Giants at war over DVD

By PETER GRIFFIN


TOKYO - The latest technology standards war intensified this week as Japanese electronics giants used a major Tokyo tech show to show off two technologies jostling for position in the high-capacity storage market - Blu-ray and HD DVD.

At the huge Ceatec show running this week in Tokyo, backers of both standards were outdoing each other to present the best face on their technologies.

The HD DVD camp went for showing off the action movie Ronin in HD DVD (high definition) format. Blu-ray went for a more educational approach, getting into the science of the technology.

Both Blu-ray and HD DVD are designed to do the same thing - bring huge capacity to disks so that more information can be stored, played and recorded on them.

With the high-capacity, multi-layered disks that the companies supporting the standards are making, movies and audio require less compression to fit on the disks, allowing much higher picture and sound quality.

If DVD introduced consumers to a lush home cinema experience, Blu-ray and HD DVD promise to boost quality even further.

Blu-ray disks with 52GB (gigabytes) of capacity are already on sale, and eight-layered versions being developed will provide 200GB of storage.

Blu-ray boasts higher storage capacity than its competitor, but HD DVD backers cite the lower cost of producing their technology. They claim it will be cheaper with their products to put machines and disks into the market.

As with the still unsettled standards war between DVD+RW and DVD-RAM rewritable disks, both Blu-ray and HD DVD have serious backers.

The Blu-ray association was formed this week and includes Panasonic, Sony and Hitachi. Toshiba, NEC and Sanyo have lined up behind the HD DVD format.

What does that mean for consumers? A marketing war as the two camps try to woo computer and consumer electronics makers and the movie-hungry public.

"The power game has already started," said Fumio Ohtsubo, president of Panasonic's AVC Networks division, which contributes about 20 per cent of Panasonic's US$79 billion ($117 billion) in annual revenue.

Ohtsubo said access to content would be the key to deciding which format won, and stressed the importance of getting the movie studios on side.

"Hollywood is very challenging. Sony already has MGM, we still have some human networking with Universal," he said of the Hollywood studio in which Matsushita still has a 5 per cent stake.

Software companies and the Hollywood studios are trying to keep their options open, afraid of backing a losing standard.

Twentieth Century Fox this week joined the Blu-ray camp but the studio is remaining non-committal in the standards debate. Fox will still work with the HD DVD manufacturers.

All of the studios will be watching closely to see which format predominates in the next year before deciding what format to release movies in.

Ohtsubo expects movies to start being sold on Blu-ray disks by 2006.

But Blu-ray is unlikely to make an appearance in New Zealand until digital TV is introduced or the Hollywood studios agree to release a large number of titles on Blu-ray disks.

"In the US, high-definition broadcasting has to get more popular," said Ohtsubo.

He believed Blu-ray could soon be made at a similar price to the rival devices and disks.

"We can easily overcome the cost gap. Then capacity [of the disk] becomes more important."

Sony last month led a consortium purchasing Metro Goldwyn Meyer, securing access to thousands of movie titles.

Ohtsubo makes light of the split that technology standards have once again made in the Japanese electronics industry.

"This is a free market system. Without competition we can't easily say which is the best system," he said. "Panasonic will try its best to make Blu-ray the standard."

* Peter Griffin attended Ceatec 2004 as a guest of Panasonic