Daniel Eran Dilger
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Lessons from the Death of HD-DVD

Daniel Eran Dilger
Over the last few months, HD-DVD appeared to rapidly fall from its apparent position as promising new disc format–touted by supporters as being technically superior, significantly cheaper, and less restrictive–down to a harsh new reality of scheduled death. However, the fate of HD-DVD wasn’t nearly as unpredictable as some seemed to think. Here’s why HD-DVD’s end should not have been a surprise, what lessons can be learned from its death, and what its demise means for Microsoft.

Auf Deutsch: Lehren aus dem Tod der HD-DVD
Übersetzung: digital express

A New Format War.
Six months ago, I presented the format war between HD-DVD and Blu-Ray as a skirmish on the edge of the console video game business. Through the end of 2007, both HD formats had failed to sell more than a few hundred thousand standalone units, leaving HD discs a collective failure on the order of Microsoft’s Zune music player.

While standalone HD disc players languished in the market throughout 2007, Sony advertised Blu-Ray in its PlayStation 3 game console as Microsoft pushed HD-DVD on PCs with support built into Windows Vista and sold a low priced external HD-DVD drive option for the Xbox 360. This appeared to give Microsoft and HD-DVD a strong edge in the market, as it had the monopoly power of Windows behind it.

Both companies wanted to control media playback in the emerging market for HD video, just as they battled to control audio playback a half decade prior, when Microsoft had pushed its PlaysForSure Windows Media Audio players against Sony’s ATRAC Walkman hardware; both efforts lost out to Apple’s iPod. In the new HD video market, Microsoft again wanted to push its Windows Media codecs while Sony wanted to establish its blue-violet laser technology.

Blu-ray vs HD-DVD in Next Generation Game Consoles

Blu-ray vs HD-DVD in Next Generation Game Consoles

The Format War Origins.
Since Sony had no rival video codec software to push, and Microsoft had no real hardware interests to defend, why were they battling for the next generation of video discs rather than working together on a joint standard? Initially, Microsoft did work with Sony. However, the rest of the industry working with Sony on Blu-Ray rejected portions of Microsoft’s technology, sending the company into a furious rivalry against Blu-Ray.

A follow up article on the origins of the format war presented Microsoft’s efforts to push its Windows Media and WinCE as essential, proprietary aspects of both the new HD disc formats. While Microsoft successfully wrote Windows Media (aka VC-1) into the specification of both Toshiba’s AOD and Sony’s Blu-Ray, the Blu-Ray consortium members later selected Java-based technology from Sun as its interactive menu layer rather than Microsoft’s WinCE/HDi.

Origins of the Blu-ray vs HD-DVD War

The Early Lead of HD-DVD.
Years earlier in 2003, the DVD Forum had selected Toshiba’s AOD format as the successor to DVD because the company promised it would be finished sooner than Sony’s Blu-Ray; the Forum subsequently renamed Toshiba’s format HD-DVD to associate it with DVD, while Sony continued work on Blu-Ray.

At the time, Sony’s efforts looked significantly behind. Blue-violet lasers were already expensive, but Blu-Ray also required retooled manufacturing lines. HD-DVD promised to reach the market faster and cheaper due to its similarities to DVD player assembly as well as support from Microsoft on the PC desktop and in its first-to-market Xbox 360 game console. Microsoft had also sold Disney CEO Michael Eisner on HDi and Windows Media DRM.

It appeared that Microsoft had time, technology, and studio deals all on its side, while Sony’s Blu-Ray was falling behind, more complicated, and lacked support from studios. Those same problems had spelled death for Sony’s UMD, a proprietary mini-DVD disc designed for use on the PlayStation Portable. Blu-Ray was also frequently compared to Betamax, which had fallen to JVC’s VHS format in the 80s after a prolonged format war that confused and irritated consumers.


Movie Studios vs. Consumers in Home Theater
Format Wars in Home Theater

A Reversal of Fortune.
A series of industry shifts resulted in a weakening of the initially strong presence of HD-DVD long before consumers could even select between them. In 2004, Sony bought MGM. The next year, Eisner left Disney and the company’s ties to Microsoft began to wane. That shifted major studio support towards Blu-Ray.

By the end of 2004, it was also obvious that Toshiba wasn’t going to deliver HD-DVD a year ahead of Blu-Ray as promised. The rest of the industry also began to view Blu-Ray as a more credible format despite the DVD Forum’s official blessing for HD-DVD. Sony had developed hardware partnerships with every major hardware manufacturer, while Toshiba was the only significant manufacturer of HD-DVD players.

Through 2005, Toshiba continued to struggle with HD-DVD. The components required to to render HD video and display Microsoft’s HDi were similar to a low-end PC, and cost roughly $675 just for the bill of materials. That left Toshiba with a major hardware loss when trying to sell the players at a $500 consumer price target. The company was ready to drop HD-DVD that year and join the Blu-Ray consortium, but Microsoft pushed it to continue.

The first HD-DVD players weren’t ready until early 2006. Blu-Ray players debuted just weeks later, priced closer to $1000. By the end of that year, Microsoft began selling an external $200 HD-DVD player for the Xbox 360, just as Sony introduced its PlayStation 3 with an integrated Blu-Ray player.

Five Ways Apple Will Change TV: 5 Eisner: the Bronfman of Movies
Why Low Def is the New HD

HD War Games.
By the end of 2006, Microsoft had shipped ten million Xbox 360s to stores, while Sony had only sold a few hundred thousand units of the new PS3. However, Microsoft only sold a limited number of its optional HD-DVD drives to Xbox users, while every PS3 shipped with Blu-Ray capabilities.

Compared to standalone HD disc players, Sony’s PS3 not only offered the cheapest Blu-Ray system, but also did a variety of other things, including media downloads and of course games. Throughout 2007, Sony shipped nearly as many PS3 units (6.5 million) as Microsoft sold Xbox 360s (7.3 million). Again, every PS3 played Blu-Ray, while only a small number of Microsoft’s console buyers opted for the HD-DVD option.

Many PS3 buyers were buying them, not as game machines, but on the recommendation of sales people because it was the most economical Blu-Ray player. That surge of Blu-Ray players began creating a market for HD discs that greatly outnumbered the few hundred thousand HD disc players sold outside of the PS3.

