A battle reminiscent of the titanic Athens versus Sparta wars continues to play itself out in the consumer electronics space. Dating back to the 1970s, industry giants Sony and NEC have developed competing standards for recoding information on a variety of media from VCR tapes to CDs. Their latest skirmish centers on next-generation DVDs, which should start arriving near the end of the year but a clear victor may not emerge for a few years more, say industry watchers.
DVDs have proven to be such a popular medium for storing media such as movies and video games that market research firm In-Stat expects worldwide revenue for these devices to grow from approximately US$33 billion in 2004 to $76.5 billion in 2009, a compound annual growth rate of 18.2 percent. Like many high-tech products, DVDs are about to enter a transition period to next-generation systems.
“Vendors are running into a problem where there is not sufficient storage for some of their rich content, such as HD movies,” said Josh Martin, associate research analyst at market research firm International Data Corp.
Just as the consumer electronics industry moved from CDs to red-laser DVDs, it is getting ready to migrate from red-laser DVDs to blue-laser DVDs, which offer as much as 10 times more storage. In addition, the new discs promise easier navigation, better graphics, and Internet connectivity. “Movie studios want their DVDs to carry updated information, so consumers see current promotions rather than ones for movies that were out years ago,” said Gerry Kaufhold, principal analyst at In-Stat.
Forced To Choose
Two options, Blu-ray and high-definition DVD (HD-DVD), have emerged as potential standards for these next generation discs. Whichever format the market embraces is expected to provide consumer electronics manufacturers with control over the technology used in future DVD systems, and to protect them from the price deterioration as those devices move from emerging to mature markets. Sony is heading up the Blu-ray camp, and NEC is marshaling the opposing force; each approach has strengths and weaknesses.
Blu-ray was first developed for PC backup but has since been tailored to the DVD market. This option works with the same audio/video codecs, such as MPEG-2 and Dolby Digital, used in U.S. digital HDTV systems. Blu-ray relies on a newly designed optical-disk format and optical pickup facility to increase disk capacity. The format’s optical-pickup offers a 25 GB capacity on a single-layer disk and 50 GB capacity on a dual-layer disk. Blu-ray relies on a newly designed optical-disk format and optical pickup facility to increase disk capacity. The format’s optical-pickup features a narrow band blue-violet laser capable of writing information in 0.1-mm increments, compared with the 0.6 mm cover layer used in current DVD disks.
One goal for the Blu-ray supporters is to prevent not only casual copying but also professional copying, so it features a new copy protection scheme. Unlike current DVDs, Blu-ray uses a 128-bit encryption algorithm; content providers physically insert a ROM mark onto a prerecorded disk during the mastering process, and that item is needed whenever the user wants to playback the content.
Sony has convinced 100 firms, including Apple Computer, Hitachi, Philips Electronics and Samsung, to support its format. Movie studios 20th Century Fox and Sony Pictures plan to release their HD movies only in Blu-ray format, and Sony said it will incorporate the technology into PlayStation III, its next generation gaming system which is expected to arrive in 2006.
Banking on Backward Compatibility
The HD-DVD specification works with four codecs: H.264, Windows Media9, MPEG-2 or a hybrid of MPEG-2 and H.264. The HD-DVD format relies on blue-laser technology and is based on Advanced Optical Disc (AOD) technology developed by NEC and designed to maintain backward compatibility with current DVD disks. AOD relies on the same bonded-disk structure, the same thickness of the substrate disk, and the same process for replication as red-laser DVD systems now use.
Because HD-DVD maintains the same physical-disk format as standard DVDs, Hollywood studios and replicators may be able to switch from DVD to HD-DVD without major changes to their production lines. By relying on blue lasers, vendors increase DVD data capacity three to six times, so users can store 15 GB for a single-layer ROM disk, 30 GB for a dual-layer disk, and 20 GB for a single-layer rewritable disk.
Sixty companies, including NEC, Intel and Pioneer Electronics, are backing the HD-DVD format. Movie houses Thomson and Time Warner plan to use it for their HD content.
As Blu-ray and HD-DVD products begin making their way from the research and development laboratories into commercial products, there has been talk of a truce. At the National Association of Broadcasters convention in Las Vegas in April, the two sides discussed unifying their standards. “I don’t think it is likely that a single standard could emerge because the two approaches are based on such radically different technology,” In-Stat’s Kaufhold told TechNewsWorld.
All Talk, No Action
Even as the two sides talk, each is preparing products that will conform to the new specifications. “The HD-DVD group may have a bit of an advantage,” noted In-Stat’s Kaufhold. “Because its approach is backward compatible with existing systems, it may be able to deliver its products to market by the Christmas season.”
How much impact the new formats will have is unclear. First generation HD recorders and players systems will be expensive, costing a few thousand dollars. “There are individuals who paid US$5,000 for their HD-TVs and will be willing to spend a few thousand dollars for a high-quality HD player,” IDC’s Martin told TechNewsWorld.
Yet, Jon Peddie, president of Jon Peddie Research which focuses on digital media, thinks the talk about the two formats is overblown. “The MPEG-4 format allows individuals to store HD content on DVDs and seems like a less costly and less disruptive option than either Blu-ray or HD-DVD,” he said.
The bottom line at the moment is that nothing is clear about next generation DVD formats except that the key suppliers’ are engaged in an epic battle, and it continues to rage.
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