BusinessWeek: ‘it looks as if HD DVD’s days are numbered’

“Every July, 400 of the most powerful media and tech industry chieftains meet at investment banker Herb Allen’s conference in Sun Valley, Idaho, for what are usually convivial discussions of megatrends and megamergers. But this year, Microsoft Chairman Bill Gates III laid into Sony Chief Executive Howard Stringer, according to two sources, including one who witnessed the exchange in a private room,” Cliff Edwards, Peter Burrows, and Ronald Grover report for BusinessWeek.

“Gates argued that Sony’s new high-definition DVD standard, called Blu-ray, needed to be changed so it would work smoothly with personal computers running on Microsoft’s Windows operating system. Stringer and two lieutenants defended the technology, insisting Blu-ray would work fine in PCs,” Edwards, Burrows, and Grover report. “Yet Gates’s ire only grew. ‘There must be something much deeper going on,’ Stringer said later, according to another person who heard the comment.”

“Despite the backing of the PC industry’s two biggest titans [Microsoft and Intel], it looks as if HD DVD’s days are numbered,” Edwards, Burrows, and Grover report… Sony appears to have a critical mass of support for its [Blu-ray] standard… A major factor swaying these companies is Blu-ray’s massive capacity. Its disks will hold at least 50 gigabytes and perhaps 100 gigs or more. HD DVD will start at 15 gigs, and top out at 45. ‘We want a standard that’s going to be around for 10 or 15 years,’ says one studio exec… Why is so much vitriol spilling from behind closed doors over one tech standard? The shiny little disk that Gates and Stringer tangled over has the potential to alter the landscape of the entertainment and technology industries.”

Excellent full article that explains the whole Blu-ray vs. HD DVD “war” here.

Related articles:
China to develop own as-yet-unnamed DVD format; Blu-ray vs. HD DVD vs ? – October 07, 2005
Paramount’s decision gives Blu-ray slight lead over HD DVD in next gen DVD format war – October 04, 2005
Record set straight on Blu-ray Disc Association’s superior high definition format – September 29, 2005
Microsoft backs cheaper, less sophisticated, lower capacity HD DVD over Apple-backed Blu-ray format – September 27, 2005
Twentieth Century Fox joins Apple, Dell, HP, others to support Blu-ray Disc format – July 29, 2005
Poll shows Apple-backed Blu-ray preferred by consumers over HD DVD for next-gen DVD standard – July 14, 2005
Microsoft allies with Toshiba on HD-DVD vs. Blu-ray Disc backers Apple and Sony – June 27, 2005
Apple joins Blu-ray Disc Association Board of Directors – March 10, 2005

44 Comments

  1. “It’s all about VC-1. HD DVD has it, Blu-Ray does not.”

    As I understand it–and from the article–Blu-Ray will support VC-1 as well as H.264. Conversely, HD-DVD will only support VC-1.

  2. Quote from article:
    “A Microsoft spokesman acknowledges that Gates and Stringer talked at the conference, but says things did not become “heated.” “

    Just like Ballmer never threw his chair and said he would “fscking kill Google”

    Nice boys, these Softies.

  3. Nice to hear how visibly upset Gates has become. He insists on setting the hardware and software (co-dec) “standard”, not the other way around. It looks like Sony and other big entertainment content providers are going with Blu-Ray. Apple continues to lead, not follow, as the entertainment industry as a whole are adopting flexible standards independent of Micro$oft’s paths. I expect the final nail in the coffin to be set soon.

  4. PC Apologist: Why do you stick around here? It’s clear you’re not a common troll, so there must be some reason. Is it out of sheer stubborness? Are you obsessed? It’s obvious you have little respect for the site or its readers, so why don’t you leave?

    Get it through your head: THIS IS A @#$%IN’ MAC FAN SITE!! Of COURSE we’re all “rah-rah Mac”! Of COURSE we’re all “Microsoft sucks”! If you want unbiased news coverage, go to a general news site.

  5. Gates gets visibly upset pretty easily. He and Ballmer are very ‘sympatico’ in that regard.

    Pertinent quotes from the article:
    “A major factor swaying these companies is Blu-ray’s massive capacity. Its disks will hold at least 50 gigabytes and perhaps 100 gigs or more. HD DVD will start at 15 gigs, and top out at 45. “We want a standard that’s going to be around for 10 or 15 years,” says one studio exec.”

    First, if each BluRay layer can hold 25Gbs, and a triple layer disk is all that’s reasonable to expect they can make (a] because HD-DVD tops out at 3 layers, and b] BluRay group hasn’t even made a dual layer version yet that can be manufactured), then the most anyone should expect from BluRay is 75Gbs. Nice, but a far cry from “100 gigs or more”.

