No Choice - thoughts on the format war

Nowadays, if you enter a consumer electronics store, you're greeted by high resolution TVs everywhere. The move to flatscreen TVs also brought us in the HD age - even your entry level TV has a resolution of 1280x800 or slightly larger, and the higher end models offer the full 1920x1080. With DVDs maxing out at 720x480 (or 720x576 in PAL countries), it's time our movies sport a higher resolution to fully utilize the available screen real-estate. While High Definition TV has been available in the US and Japan for many years, times are changing even in Europe (where we might have a lot of high definition capable TVs but not that much content to go with it - hopefully the upcoming Olympic Summer Games and the European Soccer Championship Euro08 will launch HD broadcasts into the mainstream, just like the last Soccer World Cup marked a trend towards widescreen broadcasts) - and if TV broadcasts suddenly surpass prerecorded movies in quality, it's about time something better looking became available.

A bit of DVD history

When the industry started to get serious about a disc based format for movies back in the nineties, DVD wasn't the obvious choice - in fact, the situation was not unlike before the launch of today's high definition media formats and there were two competing camps both having their own ideas. One was lead by Sony/Philips, and one by Toshiba. Long story short, before the launch of either format, the two camps worked out their differences which resulted in the birth of DVD.

However, even though the industry largely agreed on one format, that wasn't quite the end of it yet. One of the largest consumer electronic retailers in the US - Circuit City - teamed up with an entertainment industry lawfirm to bring us DIVX - Digital Video Express. DIVX added another layer of encryption to a regular DVD (triple DES - to my knowledge it's the only disc format to not have its encryption broken), and required more expensive players equipped with a modem so that the player could "phone home". The phone home was needed because DIVX was set up as a hybrid rental / purchase system. Under the scheme, you could pick up a disc anywhere (be it a consumer electronics store, grocery store, pharmacy, etc.), pop it into your player, and you'll get 48h of playback time once you start playing. After that, you could toss the disc away, or purchase additional rental periods later on. You could also decide to "buy" the movie for an additional amount. That would grant you unlimited playback on your player (or if you had multiple players registered to the same account, on those players). That option was called DIVX silver. Then there was DIVX gold which is a full price disc without any ties to any specific player. Since your average disc was first and foremost a rental disc, movies were only made available in 4:3 format (still dominant at that time) and without any extras (including foreign language soundtracks, subtitles and such) Any DIVX player was also a DVD player since DIVX was just another layer of encryption plus the rental option.

Now why am I getting into old history? Because besides the hardware side, there was a software angle as well. Studios chose to align themselves with one or both formats. Here's a rundown of how both formats started out studio support wise

Both Sony and Warner have stakes in the DVD format, so it's not surprising that they chose to side with DVD. Disney and Paramount were neutral on paper. However, Disney chose to only release a very limited number of discs in the DVD format, while really stepping up DIVX wise, by releasing many more titles and even some of their animated content early on. Paramount also seemed to favor DIVX at the time release-schedule wise (they released more on DIVX). Fox was the only major to not release any titles on DVD when the format launched.

Early on in the game, there was quite a bit of concern over having two formats available (note that DIVX was only available in the US at the time, although there were plans to bring it to Europe) and about the somewhat lackluster release schedule of the neutral studios (which initially signed up for DVD and only later on joined the DIVX camp as well).

In 1999, DIVX went out of business. It followed speculation about Viacom (owner of Paramount, and the Blockbuster rental chain) buying out DIVX. When the deal fell through, Paramount started to slow down their DIVX release schedule, which was the first indication that not all was well in the DIVX camp. Either way, the bottom line here is that early on in the game, you had to make a choice - would you go for DVD and live with the content provided for that format, or get DIVX instead to have all the options.

Now fast forward to 2006

Prelude to another format war

At the advent of high definition, hardware makers and studios once again teamed up in two competing groups, but this time, despite negotiations to get a single format, no consensus was reached. Interestingly, when the two groups had come together before the inception of DVD, they formed a common standard group called the DVD forum, which is responsible for standardization, licensing and development of the format. But when the group around Sony couldn't convince the other DVD forum members to adopt its ideas (via their votes in the group), they went ahead and created their own format outside the umbrella of the DVD forum. If you think back just a few years, we saw the same thing with DVD- and DVD+.

