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Glass Houses: CES 2006 and the Push for HD on Disc
Posted Jan 24, 2006 Print Version     Page 1of 1

Pay off the Christmas Visa bill now, because even though you may have purchased a portable DVD player or a Playstation 2, it's already outdated; perhaps even before your bill arrived. Every year, the latest and greatest technologies are exhibited at the Consumer Electronics show in Las Vegas the first week in January. This year's four-day show attracted more than 150,000 attendees and 2,500 exhibitors.

In addition to Playstation 3, the star of the show was HD DVD and Blu-ray. Toshiba shook the Vegas foundation when they introduced an HD DVD player for $499, way below what most industry analysts were predicting. The finalization of the Blu-ray spec was announced. Several studios who had previously announced alliances, announced specific titles. Sony unveiled manufacturing plans with the first Blu-ray discs scheduled to run off lines in Japan next month. In all of this excitement, my question is … are we really ready for a new disc?

Before I even begin giving impressions of high-definition at the show, it's important to point out that the biggest obstacle right now for both formats is licensing for copy protection. Industry sources told me that it's a problem because without the licensing, players can't be finished and you can't provide the proper encryption for mastering either. A meeting is scheduled for the first week of February, and all parties involved hope these issues will be worked out.

Back to the issue at hand. When I say, are "we" ready for a new disc, I mean consumers, primarily, but I also mean disc manufacturers. Let's take it piece by piece. Consumers are very excited about their high-definition televisions. In fact, the Consumer Electronics Association says that HDTV sets will outsell analog sets by 89 percent in 2006, reaching total unit sales of 15.9 million. Reports about celebrities' disgust with the pristine broadcast of their facial wrinkles were abundant during the holiday buying season, but the sets kept selling. Much to the chagrin of my 12-year old daughter, I'm always thinking in terms of a story. So, I took a very unscientific survey at a Christmas party given by a friend of mine who just bought a very expensive, HDTV set. When I asked if anyone knew about blue laser discs, everybody at that party aked, "Will the quality will be better than DVD?" Not the answer I'd been hoping to get.

What about replicators? Are they ready to roll with a new format? Certainly all of the replicators I know have been reading the press and attending shows. Most of them are happy that there is another physical format on the horizon, but many if not most are not looking forward to the equipment purchases they will have to make. Which brings me to another question: Is there equipment to be purchased? Are the processes really fined tuned? When I ask these questions, companies dodge me left and right. Are they afraid of tipping their hand? Or are they not sure of the answers?

If you remember, just a few short years ago, DVD became the fastest-growing consumer format ever. Why? The competing format camps came together and decided to compromise on one format. I remember going out to the Cinram plant, then to the Warner plant in Olyphant, Pennsylvania, where they were training their competitors to make DVD. I sense no such cooperation with Blu-ray or HD DVD. I may be wrong, and by writing this I may get people mad enough to fill in the manufacturing blanks.

Singulus is not ready to talk, and I've also done some interviews with GE Plastics about using Noryl instead of polycarbonate. I've heard that there is controversy over whether spin coating or film lamination is most efficient. Although in their press release Sony says they will use the spin process, have any of these questions totally been answered? Degussa, for example, is still banking on film lamination.

I spoke to a few replicator friends who attended the show. I got very different answers from them as to the level of excitement surrounding high-definition formats. They did not want their quotes to be attributed. However, one manufacturer said, "My personal perspective is that I cannot see any non-tier one replicator even thinking about HD or BD this year. The ones that would be interesting to me would be the tier-1A replicators (i.e. JVC, Sonopress). I think the whole HD business is crazy. It would be difficult enough for a unified format to come even close to the success of DVD, but two formats? I've yet to hear anything about either format that gets me, as a consumer, at all excited. From an industry perspective, I hope I'm wrong."

I tried calling JVC and Sonopress. They really didn't have much comment for me this time although in the past sources at both companies expressed belief that a higher-definition format would "take off" quickly. Another replicator was totally positive. "I think replicators are nervous about the new formats because they are going to have to make a big investment but I think they are pretty comfortable with being able to manufacture HD DVD discs. Equipment is in place, front-end and mastering systems are there, and a lot of replicators are experimenting."

CEA spokesperson Megan Pollock says many have tried to compare what is going on in high definition to the VHS/Beta wars. But this battle is different. "When VHS and Betamax came out, no one had content. It was about the technology. This time, there are content guys lining up on either side. Content is going to be the driver. If your main interest is Disney, you'll buy Blu-ray, but if it's Microsoft, you'll be looking at HD DVD."

Pollock agrees that a lot consumer education will be needed, but says that with or without that education, ultimately consumers will simply demand discs that can deliver the same video quality as their HDTVs. "They already like the broadcast content, but now they want everything to look like that," Pollock says. "It seems unfair to have to go out and purchase a DVD. It's downgrading. I think consumers are ready for this!"

Don't get me wrong--I'm excited. I love new technology. But I have one question that goes beyond video. Will the music industry get in on this, or will they let this new format slip through their fingers? I still have hope for 5.1 Audio (Listen to "Bohemian Rhapsody" in 5.1 and you'll be hooked, too). But will video enthusiasts push the audio envelope, too, and compel the manufacturers and content providers to do likewise?

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