Both proposals currently on the table attempt to define an entirely new, hybrid format made up from elements of the Blu-Ray and HD-DVD systems. In addition, both proposals try to include additional capabilities that would give proponents of the existing camps reasons to move to the new format.

"The most important thing to understand here is no one really wants a format war," said the source who asked not to be named.

Executives on both sides realize that DVD video was hugely successful, in part, because it was a unified standard. In contrast, DVD audio has been one of the worst failures in the technology business because two competing standards came to market, the source added.

Indeed, a single DVD standard would be a huge win for consumers. If both standards come to market consumers would likely be faced with buying both Blu-Ray and HD-DVD players if they wanted to play all the prerecorded movies that would become available.

No details about the two hybrid proposals were immediately available.

According to sources close to the DVD Forum and the Blu-ray Disc Association, the groups are on the verge of agreeing on a higher-level protocol and interactive layers as well as the physical formats of the incompatible standards.

Both unification proposals also try to address the fact that some of the big studios have conflicting requirements. Warner Brothers is said to want the lowest cost media, while The Walt Disney Co. is said to prefer the standard with the highest capacity.