In the end, the DVD forum went for a solution that is close to today's DVDs, which they hoped would lead to a low production cost as proven technology is used. The Blu-ray camp settled for the successor of Sony's already existing blue laser based storage solution (which is now defunct), which uses a physically different structure where the data layer is closer to the surface of the disc, which makes it more risky for scratches (and hence every Blu-ray disc has a special coating to prevent scratches as their effect can prove to be significantly more disastrous than on a CD, DVD or HD DVD), and which has not been mass produced on a large scale before.

In addition to the physical differences, one of the main differences is the choice of the programming language for menu and navigation programming. The DVD form settled for iHD, an XML and Javascript based specification jointly developed by the DVD forum, Microsoft, and Disney. The Blu-ray camp settled for a derivation of the Java 2 for mobile devices and gave it the name BD-J.

Finally, another major difference was copy protection: While both camps settled for a renewable strong encryption system called AACS (and players from both camps have a stake in that encryption scheme), the Blu-ray camp adopted two additional layers of DRM BD-ROM - aimed at stopped counterfeit discs - and BD+ - aimed at preventing any copies even if AACS has been circumvented. It is widely believed that Fox was the driving force behind BD+ and the DVD Forum's refusal to include it in the HD DVD specs is why Fox chose Blu-ray

Studio wise, there was an effective split between the two camps, with no studio releasing their movies in both formats:

As you can see, things were pretty much evenly split.

The Blu-ray camp also put a lot of hopes into the Playstation 3 gaming console. Sony decided to put a Blu-ray drive into every console, and thus use gamers to jump-start Blu-ray into millions of homes within a short time.

And so it happened - first HD DVD entered the market, then shortly thereafter Blu-ray.

Comparing the two systems

Here are the main differences between the two formats

The rest is pretty much the same - both formats support 3 codecs: MPEG-2, MPEG-4 AVC and VC-1, 32 subtitle channels, the same 1920x1080/1280x720 and standard definition resolutions.

Video quality

As you can see, size wise, Blu-ray has a significant advantage, which also translates into more than 33% higher maximum bitrate. Unfortunately, this doesn't necessarily translate into a better picture. There are various factors that come into play here:

• Codec choice: When using AVC and VC-1, you won't nearly need as much space.
• Codec saturation: You may know this from creating your own DivX or XviD rips that come out too small - there's a minimal compression factor for each frame, which translates into a maximum size a movie can attain.
• Peak bitrate limitations: The maximum bitrate can only be reached if there's enough room in the bit reservoir - hardware devices don't have unlimited resources (both CPU and RAM wise) and therefore, the bitrate variations and the length of a peak in video bitrate are rather limited.
• Preprocessing: Nowadays, many titles are being filtered before transferred to any disc format. That filtering can involve noise filtering, which lowers the video bitrate needed.
  

So much for the theory - now let's see where we're at today.

The first batch of Blu-ray titles often came as single layer MPEG-2 titles. Now you might be surprised - what happened to all the talk about more space and higher quality? If you check the disc specs at High-Def Digest nowadays, that situation is a far cry from when Blu-ray launched last year. There are now somewhere between 60 and 70% dual layer titles for new releases, but you'll still find the occasional single layer MPEG-2 title.

On the other hand, there are few single layer HD DVD titles and MPEG-2 is only used (if at all) on extras (still a waste of space if you ask me).

Even with two studios temporarily releasing movies in both formats, there has yet to be a title where there's a noticeable difference in video quality, and the best single format titles do not seem to offer any discernible quality difference. It will be interesting to see how the director's cut of Troy and the extended edition of Lord of the Rings (both titles will be available in both formats) might show a deficit on a 30 GB HD DVD or if Warner/New Line will just put the extras on another disc (and thus incur a higher production cost), as it has been done so often for DVDs.

For now, unless lossless audio is being used, the size differential hardly seems to matter, and the use of single layer discs and MPEG-2 for the main feature should make you wonder if Blu-ray may not simply offer too much space so that space can wasted by using an old codec like MPEG-2 (after all, all players need to support all three codecs).

Audio

Audio is a topic that has the potential to bleed into video quality - especially when a lossless track is being used. Since both compressed lossless formats (Dolby TrueHD and DTS-HD Master Audio) are optional on Blu-ray, you'll find that title sporting a lossless codec make use of LPCM, whereas the bitrate of an LPCM track could be detrimental to video quality on HD DVD, and hence, HD DVD titles are less likely to have a lossless soundtrack (and if they do, TrueHD is the more attractive solution).

