“Most people are happy just buying a better DVD player instead of spending $350 or $400 for Blu-ray,” Mike Abt, president of Chicago area electronics retailer Abt Electronics, said to the New York Times last month. “An upconverting DVD (player) for $79 is a great value. It has a great picture, really better than old DVD. You really see a difference.”

Blu-ray signatories — now a consensus group featuring every major studio, including former HD DVD die-hards Universal and Paramount — correctly argue that upconverting doesn’t make for a true 1,080-line progressive-scan picture.

Still, that qualitative difference seems far narrower than the obvious chasm that existed between VHS and DVD — a concept that wasn’t lost on Universal during the apex of the format war last year, when it was aggressively developing next-generation bonus features for its HD DVD releases.

“If all we do is put high-def movies on discs, we’re going to have a niche laserdisc business,” U homevid topper Craig Kornblau told Variety in August. “It’s about creating a unique experience compared to the one we have with the DVD player.”

Early on in the two-year format war, U developed an array of novel if not quite mind-blowing extras for HD DVD, some of which used Internet connectivity, while Blu-ray studios stuck to just authoring their movies. Having tooled with their format’s Java-based operating software for several years, the Blu-ray publishers say they’re finally ready to start integrating next-level interactive features into their titles — an endeavor, they say, that will be buoyed by their long-touted digital storage advantage (50 gigabytes on a Blu-ray disc vs. 25 for HD DVD). But one wonders that if extra features are so important to high-def DVD consumers, why did plain-vanilla Blu-ray titles enjoy a 2:1 sales advantage over the more robustly packaged HD DVDs?

In any event, contrary to many predictions, Blu-ray denizens believe they still have time to get their message out there and gain a foothold on the mass market. But as they handle the delicate matter of competing with their own standard-def DVD business, the studios do have to deal with the possibility that digital downloading might swallow up any momentum Blu-ray is able to muster over the next several years.

Indeed, a range of services, from Apple’s iTunes to Amazon’s Unbox, are nurturing nascent market shares, while powerful Microsoft –which fought side by side with Toshiba on behalf of HD DVD — will likely redirect its resources toward steering the homevid biz away from physical media.

Happily for Blu-ray publishers, the U.S. broadband market still has plenty of bandwidth issues to work out before millions of data-dense high-def movies can be transacted through it. And since slightly more than half the country remains vexed by the high-def transition, the prospect of the masses ramping up to movies delivered via the ether might be a bridge too far for the near future.

Ben Fritz contributed to this report.

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