November 28, 2005 4:00 AM PST

Cost questions dog Blu-ray DVD's lead

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Blu-ray has more clout right now thanks to backing from studios such as Warner Bros. and Paramount, which have said they would release films in both formats. No Blu-ray backer has made the same gesture toward HD DVD.

Manufacturers have been testing both technologies in their labs for months and are now gearing up for actual production. Sony Pictures announced earlier this month that it had made the first "reference" disc of a Blu-ray movie, using a copy of "Charlie's Angels: Full Throttle." It's now being shipped to player companies for testing.

"The Blu-ray technology and process is new," said Lyne Beauregard, director of communications at Cinram International, a large disc manufacturer in Toronto. "If the format is launched and grows, there will be multiple generations of equipment. As we refine it and find efficiencies--that will lower the cost."

Cinram's Beauregard said her company had a single Blu-ray production line up and running, compared with 12 new DVD lines that could also do HD DVD discs. She wouldn't provide cost comparisons.

The disc manufacturing executive critical of Blu-ray said his company's production test lines showed that Blu-ray production was far less efficient than HD DVD. Component costs, for example, are higher because they use different materials than DVDs, including a high-tech film layer currently produced only by Sony.

"The difference is significant," the executive said. "Those are real costs. I don't think the price will ever equalize."

He also said that both sides' promises to make "hybrid" discs, with high-definition content on one side, and an ordinary DVD on the other, should be viewed with deep suspicion. Though it's feasible to combine the lowest-capacity HD DVD with DVD, Blu-ray and higher capacity HD DVD discs will be very expensive to meld with the standard format.

For now, since hard production data on the new technology remains scant, many of these comparisons rely on educated guesswork.

A recent white paper published online by Richard Marquardt, an engineer who served in top executive roles at disc replicators for years, predicted that retooling manufacturing plants for Blu-ray could cost up to $1 billion worldwide, while existing DVD manufacturing capacity could be refitted for HD DVD for less than a tenth of that.

"Already-beleaguered CFOs will be challenged to raise--and risk--this significant amount of capital," Marquardt wrote.

His predictions were immediately challenged by Blu-ray supporters, who noted he is a close associate of Warren Lieberfarb, a Hollywood consultant who works closely with the HD DVD camp. In an interview with CNET, Marquardt said Lieberfarb had asked him to provide his thoughts on the manufacturing issues, but that he had no personal or financial stake in either side.

The real cost and quality issues will be apparent only when both formats hit the market next year.

"If we had made the determination solely based on cost, we would never have launched DVD," Sony's Alperovich said. "And that's absurd."

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PS3 Blu-Ray
Sony are expected to have Blu-Ray in the PS3.
If this is the case then the expected cost to manufacture the discs can't be that high.

Also, with gamers being bigger earlier adopters there will initially be more Blu-Ray enabled devices in the home than HD-DVD.

New technology always costs more. Look at DVDs when they came out first. The players were really expensive and so were the discs.

Now £30 will get you a DVD player and onlne you can get the latest releases for as little as £15.

Quote about the PS2 launch from :<a class="jive-link-external" href="" target="_newWindow"></a>

"...during the console's first weekend of release, while DVD software sales in Japan increased between two to four times..."

I expect the PS3 will have the same impact for Blu-Ray movies.
Posted by ahickey (177 comments )
Reply Link Flag
Cost to consumer
If the price of the media or production was the direct driver of consumer cost, CDs would cost a lot less than tapes. The bottom line is that its the desirability and/or quality of the content that drives the price to consumer. I think this FUD's purpose is to gear the consumer up for another price hike like they did for CD.
Posted by samkass (310 comments )
Link Flag
player vs disc
This article is about the discs, not the players, so your point is kinda moot.

Expect Sony fully to release the players at the lowest price point possible in order to get you to buy the software, this being where the profit is anyhow. Look at the loss MS is taking on the 360 for instance. There is no doubt that companies will take short term hits for long term dominance.