Quality wise, most reviewers don't give either format the edge, but if you aim at backing up a disc and convert the audio track, having a lossless audio track is definitely preferable.

Specs

The audio department actually showed one of the main differences between the two formats - optional versus mandatory features.

There is but one revision of the specification for HD DVD. Every player on the market has to support the full set of features, every player needs to have a certain amount of persistent storage and an Ethernet connection to allow content loading via the Internet. The Ethernet connection is also used for the managed copy feature - Managed copy is a limited right to copy content in your home network to authorized devices. At this point however, nobody has seen managed copy in action, and it will most certainly require special hardware, be severely restricted, and you could end up having to pay extra to make a copy to your media streaming server.

Blu-ray is another matter entirely:

There are 4 different profiles in the specification: Current players implement the 1.0 profile, which requires almost no persistent storage, plus all the improved audio codecs over what's available on DVD are optional (hence the frequent use of LPCM for higher quality audio on Blu-ray). All interactivity features are part of the 1.0 profile, however, part of those features can only be used on players supporting the 1.1 profile, which will be mandatory for new players starting November 1st 2007.

The 1.1, or "final" profile, requires 256MB local storage, a secondary video encoder (to allow picture in picture features) and a secondary audio encoder (allowing for commentary tracks to just take one audio channel and the player mixes this together with the regular audio track). It is possible that certain existing players can be upgraded to the 1.1 profile, but so far, there have been no announcements. I would presume that at least the Playstation 3 will be upgradeable, since it has the necessary CPU power and local storage so it's just a matter of a software update.

The 2.0 profile adds network features and requires 1 GB of persistent storage. You definitely won't see 2.0 features on a bunch of existing players, as they simply don't have the hardware, but once again, the Playstation 3 is a prime candidate for an upgrade.

Then there's an audio only profile - I don't think it has been used before.

Interactivity

iHD, even though quite powerful, is aimed at existing web developers - you don't need to be a full blown software engineer to create an interesting disc. Also, in Microsoft tradition, there's quite a bit of information and tools readily available. In fact, it takes you less than a minute to find out how to do picture in picture with iHD. However, there are two drawbacks: the technology has its limitations (only time will tell if they matter), and if you want a list of all the features, you have no choice but to shell out the money to get the HD DVD specs. So you might be able to create an advanced HD DVD title with the available information, but to figure out what you can do, you have to pay and I can't say I'm much of a fan of that approach.

BD-J, as the name implies, is based on Java. It thus offers a richer set of features than iHD, but it also requires a solid foundation in software engineering. Now if you try to find any documentation or samples online, you'll be hard pressed. Also, since the people authoring discs are generally not software engineers, it will be a challenge to marry generic authoring with programming. And from the programming side of things, without a thriving community, and SDK, and the specs under NDA, it'll be a challenge to turn BD-J's possibility into actual titles. There's been a flurry of BD-J announcements recently so perhaps that's an indicator for things to come..

Note that both formats also have a basic mode of authoring, which resembles what's available on DVDs. In fact, there's but a handful of titles making use of BD-J at this point.

Consumer Restrictions

Now we are on my favorite subject - without CSS trying to prevent us from making backup copies of our DVDs, this site might not have come to life.

Especially if you live in a PAL country, you probably have a DVD player that is region free and can play discs bought in other regions. So, HD DVD's lack of a region code (though there's been talk about adding that because studios apparently still don't get it) removes any regional restrictions - put any HD DVD into any player and it'll play. What makes this even more interesting, is that due to the distribution differences in Europe (studios don't always distribute their own titles), you can actually get a bunch of titles that are Blu-ray exclusive in the US on HD DVD in Europe.

Blu-ray uses a simplified region coding scheme where the world is divided into 3 zones: America + Parts of Asia, Europe + Middle East + Africa + Australia + New Zealand, and Russia, India, China, Pakistan and Central/South Asia (could this be internally known as the piracy zone?). So, no US discs in Europe and vice versa and we're just as stuck as we were with DVD. For a world map showing the zones, check Wikipedia.

And then there's copy protection: both formats use AACS. While the system is still sound, the discovery of certain master keys have so far made it possible to decrypt every disc.

