High-definition optical disc format war
The high-definition optical disc format war was between the Blu-ray and HD DVD optical disc standards for storing high-definition video and audio; it took place between 2006 and 2008 and was won by Blu-ray Disc.
The two formats emerged between 2000 and 2003 and attracted both the mutual and exclusive support of major consumer electronics manufacturers, personal computer manufacturers, television and movie producers and distributors, and software developers.
Blu-ray and HD DVD players became commercially available starting in 2006. In early 2008, the war ended when several studios and distributors shifted to Blu-ray disc. On February 19, 2008, Toshiba officially announced that it would stop the development of the HD DVD players, conceding the format war to the Blu-ray Disc format.
The Blu-ray/HD DVD conflict resembled the earlier videotape format war between VHS and Betamax, partly because of Sony's strong involvement in both episodes. These format wars have often proved destructive to both camps because consumers, afraid of committing to a losing standard, would refrain from purchasing either. Format wars have been avoided in notable cases such as the DVD Forum for the unified DVD standard (except for a minor war from 1998 to 1999 with the DIVX format), the Grand Alliance for the HDTV standard, and the Wi-Fi Alliance for wireless networking standards.
The emergence of high definition players followed the entry of HDTV televisions into the mainstream market in the mid-2000s. Consumer-grade high definition players required an inexpensive storage medium capable of holding the larger amount of data needed for HD video. The breakthrough came with Shuji Nakamura's invention of the blue laser diode, whose shorter wavelength opened the door to higher density optical media following a six-year patent dispute.
Sony started two projects applying the new diodes: Ultra Density Optical and, with Pioneer, DVR Blue. The first DVR Blue prototypes were unveiled at the CEATEC exhibition in October 2000. On February 19, 2002, the project was officially announced as Blu-ray, and the Blu-ray Disc Association was founded by a consortium of nine electronics companies.
The DVD Forum, chaired by Toshiba, was deeply split over whether to go with the more expensive blue lasers, whose discs initially required a protective caddy to avoid mishandling, making the medium more expensive and physically different from DVDs. In March 2002, the forum voted to approve a proposal endorsed by Warner Bros. and other motion picture studios that involved compressing HD content onto dual-layer DVD-9 discs. In spite of this decision, the DVD Forum's Steering Committee announced in April 2002 that it was pursuing its own blue-laser high-definition solution. In August, Toshiba and NEC announced their competing standard Advanced Optical Disc, which was finally adopted by the DVD Forum and renamed "HD DVD" the following year after being voted down twice by Blu-ray Disc Association members, prompting the U.S. Department of Justice to make preliminary investigations. Three new members had to be invited and the voting rules changed before the initiative finally passed.
The competing standards had significant differences that made each incompatible with the other.
Attempts to avoid a format war
In an attempt to avoid a costly format war, the Blu-ray Disc Association and DVD Forum started to negotiate a compromise in early 2005. One of the issues was that Blu-ray's supporters wanted to use a Java-based platform for interactivity (BD-J), while the DVD Forum was promoting Microsoft's "iHD" (which became HDi). A much larger issue, though, was the physical formats of the discs themselves; the Blu-ray Disc Association's member companies did not want to risk losing billions of dollars in royalties as they had done with standard DVD. An agreement seemed close, but negotiations proceeded slowly.
At the end of June 2005, Sun Microsystems, the developer of Java, announced that the Blu-ray Association had chosen the Java-based BD-J interactivity layer instead of Microsoft's HDi. At the same time, Microsoft and Toshiba jointly announced that they would cooperate in developing high-definition DVD players. In a top-level meeting in July, Microsoft's Bill Gates argued that the Blu-ray standard had to change to "work more smoothly with personal computers". The Blu-ray Disc's representatives defended the technology.
On August 22, 2005, the Blu-ray Disc Association and DVD Forum announced that the negotiations to unify their standards had failed. Rumors surfaced that talks had stalled; publicly, the same reasons of physical format incompatibility were cited. At the end of September, Microsoft and Intel jointly announced their support for HD DVD.