Video Game Consoles 2007: Wii, PS3 and the Death of Microsoft’s Xbox 360

Video Game Consoles 2007: Wii, PS3 and the Death of Microsoft’s Xbox 360

The War on Microsoft.
While the PS3 pushed the Blu-Ray format over the goal line, the entire industry outside of Microsoft, Intel, and Toshiba was lined up behind Blu-Ray. There simply wasn’t any realistic chance that HD-DVD would prevail. This wasn’t a simple physical format war like the old VHS and Betamax rivalry; also at stake were the future of video codecs and embedded interactivity development. This was a battle for software and open markets that went far beyond HD disc movie playback.

Companies like Apple and Sun, neither of which had expressed any interest in building or selling HD discs, were unitedly opposed to HD-DVD because it meant Microsoft would expand its proprietary control over video codecs and the embedded software runtime used for interactivity. The industry in general has actively been pushing to rid itself of dependance upon Microsoft controlled standards.

Ten years ago in 1998, Apple, Sun, IBM, Netscape, Oracle, and Silicon Graphics all collectively backed QuickTime against Microsoft’s ASF as the new container for MPEG-4. ISO members subsequently selected QuickTime over ASF and set in motion the development of open standards for mobile, disc, and high definition media distribution using a standard set of codecs collectively maintained by the entire industry rather than beholden to a specific company.

Since then, Microsoft tried hard to push ASF, derail MPEG-4, and even created its own bastard version of MPEG-4 codecs under the name Windows Media 9. It also worked hard to establish its proprietary audio codecs in the field of portable media players. When those efforts all failed, Microsoft ran WM9 though a sham standards process that rebranded it as VC-1, and set up a satellite group of “partners” to advocate it, all of which were owned or directly controlled by Microsoft.

None of these efforts hid the reality that Microsoft wanted to simply duplicate in media what it had done to the PC desktop: copy existing technology, add proprietary hooks, and then sit back and tax the industry with software fees without adding any value. After having been burned repeatedly, the rest of the industry is now ready to shoot down every effort Microsoft makes to enslave innovation and progress.

Microsoft's Plot to Kill QuickTime

Microsoft’s Plot to Kill QuickTime

Misinformation Wars.
Added to the strong showing of studios and manufacturers already supporting Blu-Ray since 2005, the impact of Sony’s integration of Blu-Ray on the PS3 left little room for the HD-DVD camp to maneuver. Microsoft’s efforts to support HD-DVD in Windows Vista and on the Xbox 360 had a limited effect because Vista turned out a commercial failure, and 360 sales were in a precipitous free fall, dropping 33% year over year in 2007. Sony had attached Blu-Ray to its PS3 rocket at launch while Microsoft tied two sandbags to HD-DVD: Vista and the Xbox 360.

Apple, Nintendo, and Sony were all working to push OpenGL against Microsoft’s proprietary DirectX. The video industry was pushing behind the ISO’s MPEG-4 H.264 and AAC, aided by the popularity of Apple’s iTunes, rather than the proprietary WMA and WMV/VC-1 codecs Microsoft was working to advance. The embedded industry favored Java over Microsoft’s latest proprietary efforts to own interactivity. HD-DVD died because the industry collectively worked to kill it as a proprietary monster that would enslave users, studios, and developers to Microsoft’s software. It wasn’t a simple disc format struggle.

The public wasn’t aware of what was going on behind the scenes because Microsoft worked diligently to spin a misinformation campaign that suggested that HD-DVD would be cheaper, more open, and deliver more content. Backers were fed talking points that insisted that HD-DVD discs were cheaper to create, that the Chinese would pump out ultra cheap players to support Microsoft, and that HD-DVD’s DRM was somehow easier to get around than Blu-Ray. This was all false.

When charged with the reality that Microsoft is nothing more than a marketing organization pushing inferior technology tied to proprietary standards that will later be leveraged to extort higher prices, the company responds with a smoke screen that declares that its products will be first-to-market and supported by lowballing Chinese manufacturers. At the same time however, Microsoft has only ever delivered late, inferior products that have a higher total cost of ownership. Its supporters have worked hard to bury this reality even as Microsoft continues to raise prices on poor products that have limited competition, such as Windows Vista.

Why Microsoft’s Copy-Killing Has Reached a Dead End

Reality Distortion.
Despite the industry’s widespread backing of Blu-Ray, Microsoft similarly worked hard to create the illusion that HD-DVD was a viable product. This was critical because HD-DVD was Microsoft’s last effort to force the adoption of VC-1 and HDi. It had already failed to successfully use WinCE in any other embedded market, from smartphones to music players to handheld computers, and had similarly failed to establish Windows Media as a download format against the ISO’s AAC and H.264, widely popularized by Apple’s iTunes.

In a final act of desperation, the HD-DVD camp signed up Paramount and DreamWorks as new exclusive movie studios for HD-DVD. This pitted roughly half of the studios behind each of the two rival formats, with Warner Bros. being unique in offering titles in both formats. Microsoft’s efforts to prolong the format war had nothing to do with players or media, and everything to do with forwarding its proprietary software.

However, consumers were confused by the format uncertainty, which helped to slow sales across the board. Irritated by Microsoft’s refusal to cooperate, Warner Bros. announced a pullout of HD-DVD support right before CES, yanking the plug on Microsoft’s HD-DVD marketing push planned for the show. That signaled an enthusiastic redrawing of the watershed of support behind Blu-Ray, from retailers like WalMart to movie rental groups including Blockbuster and Netflix, and ultimately to Toshiba as HD-DVD’s hardware producer.

What the Death of HD-DVD Means.
HD-DVD is dead, and with it dies Microsoft’s aspirations to inject its proprietary software in media development. This is also a big strike against VC-1; despite being written into the Blu-Ray standard along with the ISO’s H.264, most Blu-Ray developers are moving toward H.264, which not only allows them to master HD discs, but also deliver mobile and downloadable versions using the same codec for playback on devices such as the PSP and iPod.

The death of HD-DVD also presents further evidence that Microsoft is increasingly incapable of pushing its own proprietary standards using its Windows monopoly. Building support for HD-DVD into Windows Vista did almost nothing to shore up support for the format, and tying it to the Xbox 360 similarly did little to push things toward the outcome Microsoft wanted.

In the 90s, Microsoft maintained an invincible aura praised by loyal pundits; it defeated small companies, bought up rivals and destroyed them, slit its partners’ throats, and put startups out of business. It only ever gave the appearance of maintaining strong relationships with its partner companies. However, in the last ten years, that strong facade has been destroyed by a series of very public failures:

WinCE helped to destroy Palm, but did nothing to advance the state of the art and has since fallen into a distant and increasingly irrelevant third place in smartphones. It has become similarly irrelevant in the small handheld computer market for which it was created, and has failed as an embedded system. Microsoft moved its UMPC plans to use its desktop Windows, dropped any hope of using WinCE as the basis for game consoles, and most recently bought up Java-based Danger to replace WinCE as its mobile strategy. If Microsoft is fully abandoning WinCE, why should partners stick around?