Blu-ray adds to additional layers: BD-ROM, which is a mechanism to prevent stamping of pirate titles. BD+ is aimed squarely at people who frequent sites like this: it's an additional layer of encryption that sits on top of AACS, and which checks and transforms the output of the AACS decryption in real-time. Unlike AACS, where a master key will permit you to decrypt any title until the key is revoked with future discs, BD+ allows title specific security, so even if one title is compromised, you'd need another hack for each other title (provided this is how BD+ is implemented - it remains to be seen if having title specific protection is technically and financially feasible). Either way, Blu-ray takes DRM to a whole new level and it remains to be seen if it is the holy grail in DRM or just another nuisance. For a good overview of the copy protection technologies used on Blu-ray, check out this article.

Also, AACS is optional on HD DVD. Seeing as AACS adds cost and time to the authoring process, some small distributors actually prefer to release titles without AACS and to save cost. Since AACS is mandatory on Blu-ray, it is up to each player to decide what to do with non encrypted content. That's the reason why WinDVD does not play a decrypted Blu-ray disc. However, since it's perfectly permissible to author your own BDMV (there's two types of Blu-ray content, BDAV which is geared at recording and offers very little in terms of features, and BDMV which is what you need to have menus, multiple audio tracks, etc.) titles on a recordable Blu-ray title, Intervideo apparently added a source type check to their player in order to prevent playback when a software like AnyDVD HD is running.

Hardware

So far, Toshiba is the only company that has released any HD DVD players. Starting in October, their third generation of players will launch, starting at $299. There's another player, the hybrid HD DVD, Blu-ray player from LG, but it's not fully HD DVD compliant as it cannot handle iHD. Samsung is scheduled to release a fully compliant dual format player later this year, and Onkyo will also release a player later this year. There are also persistent rumors about upcoming Chinese low end players - I even saw a model back at CeBit but so far there has not been any announcement.

The most popular way to play HD DVDs right now is the HD DVD add-on for the Xbox 360 gaming console - however, I haven't found any hard numbers on just how many such add-ons have been sold. So far, the number of standalone players sold in the US should have crossed 200'000.

There's quite a bit more choice for Blu-ray with players from Sony, Samsung, Pioneer, Philips and LG. At least Sharp is also supposed to launch a player later this year.

The most popular Blu-ray player by far is the Playstation 3. There are approximately 4.5 million devices in homes worldwide. While hard numbers on standalone player sales are hard to come by, I figure this gives the Playstation over 90% of the total Blu-ray hardware market.

Studio support

Since the format's inception, there's been quite a bit of activity on the studio front.

Both Warner and Paramount eventually went format neutral, with Paramount switching back to HD DVD only last week amidst rumors of cash incentives. What has not been as widely reported is that Paramount's neutral stance came with a replication cost cap. And with the head of Warner's VP of high definition media leaving, the rumor mill has been buzzing about a possible shift in format allegiance for the studio that provides 30% of all HD DVDs and 20% of all HD DVDs (making it the second biggest contributor of both camps), so much that Warner issued a statement that there's no change in strategy at this point. The Paramount deal also involved Dreamworks, which started out as a format neutral studio when it entered the HD market earlier this year.

Fox and MGM also pulled the plug on any Blu-ray releases earlier this year, possibly in response to the leaked AACS keys. The same day the Paramount deal was announced, Fox and MGM announced that they'd get back into the game (likely with BD+).

The EU has launched an antitrust probe into the format war and is looking at why certain studios only support one format and if they could've been paid off for doing so.

By the way, speaking of replication cost, even today, there is a significant difference - for low volumes, a single layer Blu-ray disc will cost you almost 50% more than a dual layer HD DVD.

HD formats as storage medium

I've seen this come up a few times. Blu-ray always had a focus on recordable - probably because it is based on Sony's now defunct blue laser data storage system. Even a year after the launch, you'll be hard pressed to find an HD DVD recorder or blank discs, whereas PC recorders and blank media are readily available, albeit at a steep price. If you're coming from DVD, using a 25 or 50 GB disc could save you a lot of storage space. However, there's a high price tag to pay for using up less space. We have seen prices erode on both CDs and DVDs as the formats picked up steam - but will it happen for HD, too? You might recall that despite the availability of cheap recorders (in fact it's hard to get a DVD burner that cannot handle dual layer recording), dual layer DVDs have remained expensive despite offering the best space/size ratio before the HD age (and being a perfect medium for a 1:1 DVD backup).