The fact it's on the PS3 is proof of this.
Posted by vesavius (8 comments )
Link Flag
PS3 will not have the same effect on blu-ray as the PS2 may have had on DVD sales in Japan. The current DVD technology has hit the point of affordability for the masses and is firmly established in the worldwide market. PS3 will be sold to gamers who aren't always audio/videophiles. Most of these users will already have a decent DVD player and these guys will likely fork over $60.00 for a game before spending $50.00 on a movie. Another factor is that HD Movies only have appeal to folks with HD tv's. While many next-gen consoles will be bought by hdtv owners in order for the consoles to be successful they will have to have a large number of regular TV customers. Until HDTV's become mainstream neither BLU-RAY nor HD-DVD will have significant sales to drop cost. With that in mind you're talking about 3-5yrs before we'll see any significant movement of players in the home market. The Yankee group predicts that by the end of 2008 there will be 59.8 million HD sets. There are 266 million tv's in the US right now. So one could REASONABLY estimate that in 3yrs HD tv's will still be less than %25 of the total US tv market. Currently there are 50-60 million dedicated set top DVD palyers in the US. In order for prices of players and media to hit current levels in 3yrs you'd have to sell a HD-DVD OR Blu-Ray player for every HDTV in US homes by the end of 2008. Toshiba plans to LICENSE Korean and Chinese MANUFACTURERS of HD-DVD players sometime 2006. Their strategey is to produce a cheaper player and get it to the market place first to combat Blu-ray. Those players are still going to be in the neighboorhood of $700-$1000. Not what the mass market is willing to pay obviously. Whatever HD dvd technology prevails it wont hit stride until sometime around 2010. By that time PS3 and XBOX360 will be at the end of their lifespan.
Posted by Captain-Atari (80 comments )
Link Flag
blu-ray installs rootkit i hear
just a friendly reminder that the folks at sony are only looking out for what's best for you..... NOT! boycott sony!
Posted by sadchild (280 comments )
Reply Link Flag
Sony? you got to be kidding me
Well I guess I won't be buying anymore DVDs is this becomes the standard.
Posted by rivercityweb (3 comments )
Link Flag
Shut your pie hole
Before you start opening your pie hole. You need some proof to back you statement.
Posted by calidan (2 comments )
Link Flag
No confirmation on rootkit for HD DVD
Sony has no plan to implement the installation of rootkits on neither blu ray or HD DVD disks at this time as Sony is under pressure to do away with rootkits on its IMG titled music CDs.

The company is also looking at the costs of packaging and distributing future yet to be pre-rec HD DVD disks and to what effect this will have on consumer's wallets.

just a friendly reminder that the folks at sony are only looking out for what's best for you..... NOT! boycott sony!
Posted by msims (66 comments )
Link Flag
This is because....
This is because it cost extra money (R&#38;D) to create new rootkit software for the DVD

<a class="jive-link-external" href="" target="_newWindow"></a>
Posted by SqlserverCode (165 comments )
Reply Link Flag
I'll wait for a winner or all-format players
Like with the DVD burner wars between the + camp and the - camp and to some extent the RAM camp, I'll wait until either BlueRay or HDDVD is a die-hard media winner, or players support all formats. Ideally I'll use my MythTV Linux computer for my DVD and HD successor format playing, so I hope that drives for computers will support Linux and that there will be player software for Linux. And I don't care if such software is open-source or not, I'd just like it to work on my HTPC.

I realize that PS3 will have BlueRay, and that's fine even if HDDVD wins in Hollywood. I don't use my PS2 as a DVD player, and if I get a PS3 I wouldn't expect to use that as my movie player device either. BlueRay may end up nothing more than the disk format Sony uses for their games data, and like weird disk formats for Gamecube, Greamcast, etc. that's fine even if BlueRay loses the movie industry.

I wonder if those claiming they will ship movies in both formats will make a hybrid disk with Blueray on one side and HDDVD on the other side, similar to the hybrid specs including traditional red-laser DVD format on one side. It'd be annoying to find players that only do one format or the other, and have to make sure you buy the right version of the movie off the store shelf. I'd be afraid that anyone else in my family buying movies for me as gifts would likely get the wrong format if they are in seperate packages. I already have trouble getting the whole full-screen/widescreen thing through their heads, especially as I prefer widescreen and others in my family prefer full-screen, I often get the wrong one and have to exchange or trash it and re-buy it myself. Once in a great while I myself don't pay enough attention and end up buying a full-screen by mistake and have to exchange it.