Hewlett Packard (HP) proposed an ultimatum for the Blu-ray Disc Association: adopt Microsoft's proprietary HDi (instead of the Java-based system) and a mandatory managed copy feature, or HP would support HD DVD instead. In a research report, Gartner analysts Van Baker, Laura Behrens and Mike McGuire wrote that if HP's proposal were accepted, Blu-ray would become the winner of the format war. Though the Blu-ray Disc group did add mandatory managed copy to Blu-ray, they did not add HDi.
HD DVD players and movies were released in the United States on April 18, 2006. The first Blu-ray Disc titles were released on June 20, 2006 and the first movies using dual layer Blu-ray discs (50 GB) were introduced in October 2006.
The Blu-ray Disc Foundation was formed by Hitachi, LG, Panasonic, Pioneer, Philips, Samsung, Sharp, Sony, and Thomson on May 20, 2002. Other early supporters included Dell, HP, Mitsubishi and TDK. The Blu-ray Disc Association was inaugurated on October 4, 2004 by 14 companies of Board of Directors which added 20th Century Fox to the 13 above-mentioned companies, Contributors of 22 companies, General members of 37 companies, and a total of 73 companies.
Toshiba, NEC, Sanyo, Memory-Tech Corporation started HD DVD Promotion Group on September 27, 2004. It also included Microsoft, RCA, Intel, Venturer Electronics. In Europe, HD DVD was supported either exclusively or non-exclusively by Medusa Home Entertainment, Studio Canal, Universum Films, Kinowelt Home Entertainment, DVD International, Opus Arte, MK2, Momentum Pictures, Twister Home Video, among others.
During the height of the format war, some studios supported both formats, including Paramount Pictures, BBC, First Look Studios, Image Entertainment (including the Discovery Channel), Magnolia Pictures, Brentwood Home Video, Ryko and Koch/Goldhil Entertainment.
The format war's resolution in favour of Blu-ray was primarily decided by two factors: shifting business alliances, including decisions by major film studios and retail distributors, and Sony's decision to include a Blu-ray player in the PlayStation 3 video game console.
Studio, distributor alliances
Studio alliances shifted over time. Before October 2005 and the release of either format, each had the exclusive support of three of the Big Six. HD DVD had Universal Studios, Paramount Pictures, and Warner Bros. Pictures, while Blu-ray Disc started out with Sony Pictures, The Walt Disney Studios, and 20th Century Fox. Disney and Fox were both impressed by the extra DRM (BD+ and region coding) that the Blu-ray Disc format provided on paper. Then HD DVD supporters Warner Bros. and Paramount added support for Blu-ray. But in August 2007, after supporting Blu-ray for over a year, Paramount announced it would release all high-definition content (except titles directed by Steven Spielberg) exclusively on HD DVD. At the same time, DreamWorks Animation SKG, which had not released any high-definition discs, announced it would release exclusively on HD DVD. Explaining their decisions, the companies cited perceived advantages to HD DVD's technology and lower manufacturing costs. The companies together received about $150 million in cash and promotional guarantees, including a Toshiba HD DVD marketing campaign with a tie-in to Shrek the Third.
But retail support for HD DVD was eroding. In June 2007, Blockbuster, at the time the largest U.S. movie rental company, moved to Blu-ray exclusively in 1450 stores after test-marketing both formats at 250 stores and finding that more than 70% of high definition rentals were Blu-ray discs. In July 2007, Target Corporation, began carrying only Blu-ray standalone players in its stores, promoting them with end cap displays featuring Blu-ray Disc movies from Sony and Disney.
On January 4, 2008, Warner Bros., which has the largest market share of DVDs, announced plans to drop HD DVD support completely as of the beginning of June 2008. At the Consumer Electronics Show in Las Vegas, some HD DVD-related events and private meetings with analysts and retailers were canceled, including an event scheduled for the eve of the show sponsored by the North American HD DVD Promotional Group.