Windows XP has floated along as the default choice for PC consumers, but when Microsoft tried to raise the price and tack on fluff features with the Vista rebranding, buyers demanded to upgrade to the previous version. Microsoft is still shipping Vista to manufacturers, but corporations and end users are frequently reverting to Windows XP, killing Microsoft’s ability to leverage its market position to push new proprietary standards and raise prices for features that were once included for free, such as standard networking.

The Xbox 360 had a strong showing in its first year, but was still unable to match the sales of Sony’s PS2. In its second year, it not only fell behind sales of the original Xbox [correction: 360 unit shipments were up 30% over the original Xbox after the first year], but 360 shipments also fell 33% year over year as buyers shifted their attention to the newer Nintendo Wii and PS3. The Wii outsold the 360 in 2007 and the PS3 came within a stones throw of matching its sales [update: the PS3 has also eclipsed 360 unit sales as it enters its second year]. Going forward, there is no reason for thinking 360 sales will dramatically turn around, as sales growth fell this year despite the arrival of major hit new games.

In contrast, after a slow initial start in its first year, Sony’s PS2 grew dramatically year over year back to back in 2001 and 2002, and maintained annual sales well above the Xbox 360’s 2006 peak for over six years, selling an average of 16.8 million per year over its seven year lifespan. Sony has similar long term plans for the PS3, while Microsoft has been unable to sell a game console with a lifespan over four years. The 360 is having a late life crisis just as the PS3 is beginning to sell in adolescent volume.

Microsoft’s monopoly power is dissolving, and its ability to create anti-competitive partnerships and exclusive alliances is also falling apart. Its hardware partners have been led on wild goose chases with WinCE, desktop Windows, PlaysForSure, and now HD-DVD, leaving alliances with Microsoft looking more like charity exercises than business decisions.

The Spectacular Failure of WinCE and Windows Mobile
Windows 95 and Vista: Why 2007 Won’t Be Like 1995
Myth 7: The Xbox Success Myth

Misinformation Is and Misinformation Does.
With the mask pulled off the bluffing, blustering HD-DVD, it becomes clearer that the talking points generated by Microsoft’s supporters all have the same source. As new promises are made about the imminent arrival of cheap new hardware from Chinese dumping, new partnerships just around the corner, and the power of Microsoft’s monopoly to make the improbable happen, it will now be increasingly difficult for the public to swallow them.

Those assurances applied not only to the failure of HD-DVD but also the failure of the Zune, which was similarly supposed to take on the world with Toshiba and turn into a Chinese mass production established in place by the influence of Windows and the Xbox. Instead, MTV’s Urge defected from its Zune store partnership with Microsoft to join Real’s rival Rhapsody music store, and Microsoft never even built any significant integration between the Zune and Xbox.

The Xbox itself was also supposed to rapidly turn around in price, but it soon be came clear that the Xbox 360 was actually more expensive to buy compared to the PS3 for users who get a hard drive, HD disc player, wireless networking, and other features left off Xbox models. In order to hide the fact that Xbox sales are dramatically tapering off, pundits only ever counted the 360, PS3, and Wii in cumulative numbers. No other market uses installed base to compare sales. Microsoft certainly doesn’t talk about installed base when comparing the Zune to the iPod.

If the Zune had sold a respectable number of units, it would be praised for its achievement rather than compared to the total number of iPods sold in previous years. Instead, Microsoft gerrymandered a market for “30GB hard drive based music players” in order to briefly claim a slice approaching 10% of weekly sales numbers.

Why Microsoft’s Zune is Still Failing
Rise of the iTunes Killers Myth

The End of A Great Illusion.
The reality is that Microsoft is forced to falsify reports and color numbers because reality doesn’t support the illusion of Microsoft’s unquestionable market power. The company is failing in consumer electronics, and every year that passes makes its losses greater and its accomplishments less impressive.

With shrinking sales, the 360 isn’t going to hold off expansion of the PS3. With the death of HD-DVD, Microsoft isn’t going to push into media sales and production. With fire sales of the Zune, Apple is not going to lose its iPod business to the same company that already failed to take it on with its PlaysForSure partners.

The death of HD-DVD says more about Microsoft and its future than the general media seems to recognize. It’s not a format war, its a culture war between industry players working to advance the state of the art collectively in partnerships, and one company working to own everything while contributing very little. It’s not hard to see why Microsoft’s bruised and abused former partners are working to align themselves with open solutions rather than buy into more pain with technology tied to Microsoft. That’s very bad news for a company that exists solely as a licensee of third rate product ideas.

The death of HD-DVD is another lethal wound for Microsoft’s dying empire.

What do you think? I really like to hear from readers. Comment in the Forum or email me with your ideas.

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  • WholesaleMagic

    Well, you make some interesting points. However:

    Although PS3 is a superior system, I’d have to say that the games on XBox 360 are far better. I’m an Apple fan, and I dislike Microsoft as much as anyone else, but the fact that Halo 3 was exclusively on XBox 360 was enough to sell me.

    Sure, it doesn’t have Blu-ray/HD-DVD/wireless/etc., but you can get around those things with a little ingenuity. I was able to pipe internet through my computer straight to my XBox, as well as use Elgato’s EyeTV Hybrid to turn my Mac into a TV. Works fine.

    As for HD-DVD vs. Blu-Ray, I think discs will be to the movie industry what CDs are to the music industry: stuff for aficionados. Sure, I like to listen to the odd CD every once in a while, but most of the time I use my iPod.

    As soon as Apple can pipe movies at a high enough quality to rival discs (maybe it already does), discs will be relegated to that backseat to be used only by videophiles and old fashioned people.

  • slayerjr

    Very nice Daniel. This post is fast approaching the lofty level of valuable industry analysis. Anybody that has any financial stake in technology and IT, would benefit from what you’ve written here.

  • worker201

    Very nice article, sums up the format war concisely. It was hard to tell who to line up behind – rootkit Sony or monopoly Microsoft. I guess you’re right – in the long run, the market players have more say in it than consumers, and the market don’t like Microsoft.

    But don’t think this means I’m going to rush out and buy a Blu-Ray player or Blu-Ray discs. The format wars will truly be over when the DRM on Blu-Ray is as easy to get around as the DRM on a DVD. The next generation of DeCSS can’t be too far behind…

  • Urian

    The first DVD players had appeared in the market in 1997 and it wasn´t until 2001 that the devices became very popular.