    Second, what standard is realistically going to be around for a decade or more in the climate of technological change that we live in today? It’s just plain stooped to think BluRay, in any from we recognize now, will be on top in 2015. By that time, video streaming or high capacity, non-volatile flash memory (of just the technologies that we can predict) will make optical disks look quaint.

    “Sony’s people have “bet the entire future on this,” says analyst Michael Pachter of Wedbush Morgan Securities. “It’s too important for them to lose, so they will do everything they can to win.””

    That’s what this is really all about. FUD in the service of one side’s bottom line, not a rational accounting about which technology actually makes more sense – economically and technologically – to invest in.

    As for why BluRay seems to have so many adherents besides the principals:
    “In July, Sony decided to refine the Blu-ray standard in a way that would have far-reaching implications … Sony wanted to win the support of Twentieth Century Fox Film Studios, long Hollywood’s leading advocate for tough anti-piracy measures. So Sony agreed to add safeguards developed for Fox by San Francisco’s Cryptography Research, which could prevent Blu-ray movies from being ripped to a computer’s hard drive. … Fox execs say their decision became a no-brainer, because of the extra protection …”

    This probably why Apple is on board too. They likely figured it was a good strategy to lick these studios’ boots in any way possible when it came to DRM, in order to get access to their content for the ‘iVideo Future’ Jobs wanted. In fact, a disk that made streaming more difficult dovetails nicely with Apple wanting to establish an online video download business (“Sure it may take a while to download content, but at least you can stream it from your hard drive!”).

    With Universal’s recent decision to go it’s own way with downloadable content (and the probablility that the other studios will do the same), all of the toadying to them was for naught in Apple’s case. But the fact that BluRay disks will really lock down the content was and is a huge incentive for the rest of the industry – the economics of actually making the thing be damned. After all – they can always pass along the costs (not to mention the hassle) to us law-abiding customers. Right?

    I’ve said it a milllion times, but forgive me – for the consumer, and for producers who realize that optical disks probably won’t be the ‘consumer’s choice’ for decade, HD-DVD makes MUCH more economic sense. It’s a tenth of the cost to produce, it has higher capacity versions that aren’t just ‘vapor’, and – since a 2+ hour HD movie will fit comfortably on a 15GB disk – the dual/triple layer versions will also hold all the content any HighDef release will ever need.

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  6. LordRobin, I, for one, am not bothered by PC Apologist. Why do you let him/her bother you.
    I could even see myself saying “Rah Rah; Apple’s winning, Microsoft’s losing. Can we get past the cheerleading and look at the actual implications of these technologies?”

  7. I would prefer Blu-Ray to win… if only because of its capacity and nothing else.

    HD-DVD doesn’t offer enough capacity above existing discs to really be considered a serious contender for the next 10-15 years, especially for computing needs.

    I was caught thinking about the leap from floppies to CD, and then from CD to DVD. Do we really want to make an incremental leap now when we can make a larger leap instead?

    Floppy (is it really work mentioning at all???) 1.4Mb
    CD – 700Mb = ~450 floppies
    DVD – 4.7/8.5Gb = ~7-12 CDs

    New contenders:
    HD-DVD 15/30Gb = ~4-7 DVDs
    or
    Blu-Ray 50-100Gb = ~10-20 DVDs

    (I hope I’m right on the numbers… I was kinda averaging it out, but it’ll be roughly correct.)

  8. This is a classic management vs engineers situation.

    Here we have some obviously brilliant engineers on both camps designing and building the next generation of optical storage, both with differing points of view (one is compatibility/low-cost, one is higher storage). Clearly, both sides have succeeded in accomplishing their goals.

    However, now it’s down to a management decision as to which will end up being used in the marketplace.

    To the losers:
    “I see only B and C players here… “

    (note that whilst Sony lost out with Betamax, my understanding is that the technology wasn’t totally wasted – I heard the Video8 format was based upon it, albeit shrunk down)

  9. Hey PCApologista, Not to bash MS too badly, but please, give me a break. BlueRay intends to reduce fair use rights? HA HA! MS has all but promised the major studios that their DRM will put the wraps on any fair use. MS wants the same thing the studios do, a rental model for EVERYTHING, insuring a constant revenue/profit stream that will continue forever without ever having to do another once of work.

    The technology itself on either side doesn’t seek to limit anybodies fair use. That comes from the twinAAs, RIAA and MIAA, with a healthy dose from BSA (Business Software Alliance, not boy scouts) and of course MS.

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