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I realise it’s considered gauche to question a gift, particularly one that comes in a big box. But for those of you who received an HD-DVD player this holiday season, it would be completely understandable if you packed it up and marched it back to the buyer and demanded an explanation.
In fairness, the buyer probably had no idea the HD-DVD player would be obsolete by, oh, say, Christmas, 2008. The salesman probably made no hint to your well-meaning girlfriend that there is a winner-takes-all format war going on between HD-DVD (backed by Toshiba and Microsoft) and Blu-Ray (backed by Sony). Or maybe the buyer knew but figured it would be years before one technology proved the victor. After all, the Betamax player hung on for a string of Christmases before being pronounced dead in the late ‘80s. The good money would have suggested that HD-DVD and Blu-Ray could compete side-by-side for years.
Alas, not so. That’s because Warner Bros., the movie studio behind Harry Potter, the sci-fi classic Blade Runner (a collector’s edition is on the new release schedule) and the high-def version of the remarkable BBC series Planet Earth, jumped sides last week to Blu-Ray, saying that from May it will only produce new releases in the Sony-branded format, signalling an early end to HD-DVD.
The Warner Bros. decision “strengthens Blu-Ray’s hand considerably”, says Jim Bottoms, co-managing director of digital media consultancy Understanding & Solutions. If the Toshiba camp is to survive it will need to convince its remaining studio partners to continue supporting HD-DVD and hope to pull back to its side reluctant studios. The chances of this are bleak. As The Times reports, one of the remaining hold-out supporters of HD-DVD, Paramount, is also considering a jump to Sony.
With the about-face, Warner now joins the Sony, Fox, Lionsgate and Disney studios as exclusive adopters of Blu-Ray. In the U.S. market, the world’s biggest, the Warner switch means 75 per cent of all upcoming high-definition releases will be exclusively in the Blu-Ray format, Understanding & Solutions calculate, all but sinking HD-DVD’s chances.
“We should see an end to the format war within the year,” Bottoms declares.
There’s no denying that consumer electronics format wars are a nuisance. The rules of engagement are particularly cruel for the buying public, asking them to make an expensive bet on a technology that could be obsolete in a few years time. They emerge with remarkable frequency: 78 rpm discs verses 45 rpm in the 1940s, 8-track verses cassette in the 70s, Betamax verses VHS in the 80s, digital audio tape verses the compact disc in the 90s. Not to mention, of course, the ongoing QuickTime verses Windows Media verses RealMedia struggle.
The Blu-Ray verses HD-DVD tussle is particularly perverse. While the retail price continues to fall, high-definition players – which pack a sharper picture quality and cinema-like sound – will set you back, at a bare minimum, between £150 and £250 for the most basic machine, and hundreds more for a more kitted-out player. The average price of a high-definition optical disc, meanwhile, is around £25, a healthy premium over DVD prices. An aggressive format war would, in theory, push prices of both discs and players down as both camps try to win over a loyal base.
But if the format war is hastily called off you can forget about a price reprieve. With just one horse in the race you arrive at a scenario that is just as bad as a nasty format war: collusionary pricing. If the studios decide to back just one format – in this case, Blu-Ray – a vital price stimulus will be removed from the market. Studios need to recoup development costs for the new technology and so will price their optical discs much higher than ordinary DVDs until that initial investment begins to pay itself off. In this very likely scenario, expect high-def discs to be priced well above £20 for the near term. Only when consumers begin to protest by defiantly plodding along with the same old DVD players will we see the next generation disc and player prices begin to fall.
But for those of you now staring incredulously at your HD-DVD player, it’s too late. You’ve been drawn into this turf war under false pretences, thinking that on Christmas morning your flashy new player would be able to play all the Hollywood blockbusters on your wall-sized, high-definition flat-screen TV. Take heart: a new technology will emerge in the next few years. You won’t make the same mistake twice. Choose wisely.
Are you a victim of this yet? Or are you feeling smug that you got Blu-ray in the first place? Or are you feeling smug that your waiting to see who wins in the end before you buy? 