Also, at this point, we know very little about the longevity of recordable HD media - scratches are one thing, but there's natural decay, too. Who has not experienced read errors on a disc that you burned a few years ago? Last year, I moved a sizable collection of data stored on both CDs and DVDs to a bunch of portable harddisks (for convenience and using up less storage space). And even though most of the discs were brand name, and the discs were recorded in high quality drives and never going over the specified write speed of a disc, there were plenty of examples with read errors. Some time, the discs would still play in a standalone player (you might see a glitch or two), which might be an inconvenience for video, but if you're dealing with other data, a swapped bit can get you into major trouble. Therefore, I have since given up on recordable media for long term storage. I realize that harddisks crash - in fact I even had a harddisk that lived all but two hours, and back in the early days of computing a buddy and myself managed to get a harddisk to start smoking (interestingly, it still worked afterwards.. ) - but I take the MTBF of a modern harddisk (you don't have to keep them running 24/7, either), as well as the price per GB and the size per GB over any disk based format. Obviously, I continue to use recordable media for certain use, but for a collection of movies or music, a harddisk seems the more obvious choice today, especially in the light of streaming devices and NAS storage solutions becoming more common in the home arena (plus the upcoming Windows Home Server).

Summing it all up

As you could imagine, for me, what I can do with any format is one of the foremost questions I need answered when investing into any digital media format. The dislike of DRM is why until this day I have not bought a single piece of music online. I do have an iPod and have found plenty of music that I would buy, provided the proper price and no DRM and studios only have themselves to blame that I've stopped buying music altogether and rely on Shoutcast exclusively (these days I don't even bother recording anymore).

When I looked at the specs of both high def formats before they were released, AACS had me worried and I figured I'd at least wait and see how it holds up. So when it became possible to decrypt HD DVDs, I ordered the Xbox 360 add-on for my PC (I don't have any consoles) and have built up a nice little collection of titles. After comparing a few with DVDs I already had, I figured I couldn't go back and have only bought a few TV series on DVD since then. While tools to decrypt Blu-ray followed shortly after BackupHDDVD, that's not quite the end of the story yet. We'll soon see the first BD+ titles, and as I've outlined above, that's a whole different ballgame. It is anybody's guess whether BD+ won't be a big challenge, or if it will effectively mean that those roughly 300 Blu-ray titles available today will remain the only Blu-ray titles that you can decrypt. I for one prefer to be safe than sorry, so it's no Blu-ray for me. Back when DVD was new, I didn't bother to think if I ever needed to copy my movies (at that point I had a nice Macrovision buster so I could copy VHS tapes despite studio's attempts to deny me what I'm paying levies for), but you wouldn't be reading this if I didn't decide that being able to copy was crucial. Even if today the ability to copy doesn't seem important to you, make sure you don't discard it as irrelevant just at a whim.. the day you find you can no longer play a DVD because you accidentally dropped it on the floor, your kid tried to eat it, or you got it back from a friend with one too many scratches, then it's too late, and the studio won't exchange it for the cost of the plastic. After all, you do keep backups of other important data, too, don't you?

Region code wise, it seems so far Blu-ray has remained mostly regionfree, with almost 80% of titles not being restricted to a certain region, which is great news for those living in a region where only a limited number of titles is available. But, it's anybody's guess whether this'll remain the same in the future.

One of the main arguments I hear in favor of Blu-ray is video quality. Yes as I outlined above, at this point, there's not a shred of evidence that it is even an issue. I figure, if studios run out of space, there's always the dual disc solution, which will cost them more, but since it's not required for most titles, it's not that big a deal. Also, let's have a look at some statistics, courtesy of blu-raystats.com and hddvdstats.com.

Over 50% of all existing Blu-ray titles use the inefficient MPEG-2 codec (versus 3.7% for HD DVD of which there's just one movie). Almost 61% of all Blu-ray titles are single layer titles (versus 83% of all HD DVD titles). So, that should have you wondering if the 50 GB are really necessary? Nobody can argue that if needed, having more space is a good thing to have, but the stats so far support two conclusions: either studios don't just care about giving you the best possible quality despite claiming differently (and I suspect that's at least partially true seeing how badly certain DVDs are being utilized size wise), or 50GB is just too much.