Toshiba management expressed disappointment over Warner's decision but said that Toshiba would continue promoting the competing format. The following Monday, Toshiba reduced the price of its HD DVD players by 40 to 50 percent, calling the price a "deal breaker for the mainstream consumer". At the time, analyst Roger Kay of Endpoint Technologies Associates likened the price cut to the high-stakes Blackjack bet of "doubling down" in an effort to increase market share and "win back the studios". Richard Greenfield of Pali Capital called the move a gimmick and predicted that HD DVD would not become widely adopted. Gartner analyst Hiroyuki Shimizu predicted that while the price cut might extend HD DVD's life somewhat, the limited title library would ultimately "inflict fatal damage on the format", leaving Blu-ray the victor by the end of 2008.
Warner Bros.' sister studio New Line Cinema followed suit, canceling tentative plans to release titles on HD DVD. Other small studios and producers moving exclusively to Blu-ray included National Geographic Society, Constantin Film, and Digital Playground.
Warner's move was echoed by Walmart's February 15, 2008 decision to phase HD DVD out completely by June 2008. Walmart is the largest DVD retailer in the United States, and its decision prompted the New York Times to run a mock obituary for the HD DVD format. The newspaper quoted technology analyst Rob Enderle's contention that if Walmart "says HD DVD is done, you can take that as a fact." Four days earlier, Best Buy began recommending Blu-ray Disc as the customer's digital format choice, and Netflix, the largest online video rental service, began phasing out its HD DVD inventory after stocking both formats since early 2006. In January 2008, UK retailer Woolworths Group plc said it would stock only Blu-ray discs in its 820 stores beginning in March 2008.
Sony's decision to incorporate a Blu-ray Disc player as a standard feature of the PlayStation 3 video game console also helped ensure the format's eventual triumph. By the time Toshiba ceded the market, about 10.5 million of the Sony consoles had been sold worldwide versus an estimated 1 million HD DVD players—including both standalone units and the add-on player for Microsoft's Xbox 360 console, which did not use the HD DVD add-on for gaming unlike the PS3 which had games that used the added storage capacity of Blu-ray discs. This equipment gap was a factor in Blu-ray titles (including the ones bundled with the PS3) outselling their HD DVD counterparts two to one in the United States and three or four to one in Europe.
Sony's strategy came at a cost. The company initially priced the PlayStation 3 at $599 for the 60 GB model and $499 for a 20 GB (released outside the PAL region), roughly double the price of the PlayStation 2 and substantially higher than competing consoles. But the PS3 console sold at an estimated loss of more than US$200 per unit, resulting in losses estimated at about $3 billion. But analysts, such as Richard Cooper with Screen Digest, expected Sony to recoup far more than that through the sale of games on the system.
AVS Forum shutdown
In November 2007, the popular audio-visual discussion site AVS Forum temporarily closed its HD-DVD and Blu-ray discussion forums because of, as the site reported, "physical threats that have involved police and possible legal action" between advocates of the rival formats.
Toshiba announcement and aftermath
On February 19, 2008, Toshiba announced it would cease developing, manufacturing and marketing HD DVD players and recorders. On that same day, Universal Studios announced it would release its titles in the Blu-ray Disc format, following two years of exclusive HD DVD support. The studio subsequently released its final two HD DVD titles: Fletch on March 11, 2008 and Atonement on March 18. On February 20, 2008, Paramount Pictures announced it would back Blu-ray, becoming the last of the major studios to do so. Paramount ceased HD DVD production on February 28, 2008, with Things We Lost in the Fire and Into the Wild becoming the studio's last HD DVD releases, both released on March 4, 2008. The studio scrapped the HD DVD version of Bee Movie, which, on May 20, 2008, joined Face/Off and Next in becoming the studio's first Blu-ray releases since becoming HD DVD exclusive. In April 2009, Warner Home Video announced it would trade up to 25 HD DVDs for the Blu-ray equivalents, charging only for shipping and handling.
Microsoft ceased production of Xbox 360 HD DVD players while considering how its HDi and VC-1 technologies could be applied to other platforms. Microsoft's VC-1 codec is already in use in Blu-ray titles; Warner Bros. encodes the main features of all titles in the format but encodes supplements and bonus content in MPEG-2. Microsoft has since entered into talks with Sony regarding Blu-ray; although, Windows Vista has supported basic filesystem and shell functionality for both Blu-ray Disc and HD DVD since launch, relying on third parties to implement movie playback. A Blu-ray drive was not released for the Xbox 360, but its successor, the Xbox One, features a built-in Blu-ray drive for movies and gaming, and the Xbox One S supports Ultra HD Blu-ray for 4K playback.
