How HD-DVD Can Get Its Groove Back

Warner Drops A Bomb On HD-DVD, Baby

After Warner’s cataclysmic announcement at the Consumer Electronic Show — where they announced that they were abandoning their platform-neutral position and going steady with Blu-ray — things looked pretty grim for HD-DVD: With Warner’s defection (most certainly a very big-dollar bribing on the part of the Blu-ray consortium), HD-DVD would now be targeted by only 30% of releases, versus Blu-ray’s 70%.

HD-DVD for the win!

HD-DVD's fate seemed to be sealed, made worse by a flurry of misinformation and FUD following Warner's announcement, spreading rapidly across the “got-my-news-from-a-little-birdie” blogosphere (rumoring that Universal, Paramount and the apparently all-important adult industry were going blu, though of course that hasn't come to pass…yet, at least).

HD-DVD seemed to be a short-lived format doomed to die a “Betamax” death.

[Psssst…a little birdie told me that 20th Century Fox is on the verge of switching sides, abandoning Blu-ray in favor of HD-DVD. Don't tell anyone I told you!]

Ebay filled with early adopters trying to unload their gear before buyers got wise.

Maybe those people are right and their pennies on the dollar was the best economic evacuation they could hope for. Maybe HD-DVD really is doomed.

Or maybe they're wrong. It wasn't that long ago when Universal's decision to go HD-DVD was declared a "death blow" for Blu-ray, and of course we know that the blu lived to fight another round.

How We Got Here

Let’s take a step back and look at the whole picture for a moment. The following is a rough graph of current market penetration for the various formats.

HD-DVD Marketshare

The point of the above pie chart is simply to demonstrate that the vast majority of consumers haven’t even made the switch yet.

This is a significant point when considering claims that consumers have chosen one format or the other, as was Warner's guilty plea when asked to explain their actions. 

A small group in a small subsection of the market with a skewed demographic would decide things for everyone.

That's where the high-definition video race is right now: A million or so HD-DVD players, plus the add-ons to the XBox360, along with the millions of PS3s with their built-in Blu-ray, along with several thousand stand alone units, would decide the market for every Joe LateAdopter across the land.

Of course that's a ludicrous way for it to play out, though it seems to be the course the industry is taking.

Which brings us to an obvious question: So why haven't consumers made their vote, given that the contest has been going on for a couple of years now?

DVD Is Good Enough For Most Users

The answer is obvious – to most consumers, DVD is more than adequate for their movie viewing needs. Not only is DVD adequate, it's generally the high-point of their visual experience. An experience that is dominated by pixelated overcompressed online videos and cable companies that hyper-compress hundreds of channels onto too thin of a pipe, with so many visual artifacts one expects some tomb raiders to bust in and steal their set.

DVD is pretty much head and shoulders and torso above the rest of the crowded class of commonly consumed video options. Recently Apple has made strong inroads in the digital video delivery market, pushing out so-called high-definition at far lower than DVD bitrates. Few are complaining, so obviously they've passed the bar that most consumers consider good enough.

This is why sales pitches based upon high bit rates and 6x the pixels just aren't compelling to most consumers, and most just sat on the sidelines unsold on the advantages. When you're watching standard definition 4:3 television — often hilariously showing letterboxed content in a hilarious pseudo-high definition attempt — stretched out on your 52" 16:9 TV, running the sound through some low-quality "virtual surround sound" speakers, the Mbps of the media just isn’t compelling. Add the fact that most high definition media is only high definition media, which is a no-sale to consumers that want to play the same disc on their laptop, their computer, the old entertainment unit in the basement, and the SUV (though this is one of several areas where HD-DVD has a pronounced advantage — the only high-def discs I’ve purchased have been combo discs, a purchase criteria having nothing to do with faith in the longevity of the format)

So who did put on the battlegear and takes sides in the high def war if most consumers sat on the sidelines?

Legions of Freecenaries

On the Blu-ray side the army is largely made up of accidental enlistees, and it has been a brilliantly played strategy on the part of Sony-

  • Playstation 3 gamers — the PS3 has been a failure for Sony from a gaming marketshare perspective (if software makers dumped platforms based upon marketshare in the gaming market, the PS3 would be in much worse shape than HD-DVD), but it's been an incredible triumph in securing dominance in the next generation optical media battle, lending to the fact that the market is so immature right now that smaller numbers can make a big impact. While millions of PS3s are small stuff in the overall gaming world, it is a huge boost for Blu-ray media even if only a fraction ever decides to try out the player. Not only did the PS3 sneak Blu-ray into millions of homes, many adopters put on the colors of their adopted hardware and went forth to battle for Blu in message boards across the land.
  • Technology zealots and advocates in various camps — Apple simply had to declare a non-committal lean towards Blu-ray for the Apple camp to almost universally start rallying for Blu-ray, which is a bias that oozes out of every Apple-focused blog or advocacy group.
  • A small group of -philes who really are convinced that Blu-ray's higher per layer and maximum bitrate advantages are important.

