A fight for vanishing spoils

With the next-generation DVD war of words raging between supporters of competing HD-DVD and Blu-ray Disc formats, both camps are trumpeting interactive capabilities, consumer adoption rates and the all-important support of content providers. But recent events suggest they might be fighting over an evaporating market.

For starters, format-agnostic products and technologies have emerged. LG Electronics has introduced a dual-format player; Warner Bros. has announced a disk format that carries HD-DVD content on one side and Blu-ray on the other. A company called New Medium Enterprises said it has worldwide patents on the Versatile Multilayer Disc, which offers up to eight layers on each side and can handle both blue-laser and red-laser formats. The company intends to license the technology broadly.

The dual-format technologies appear to benefit consumers by rendering the format war moot. As critics have pointed out, however, they could also prolong the battle or even extend it indefinitely, leaving end customers to pick up the tab for both sets of royalty fees. For the formats themselves, the battle's a draw, since both survive but neither is clearly victorious.

A bigger threat looms for both formats, one that will ultimately render them both irrelevant. The all-digital transmission, storage and consumption of content will one day make us all wax nostalgic about the good old days when it was necessary to actually get up and load something called a disk to watch a film or listen to an album. And while hurdles remain to this dream of a truly digital living room, it may not be as far off as widely believed.

Last week, Netflix Inc., a pioneer of the DVD-rental-by-mail market, announced it will make movies and TV programs available to subscribers for viewing on PCs through streaming media. Quality questions remain, but Netflix will initially offer about 1,000 titles this way and will no doubt add more.

Apple Computer announced this month that more than 75 movies can now be bought and downloaded to watch on computers and iPods. Soon, with Apple's upcoming iTV player, customers will be able to watch the downloaded films on flat-screen televisions.

For years, people have envisioned consumers renting films but needing no disks or other physical media. In a sense, pay-per-view and on-demand services do this now. Still, despite dramatic increases, choices remain limited. The Netflix and Apple announcements suggest an emerging future in which consumers acquire, store and view any movie without physically finding and loading a disk. Given digital storage's increasing capacity and decreasing cost, Best Buy customers will soon bypass next-generation DVD players and opt for digital media servers, video recorders and media adapters.

Not only will storing content be effortless, but entire movie collections will be available at the touch of a few buttons. After all, in whose vision of the digital living room is the place cluttered with DVDs?

Hurdles must be overcome. They include the relatively long download time for high-definition content over a broadband connection and a variety of digital rights management systems that are likely to restrict the use of content one has already purchased.

With an onslaught of electronic content delivery to the home, however, Blu-ray and HD-DVD are living on borrowed time. It's hard to imagine either format hitting a level of sustained adoption that would justify the expense to CE vendors, retailers and content providers.