HERE IS AN ARTICLE FROM BETANEWS.COM SAYING IF THE FORMAT WAR IS OVER THEN WHAT DID BLU REALLY WINWe really didn't have enough stories on the format war this week, only a few dozen. And I figured that perhaps to make it an even thirty (or was it forty?) we should close the gap with one more.
The huge trend we saw this week was the move away from the format war. Well prior to Warner Bros.' announcement, it appeared the major CE manufacturers were working to build the functionality some of them had once planned for their high-definition disc players, into their HDTV displays and set-top boxes instead. A great many of them -- with a few prominent exceptions, such as Sony -- were about ready to write off their losses and move on.
And honestly, who can blame them? This farce has gone on for too long, and the differences about which both sides are still arguing are not only negligible, but growing more insignificant by the day. For instance, the Internet functionality and updated interactivity layer being built into Blu-ray Profile 2.0 are already being superseded by systems-on-a-chip planned now for the HDTVs to which they would connect.
To say Jackie Emigh's been digging into some new angles on this story is to say the New England Patriots are scoring some first downs these days. Jackie
Jacqueline Emigh, BetaNews: Scott, doesn't the timing of Warner's retraction of Blu-ray support -- just days before CES -- seem a bit strange to you? And isn't that about as odd as the seemingly miraculous rebound in Blu-ray sales from November to December?
At this point, it's kind of hard to believe that it was only this past November that Sony CEO Sir Howard Stringer grimly declared the war a stalemate. Industry figures were showing that HD DVD had managed to close its sales gap with Blu-ray in a couple of weeks simply by lowering its prices.
But by December, Stringer was a happy man. Buoyed by an investment estimated at between $500 million and $2.5 billion from Dubai International Capital (DIC)-- a fund controlled by Sheikh Mohammed bin Rashid al-Maktuom, ruler of Dubai -- Sony had cut its own pricing on the Blu-ray-enabled PlayStation, and sales had surged back up again in time for Black Friday.
And oh, by the way, a few days after DIC announced its investment in Sony, DIC named Nobuyki Idei -- former chief executive of Sony's chief advisor board -- to the board of its own Global Strategic Equities Fund.
And here we are around six weeks later, after a horrific experience for HD DVD at CES, with some folks already ready to sound the death knell for Toshiba's format.
But ideally, technology wars should be decided on the sole basis of a product's ability to meet the need of its users. And here, Blu-ray and HD DVD each have their advantages and disadvantages.
Blu-ray, for example, is now in the throes of moving from Profile 1.0 to the incompatible Profile 1.1 to Profile 2.0, a format which is expected to introduce still further incompatibilities.
And although Sony and its partners stand to pick up additional revenues from users who decide to upgrade to newer Blu-ray drives, there's every possibility that some of them might migrate over to the HD DVD side, too.
Moreover, Blu-ray products are reportedly more costly to make than those that follow the HD DVD format -- and in many cases today, the price of a Playstation doesn't even cover Sony's manufacturing costs.
So if Blu-ray is in fact going to win the war, it'd really better happen fast, to prevent the kind of price erosion that might interfere drastically with production and profitability.
Yet from a product standpoint, Blu-ray does hold one clear advantage over HD DVD, and it is this: Essentially, Blu-ray disks can hold more data.
Here, Sony seems to have learned well from experience. If you've heard about the old videotape wars between VMS and Sony's Betamax format, you might know that one of the main reasons why Sony lost that particular war revolved around a one-hour tape time for Betamax, versus two or even three hours for the competing VHS.
So, I say, may the best product win the Blu-ray/HD DVD war -- regardless of financial investments and real or rumored studio defections.
Scott Fulton: Yes, Jackie, and thank you for that lead-in: I'm still wondering whether either product can genuinely remain the best product in its category for too long. To that end, I have a theory I'm working on. But I'd like to try it out first on our CES analyst, Sharon Fisher.
Sharon, we're always hearing about companies pledging to "push" the envelope. An old Chuck Yeager phrase. I've always said that in order to create a new platform, you have to "break" the envelope. You can evolve platforms incrementally, but to justify a new one, there needs to be a complete new reason for its existence.
Sharon Fisher, BetaNews Senior CES Analyst: I'd go along with that.
Scott: Why build a new interstate system, for instance, unless our cars can fly now?
Sharon: Heh. You're going to pull in the Freepers with their talk of a Canada-Mexico highway.
Scott: When Comcast advanced its fat pipes model, and demonstrated the idea of turning on the TV selecting what you want to see as opposed to what's on, that changes everything for me. That deals with the very nature of television itself. That's when I heard an envelope rip.
