The High Definition War

Pradip K Bhaumik and Arindam Banik

The war for the next generation removable digital storage medium, now unfolding in all its viciousness in front of us has all the ingredients of a high drama. Both Toshiba and Sony are aware of the dangerous consequences of losing the war – as well as the benefits of winning it. It is a high stake war.
The consumers have a need to store higher and still higher amount of digital information in a single medium and this need has spawned the development of floppy diskettes, compact discs (CDs), and later digital versatile discs (DVDs). A DVD can store 4.7 GB of data where a CD could store about 700 MB and so you have a whole 3 hour movie stored in a single DVD which otherwise required 3 or 4 CDs. By now, customers’ expectations have gone up where they would expect to have a high resolution movie stored in a single disc. Simultaneously, technologies have also grown further where a single multilayer disc can store up to 100 GB of data enabling storage of high definition movies. The only problem is that we have not one but two competing technologies – both vying for that single slot.
Announced in 2002 by nine companies including Sony, Hitachi and Philips, the Blu-ray technology promises 25 GB on a single layer of a BD disc while the High Definition DVD (HD-DVD), with a storage capacity of 15 GB per layer, was sanctioned by the DVD Forum in 2003. A distinct advantage of HD-DVD for the disc manufacturer is that the stamping machines for regular DVDs require only minor modifications to make HD-DVD discs. Toshiba, a traditional rival of Sony is now ready to compete again in this arena. Between them they have been able to split the whole industry into two opposing camps each claiming the superiority of their standard over that of the other.
Sony seems to have learnt its lesson very well from a similar situation in the seventies when Panasonic with its VHS format for video cassettes, came from behind and overtook Sony even though Sony’s Betamax was arguably technically superior. Sony lost out as it did not share its standard with others while VHS technology was licensed to many among both VCR manufacturers and content providers and soon emerged as the de facto industry standard. This also reminds us of a similar story when Apple computers lost to the Wintel machines despite having a better product.
This time too BD is perhaps technologically superior to HD-DVD but there is an even chance that HD-DVD may turn out to be the eventual winner. Both of these use the low frequency blue laser unlike the red laser used in CDs and DVDs, allowing discs to store data at higher densities required for high definition video storage. Both formats have multiple layer capability and so technically BD can have up to 100 GB capacity in a dual side dual layer BD disc, while Toshiba has already developed a prototype three-layer 45 GB HD-DVD disc. There are differences in the compression technologies used but either format would offer vastly improved picture quality and consumers may not experience significantly different viewing pleasure between the two formats.
As neither format is likely to offer lossless recording, it is possible that a later generation of technology may make these discs also obsolete just as CDs and DVDs may become obsolete after the high definition discs are released in the market.
The ultimate success of either format will not depend only on the storage capacity of the discs. Thanks to a special hard coating developed for BD discs, they can reportedly withstand even screwdriver swipes unlike other optical media like CDs and DVDs which can be damaged even by tissue wipes. BD also claims to have superior security features by way of BD+ and the ROM mark which may make it the content and media companies’ darling. The ROM mark is designed to tie the recorded disc with the specific burner used to prevent large scale copying while BD+ is a safeguard against future cracks and hacks.
HD-DVD is cheaper and easier to manufacture and has product familiarity on its side as it conveys a high definition version of DVD. The lower price of players, recorders and discs would be a significant advantage as would being the first-mover when Toshiba launches its HD-DVD any time now. But Sony’s strength in the content market with its ownership of Hollywood studios, media companies and dominant position in the games market with Playstation cannot be wished away. It thus appears to be an evenly poised war with formidable armies lined up on both sides.
HD-DVD has the backing of the DVD forum, which is an international membership-based organization created to enable the DVD platform grow through technical improvement and innovation. Ironically, Sony Corporation is one of the founding members of the DVD forum but it sponsored the Blu-ray Disc association (BDA) as an alternate forum for BD thus implying that BD incorporates a technology distinctly different from that of DVD. Almost all the global bigwigs among hardware, software, media and content companies are covered between the two with many joining both.
Both sides seem confident about winning in the market where other stakeholders besides the consumer like the manufacturers, content providers, games console producers, computer manufacturers, etc. will also have significant roles. There are reports of Toshiba encouraging low-cost Chinese producers to start making HD-DVD players and recorders. If true, such early commoditization of the product will hurt all. Attempts of mediation and negotiation to avoid such a high-cost war have failed as each side asserts the superiority of its technology and strategy. The absence of a regulator leaves the market as the only arbiter.
From the sidelines, the whole episode may appear as wholly avoidable and costly for the two camps and particularly for the consumers when seen from an Indian perspective still used to notions of guiding hands of the government but for both the warring sides any government role is conspicuous by its absence. The only Indian company in the middle is Moser Baer and it has hedged its position by joining both the DVD forum and the BDA.
The inexorable march of technology is accompanied by destruction of the old giving way to the creation of the new and guided by the principle of survival of the fittest where fitness is as defined by the market. Particularly for Indian companies, it would seem that development of technology is far less risky than launching products based on new technology. For Indian companies with global ambitions, tracking the details of these technology wars would be of immense learning value, as would be for the government and the various regulatory bodies.
Technology-wise, we began with transfer and graduated to assimilation through adoption. Hopefully it will not take many more years for Indian companies to move up to innovation.