Feb 24 2008
In the 1980s, Sony and Matsushita engaged in a battle over VHS v. Betamax. Sony lost that battle but has emerged the victor in home entertainment fight club battle 2.0. Last week, Toshiba announced it would “no longer develop, make or market high-definition HD DVD players and recorders.”
In the early 2000s, the movie industry and the technology industry began a redux of the VHS v. Betamax struggle in creating a successor to the DVD player. The current DVD technology does not take advantage of the visual capabilities of high definition televisions. Given that the FCC mandated that all video signals would be in digital versus analog format, more and more consumers will have HD televisions in their home. Making components that match that increase in technology means more money for the entertainment business.
Toshiba’s abandonment of the HD DVD format came with the promise that it would continue to support the 1 million users worldwide that had already purchased an HD DVD player. It’s a cautionary lesson for early adopters.
The battle for high definition home entertainment came down to HD DVD (Toshiba/Miscroft) and Blu Ray (Sony and others). Initially Paramount and Warner Brothers released its content in both formats but Universal supported only HD-DVD and Disney, Fox and Sony supported only Blu-Ray. A Blu Ray Disc could only be read by a Blu Ray player and HD DVDs had the same limitations. Therefore, if you wanted the enhanced viewing of the high definition movies in your home, you had to buy one of each player. The devices were very costly, anywhere from $499 on up.
What’s the big deal? HD DVD and Blu Ray use blue lasers to read and write data versus the red laser that is used to read/write data in DVD and CDs. The blue laser has a shorter wavelength and allows more information to be placed on a single disc. The higher the resolution of a movie, the more memory space it takes up. A Blu Ray DVD can hold 5 times as much data as a traditional DVD allowing movies to be delivered in a much higher resolution.This battle for home entertainment supremacy is not uncommon. Not only was there the 1980s VHS v. Betamax battle, but in the 90s there struggle between the Super Disc and the Multimedia CD which ultimately led to a standard that became DVD. This meant that every DVD sold could be used in any DVD device on the market. It allowed manufacturers to create and sell varied DVD products. It allowed content providers to release only one format. It allowed consumers to rely on the useability of its content.
Warner announced it would switch to Blu Ray just as the 2008 Consumer Electronics Show was getting underway. This left Universal and Paramount as the two major content providers still on the HD DVD side. A couple of weeks ago, Wal-Mart put the nail in the HD DVD coffin by declaring it would only stock Blu Ray.
Why is it that the movie industry can realize, however slowly, that a unified format benefits everyone but the publishing industry cannot ? Sure, every major publisher and many technology companies belong to the IDPF which talks about a uniform standard and Warner is one publisher that is moving toward that, but the fact remains the the ebook market remains fractured. Sony device reads only proprietary Sony format. Kindle device reads only proprietary Kindle format. Bookeen’s Cybook reads only proprietary Mobipocket format.
The lack of a uniform standard adds increased cost to a digital product which might be one reason the prices of ebooks remain unnaturally high. For example, it costs $200 for a title to be placed in the Sony digital wrapper. Every other wrapper or format, whether it be Microsoft Reader, Kindle, or eReader, costs an additional amount. Assuming that each wrapper or format costs about $200 per title, it is easy to see the additional costs for a publisher or retailer can drive up the ebook price or at least justify keeping it at higher than reasonable levels.
It doesn’t make sense to me to have a retailer like Amazon dictate to a publisher the market for their product. Having an agreed upon standard that is open to other manufacturers creates competition and can serve to open the market for digital books, something that it appears publishers are dedicated to pursuing.
All it would take would be for the major publishers to say, like Warner has said, like Wal-Mart has said, this is the one we will be using to the exclusion of all others. The technology companies would then invest and perhaps invest at a greater rate than now because the uncertainty of the format wars might prevent entry into the market, particularly cheaper entries.
An end to the format wars is a win for publishers. It’s a win for consumers. It’s the one time that NOT being reactionary would actually be a safe move. If the publishers lead the way, the retailers and technology companies will follow and the digital book market will grow and enhance the book industry. The ability to share common content across platforms and devices is essential for the consumer and is a major barrier in the progression of ebooks.