Sharon: I suppose. On the other hand, I'm a big fan of serendipity. I'll watch a movie on TV when I have the same movie in my rack.
Scott: True, but imagine the peace we would have in our lives if the few hours we do spend watching television were watching the good television we want rather than wasting our time with whatever's on.
Sharon: Part of the reason I don't get cable is that I know I'd watch History Channel all day, just because I could.
Scott: My wife would say my 24-hour channel would feature photon torpoedoes.
But think about it: The structure of many people's lives in America revolve around television. The real reason why evening news ratings have dropped is because people work later. The reason why morning news ratings climb is because they go to work earlier.
Then there's prime-time, a three-hour block for most networks. There's an industry devoted to that.
Sharon: Television used to be a social phenomenon, too. Everyone would get together to watch Uncle Miltie.
Scott: And there's "The Tonight Show." Proof right there, viewing habits revolve around time. Pat Weaver, the great former president of NBC and Sigourney Weaver's dad pretty much invented television around the concept of the clock.
Well, along comes Comcast. Granted, they're not really the first to suggest this, but they're the first with the know-how and the capital to actually pull this off.
Sharon: On the other hand, look at what the writer's strike has done to TV. All reality shows, all the time.
Scott: "Reality." Glad I don't live there.
Sharon: I know. When I want reality, I turn off the TV.
With Comcast's tru2way, television could become much more participatory. Think of real-time "America's Funniest Home Videos," sponsored by YouTube.
Scott: But the big suggestion is that it may become feasible for programs to become recorded entities waiting for our perusal. And yes, participatory.
But imagine how that changes the entire industry. The business model of entertainment production.
Sharon: How would they promote them?
Scott: If you didn't have to watch CSI any more...why would you???
Sharon: Hey. Some people like CSI.
Scott: So much of network entertainment is placeholder material in-between a few moments of quality. If there were no revenue to be derived from placeholder material, if people could refuse it if it were offered, there would be a huge depression for the entertainment industry.
Sharon: You know, that's not what I'm worried about. I'm worried about the opposite: the few gems out there being overwhelmed with waves of dreck. As I pointed out earlier this week, Comcast's big promotion of HD was...Norbit.
Scott: Waves and waves of dreck....disguised as Eddie Murphy. But wouldn't people reject the waves of dreck out of hand?
Sharon: I don't think people would refuse what was offered, no. It might be a big boon to the sports industry.
Scott: True! A lot of new sports would get new viewers. Softball.
Sharon: Curling!
Scott: Cricket!
Sharon: I shudder to think about the kids' programming, though...as the mother of someone who eats, breathes, and sleeps Hannah Montana. She's put out that I won't spend $3000 and airfare on a Hannah Montana ticket.
Scott: And on that note of nightmare...I bid you good luck with that, Sharon.
Next: Scott Fulton on the lessons of history unlearned.
Scott Fulton, BetaNews: When I was a boy (if I was a boy) growing up in that mighty metropolis I thought Oklahoma City to be at the time, my aunts and uncles would often make the 90-mile trek north to visit me in what my local weatherman lovingly referred to as "the Big Town." They'd arrive in a recent-model Ford stretch sedan that seated about 29 -- never a GM car, always a Ford, for it was Henry who got America through the depression and we all owed him a debt of gratitude.
The Ford LTD back then had a trunk large enough for a queen-size mattress, with room left over for a few sleepers. My Uncle Vernon, a retired chief of detectives, would use that trunk to haul back a month's supply of Coca-Cola, Dr. Pepper, and 7-Up -- not the knock-offs, but the "real" soft drinks, in glass bottles that clinked around in wooden crates. You couldn't always get the real soft drinks in Southern Oklahoma or Northern Texas, because the bottlers' trucking routes didn't extend very far south of us, or very far north of Dallas. Some people subsisted on Cragmont Cola, Dr. Wells, and Bubble-Up.
My cousins from the back seat of the LTD would beg to go to the movies, because the Big Town always got the first-run films. Not that going to the local theater in Lindsay, Oklahoma wasn't a hoot in itself, at a venue whose décor seemed best suited for the premiere of a Harold Lloyd film. But the Big Town had the Cinerama screens, the plush seats, the ushers with the hats, and on top of that, all the brands of candy -- the local Bunte brand, Brach's, Hershey's, Hollywood, Peter Paul, and the real M&Ms rather than the cheap knock-offs that tasted like buttons pinched off your granddad's overcoat. And we had twin theatres -- not just one screen but two! We had the luxury of choice in the Big Town.
