Friday, February 15, 2008

Second Chance Victory a Bit Too Late

The folks at Sony have to be loving this. Decades after their technically-superior BetaMax VCR format lost the marketing battle with VHS (Video Home System), the advent of high definition television has given them a second chance. Their Blu-Ray format for high definition DVD disks is gaining lots of momentum against the competing Toshiba HD DVD standard. WalMart has just joined the list of companies that will only support Blu-Ray, a list that includes Netflix, Best Buy, and Warner Brothers. I now believe it is only a matter of a few weeks before the plug is pulled on HD DVD, and its supporters switch over to Blu-Ray.

Until their was a clear winner, there was never going to be mass acceptance of either. The studios and consumer electronics companies choose a side, leaving the consumer caught in the middle, and unable to watch programs from providers using the platform they didn't select. There is no doubt that the broad penetration into the market of the next generation of DVD has been hampered by these incompatible, competing systems.

I actually despise market-driven "standards" wars. I believe the reason AM Stereo broadcasting never took off was the fact that the FCC declined to set the standard, leaving four different and incompatible systems, to be deployed. As consumers didn't know what system would win, they stayed away, and AM Stereo is a non-starter. The FCC used to step up and do its job, as when they mandated radios over a certain price point include FM tuners; or when they mandated TV manufacturers to include UHF tuners. These decisions allowed broadcasters to expand services with the expectation that their programming could actually be delivered.

So now, it appears that like VHS before it, Blu-Ray will come out the champ, giving Sony a win in the next generation of home entertainment. However, it could also be a hollow victory. With broadband, satellite, and cable delivery of programming; coupled with "on-demand" programs; will we continue to be interested in getting programs on physical plastic disks? When you can plug an external hard drive into a DVR, building a virtually limitless library of programming, why do you want to store boxes of disks? It could be that the Blu-Ray win will ultimately be the last victory in the battle for dominance in the physical delivery of entertainment.

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