    BluRay real enemy is the DVD, I live in Europa and I don´t know how the prices of the movies are in the US but here I can buy the new movies in DVD for 20 euros and some of them for less (from 10 to 15 euros) and in the last years I have made an important collection.

    Today I can buy a DVD Player with HDMI Output and a chip that can re-scale it to 1080p, one of the reasons why the HD-DVD players were bought weren´t the HD-DVD movies, they were bought because they were cheap DVD up-converters. I know that the conversion isn´t at the same level than a native 1080p movie but imagine a different situation.

    Imagine that you are a person who doesn´t know anything about the format wars and someone says to you that a player of 130 euros can play your current movie library at 1080p in your new HDTV and in the other part the BluRay player forces you to buy the movies again.

    People must remember that the DVD was an huge step from VHS (I had a lot of destroyed movies) but BluRay is nothing more then DVD with more restrictive DRM (worse for consumer) and higher prices for movies.

  • duckie

    @wholesalemagic – I think you’re missing the point regarding physical disks and whether they shift in volume or not. The crucial thing is that without HD-DVD Microsoft has no leverage to establish VC-1 as the default format for all video, whether consumed on disk or in download format.

    I am still amazed when I see new music sites starting up using WMA (Qtrax being a recent example, although of course their much-touted licenses with all the major labels turned out to be, er, not quite signed). If I was starting a music download service I would look at what potential customers have i.e. mostly iPods, and make it the best fit for that. Seems obvious. Old Chinese proverb: you cannot sell gloves to a man with no hands.

  • Jon T

    5 stars Dan!

    “The industry in general has actively been pushing to rid itself of dependance upon Microsoft controlled standards.”

    One quote that ought to put the shivers down the spine of many an MSFT investor.

  • Urian

    I forgot to say something before.

    Microsoft ever acts as a mirror in the industry, they never innovate because they are mirroring all that the other companies and communities in the industry do.

    If the HDD multimedia players (HDD with multimedia output) becomes very popular we will see how the HDi+Windows CE will end in these devices in a mirrored imaged of them by Microsoft.

  • Rich

    “The Xbox 360 had a strong showing in its first year, but was still unable to match the sales of Sony’s PS2. In its second year, it not only fell behind sales of the original Xbox…”

    You’re right, the Xbox 360 hasn’t outsold the best selling console of all time. However, it’s comfortably beating the original Xbox.

    Also, don’t forget that VC-1 is in both HD-DVD and Blu-Ray. It didn’t prove to be particularly popular on either format though.

    The reason why Blu-Ray was able to launch just a few weeks after HD-DVD is because they rushed it to market. That’s why we’ve now got the Blu-Ray profile mess, where a lot of the additional features won’t play on older Blu-Ray players. In fact, the only Blu-Ray player currently on the market that matches the latest Blu-Ray spec (profile 2.0) is the PS3. The Java interactive language is also said to be a total mess and a nightmare to program.

    HD-DVD was in many ways the superior format. However, I’m glad Microsoft isn’t in control and I’m glad that the war ended so soon.

  • OlivierL

    The 33% decrease is in XBox360 SHIPMENT and not sales (cf your own previous article Video Game Consoles 2007: Wii, PS3 and the Death of Microsoft’s Xbox 360). In sales, Jan’08 is 16% higher than Jan’07 and a 21% for 2007 vs 2006 – thank you Halo3 (source : vgchartz.com).

    But still, the Xbox360 is far from the PS2 success and even now it is struggling to match the decade old PS2 sales figures. The only exception was during the Halo3 surge.

    Sony, thanks to the HD-DVD death, has sold 33% more PS3 than MS has sold XBox360 in January and February 2008.

  • http://www.jon-wright.co.uk/oldarchives/ mrunderhill

    “the fate of HD-DVD wasn’t nearly as unpredictable as some seemed to think. Here’s why HD-DVD’s end should not have been a surprise”

    Well they do say love is blind!!

    I’m a PS3 user, which was bought solely to watch Blue Ray and own many titles, albeit from the US to justify the cost, but i have a feeling this format is going to be relatively short lived.

    Most people agree Blue Ray video quality is good, for most it’s still too “out there”. At present Blue Ray is more for videophiles and DVD has a lot of shelf life left in it.

    Also i reckon the vast majority of HD TV’s owned in the UK don’t even support 1080p having been somewhat duped into laying out vast sums of cash on their “HD-Ready” big screens. My daughter worked for one of the big stores here in the UK during the so called “HD TV Revolution” and the amount of disgruntled customers who came in complaining their TV’s didn’t support Blue Ray was significant.

    I just can’t see the same people laying similar amounts of cash out replacing TV which they already thought would do the job in the first place. Certainly not in the short term anyway.

    In the long term there’s Apple TV or similar devices that can offer a similar viewing experience to what these people are used to right now. I also own an Apple TV and whilst i can appreciate the superior quality of Blue Ray, there ain’t much wrong with some of the content coming from the Apple Store.

    Whilst Apple have a long way to go getting these devices under their set tops, you can almost see the headlines now: Apple Sound The Death Knell On Blue Ray.

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  • gus2000

    Death to the Emperor!

    Vive Le Revolution!

    I actually had one of those Betamax VCRs pictured above, which I just recently thew away. I tried to play a tape but it didn’t work well with 30-year-old drive belts. It seemed to be a “60 Minutes” talking about this new startup company that just might make it, called “Federal Express”. I wonder whatever happened to them? I have Laserdiscs, too. (No 8-tracks, sorry.)

    So, how long will Microsoft and its’ minions stay in denial? Will HD-DVD ever REALLY die? I can still buy vinyl records; and now, even 20 years after the LP was declared dead, a turntable is beating the Zune in Amazon’s top-selling electronics.

  • Les

    “I think discs will be to the movie industry what CDs are to the music industry”

    I don’t expect (legal, high quality) movie downloads to take off with the masses soon to be honest. Digital music files became a hit because it’s great to have your whole music library with you on road trips or when excercising, etc. Movies are still best viewed in theaters or at home.

