Economics and the mid-life crisis have much in common: Both dwell on foregone opportunities

C'est la vie; c'est la guerre; c'est la pomme de terre . . . . . . . . . . . . . email: jpalmer at uwo dot ca

. . . . . . . . . . .Richard Posner should be awarded the next Nobel Prize in Economics . . . . . . . . . . . .

Tuesday, June 28, 2005

Blu Ray vs. HD-DVD

As most of you know, there is a battle raging for format supremacy in the post-DVD world. The two major contenders are perennial loser, Sony (Beta, memory stick) with Blue Ray Disc [BD], and Toshiba with HD-DVD. The story is that Blue Ray is "better" [I think we heard this about Beta in the past] but that HD-DVD will be much cheaper to implement. Sony has lots of technical and computer-type firms aligned with it; Toshiba seems to have more movie studios aligned with it.

There have been talks between supporters of the two formats, but there has been no public appearance of any movement by either side.

Sony first made the suggestion back in April, in a bid to prevent not only a war between the two formats as each battles to win the favour of consumers, but also to limit HD DVD's lead in content availability. Pre-recorded movies on HD DVD are expected to ship in the US in Q4, just ahead of BD-based movies. And while the HD DVD spec is complete, some elements, such as copy protection, have yet to be finalised by the BD camp.

By late May, however, it was clear the negotiations were in deadlock, and so the principals brought in more senior staffers, including Kutaragi, to bring the discussions to a higher level. Once again, Sony's suggestion that HD DVD's data structure be incorporated into BD's, with BD providing the unified physical structure appear to have been rejected by Toshiba. To be fair, Sony hasn't been willing to embrace HD DVD, either.
So far the prognosticators have spent far too much time discussing technical merits and who supports whom. Not enough attention has been paid to what the consumers are likely to want. In the end (probably within 2-3 years) consumer sovereignty will anoint a winner. As Stan Liebowitz has shown for other technologies, there certainly is no reason to worry about path dependency. For his complete work in this area, see his Re-Thinking the Network Economy.

My own view is "enough already!" I have absolutely no desire to have to upgrade my meagre video collection once again. I'm quite content with our current DVDs. In fact, the new technologies befuddle me. But then it probably doesn't matter all that much to me, really; I don't watch very much on DVD; I mostly keep sports or music going in the background while I surf the net.
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