I can see this all possibly being quite a mess for a while, and I'll wait it out until the sorts of people who don't know the difference _can't_ buy the wrong thing, before I bother to get involved. Until my mom can buy something without having things explained and written down, and she doesn't have to be careful at the store, then HD movie formats and players are going to suck.
Posted by amigabill (93 comments )
Reply Link Flag
Not a good solution
A better example would be the battle between the DVD-Audio and SACD next-generation audio formats. By the time "good" combination players reached the marketplace (i.e. that could play both formats equally well and were reasonably affordable), the consumers that cared had largely lost interest. Now, serious music lovers are waiting for the new DVD format, as its spec includes even better fidelity multi-channel audio. Consequently, the "enhanced CD" market is basically dead on arrival and everyone loses.

CD and DVD were a commercial success in part because there was single, unified format and it met a consumer need. Those who ignore history are doomed to repeat it...
Posted by C.Schroeder (126 comments )
Link Flag
Maxell holographic storage to effect Blu-Ray
Expert doubts it's on track

<a class="jive-link-external" href="" target="_newWindow"></a>
Posted by grey_eminence (153 comments )
Reply Link Flag
scratchless disks....
I wonder if the plastic is as soft as tth etuff in CDs... It really bugs me when a CD skips...

I have never replaced scratched disks.... I am amazed that some of the largest and richest tech companies retreat to such lame tactict
Posted by (47 comments )
Reply Link Flag
HD DVD will be scratchless
The HD DVD disks will have a 0.5 mm scratchless hard clear mylar surface which will prevent the HD DVD from being scratched by the most common items such as keys, pens, knives and little infant hands who may want to play with them.

wonder if the plastic is as soft as tth etuff in CDs... It really bugs me when a CD skips...

I have never replaced scratched disks.... I am amazed that some of the largest and richest tech companies retreat to such lame tactict
Posted by msims (66 comments )
Link Flag
Hmm, Oh well, why buy last years technology?
Oh well, with Sony HQ, is now awash in a sea of red ink with expenses exceeding income(remember they sold off the staff pension fund in '04 to balance the books and '05 figures show a repeat performance of '04, plus losses from SONY BMG &#38; SONY Electronics Division(losing to Ipod!, bigtime on all fronts), it ain't got much spare cash to burn in subsidies for PS3!!). Further , as with all SONY eqipment sold, you pay more for less complete with many annoying petty user restrictions, and DRM inclusive, with very poor to non existent aftermarket service in general. An interestingly large number of consumer electronic products are overpriced rebrands as well! The use of a box office dog movie 'Charlies Angels Full Throttle' encoded at the old mpeg2, minus new DRM restrictions due to alleged licensing problems? should raise more questions about this product, than it answers???? The Maxell holographic 300 gigabyte recorder is said to be due late '06. I know which product I would buy, not like the lameduck last years technology, with inbuilt fair use restrictions, that come from SONY!
Posted by heystoopid (691 comments )
Reply Link Flag
Facts and conclusions
While there are many factors at play, here are some hard facts that lead to a conclusion:
1) HD DVD are easier to produce and at a significantly lower cost (despite whatever Sony claims).
2) HD DVDs will be in the market much earlier than Blu Ray.
3) Blu ray is backed by almost every big publisher, HD DVD by just a few.
4) Blu ray seems to aim to have more control over the distriution of content, regardless of them having an implementation of Managed copy (they added that one quite reluctantly).
5) Regardless of copy protection methods, everything can be copied at a certain cost if it can be seen and heard.
If this was a signle market, I'd say fact 3 would imply Blu ray wind hands down. No content=no market. But it is actually about two markets and their intersection: legal market and black (pirate) market, which exists and it's hughe, regardless of it being illegal. Pirate market cares about cost, market share of the technology, copying potential and timing. The legal market depends on copy protection and big firm support.
Thus, HD-DVD will start with a time lead, and get some sales in the legal markets and lots in the (hughe) pirate market (first with non HQ versions of movies, then with HQ versions as they are officially released on HD-DVD and blu ray. Blu ray will come later and be much stronger in the legal market. But since the HD DVD will already be there on the pirate, mostly pirate and semi legal homes (as well as some 100% legal homes) and it will be hard for the labels to convince those potential customers (ignoring the 100% pirate ones) of buying a second device, HD DVD will stay and the Blu Ray labels will probably decide to recover some of that market by launching HD DVD versions of their movies, killing any advantage Blu Ray will have for video. Elliminating this barrier, HD DVD will win in the long term thanks to the cost advantage.
Quite speculative, but mostly probable.
Posted by Hernys (744 comments )
Reply Link Flag
HD-DVD is the logical successor
Again Sony introduces a technologically superior format of an obscure, proprietary nature (think Betamax and Mini Disc) that isn't easily recognizable by the public and fades into oblivion. I predict history will repeat itself again for Sony and HD-DVD will win the format war. Not only is it the logical next step after DVDs and it has "HD" in the name so consumers know what it is, but its close lineage with existing DVD manufacturing processes should propel it to market sooner. Like JVC winning with VHS, I'd place all my chips on Toshiba.