  • John E

    very interesting thesis – that Microsoft was really the prime force behind HD DVD, not Toshiba as generally portrayed in the press. or at least an equal “partner” for its own monopolistic reasons.

    one crux of the narrative is the statement: “Irritated by Microsoft’s refusal to cooperate, Warner Bros. announced a pullout of HD-DVD support right before CES …”

    what is the source for that characterization of Warner’s thinking? i have not seen that reported anywhere, that it had anything to do with Microsoft individually. the general story is Warner’s wanted to end the format war ASAP because it was making it impossible to sell a new generation of hi-def movies in large amounts, and picked BluRay simply because of the much larger in-place installed base of PS3’s.

    is there a citation?

  • http://ephilei.blogspot.com Ephilei

    “That left Toshiba with a major hardware loss when trying to sell the players at a $500 consumer price target. The company was ready to drop HD-DVD that year and join the Blu-Ray consortium, but Microsoft pushed it to continue.”

    Are you actually saying Toshiba wanted to give up 2 years ago? What’s your source?

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  • warlock7

    This “format war” was a farce. It was prolonged by Microsoft in an effort to get people confused about the two formats in a bid to slow the adoption rate of the PS3.

    The end goal of both MS and Sony is to get as many machines into homes so that they are poised to become the dominant force in the digital download market. The 360 and the PS3 are both trojan horse devices disguised as game machines. The longer that MS could sow confusion over the Blu-ray/HD-DVD formats, the longer it would take for the PS3 to gain a foothold.

    This was all a perception game. HD-DVD has a total of 1.3 million devices in the world compared to the 10.5 million PS3s alone. In a sheer numbers game HD-DVD never stood a chance. MS and Toshiba knew this all along yet they were willing to throw money at it for as long as they could in order to continue the confusion. The longer that the misconception of a format war went on the more 360s would sell in comparison to the PS3.

    If MS were truly backing HD-DVD then they would have waited for the launch of the 360. It was only about five months between the launches of the HD-DVD platform and the 360. As has been shown via the abysmal failure rate of the 360, it was clearly rushed to market in order to meet the Christmas season in order to have a year head-start over the PS3. If they were really backing the format then where’s the vapor 360 with HD-DVD inside. Some speculation that it was coming at the CES this year and when the studio dropped the bomb the MS keynote got cut in half.

    No this was never a “format war”. It was a delaying tactic from Microsoft designed to keep people away from the PS3 in order to get a slightly better market share than the original X-Box had so that they would have a device in living rooms for digital downloaded content.

  • malocite

    What a great article.

    I have to admit to being brand new to blogging, I used to ignore the blogs as uninspired ranting whining crap, but I have found a few that seem to have spent considerable time on research and development.

    Your ideas are clear and concise, I really enjoyed reading it.

    I would like to see you cite a few more sources however, I think it would help with people that want to see where your information is coming from, etc. I do this in my blog since I think its important people know I am not just pulling this stuff out of the air.

    It is CLEAR that you are doing a lot of research and prep in your articles, it would just be nice to see some sources so we could learn more.

    Great work!


  • http://johnsessays.blogspot.com John Muir

    A Microsoft backed vehicle of tech evil? How could I guess that Enderle would have been a cheerleader for it!


    He too milked the Betamax comparison for all he could squeeze from it in an article a friend linked me from Tom’s Hardware last year. Though for whatever reason I just cannot Google it up again no matter what I try. Not that I’m claiming Tom’s have covered their asses or anything … well, not without the original URL to prove it.

  • nat


    I just bought a 360 last weekend and while I agree with you on its current game library, Daniel was not arguing that 360 lacked good games.

    As for 360 lack of WiFi, free online play, etc. not being a problem, it really is kind of pathetic if you think about it. The Wii comes standard with Bluetooth, free online play, WiFi, and 512MB of built-in storage. Even the highest-priced Elite model lacks all of these features, save built-in storage. The Arcade system has less storage, 256MB, and it’s not even built in. The Pro is what I bought and I think it’s the best deal, but it ended up costing MORE than the Elite thanks to $100 WiFi adapter and $50 for LIVE. I could only afford one game at the time of purchase because of all the extra costs.

    Meanwhile, when I camped out for the Wii, I haven’t had to buy anything since launch. I’ll probably grab a component av cable in the future and they’ll have to release a storage solution of some kind soon, but it’s nothing compared to the final cost of ownership that seems to affect every MS product. I won’t even compare it to PS3 that does considerably more for those that crave HD at $50 less than the high-end 360.

  • http://thesmallwave.com treestman

    First, the Zune totally PWNS the market for brown, hard disk-based players with the word “Seattle” on the back. Apple will never be able to beat Microsoft there.

    Second, I believe all the DRM infestation within Vista for HD-DVD applies to Blu-Ray as well. Both formats, to my knowledge, require closing the “analog hole”.

  • http://www.roughlydrafted.com danieleran

    Re: Toshiba wanting to pull out of HD-DVD and Microsoft pushing it to continue, and Warner Bros. pushing to kill and embarrass HD-DVD before CES in order to end the format war.

    The “Origins” article cites external sources on the reluctance of Toshiba to continue HD-DVD back in 2004-5. Microsoft pushed it to continue because it had invested in getting HD-DVD into Vista and hoped to push it with the 360.

    For the record, I don’t think MS was “stupid” for pushing HD-DVD; it was the best chance it had for shoehorning the industry into a new Windows PC-type bondage and dismantling the efforts behind ISO MPEG collaboration.

    It was another attempt to replace mature Unix with an infant NT: a bold power play with an exterior of bluster and an soft interior of garbage.

    Had MS managed to win, it would have enslaved the HD market and advanced its control in other areas. Of course, MS also tried to do the same thing with WMA and PlaysForSure, and looked to be invincible back in 2003-2004 when the vapor was thick and the punditry was excited about creating another Windows.

    What has changed is that the companies who helped establish Windows are now against MS, and those who were attacked along the way or coerced into serving the empire are all now diametrically opposed to entering a new MS fantasy of valueless domination.

    MS’ reversal from a company that can do no wrong in the 90s to a bumbling catastrophe in the 2000’s is very similar to Apple’s fall from the 80s to the 90s, or IBM before that. Nothing new here, apart from the fact that Microsoft has more wildly enthusiastic supporters who refuse to accept that things can change.

  • ori

    Can you write about Apache vs IIS? I will be very interested to read your way an examination of a well deserved topic. Yours Sincerely – Ori

  • http://johnsessays.blogspot.com John Muir

    For once I find myself disagreeing with the venerable Pogue:

    Web Movies Show Why DVDs Sell

    “The point is that the whole Internet-movies thing is still in its fumbling, bumbling infancy; someday, we’ll look at these limited-selection, limited-time services and laugh.

    In the meantime, congratulations to Blu-ray, the winning next-generation DVD format. Clearly, spinning silver discs will remain the dominant movie-delivery method for years to come.”

