PC big guns snub Blu-ray f0r HD-DVD

Paris — A cross-industry debate over the next-generation high-definition optical-disk format turned uglier, perhaps irreparably so, last week after Microsoft and Intel publicly backed the HD-DVD standard over its Blu-ray rival.

Moving beyond the turf war talk of whether PCs or consumer electronics will rule the digital living room, the HD-DVD vs. Blu-ray battle is focusing more on which device — or whose technology — is best positioned to deliver high-definition video throughout the home. The stakes have grown bigger, since any of the devices — including packaged media like Blu-ray or HD-DVD disks, digital recording systems, media PC centers, digital TV broadcast receivers, broadband IPTV set-tops, next-generation game consoles and even digital camcorders — can be combined or integrated in almost infinite variety.

The dispute threatens to bifurcate the computer industry. PC makers Dell, HP and Apple Computer are aligned in the Blu-ray camp while PC parts suppliers Microsoft, Intel, Toshiba and NEC are backing HD DVD.

The battle could even play out in the courts. Maureen Weber, general manager of HP's personal storage business, warned of "legal implications, if Microsoft is using its dominance in the operating system market — virtually a monopoly — to play favorites and hurt the competition."

Many believe Microsoft Corp. stands to gain the most from siding with HD DVD. Microsoft has already succeeded in promoting its proprietary video codec — now SMPTE's VC-1 — into both of the next-generation optical disk formats. By wrapping the HD DVD camp around its finger, Microsoft advances its presence in the consumer market, not only with its content protection scheme but also the interactive software layer for HD DVD.

And that would be "unacceptable to HP," said Weber. "We are hoping Microsoft will support both Blu-ray and HD DVD."

But the two camps are so badly polarized they appear unable to unify the formats. And while recent developments may have unfolded publicly, a fiercer fight could be under way privately as the rivals seek to recruit more studios into their ranks.

After all, many analysts agree, dominance will be decided by which content providers support and release the most attractive titles. Today, the match appears dead-even, with Blu-ray having signed up Sony/Columbia, Tri-Star, Disney, MGM and Fox, while HD-DVD has Paramount, New Line, Universal and Warner Bros.

Ben Keen, chief analyst at market research firm Screen Digest (London), said, "My view is that this [Microsoft-Intel move] is an eleventh-hour attempt to put pressure on the studios that have already 'voted' for Blu-ray and those in the HD DVD camp who were about to 'blink.' "

He noted "the highly significant omission of Warner from the press release" that Microsoft and Intel put out last week. The implication Keen draws is that Warner — which has been in the HD DVD group — might have been the studio most likely to "blink." Keen described the joint announcement as "pretty much the last card that the HD DVD camp can play."

"But," he added, "it's a good one."