Toshiba's pull-out did not have an immediate significant effect on stand-alone Blu-ray player sales, which rose 2 percent from February to March 2008, after falling 40 percent between January and February, according to NPD Group. NPD noted that upconverting DVD player sales rose 5 percent in the first quarter of 2008 over the same quarter of 2007 but did not release a comparison of first quarter Blu-ray sales compared to the same quarter of 2007. At the time of the report, upconverting DVD players cost around $70 versus $300 for Blu-ray players. But in spring 2009, the number of Blu-ray players nearly doubled its year to date 2009 sales over the same period 2008: about 9 million high-definition units sold in the U.S. from January through March, up from the 4.8 million that sold during first-quarter 2008, according to Adams Media Research. In April 2008, the firm estimated a total of 10.5 million Blu-ray households, including Blu-ray consoles and Blu-ray-enabled PlayStation 3s.
- Drawbaugh, Ben (February 20, 2008). "Two years of battle between HD DVD and Blu-ray: a retrospective". Engadget.
- "Toshiba Announces Discontinuation of HD DVD Businesses". Toshiba. February 19, 2008.
- Dranove, David; Neil Gandal. "Surviving a Standards War: Lessons Learned from the Life and Death of DIVX". Idea Group Inc. Cite journal requires
- Evan Ramstad (April 8, 1998). "In HDTV Age, Successor to VCR Still Seems to Be a Long Way Off". online.wsj.com. Retrieved October 18, 2007.
- Martyn Williams (August 12, 2012). "Opening the Door for New Storage Options". pcworld.com. Archived from the original on November 6, 2007. Retrieved October 18, 2007.
- S.B. Luitjens (June 15, 2001). "Blue laser bolsters DTV storage, features". planetanalog.com. Archived from the original on July 1, 2002. Retrieved October 19, 2007.
- Barry Fox (February 19, 2002). "Replacement for DVD unveiled". NewScientist. Archived from the original on August 15, 2007. Retrieved August 15, 2007.
- "Next Generation DVD Born". bbc.co.uk. February 21, 2002. Retrieved November 4, 2007.
- Junko Yoshida (March 1, 2002). "Picture's fuzzy for DVD". eetimes.com. Retrieved October 19, 2007.
- Junko Yoshida (December 12, 2001). "Forum to weigh Microsoft's Corona as DVD encoder". eetimes.com. Retrieved October 19, 2007.
- "Toshiba, NEC Share Details of Blue-Laser Storage". pcworld.com. August 29, 2002. Archived from the original on November 6, 2007. Retrieved October 18, 2007.
- "DVD Forum backs Toshiba-NEC format". theinquirer.net. November 28, 2003. Archived from the original on June 21, 2007. Retrieved October 18, 2007.
- Junko Yoshida; Yoshiko Hara (November 14, 2003). "High-definition DVD format divides industry into rival camps". my-esm.com. Archived from the original on July 20, 2011. Retrieved October 19, 2007.
- Yoshiko Hara (November 26, 2003). "HD DVD Format Wins Key Nod From DVD Forum". techweb.com. Archived from the original on January 6, 2007. Retrieved October 19, 2007.
- Junko Yoshida (April 19, 2005). "Sides close to deal on HD disk format". eetasia.com. Archived from the original on November 26, 2007. Retrieved October 19, 2007.
- Andy Patrizio (April 12, 2007). "Who Is Drawing Out The High-Def DVD Stalemate?". internetnews.com. Retrieved October 19, 2007.
- Michiyo Nakamoto (May 17, 2005). "Sony-Toshiba DVD format talks stall". ft.com. Retrieved October 19, 2007.