Also, the rocky start with many 25GB MPEG-2 titles (some of which have been reissued because they didn't look better than the DVD), coupled with the ongoing confusion about profiles and which players support them, along with the fact that BD-J is only available on a handful of titles, make me think Blu-ray was rushed to the market too early, in an attempt not to fall too far behind HD DVD. And those who bought a player early on might end up (and sometimes already have with sub par quality titles) having to pay the price (by having discs with features you cannot even use even if you wanted to).

There is no choice

In the PR war, we've heard a lot of "consumers chose this and that" from both camps in the past. However, if you take a step back and look at the bigger picture, all those statements are grossly incorrect. Just like there's no spoon, there's no choice in the HD format war.

Start with the number of players sold: There's somewhere between 4.5 and 5.0 million Blu-ray players out there, of which 4.5 million are Playstation 3 consoles. Since I have no hard numbers, let's make a few assumption (and feel free to point me to some accurate up-to-date numbers so I can improve this number play): Let's presume the number of standalone Blu-ray players sold worldwide is 500'000. For HD DVD, let's assume there's 250'000 players sold in the US today and that the same number of Xbox 360 add-ons have been sold. On a worldwide scale, let's double that number, so 1'000'000 HD DVD devices in total (as I said... there's a lot of assumptions here so I'd appreciate if you have accurate numbers.. I have a lingering suspicion that I'm going too high).

So, 90% of all Blu-ray players are Playstation3 consoles, and Blu-ray holds a 5/1 lead over HD DVD in terms of hardware. In terms of discs sold, we know that Blu-ray has a 2:1 lead, which tells us the attach rate of Blu-ray is significantly lower. This comes as no surprise since the Playstation 3 is after all a gaming console. However, that's when choice enters the equation: Those who want a Playstation 3 to play games, have no choice but to pay for the most expensive gaming console available today, even though they might not want the Blu-ray drive, and are likely to pick a Playstation 3 without a Blu-ray drive if it were available (compare the number of Xbox 360 HD DVD add-ons with the number of consoles sold in total and you get the picture). And with the disc deals you're often getting (you can't chose not to get them and pay 5x$25 less), you already count as owner of 5 Blu-ray titles (put that in relation with the 2.2 million Blu-ray titles sold in the US since the format's inception, and the number of Playstation3's sold). Bottom line, the Blu-ray marked is basically a Playstation 3 market, and while people do get a PS3 as Blu-ray player (now perhaps not so often anymore with the new Sony standalone with a list price of $499), you don't play a gaming console to watch movies but to play games. Oh, and speaking of choice, the console market is a great example of the consumer not having much of a choice. Want Halo3? You have to get an Xbox 360. Want the next Metal Gear Solid? Get a Playstation. Especially for third party games, the console market has long since driven on console makers paying off game makers for exclusivity.

Now enter choice on the software front: Once again there is no such thing as choice. If you want a movie from Universal, Paramount or Dreamworks, you have to get it on HD DVD. Want a movie from Sony, Fox or Disney, you have to get it on Blu-ray. But wait, there are the neutral releases. However, since the Blu-ray market is a Playstation 3 market, it's not much of a choice. If you had to cough up $600 (or even more if you live in Europe) for a gaming console and you wanted a high def movie for your shiny new HDTV, would you shell out another $300 (or more if you live in Europe) for a HD DVD player, or would you get the Blu-ray disc? Or, if you have an Xbox 360 console, would you shell out $179+ for the HD DVD add-on, or $499 for the Sony Blu-ray player to watch a high def movie? If it's between paying nothing or $300, it's no choice at all, if it's between $179 or $499, it's not really much of a choice either. Only the owners of a standalone player in each format had a choice in buying their player.. that is as long as they don't look at what movies they're going to play.

On the retailer front, we haven't seen much in terms of choice either. While we don't know how much was paid, the promotional incentives received by Blockbuster and Target lead to a reduction in choice for the consumer. And speaking of incentives (Sony is apparently a lot better at keeping the lid on and we have to wait for the results of the EU investigation), at least we can easily calculate how much Sony is spending on the hardware front: iSupply calculated that Sony pays $240 extra per console sold (and above $300 for the model no longer being sold now.. it pays to overcharge for the HD). In all fairness, Microsoft pays $126 per Xbox360, so let's slice that number in half and say $120 is a console subsidy and $120 is a Blu-ray subsidy. That makes a cool $540M for the most popular Blu-ray player.