Who's fighting on behalf of HD-DVD, then?

  • Toshiba enthusiasts — err… Toshiba is a big, square electronics company that steadily produces excellent electronics and computer hardware, but they garner little passion among their users.
  • Microsoft enthusiasts — err… Microsoft's half-hearted support of HD-DVD is more likely to earn it detractors than supporters.
  • Xbox360 games — Not really. It's an add-on that only a very small percentage has purchased, so it holds little influence in the community.
  • Intel enthusiasts — err…

HD-DVD was, from the outset, at a massive disadvantage from an advocacy perspective, lining up partners with few zealots or "fanboys". Sony, on the flip side, played it absolutely brilliantly, getting cheap words of support that would garner them automatic armies of supporters.

Whenever a debate about the formats broke out, legions of supporters and fanboys would appear to cheer on the blu, opposed by an ambivalent, "meh" squadron of "let's balance things out" HD-DVD defenders.

Get enough of the low-level buzz and eventually you'll get to someone higher up the chain, such as the curiously lauded Michael Bay, producer and director of films such as Pearl Harbor and Transformers, who came out swinging against HD-DVD. Later he recanted, declaring that he'd been under siege by a gaggle of blu-ray fanboys over a nigh of drinking, to the point that he capitulated to their advocacy. It should be mentioned that as a hilarious twist Transformers is a fantastic HD-DVD disc, demonstrating all of the great features that HD-DVD has had for years, that Blu-ray might possibly get…maybe…sometime in the future. (Check out the Transformer's HUD)

It's a strategy that technology companies should watch and learn from.

The HD-DVD camp just hasn't played it well at all.

How HD-DVD Can Get Its Groove Back

Nonetheless, there's still a very small chance that they can turn things around, so here's my software-architect-playing-consumer-electronics-guru perspective on how the HD-DVD camp can win things.

  • Make HD-DVD players disposably cheap, which is something that Toshiba just did. You can now get a fantastic HD-DVD player that doubles as an insanely good upscaling DVD player for about $150. Even if Paramount and Universal abandoned ship tomorrow, you'd still be able to choose from 1000 or so available HD-DVDs (buying them cheap on ebay after the exodus that would occur), and have a much better experience with your existing DVD library. You can even burn your own mini-HD-DVD disc on DVD9 discs with products like Nero 8, taking advantage of MPEG4 and some of the cool interactivity features of HD-DVD.
  • Make it hackable. The Toshiba HD-A3 is a very powerful little unit with built in Ethernet, TCP/IP, dual MPEG4/MPEG2 video stream decoders, HDMI and optical outputs. This thing would kill if I could use it to browse and play from iTunes servers and uPnP media devices in my home (or online…give me an internet radio player). The flash update ISO for this thing came it at over 40MB, so it clearly has a lot of capacity for expansion. With a healthy contingent of hackers and modders on their side, HD-DVD would have a lot more influence among early adopters, and would be a sure-win multipurpose member of the home entertainment stack.
  • PUSH FEATURES MORE LOUDLY THAN QUALITY. The reality is that Blu-ray does have a slight lead from the quality perspective (with more storage per layer, and a higher max bitrate), albeit at an unreasonable cost (namely much more expensive hardware and media, coupled with less flexibility, such as the lack of blu-ray combo discs), but that really doesn't matter — it is doubtful a fanatic could tell the minor theoretical difference between HD-DVD and Blu-ray, but that ignores the point that most buyers can't even tell (or rather don't care to tell) the difference even between DVD and the HD formats.

    This is why the features of the format should be the focus. Not just because HD-DVD soundly trumps Blu-ray in this department, but because that would really sell to the average consumer: Overlaid menus during playback, picture-in-picture special features, popup information — this stuff is gold, and most consumers still know absolutely nothing about these advantages, instead being pounded about 6x the pixels and "crystal clear" sound.

If Toshiba has the bank balance and stock to supply the market at these incredible prices (let me repeat that the HD-A3 makes an amazing upscaling DVD player. Upscaling is like those cheesy police movies where they take some grainy convenience store video and "process" it to the point that they're analyzing the culprit's retina pattern. Only here in the real world it's not quite as ridiculous, but the HD-A3 still manages to eak out an HD-like image out of the limited DVD-data, doing much more than simply pixel multiplying or naive aliasing), then HD-DVD might just have a chance.