- Christ, Julian P.; Slowak, André P. (2009), "Why blu-ray vs. HD-DVD ist not VHS vs. Betamax: the co-evolution of standard-setting consortia", FZID discussion papers, No. 05-2009: 10
- David Cohn (June 27, 2005). "Microsoft, Toshiba Gear Up". wired.com. Archived from the original on November 5, 2012. Retrieved October 19, 2007.
- Cliff Edwards; Peter Burrows; Ronald Grover; Tom Lowry; Kenji Hall (October 17, 2005). "Daggers Drawn Over DVDs". businessweek.com. Archived from the original on November 6, 2007. Retrieved October 19, 2007.
- "Sony, Toshiba fail to unify DVD format - report". forbes.com. August 22, 2005. Archived from the original on February 24, 2006. Retrieved October 19, 2007.
- Susan B. Shor (September 27, 2005). "Microsoft, Intel Back Toshiba's HD-DVD". ecommercetimes.com. Archived from the original on January 24, 2008. Retrieved October 19, 2007.
- Ken Young (October 20, 2005). "HP calls for changes to Blu-ray". vnunet.com. Archived from the original on October 23, 2005. Retrieved October 19, 2007.
- Robert Jaques (October 25, 2005). "HP's Blu-ray move spells doom for HD-DVD". vnunet.com. Archived from the original on December 20, 2007. Retrieved October 19, 2007.
- "Blu-Ray Won't Bow to HP's Demands". Fox News. November 17, 2005. Retrieved November 4, 2017.
- Lawler, Richard (March 23, 2006). "Toshiba delays HD-DVD rollout". Engadget. AOL Inc. Retrieved July 24, 2014.
- Bracke, Peter M. (October 10, 2006). "Click: Blu-ray Disc review". HighDefDigest.com. Retrieved September 15, 2007.
- "Disclosure of Specifications for Large Capacity Optical Disc Recording Format Utilizing Blue-Violet Laser Blu-ray Disc Begins (May 20, 2002)".
- "Blu-ray Disc Founders Open the Door for Blu-ray Disc Association To Welcome New Members". Archived from the original on August 23, 2007.
- "Blu-ray Samsung backs HD DVD - Foot in both camps (April 16, 2007)". Archived from the original on June 29, 2007.
- "New HD DVD Promotion Group to Expedite Commercialization of HD DVD Hardware and Software (September 27, 2004)".
- "BBC says it will still support both high-def formats". Archived from the original on January 20, 2008.
- "First Look Brings 'King of California,' 'Amateur' to HD DVD; Adds Blu-ray Support".
- "Discovery Channel Brings 'Atlas' to Blu-ray, HD DVD".
- "Psst! Magnolia Jumps Into Blu-ray with 'Bubble'".
- "'Chronos' HD DVD Gets New Distributor; Blu-ray Version on the Way".
- Kageyama, Yuri (February 19, 2008). "Toshiba quits HD DVD business". Los Angeles Times. Associated Press. Retrieved March 25, 2008.
- Sabbagh, Dan (February 21, 2008). "How the Blu-ray war was won - Sony outspent, outsold Toshiba". The Times. London. Retrieved February 23, 2008.
- Smale, Will (February 19, 2008). "How the PS3 led Blu-ray's triumph". BBC News. Retrieved February 23, 2008.
- Grover, Ronald; Peter Burrows; Cliff Edwards (October 5, 2005). "A Warner Bros. Green Light for Blu-ray?". BusinessWeek. Retrieved January 14, 2008.
- "Paramount and DreamWorks Animation Each Declare Exclusive Support for HD DVD". Archived from the original on August 23, 2007.
- Barnes, Brooks (August 21, 2007). "Two Studios to Support HD DVD Over Rival". New York Times. Retrieved November 13, 2007.
- Blockbuster backs Blu-ray CNN, June 18, 2007. (Web archive)
- "Blackbuster Online - HD". Archived from the original on August 19, 2007.
- Paul, Franklin (July 26, 2007). "Target to sell only Blu-ray DVD players". Reuters.
- Waters, Richard Waters; Paul Taylor; Mariko Sanchanta (January 6, 2006). "Sony DVD move deals blow to Microsoft". Financial Times. Retrieved January 6, 2008.
