What's New for 2006

Page 3 of 8

Blu-Ray vs. HD-DVD

Get ready for the next generation of DVD. Unfortunately, a nasty format war will make purchasing a new player rather complicated.

Recordable Blu-ray and HD-DVD discs will store hours of HD video.
Recordable Blu-ray and HD-DVD discs will store hours of HD video.
Just when the whole DVD thing seemed too good to be true--$30 players, $10 movies--the industry decided to up and change everything. You shouldn't be surprised: The music industry essentially did the same when it introduced CDs in 1981. But think about it: Would you really want to listen to a cassette audiotape today? Probably not, and by this time next year you may start to feel the same way about your current DVD collection.

Why the change? The next generation of DVD technology will hit the United States in 2006 to handle the demands of high-definition TV. Two new DVD formats--Blu-ray and High-Density DVD (HD-DVD)--will deliver unparalleled picture clarity for home-recorded content, since they are designed to record high-definition television (HDTV) with no quality loss. What's more, the formats will permit far more data storage than is possible on today's DVDs. Blu-ray discs will hold either 25GB or 50GB of data, depending on whether you use single- or dual-layer discs. HD-DVDs will be 15GB and 30GB. With 25GB of storage, you can record 2 hours of HDTV content or 13 hours of standard-definition television fare. These new discs will allow moviemakers to store high-def films with more room for extras.

But as is the case with so many new technologies, there are some issues. First and foremost, the two next-generation DVD formats jostling for market supremacy are incompatible. If you put on your early adopter hat here, you may find some rough times ahead. For starters, the major movie studios and the consumer electronics manufacturers have divided, aligning with one or the other format. So if you buy a first-version Blu-ray player, you'll be able to watch movies such as The Chronicles of Narnia: The Lion, The Witch, and The Wardrobe, from Walt Disney Studios, but not The Bourne Supremacy or Chronicles of Riddick, which are property of Universal Studios, a company aligned with HD-DV

Many observers give the early edge to Blu-ray, with its greater storage capacity, impressive lineup of supporters, and plans for intensive marketing. HD-DVD was supposed to ship in late 2005, but the original release date has now slipped to early 2006, eroding much of the format's first-to-market advantage. One plus for HD-DVD: Its discs are the same physical size as current DVDs (Blu-ray discs are slightly thinner), meaning that creating blank discs and players will be easier and cheaper, which may endear the technology to manufacturers a bit more.

Don't get too upset about the format war, however. Few studios have signed exclusive pacts with either side. And if one format jumps out to a commanding lead, most studios will surely begin offering movies that play in it.

A final thing to watch: Though both Blu-ray and HD-DVD will incorporate the AACS content protection scheme, their policies may differ on a portion of AACS called "managed copy," which would allow consumers to make a limited number of copies of their discs for personal use or backup. Both formats will support managed copy, but at press time the HD-DVD camp had committed to making managed copy mandatory on its discs, while the Blu-ray contingent had not.

No manufacturer we contacted would disclose pricing for its next-generation players, but analysts expect the first versions to sell for about $1000. That price is likely to drop significantly by the end of 2006, due in part to Sony's launch of the PlayStation 3 (see page 110). This gaming unit, which will use Blu-ray technology, is expected to cost less than $500. Its predecessor, the PlayStation 2, helped force a DVD player price drop when it debuted with DVD functionality, and the PS3 will probably have a similar effect.

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