Isn't it ironic, though, that the last two major advances in home entertainment formats have been battled out by Japanese, rather than American, companies?
Posted by omaryak (59 comments )
Reply Link Flag
I agree
Blue ray will confuse people. Not only that but from what I hear the costs of manufacturing BR Disks will be a 4:1 ratio. In other words, it will cost 4 times as much as HDDVD to produce a single disk. Which would drive prices upwards. I dont really care which one prevails, as long as I dont have to pay 50 bucks for a damn dvd or worst, 300 for a player. In the end i think that HDDVD will most likely prevail in the US. Just because manufacturing costs are so low and current manufacturing lines can be outfitted quick and cheap to support the new format. Blu-Ray doesnt have that luxury. I am well aware of the differences in the two. But dont think BluRays higher capacity will really help it. HD is HD, so neither can say they are a "higher" quality because 1080i is 1080i is 1080i is 1080i...No matter how you dice it.
Posted by SystemsJunky (409 comments )
Link Flag
Two dying concepts....
,,,, both HD-DVD and Blu-Ray are dying concepts, tho their
proponents may not yet admit it. The Maxell holographic disk will
blow them both away. And well it should.

Sorry Toshiba. Sorry, Sony. You two spent too much time arguing
when you should have been cooperating. Now, neither of you are in
the game any more.
Posted by Earl Benser (4310 comments )
Reply Link Flag
the 300GB disk can be reduced in both size and cost, this technology doesn't impact next gen/HD DVDs at all which is where the money is in both HD-DVD and Bluray. $100 bucks for 300GB at manufacturer cost (not finished goods cost) is too much money for consumers on movies and too much wasted space. the only viable content is perhaps entire TV seasons or runs on one disk or trilogies+ movie sets...both of which are a small fraction of content that is put out.

this doesn't even take into account the couple years of work invested by both HD-DVD and Bluray to ensure content providers are comfortable with the contect protection measures and device manufacturers on technical/manufacturing specs for mass production.

this might be good for PC storage but won't even come close to competing in entertainment content at minimum a few years...if ever.
Posted by tlite722 (160 comments )
Link Flag
Personally, I like the Blu-ray technology more. However raising prices on dvd movies would do little but encourage piracy, in my opinion.
Having that said, win or lose, blu-ray disk are still going to hit production unline HD-DVD. Because sony is using blu-ray in PS3, and I really dont think they are going to change their mind to HD-DVD even if blu-ray loses.
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Posted by Roman12 (214 comments )
Reply Link Flag
boycott Sony
The recent rootkit fiasco showed Sony for the kind of company it really is. They have no respect or use for their clients except as a source of money. It will be a cold day in hell before I buy anything with Sony's name associated with it.
Posted by HughT (28 comments )
Reply Link Flag
Blu-ray in PS3? Maybe...
My guess is that Sony will give up and put a regular DVD drive into the PS3. The technology is simply too new for a mass-manufactured product. As of yet no one is making Blu-ray drive. To expect manufacturers to be able to ramp up production level in a matter of months is a major folly at best, epseically as no PS3 game would actually require the capacity of Blu-ray.
Posted by Chung Leong (111 comments )
Reply Link Flag
Expect to see Blu-ray in PS3
You can expect to see Blue-ray in the PS3. Your point of having months to ramp up production was disproven by Microsoft's X-Box 360. Microsoft didn't even decide on a CPU, graphics processor or the list of manufacturers until late this year. While they may have problems meeting customer demand, they did get plenty of units produced on time.

