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Feisty CEA Panel Debates HD DVD, Blu-ray

The ongoing battle between HD DVD and Blu-ray got a full airing in a frank exchange of opinions during a panel discussion at the CEA Industry Forum last Monday.

The panel, comprising members of the groups supporting the respective formats, answered questions from each other, industry watchers and the audience. It was moderated by Brian Cooley, editor at large with CNET, and featured Mark Knox, advisor of Toshiba’s HD DVD Promotion Division, Andy Parsons, Pioneer’s senior VP of product development and chairman of the Blu-ray Association’s U.S. Promotion Committee, Chris Crotty, senior analyst of CE for iSuppli, Patrick Beaulieu, NVIDIA’s Pure Video technology manager and the audience chiming in at various times.

To jump-start the conversation, Cooley released the results of a recent CEA/CNET Tech First Panel which showed that while awareness is high for the formats from early adopters, real familiarity of each is low, there is much confusion, and the so-called “format war” is turning off many from buying either technology.

For instance, the survey showed:

  • 24 percent of those polled were not sure if either HD disc format was compatible with the existing DVD format;
  • Less than one-third of “tech enthusiasts” or early adopters are interested in buying an HD disc format at this point; and
  • 81 percent of those consumers interviewed are most concerned about the price of the hardware and the cost of updating their extensive DVD libraries with new software.

Knox said that with HD DVD the market now has a format that is “here, new, cool and well-priced.” Parsons volleyed back saying that one of the strengths of Blu-ray is that it currently has backing from seven of the eight major studios and that consumers’ “fear would be not having content.”

Crotty’s first comment of the panel was a double-edged sword towards both formats and their backers. “Both sides should be commended for coming up with these formats, but this is most pointless format war ever,” he said.

Beaulieu said that NVIDIA’s decoder works with both and he feels that “the PC is where the format war will be decided.” And he added that it will “not necessarily be the quality of either format or the technology that will win” harking back to the days of other format wars where the best product did not necessarily win out.

Crotty complained that consumers have not been made aware of the benefits of either format, saying that while cable companies are flooding the airwaves with ads about digital cable, HDTV on their systems, et al, “Where are the ads for HD DVD and Blu-ray?”

Knox said that the HD DVD demonstration area at shows such as this month’s DigitalLife in New York is one way to get the word out. “Consumers need to experience the technology.” Later Knox lamented that unlike DVD’s introduction “Many retailers don’t do retail demonstrations like they used to in the late 1990s, where they demonstrated technologies and qualified consumers interested in the products.”

Parsons partially answered the issue of education by saying that Blu-ray has been available for four months and that HD DVD has been out for six months and that during the first 18 months of the DVD launch “we were just getting the studios” to fully get behind the format. He added that even with the comparatively faster start of these two formats, it takes a while for even early adopters to embrace a new format.

Crotty agreed, but stressed, “This isn’t 1997. Going from DVD to an HD disc is not as big a stretch as explaining to consumers about going from VHS to DVD.”

Beaulieu brought up the point that acceptance of either format may not entirely revolve around CE products. “Xbox 360 and PlayStation 3 will sell millions and consumers will put these devices in their living rooms. They will have HD DVD or Blu-ray drives, so this could be a PC-based battle.”

Parsons volunteered that CE companies have seemingly made a determination that the “game buyer is different than the home theater customer,” and that the early adopter would turn to more of a stand-alone deck then a game system peripheral as the main HD disc player of the home.

Crotty noted that for the mainstream consumer there may not be a lot of time to educate the consumer since, “both sides are wasting time and money fighting each other. They should be fighting the common enemy, online HD downloads that will compete against them.”

Parsons and Crotty then went back and forth as to when such downloads might become a problem. Parsons said bandwidth is still too narrow for it to be an immediate concern. “Today people still go to Best Buy to buy DVDs even though they could download movies.” said Parsons.

Questions then came from the audience about hybrid disc or combo hardware. Parsons and Knox said that nothing in the licensing rules for either format would preclude such a product. It was acknowledged that unless a combo disk for the formats could be developed, like the one announced recently from two Warner Brothers engineers, retailers will still be stuck with carrying twice the inventory to support both formats.

Cooley asked the audience during the question and answer portion of the panel whether or not they would want an HD disc deck that acted like a regular DVD player and played movies or one that acted more like a PC and an overwhelming show of hands proved the former as the most popular choice. Cooley then quipped, “I think we may have saved millions in product development” for both formats.

Crotty commented about the whole issue of combo decks that “by the 2007 holiday season some manufacturer will be offering that product,” no matter what the software concerns are by retailers.

At the end of the panel Bernie Appel, veteran RadioShack merchant, CE Hall of Famer and president of Appel Associates, placed the entire conversation into perspective. “You can go back to the 1960s with records. Many people don’t remember records, but companies developed turntables for albums and singles. It’s about standards. The consumer wanted that. The same held true with 8-track and audio cassettes, later on VHS and Beta and then DVD. The consumer always decides. What that means [talking directly to Knox and Parsons] is that eventually, one of you will be out of a job.”