Smooth Sailing for Blu-ray?

Katherine Stevenson

Starting with Warner Bros.’s dramatic defection to Blu-ray on the eve of this year’s CES, it's been a tumultuous couple of months for HD DVD, ending at last on Monday with Toshiba's announcement that it would cease developing, manufacturing, and marketing HD DVD players and media. And frankly, we have to give Toshiba props for accepting its defeat so readily and putting an end to a format war that had already lasted too long.

The question now is what the future holds for Blu-ray. Will its triumph over HD DVD prompt consumers to finally buy high-def disc players and movies en masse? Not according to Apple CEO Steve Jobs, who recently made the claim that optical discs are an obsolete content distribution method. And indeed, while the two optical formats have been duking it out, the Hollywood studios have been forging online-distribution partnerships. The most high-profile of these involves the updated Apple TV, which now lets you stream both standard- and high-def material that you buy or rent from iTunes directly to your TV. A set-top box by Vudu ( ) offers similar functionality, as does the Xbox 360 via Microsoft’s Live Marketplace (in fact, movie director Michael Bay made waves a while back by accusing Microsoft of supporting HD DVD just to fuel format confusion and drive frustrated consumers to its online store).

It all sounds very juicy, but communications analyst Michael Inouye of market research firm In-Stat isn’t convinced of the online threat: “Until we get much larger data pipes for downloading, HD will be a pipe dream. I would imagine that quite a few consumers will not accept video ‘hiccups’ should they occur as they download the video (in cases where they stream the content). And if the consumer wishes to upgrade to larger data-transfer rates, it will likely come at a price.”

In-Stat analyst Gerry Kaufhold offers up another factor: “Cable TV operators and the TelcoTV services provide you with your subscription TV service and your broadband Internet service, so they will continue to make sure their pay-TV services provide the highest convenience, the best image quality, and the most recent new titles so that they won’t lose too much of their user base to the Internet-delivered services.” That should come as little consolation to the Blu-ray camp, however.

We’ll render our own hands-on assessment of the major movie streaming/downloading services in the May issue of Maximum PC, so stay tuned.

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