    He’s confusing high def discs with DVD’s (even calling HD-DVD and Blu-ray players “DVD players” at one point), as to be honest the old “DVD is Blu-ray’s real enemy” remains true until disproven.

    I count myself among those he mentions who are sure that downloads will rule over optical discs. But standard def DVD is the disc to beat until Blu-ray seriously rivals it in sales. It’s probably a long old fight; but one I doubt we’ll be seeing much of VC-1 or Microsoft in the lead!

  • http://InsideAperture.com kgelner

    Urian – you said that Blu-Ray has more restrictive DRM than DVD. But think about things from the standpoint of the average consumer:

    * Most Blu-Ray discs do not use region codes. Almost all DVD’s did – for example, I had to have a region-free player to watch BBC DVD’s in the US, but all the BBC shows on Blu-Ray I’ve been able to find have been without region coding.

    * Even for discs that do use region codes, Blu-Ray has fewer regions (three ot DVD’s seven). That means more overseas discs would play without a region free player, even if they were region coded.

    * You can currently play any Blu-Ray disc at 1080p or 1080i over component cables (read: analog unencrypted video output). People think that the ICT token added to Blu-Ray and HD-DVD stops them from doing so, but the reality is that too many people have HD TV’s with component inputs and I don’t think the market will ever ship a product that makes use of that flag.

    For the average consumer, Blu-Ray appears slightly better – not worse – than DVD a far as restrictions go.

    For the much more technical consumer ripping Blu-Ray discs is currently harder, but does anyone really think that will last long?

  • Gatesbasher

    Maybe it wasn’t as unpredictable as we thought it was, but let me bask in the glow of thinking that the Good Guys won, for the first time in my lifetime. I swear, the Congressional-Committee-CBS-vs.-RCA-color-TV-shootout disaster must have created some kind of hoodoo that made an equally atrocious disaster out of every other format war for the last 54 years! Maybe it’s worn off now.

    (Anybody but me amused that the projection TVs with sequential red-green-blue pictures and a rotating color wheel are reproducing the CBS system in toto?)

  • beanie

    Daniel Eran Dilger wrote:
    “the Blu-Ray consortium members later selected Java-based technology from Sun as its interactive menu layer rather than Microsoft’s WinCE/HDi.”

    HD-DVD’s interactive content specification is based on open standards ECMAScript and XML, which you failed to mention. Microsoft’s HDi is just one implementation of it. I assume any OS with an ECMAScript compliant engine can run it.

    So is ECMAScript or Java easier to develop for? Which is better for Internet delivered media? I would
    answer ECMAScript to both. Blu-ray should compare them and use the better technology.

  • WholesaleMagic

    I wasn’t disagreeing with Daniel in any way. I completely agree with him, and I’m VERY happy that Microsoft hasn’t gained control of this still crucial market.

    I was just making some alternate points in saying that Microsoft’s XBox 360 isn’t completely worthless. I do, however, think that the 360 lacks some very vital features, as well as having disgustingly obtuse interface. It’s ALMOST completely worthless.

    Forgive me for not commenting on Daniel’s article directly, I was sort of making some complementary points. Just my two cents worth.

    It’s great that the market is finally breaking out of Microsoft’s blanket on open source.

    @kgelner: I agree. I don’t think that any DRM currently on Blu-Ray will take very long at all to be broken now that it’s clearly the winning technology. There are plenty of smart hackers in the world. MacTheRipper for Blu-Ray isn’t far off.

  • John E

    SlySoft’s AnyDVD already has cracked BluRay for Windows users: http://en.wikipedia.org/wiki/AnyDVD. Mac will follow sooner or later.

    Several factors will ultimately determine if internet downloads or BluRay become the main source for consumer video over the next 5 years – or maybe neither one:

    – how fast cheap internet bandwith can be at least doubled in capacity for the majority of users so downloading very good quality hi-def is really practical.

    – how fast all the on-line providers get their technical act together to provide such good quality hi-def downloads, as AppleTV and some CATV providers already do.

    – how fast the price of 2nd generation BluRay DVD players comes down to well under $200, so simply replacing your old DVD player with one is cheap.

    – most of all, what price is charged for what result. $5 for a 24 hour on-line hi-def movie rental is too much. $20+ to buy a new BluRay movie is too much. The studios are making the same greedy mistake the music labels did with CD’s. we now already have got alternatives like Pirate Bay and MacTheRipper. whether they like it or not, the true value of a movie rental is $1 or $2, and the true value of buying a movie is about $5. if they demand more, they will mostly get $0 instead. The greedy fools.

  • OlivierL

    As already stated by DED, and I completly agree with point, the main reason FullHD might not take of is its lack of practical advantage. It is only useful with projectors or insanely huge TV set. At 10 feet, you need a 60″ plasma to see FullHD and fitting permanently a 1.5m wide device in your living room isn’t easy (at you can roll a projection screen to the ceiling).

    So FullHD has no practical way of enhancing your experience.

    But VoD, especially one that span the same content on both fixed and mobile devices, truly adds something to your experience.

  • jltnol

    The death of HD-DVD says more about Microsoft and its future than the general media seems to recognize. It’s not a format war, its a culture war between industry players working to advance the state of the art collectively in partnerships, and one company working to own everything while contributing very little.

    That says it all in a nutshell, and also explains why I’m a Mac person….

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  • http://web.mac.com/matteorampazzi imat

    don’t you think the victory of Blu-Ray also has implication with regards of other business models, specifically iTunes Store?

    My opinion is that Apple, I don’t know whether because of own fault or because of the industry, lost a great opportunity last year when the war was still going on for establishing AppleTV as a major competitor to phisical discs as a whole.

    Apple, moreover, should learn that partnership with the studios is key to providing a real chance to a new distribution model to succeed.
    Sony won, besides the arguments you mention, also because they were considered “insiders” in the industry and empaty was much easier to gain (Sony itself own some studios and therefore might have been percieved as to be in a better position to understand the industry’s concerns).

    Apple, on the other hand, seemd to have started off in a more similar position as Microsoft did. Apple seems to have changed their attitude and where able to strike deals with many content providers.

    The fact is that, the war being over, sales of High Def players (Blu-Ray) will rapidly increase because uncertainty, which caused many potential buyers to wait, has gone away. If you look at that in a worldwide perspective you can see that the end of this war poses a great potential threat to Apple, particularly on an international level. In the US Apple has established an intersting business model, but it is not going to be sustainable if not backed by an international release. Volumes of Blu-Ray worldwide, and their “mind share” will be much higher than AppleTV (since it doesn’t provide any content outside a handful of countries).