Sony really needs to go big with the PS3, and Blu-ray is part of that. Including Blu-ray will help ensure that feature for feature, the PS3 out shines the Xbox 360. Now if only Sony can provide a unified online match making system to compete with Xbox Live.
Posted by zaznet (1138 comments )
Link Flag
More than a 2 way format war...
I think everyone is missing an important point. These two new formats are not the only players in the market. You will not see DVD sales slow down at the launch of HD-DVD and Blu-ray.

You can still buy VHS movies and VHS players. There is a huge supply of DVD movies available. Even if you take out VHS that still leaves 3 formats.

Keep in mind that the new HD-DVD and Blu-ray players will support traditional DVD playeres for a long time to come. Where is the economic incentive to leap? With the launch of HD-DVD and Blu-ray you will see DVD prices drop, that is an incentive to stay with DVD, while cutting the profits for the content producers.
Posted by zaznet (1138 comments )
Reply Link Flag
Incomplete Article
This is another broken article - it omits a key fact. Blu-Ray DVD is based on shipping products (UDO and Sony's ProData). These products have a two year track record. Can HD-DVD say the same ?
Posted by Kay-Sugg (1 comment )
Reply Link Flag
This is pure propaganda spread by the HD-DVD camp:
<a class="jive-link-external" href="" target="_newWindow"></a>
Posted by Gamigin (3 comments )
Reply Link Flag
The question is?
The question is, do we really need to buy this so yesterdays technology, when by the time it is fully released to the public, multi terabyte, multicore computers capable of being able to be fully integrated into all home entertainment systems, will be the norm! As, for this unit until, we actually have full production samples of both disc's and players, everything is but ,pure speculation! Oh well, must ask ourselves?, do we really need, to buy a product, that will be obsolete when it is finally released!
Posted by heystoopid (691 comments )
Reply Link Flag
Blu-Ray To Be New Betamax?
Blu-Ray will lose out to HD-DVD just as Betamax did to VHS. The only advantage it has over HD-DVD is higher capacity. But, with new compression technology imminent, higher capacity won't mean as much. These new compression formats (VC-1, AVR) will allow dvds pressed using HD-DVD technology to be identical in quality and format to dvds pressed using Blu-Ray technology. Whoever would pay twice as much for a Blu-Ray player which played discs with the exact same content would risk, sooner or later, looking like a fool. It doesn't matter how many studios are currently in either camp. As soon as consumers realize the only difference between the formats is price, they'll wise up. When they do, the studios will all have to follow suit. In the end, price always beats quality, especially when the only quality we're talking about here is increase data storage capacity.
Posted by rob2nelson (2 comments )
Reply Link Flag
PS3 Might Have Blu-Ray, But ...
The PS3 might have the Blu-Ray disc drive, but if it does and it sells for less than $500, Sony will be taking a big hit on each PS3 sold just as Microsoft did with the XBox. In other words, Sony will probably be selling its PS3s well below cost, at least until production costs can be brought down through increases in efficiency, etc. Perhaps this is what Sony intends so as to increase the market share of Blu-Ray devies in the high-def market. In order to do this it might be willing to incur losses which it hopes to be only short-lived. Other companies, however, producing Blu-Ray devices might not be so willing or so able. Thus, after a while the PS3 might become the only Blu-Ray device produced, as other manufacturers discover that their higher priced models cannot compete with the lower-priced HD-DVD models in consumer markets, especially as they might not have the same capabilities as the PS3, in terms of other entertainment potential besides being able to play moves in high-def. If Sony finds itself in this position, its Blu-Ray techonology will go the way of its BetaMax technology, as the studios will switch to the format most supported by consumers and manufacturers. In the end, PS3 owners might end up being the only owners of Blu-Ray technology.
Posted by rob2nelson (2 comments )
Reply Link Flag

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