How long will HD physical media last?

We reported a couple weeks ago that Warner Bros Home Entertainment was going Blu-Ray exclusive once their contract with the HD-DVD collation was up. Despite Warner’s move HD-DVD is far from dead. Though HD-DVD is precariously on the edge of “losing” the HD disc format war. Even if one format wins out we should ask the questions: “Will the HD market go physical or broadband? If HD-DVD wins, will the lower priced players and uniform spec make the market successful? Can Blu-ray make the market better? Or are the IPTV technologies too attractive to keep HD discs strong?

Despite losing Warner HD-DVD still has Universal and Paramount. While both studios have declared their ongoing support since Warner’s announcement, Universal and Paramount have also neglected to state that they will remain exclusive to the format. Despite the situation with the studios HD-DVD is still the most affordable HD format currently available and has benefitted from a finished spec. Having all players work basically the same and have similar components has allowed HD-DVDs to have a much more unique and fulfilling home experience. Having a finished format with quality titles should be a great formula for calling in the SD-DVD format hold outs. The only hitch is the growing problem of selection. HD-DVD as of this article’s publishing has 366 titles available(39% of those being from Universal alone). The catalog of titles varies from classics like The Shining to sci-fi cult favorites like Serenity. The majority of HD-DVD’s selection seems hand picked titles chosen to garner the most in sales. Despite this, Blu-ray has been leading in sales both in hardware and in software.

Blu-ray is somewhat inaccurately being declared the winner of the HD format war. While that opinion is debatable lets discuss a few things. Unlike HD-DVD Blu-ray players vary quite a bit between brands and models. This is due to the still unfinished spec being handled by the Blu-ray collation. The most recent spec version is 1.1 which added more support for network aware Blu-ray discs and Picture in Picture playback. On some older players this spec version is impossible to install. Many early players and even some current stand alone players don’t have a network access port for upgrading the firmware or allowing for network access by blu-ray titles. However some manufacturers will be able to issue upgrade discs that the players can use to install new firmware. Even so spec version 1.1 will soon be replaced with spec version 2.0 and so on and so on. The only future proof Blu-ray player on the market is the Playstation 3. Why is all of this important? Well all these differences in hardware and software just leads to consumer frustration. Which doesn’t help the electronics salesmen who hear, “What’s a Blu-ray?” many times throughout their day. These non uniform specs also help add to the still high end price bracket of Blu-ray players.

Blu-ray’s catalog of titles is indeed larger than HD-DVD. There are currently 416 titles available for Blu-ray to date in the US. Blu-rays selection mainly surrounds newer or more recent titles than hand picked classics. This larger selection adds to the details on why Blu-ray has higher software sales. In standalone player sales HD-DVD and Blu-ray were nearly neck to neck until this past holiday season. Though the Playstation 3 adds in about 6 million more Blu-ray players it’s still unknown how PS3 has affected Blu-ray’s growing sales lead.

Now we ask the question, “Can Blu-ray make the HD Disc market successful?” If HD-DVD falls by the wayside it will be just Blu-ray in the market. A market that according to sales figures is still marginal even in the larger HD market. Blu-ray will have to promote the continuing tradition of going to the store and buying your movies on disc. When DVD came out it had better picture better sound allooked better on the tvs people still owned. Now roughly 60% of the market is still using SD televisions and are unable to see the key difference HD-media can offer. Even with 30% of the Television market having HD-Capable televisions, honestly how many are over 32 inches or even have HDMI ports? Then there’s the 2 other choices to HD discs. There’s SD-DVDs which despite some lagging sales still outsell HD media every week. Despite the lowered quality upscaling DVD players are extremely affordable and can present a very satisfactory picture on 32inch or smaller HDTVs. Then there’s online distributed media. For quite a while there has been downloadable TV and movies available over the internet either per play or via subscription. Just recently Netflix started offering unlimited streaming of their “watch it now service” and is close to releasing a stand alone home theater box for people without home theater PCs. And for roughly a year Microsoft ahs been selling HD Movie rentals over their Xbox Live Marketplace(Sony ahs been working on a similar service for the ps3 for sometime as well). And just this past week Steve Jobs announced Itunes movie rentals which will be compatible with Apple’s set top box the AppleTV(which has full support from nearly every major studio).

How can HD discs compete with almost instant gratification? The idea is to offer a superior and fairly priced experience. Every online HD movie service is still only offering 720p quality. HD-discs have all been formatted at 1080p. Unfortunately 1080p capable televisions are still a smaller portion of the HDTV market. As more 1080p capable TVs come down in price that portion will of course grow but who’s to say that the need for physical media won’t already be dissipated? In my opinion it will all depend on the US’s rollout of true broadband internet.

In other countries like Japan, IPTV is going strong and offering thousands of programs 24/7. Here in America our larger land mass and lack of corporate desire to expand our networks seems to be stifling the true high speed internet revolution. Our nationwide networks just vary too much in size and spectrum. Some cities only get Comcast and others barely have any service over 768k down. So on that end HD discs can and still lead the movie industry in the home market.

The point is now that the format war could be ending in a couple years the physical disc market will need to adapt quickly to keep consumers interested before other more fortuitous prospects start becoming the better standard and gain more support from the studios.