    Personally I think Apple would have been much better off if the war continued one or two more years, providing them enough time to establish their business model internationally. That is also the reason the iPod was successfull, because the iTunes Music store is available in so many countries, compared to much of the competition.

    What do you think Apple should do to establish its AppleTV model as a viable alternative to Blu-Ray? AppleTV has advantages and disadvantages, I am not advocating ATV over Blu-Ray. But a healthy and competitive market is what ultimately benefits customers. If Blu-Ray remains the only distribution model for High Definition content, there is not going to be any real advantage in the long run for customers.

  • martimus

    Caveat: I tried to do a little research before I commented, but I couldn’t find any specific link, so I am only going on memory.

    IIRC, when Microsoft first proposed the VC-1 codec as a standard, they were touting its IP as safer and cheaper than that being used in MPEG 4 and H.264, but when they finally released all the requisite specification information, lo and behold, they had purloined many bits of previously-unpaid-for IP from the MPEG-LA and other entities.

    Another little tidbit to go with HD-DVD’s death.

  • http://www.baboo.com.br Baboo 2008

    FUD x Reality:

    1) VC-1 is mandatory on HD-DVD and Blu-ray, and Microsoft will profit from both. Who cares if HD-DVD is dead ? Microsoft will still make a lot of money from Blu-ray.

    2) X-BOX 360 outsells Wii in US and PS3 is lagging behind (http://seekingalpha.com/article/61626-sony-ps3-sales-continue-to-lag-microsoft-xbox-nintendo-wii)

    3) Zune is selling well: http://www.techradar.com/news/audio/portable-audio/zune-selling-out-fast-158316

    4) OpenGL is useless and DirectX is the main reason Linux and Mac users are still using Windows for games

    5) Mobile: Symbian has 72% of Market Share, Linux has 13,3%, Windows Mobile/CE has 6,1% (they’re used only in business phones), BlackBerrry has 5,3% (same explanation), PalmOS has 1,6% and MacOS (iPhone) has 1,3%. Font: http://en.wikipedia.org/wiki/Smartphone

    7) Microsoft always beat Wall Street expectations for both revenue and earnings. Where is the “dying empire” ?

    8) IIS is an excelent example of Microsoft competence and Quicktime in the perfect example of Apple incompetence: you just need to install Quicktime to turn your computer into a hacker party.

    9) Where is Apple innovation ? Selling MP3 players, selling online music or using PC hardware on their overpriced computers and notebooks ?

    10) Apple opposes to HD-DVD because of proprietary control ? Apple MEANS proprietary control: from locking iPhone and hiding code for tracking their users, to embedding user data in iTune tracks.

  • Tardis

    “Irritated by Microsoft’s refusal to cooperate, Warner Bros. announced a pullout of HD-DVD support right before CES… ”

    4th January 2008 – Warner Brothers announce pullout from HD DVD in favour of Blu-Ray
    15th January 2008 – Steve Jobs announces Apple TV movie downloads (including Warner Brothers titles)

    As Daniel commented earlier, the “version 1” Apple TV was a “sleeper” product and Apple has been using it for almost a year to persuade the studios to sign up for Apple’s online movie rentals.

    Warner Brothers therefore knew that High Definition physical media had a limited life-span, and the sooner they pulled the plug on the format wars the sooner they could wring some revenue out of it.

  • nat


    Ah, I see. Didn’t mean to sound like I was accusing you of any wrong doing. :)

    I also agree that the 360 isn’t totally worthless. I had the original Xbox and loved it, but its sad that their second outing is in a number of ways worse – 4 SKUs, a lack of hdd in the base model, and didn’t the original use REAL money, rather than the convoluted M$ Points?

    What’s funny is how much people hype Xbox Live. I like the voice chat, custom sound tracks, and Friend’s list notifiers, but Sony or Nintendo could easily replicate such features. While Nintendo needs to end this Friend code baby sitting, seems all Sony needs to do is provide alerts for when Friend’s get online and a long awaited feature, in-game Xross Menu Bar. Both the Wii Channels and XMB interfaces are so much more logical than the Blade system. I hit the Xbox Guide button sometimes and it slides out from the left, then I select something and it slides away and another slides out on the right and I hit OK and it pops it out again on the left. Not only is this a bit odd, but when it happens (usually for an update or something), if I want to get back to the game, I have to hit B three times and watch as these stupid blades slide back and fourth three times! The embedded of everything from games, to MS SYNC in-car voice recognition system, to ABC’s LOST, and Zune! I believe that’s a first for game consoles and it’s absolutely the wrong kind of precedent.

  • Blad_Rnr

    I seriously think you need to write a book. I would be the first in line to buy it. I don’t know of ANYONE who delves into the history of technology and its applications for the future like you do. Excellent piece, once again.

  • http://johnsessays.blogspot.com John Muir


    I have a copy of Revolution in the Valley – which is the hardback and nicely illustrated version of the free content at folklore.org about the original Mac’s creators – and I must say it’s a great complement to the site and a nice way to reward Hertzfeld’s contribution.

    I could certainly see RoughlyDrafted in printed form … a cohesive narrative built from the core articles in the site’s library covering Apple versus Microsoft and their starkly differing tales. Revolution in the Valley works quite nicely as an entirely article based book, but as Daniel is the solo author at RDM he could rework his own material however he likes and I’m sure we’d be in for a great surprise.

    Such things can’t be rushed though. And one of RDM’s strong suits is the current affairs pieces like this which are more periodical / magazine than they are paperback. Still, if Daniel can ever find enough time and wants to explore his already well established vision then I wholly commend the book idea.

  • OlivierL

    @Baboo 2008
    AHAHAHA : let’s start.

    1) MPEG-2, H.264 and VC-1 SUPPORT in both format are mandatory but most HD-DVD were in VC-1 and most BluRay were in H.264. MS might still get a cts or two from the decoder (even less since most of the patents behind VC-1 aren’t his) but its format won’t be used anymore hence no visibility and no license fee for compressor and media.

    2) XBox 360 have been sold one full year before both PS3 and Wii so its install base is surely wider. The fact that the US represents 60% of its installed is more a flaw for the XBox360 since it failed to sell worldwide. Current sales rate of both Wii and PS3 are currently above the XBox360. Wii worldwide install based is already above XBox360 and 66 weeks after its launch, the PS3 install based is already above the XBox360 at the same timeframe.