It doesn't take a genius or even a respectably smart historian to know that when Americans want to be entertained or amused, their first requirement is to know that nothing is being held back from them. It's not so much that Americans need to see everything on the menu at one time. It's not only a comfort but a reassurance of their basic principles that Americans know they're not missing out on something to which they're entitled.
The very thought that anyone would invest time and money in an entertainment medium that was guaranteed, through the stubbornness of the very people producing it, to offer less than 100% of what should reasonably be available to them, is in hindsight one of the most bizarre, hare-brained collective mis-reads of American behavior on the part of any multi-billion-dollar industry in the history of commerce.
There are some consumers today who are willing or even eager to invest their time, energy, and money on a promise of a big reward in the future. But not all Americans are gamblers, and too many of us would prefer to gamble -- when we do gamble -- on something more fundamental to our futures than "high definition." If we're going to make the big trek north, if you will, we expect a payoff, not a promise. We won't drive 90 miles out of our way just to end up with a "gussied-up" version, to borrow an adjective from my aunt, of the little hometown theater on Second Street.
It is of little or no consequence to most everyone I've ever met that Blu-ray has more of a share of the available high-def movies than HD DVD; it's like comparing two half-empty bottles of soda. It doesn't much matter which one is closest to full; neither is particularly appealing if it's sitting up there for sale on the store shelf. You kinda wonder who's gotten into it.
And it isn't as though the television industry hasn't had an epic format battle before, or a hard time coming to a decision on either of two ways to go forward.
After World War II up until the early 1950s -- back when Uncle Vernon was on the beat and The African Queen was playing at the local theater in Lindsay -- there was a real format war in the television industry.
The debate was over how to put color on the picture tube. RCA had a system that directed the stream of electrons to painted points of color on the inside of the CRT, creating varying shades of the optical primaries red, green, and blue. CBS had a system with a spinning translucent wheel painted red, green, and blue, through which flickering images were beamed at such a speed and intensity that when they collided on the back side of the CRT and hung around for a few microseconds, they looked colorful.
Now, mind you, the difference between these two formats was gigantic, not aesthetic like the difference between Blu-ray and HD DVD. The RCA system had the advantage of not catching fire when left on for long periods of time, say, an hour. It also introduced the term compatibility from the sociologist's vernacular into the technological vocabulary, in that existing black-and-white sets could show pictures intended for color broadcasts.
Yet it was CBS that set an important standard, in one of technology's most influential battles. You see, thanks to RCA's huge legal department, the matter of which standard should prevail went to the US Supreme Court. And there, setting a precedent which the high court would follow later for picking the winner, it chose the CBS spinning wheel as the national standard. But the court case took so long that, in the meantime, RCA had flooded the market with inexpensive black-and-white sets -- compatible systems that could receive NBC's later color broadcasts.
The standard CBS set was for gracefully bowing out, when it appeared its cause was lost in the marketplace. The company made up a convenient excuse (it literally said the Korean War effort forced it to shift its priorities), and moved over to the RCA field-sequential system by 1954 to make amends. It was awkward at the time, but in retrospect, it was so graceful.
Everyone knows the government has a questionable track record of settling history-making disputes, so it's a good thing they stayed out of today's blue-laser battle. But what we're faced with now, too many years after someone had the bone-jarring idea of upping the frequency on the laser beam, are two sets of technology companies and content providers with differing stakes in the concept of high-definition, battling over the remains of the recorded video market. We are already seeing consumer apathy about the whole idea of having high-def movie discs and at the same time not actually, legally owning them, thanks to DRM, EULAs, and this ridiculous notion held by the studios that we're not all consumers but rather extended lessees of their content. And while we did see buyers a few months ago willing to place a hundred-dollar bet on a discount HD DVD player, for what it's worth, the market at large has rejected high-definition video on blue-laser disc.
So what is it that Blu-ray thinks it has won this week? Any student of history or even an amateur observer of public attitudes knows that you can't win an audience with half of a value proposition. If I know for a fact that a country I live in will only let me read 50% or 70% or 99% of the books printed in the world, for whatever reason it might concoct, I don't want to live in that country.
If I can only see 70% of the movies, I don't want to waste a nickel on the theater that would withhold from me the 30%. I'll drive the 90 miles north, thank you very much, in an LTD that gets 10 miles to the gallon, filled with 30 gallons of Ethyl and 50 gallons of 7-Up. There's a right comfortable place to stretch out in the back if you don't mind the crates and the clinking and the kids with their big bags of candy.