- "Toshiba Defiant After HD DVD Setback". Associated Press. January 6, 2008. Archived from the original on January 9, 2008. Retrieved January 6, 2008.
- Adegoke, Yinka (January 14, 2008). "Toshiba cuts HD player prices in Blu-ray fight". Reuters. Retrieved January 15, 2008.
- Kessler, Michelle (January 14, 2008). "Toshiba turns up heat in DVD war with big price cut". USA Today. Retrieved January 15, 2008.
- Sung, Chinmei; Andy Fixmer (January 14, 2008). "Toshiba Cuts Retail Prices of HD DVD Players by 50%". Bloomberg. Retrieved January 15, 2008.
- Nystedt, Dan (January 28, 2008). "Gartner: HD DVD Price Cuts Only Prolong Agony". PC World. Retrieved January 31, 2008.
- "New Line Details Transition to Blu-ray". High-Def Digest. January 8, 2008. Retrieved January 25, 2008.
- "hddvd.com - New line titles delayed for HD DVD due to lack of region coding".
- "Digital Playground Switches to Blu". Archived from the original on February 27, 2008.
- Hansell, Saul (January 4, 2008). "Did Warner Bros. Just Kill HD DVD?". The New York Times. Retrieved January 5, 2008.
- Chmielewski, Dawn C. (January 5, 2008). "DVD format war appears to be over". Los Angeles Times. Retrieved January 5, 2008.
- "Pie Charts Show True Impact of Warner Bros. Move to Blu-ray". Retrieved January 7, 2008.
- Wal-Mart - Wal-Mart Moving Exclusively Toward Blu-ray Format Movies and Players
- Richtel, Matt; Eric Taub (February 16, 2008). "Taps for HD DVD as Wal-Mart Backs Blu-ray". New York Times. Retrieved February 15, 2008.
- "Best Buy to Recommend Blu-ray as the Customer's Digital Format Choice" (Press release). Business Wire. February 11, 2008. Retrieved February 12, 2008.
- "Netflix, Citing a Clear Signal From the Industry, Will Carry High-Def DVDs Only in Blu-ray Format". Netflix press release. February 11, 2008. Archived from the original on February 12, 2008. Retrieved February 11, 2008.
- Netflix Shuns HD DVD for Blu-Ray Format: Financial News - Yahoo! Finance Archived February 14, 2008, at the Wayback Machine
- "Woolworths backs blu-ray format over HD-DVD". Woolworths press release. January 28, 2008. Archived from the original on February 1, 2008. Retrieved February 8, 2008.
- Moskovciak, Matthew (November 7, 2007). "Format war fanboys shut down AVS Forum". CNET. CBS Interactive. Retrieved November 4, 2017.
- "Toshiba Announces Discontinuation of HD DVD Businesses". Toshiba Press Department. February 19, 2008. Retrieved February 19, 2008.
- Universal Ends HD DVD Support with 'Atonement' | High-Def Digest
- "Hollywood Reporter:Paramount seals Blu-ray sweep". Archived from the original on May 16, 2008.
- Paramount stops HD DVD production
- Arnold, Thomas K. (April 30, 2008). "Paramount unveils initial Blu-ray slate". Reuters. Retrieved May 1, 2008.
- Taub, James A. (April 23, 2009). "Rethinking Blu-ray". New York Times. Retrieved April 24, 2009.
- "Microsoft Pulls Plug on HD DVD Players". Associated Press. February 24, 2008. Archived from the original on February 26, 2008. Retrieved February 24, 2008.
- "Sony chews the Blu-ray fat with Microsoft". RegHardware.co.uk. March 7, 2008. Retrieved March 10, 2008.
- "Microsoft says no Blu-ray for Xbox 360". Reuters. March 13, 2008.
- Taub, Eric (April 30, 2008). "Blu-ray: The Future Has Been Delayed". The New York Times. Retrieved April 30, 2008.
- Lawler, Richard (April 16, 2009). "Analyst: '09 YTD Blu-ray sales double those of '08, 10.5 million Blu-ray households in the U.S." Engadget. AOL Inc. Retrieved July 24, 2014.