    3) When “well” is not enough. Zune is number 15 in Amazon, behind 12 iPods and 2 Sandisks. Second Zune is 31, with 7 iPods in between.

    4) DirectX was created with the sole purpose of killing OpenGL and other open standard so gaming could be locked down to Windows. So BECAUSE of DirectX, Mac and Linux user can NOT enjoy games on their platform and are FORCED to play in Windows.
    Microsoft already has enough trouble with the UE about such behavior.

    5) Wonderful, isn’t it ? The iPhone, in just a few months and a single model available in a single part of the world with a locked down operator, managed to achieve a significant worldwide figure ! And, beyond sales numbers, its usage pattern has created a whole new class of usage : those 1.3% of worldwide user are 50x more present on the web than previous “smartphone” users (cf Google stats).

    6) no number 6

    7) What’s the point of beating Wall Street expectation when you share has fallen by 5% in 1 year.

    8) AHAHAHAHA : when comparing IIS and Quicktime about security holes, you only need one word : Code Red.

    9) Ins’t this enough ? You can also add many more things.

    10) And Apple never opposes to HD-DVD : it supported BluRay.

  • duckie

    @Baboo 2008

    Your “arguments” have already been deconstructed so I’ll just add

    3) your source actually says “The question is whether the 80GB Microsoft Zune shortage is the result of high demand, short supply or some combination of both”. I believe “selling so well it’s currently unavailable” is not an actual sales figure.

    5) you’re quoting Q2 2007 figures – bother to check the latest Canalys survey (the source for your Wikipedia line) and you’ll find the iPhone now has 7% of the market


  • beanie

    Ha, ha, Zune 80 is rank #35 at Amazon. What a dud. Oh, it is out of stock at Amazon. Most Apple fans like checking Amazon. I think I’ll do a little extra and check how it is doing elsewhere.

    Let me check how Zune 80 is doing at other major retailer’s websites and sort MP3 players by sales. At BestBuy is #5, hmmm. How about at CircuitCity…it is #4, interesting. How about at the nations largest retailer, WalMart? Incredible, it is #1 at Walmart.

    RoughlyDrafted keeps telling me how Zune is such a failure. Maybe…

  • OlivierL

    Well, you made a mistake : the Zune is top RATED MP3 player, not top SELLER.
    Anyway, how can this rating be credible since the 36 most rated player contains only 3 iPods while with ACTUAL sales figure for ALL shops, iPods are above 60% market share.

    BestBuy has 2 categories for MP3 players : iPod and others…

  • beanie


    For BestBuy, go to Audio, then iPod & MP3 Players, then All iPod & MP3 Players. On that page, click Sort by BestSelling. Results are spread over 6 pages, to see all pull down the Show drop-down box and choose “See all”.

    #1 is iPod classic 80GB
    #2 is Zune 30GB Black
    #3 is iPod nano 4GB silver
    #4 is iPod nano 8GB pink
    #5 is Zune 80GB Black
    #6 is iPod Touch 8GB with software update


  • Gatesbasher

    I can’t prove anything, but these figures seem screwy to me. I’ve never seen a Zune in the wild, nobody I know has ever seen a Zune in the wild, the examples in the stores I go to are gathering dust….You’d think if they were going to be seen anywhere, it would be here in Seattle.

    How sure are we that Microsoft isn’t sending out shills to buy these Zunes to pull the figures up? Remember it wouldn’t cost them much. The stores with the lowest profit margins are also the ones where they seem to be selling….

    We needed a new version of the archaic “Anybody who would (insert disgusting practice here) would suck eggs.” I nominate: “Anybody who would shop at WalMart would buy a Zune.”

  • http://www.roughlydrafted.com danieleran

    @ beanie:

    you took issue with this:

    “the Blu-Ray consortium members later selected Java-based technology from Sun as its interactive menu layer rather than Microsoft’s WinCE/HDi.”

    by staying this:

    “HD-DVD’s interactive content specification is based on open standards ECMAScript and XML, which you failed to mention. Microsoft’s HDi is just one implementation of it. I assume any OS with an ECMAScript compliant engine can run it.

    So is ECMAScript or Java easier to develop for? Which is better for Internet delivered media? I would
    answer ECMAScript to both. Blu-ray should compare them and use the better technology”

    The answer is this:

    HDi might involve JavaScript and XML, but that doesn’t make it “open.” OOXML is also XML, but its just a binary blob of the proprietary Office format in an XML file. You might as well say ActiveX is open and interoperable because it involves HTML and could theoretically be ported to any operating system.

    But most oddly is the idea that BR should consider adopting HDi. The point was that they did and found it wanting:

    “the Blu-Ray consortium members later selected Java-based technology from Sun as its interactive menu layer rather than Microsoft’s WinCE/HDi.”

  • David Dennis

    @Daniel: Here’s something I don’t think anyone else has pointed out.

    You say that HD DVD was a clever reworking of existing DVD technology to get a higher capacity than regular DVD, but lower than Blu-Ray.

    If that is so, it should be cheap enough to mass-market, no?

    But if Toshiba has to put in a whole PC-class device to interpret Microsoft’s technology, while Sony can be much more efficient with Blu-Ray, I wonder if Microsoft’s technology was a big reason why HD DVD failed. If they had left the menu systems as simple as DVD player menus, and simply provided high definition, they could have won over everyone with $199 players from the start, and rapidly reduce the price to $50 as demand built.

    But they could not do this thanks to the PC built into these machines, and while the Chinese are clever, they can’t make a PC for much less than Toshiba could.

    In the end, then, by requiring too much computing power for a playback device, Microsoft killed their own market position.

    Interesting, no?


  • http://www.roughlydrafted.com danieleran

    somewhat ironically, very high quality HD movies using a modern codec like H.264 can fit on a DVD already. the industry pushed for a new “HD” disc format to future proof and dump on a lot of extra bonus material.

    Microsoft originally planned to push DVDs with WM9 HD video (just as it tried to push CDs with WMA DRM for a short time). It got this going with Eisner’s Disney and Paramount (?) and released around 100 titles.

    But again, studios didn’t want to be beholden to Microsoft, and hoped that an official successor to DVD would also bring tighter DRM (since DVD CSS had been broken). Thus the arrival of HD-DVD, the Blu-Ray format war, and an ending where Microsoft lost out on pushing its DRM and codecs and BR won by default.

    Even more ironically, existing DVDs could still be used to deliver HD content, and it appears that HD downloads–while compromising in quality to deliver mobile portability and convenience–will become more popular than HD discs anyway.

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