And then there's Sony

I used to be a huge supporter of Sony in the past. It started around the time of Mini Disc (which I thought was a great idea), but it gradually changed over the years as I realized their strategy is mostly peddling their own proprietary stuff rather than supporting industry standards. Just look at the direction they took with non optical disc players (the use of ATRAC instead of MP3), their own memory format (Memory Stick versus CF/SD), their own digital video format, their own recordable DVD format (DVD+) and now their own optical format for movies.

There's more though. Back when Mini Disc was launched and in the years after, Sony promoted MD as the perfect companion to your CDs. You'd buy CDs, record them onto MiniDisc and take them on the road as MiniDisc is the more portable format. Over the years I've had two portable MD players and I really liked the idea of a more portable format (the popularity of ripping your audio CDs and putting them on your iPod go a long way to show that this is what people want to do). In order to not allow perpetual copying, CD players and digital recorders were equipped with SCMS - a DRM system that would allow you to make an infinite number of copies from the original, but wouldn't let you make a copy of a copy (today SCMS remains the most consumer friendly DRM system which strikes a reasonable compromise between content owner and consumer). However, then when Sony decided to cripple their CDs with copy protection, they started to use SCMS as an anti copy mechanism - their CDs had the SCMS "I am a copy" flag set, so you couldn't record them onto your Mini Discs anymore. Great way to go back on your tagline to sell the format in the first place.

Along with copy protected CDs came the infection of our PCs with rootkits.

Then came ARccOS - messing up DVDs so that we cannot copy them anymore.

Then came the exploding batteries.

And finally as a last straw, they killed off RipIt4Me.

That's a track record worthy of competing with MPAA and RIAA (I love the "suing your own consumer" approach of doing business).

Conclusion

I said it before, there is no choice.

For me, region coding, the prospect of BD+, plus the studio's track record at making good use of the space on Blu-ray, plus who's behind the format, I cannot in good conscience recommend Blu-ray to anyone (let alone spend any money on the format).

That leaves DVD or HD DVD. Once you've compared both formats, you're unlikely to like DVD that much anymore, but you're left with the "choice" between a low res format where you can get all movies, or a high res format where you're limited to content by studios that support the format (or having been paid off to, or have been paid off not to). And it's not like I particularly like the premises of HD DVD either. Sure, picture quality is a big step up from DVD, they're much more consistent in terms of specs, but let's not forget about AACS. In fact, I got a new GFX card not too long ago, a 8600GT supporting HDCP because I read in reviews that the nVidia G84 series supported HDCP over dual link DVI (and I have a 30" Dell that is HDCP capable but requires a dual link connection to get the full resolution). And then, it didn't work. So, in fact I'm still left with the choice (and here it's actually a choice) of using AnyDVD HD or rip the disc to my HD. And now you might see why BD+ could be fatal: I need to be able to decrypt any disc before playing (yes there's the option of analog.. but no 30" screen has an analog input as the quality would be beyond acceptable.. the larger the resolution the more important it becomes to stay digital). I guess for me HD DVD is the lesser of two evils, and with the available AACS tools, they make up a bit for the complete lack of consumer friendlyness (all under the assumption that the current streak of new codes leaking shortly after the revocation of the last one continues).

P.S.

Every now and then somebody will suggest that the main reason Microsoft supports HD DVD (technically, they support both since VC-1 is supported on both formats, and Microsoft is one of the companies behind AACS) is that they want to ensure neither format gains widespread acceptance, and instead come up with an online distribution system at a later date. Looking at the current network neutrality discussion, where ISPs would rather charge extra and install complex prioritization mechanisms than expand their bandwidth, the reaction BBC's iPlayer has created as well as various ISPs around the world cutting people off or throttling people who use more than a few GBs of traffic (Comcast being the latest example) shows that we're nowhere near ready for high definition video download / streaming services.

And if you look at the level of commitment (and often dirty tricks) Microsoft shows if they're serious about pushing something, they are all but out to push HD DVD over Blu-ray. If Microsoft was serious, wouldn't we have an Xbox360 elite with a HD DVD drive? Wouldn't Vista come with native HD DVD playback and a bunch of wrenches thrown in the gears of any Blu-ray playback software? After all, that's how Microsoft usually plays the game.