Digital Media

(Credit: Microsoft)

Microsoft will take another swipe at the iPod on Wednesday when it launches the latest version of the Zune media player.

After three years and untold millions spent on the line, Microsoft's hopes of cutting into iPod's big lead are now on the Zune HD, with its 3.3-inch multitouch screen, streaming-music feature, and the ability to playback video, with the help of an HDTV, in 720p. A 16GB Zune HD is available at retailers for $219.99 and a 32GB will cost $289.99.

But at this point in Zune's evolution there's plenty of skepticism that the Zune can close the gap on Apple. A Zune-iPod comparison has for too long resembled a late-round prize fight, the kind where the challenger is cut, swollen-eyed and wobbly legged but refuses to go to the canvas. Zune sales are falling, a top manager has moved on and what's perhaps most worrisome is that the category is becoming passe.

While Apple also tries to kick-start lackluster iPod sales--upgrading Nanos with such features as a video camera and voice recording--CEO Steve Jobs has steered consumer interest away from straight digital music players and into smartphones. Apple has sold more than 30 million iPhones over the past two years and seen more than 1.8 billion iPhone applications downloaded.

Nonetheless, this is still Microsoft, one of the biggest technology companies in the world and well known for its patience.

"You can make the argument this is Microsoft's first real shot to getting it right," said Stephen Baker, vice president of industry analysis for The NPD Group. "Remember, the bar doesn't have to be set all that high for them to be successful. Nobody is supposed to unseat iPod...and Microsoft now has a product that they seem to be more confident in."

That confidence may come in part from an upgrade that some have called the best Zune yet. (For more, see CNET's full review of the Zune HD.)

Zune HD features a new OLED (organic light emitting diode) screen and will send high-def video to a HDTV using a new Zune AV dock, sold separately.

"Consumers can buy or rent HD content from the Zune Marketplace," Microsoft said in a statement, "sync that content to a Zune HD and take it with them to play back on a large screen HD TV in the home or on the road."

The 16GB is available in black and the 32GB is available in "platinum" at retail locations. Customers can purchase Zune in red, green, or blue in both capacities from Zuneoriginals.net.

Zune HD will also play games, HD Radio, and offers music-recommendation software, called Smart DJ.

Online radio service Last.fm has always seemed to occupy an awkward middle ground between on-demand streaming music services that let you pick and play any song--like free services Imeem and Grooveshark, and Rhapsody, which charges for its service--and the radio-to-your-taste service pioneered by Pandora. (Disclaimer: Last.fm is owned by CBS, which is the parent company of CNET News.)

In my opinion, this is partly because of some flaws with the service itself. The radio service has a lot of powerful features for serious music fans who are willing to do a little work, as CNET's Donald Bell recently explained, but it doesn't work very well as an on-demand service. How do you add songs to a now-playing queue? Why hasn't Last.fm secured on-demand rights for huge artists like Pink Floyd and Led Zeppelin?

But there's also a bit of a branding gap. Compared with the organic buzz I hear about Pandora and Rhapsody, for instance, Last.fm hardly comes up. Now it looks like CBS is trying to address that issue. In an effort to increase brand awareness, CBS Radio will devote four broadcast HD Radio stations to Last.fm. The playlist will be drawn from listeners' favorites--Last.fm does such a fantastic job of tracking usage, I've referred to it for non-scientific measurements of artist popularity--as well as live performances in Last.fm's New York studio. The stations will make the cutover on October 5, and include KITS-FM (105.3 HD3) in San Francisco, WWFS-FM (102.7 HD2) in New York, KCBS-FM (93.1 HD2) in Los Angeles, and WXRT-FM (93.1 HD3) in Chicago. All four stations will play the same playlist.

HD Radio itself is still in a niche phase. Although it's available in more than 90 percent of major U.S. markets, the receivers are still fairly rare. That might change tomorrow with the launch of the Zune HD, the first MP3 player with a built-in HD Radio receiver. If nothing else, it shows that HD Radio technology is getting small enough and cheap enough to begin building it into a variety of consumer electronics devices--imagine when it starts becoming a feature in smartphones, for instance.

Blu-ray players are becoming a hot item in the living room, but they have yet to attract much attention in the office, according to a new report from iSuppli.

The market research firm found that 3.6 percent of PCs shipped in 2009 will feature Blu-ray players. By 2013, the company expects 16.3 percent of PCs to sport a high-def drive. During that period, DVDs will still reign supreme.

"BDs won't be replacing DVDs as the primary optical drive in PC systems through at least the year 2013," Michael Yang, senior analyst for storage and mobile memory at iSuppli said in a statement. "They eventually will find success, but during the next five years, that success will be limited in the PC segment."

iSuppli believes that Blu-ray's lack of adoption in the PC market is centered on two main factors: a relatively small number of available movies and the cost of adding a Blu-ray drive to PCs. iSuppli said its findings suggest consumers will be more likely to add Blu-ray drives to their PCs once the cost of those drives decreases.

Although the results weren't ideal for the Blu-ray Disc Association, iSuppli said that they're not uncommon. According to the company, new media formats in PCs have enjoyed success only when the cost has decreased to a suitable level. That success also depends on whether or not consumers feel the technology's value proposition is high enough.

iSuppli cited the 3.5-inch floppy's 15-year lifespan as proof that consumers will use media as long as they perceive value. Currently, those same consumers believe there is more value derived from DVD drives.

Once the major force behind the failed HD DVD format, Toshiba may finally be launching its own Blu-ray player, according to a report in Japanese newspaper Yomiuri Shimbun.

Toshiba, which lost the HD DVD vs. Blu-ray battle in early 2008, is reportedly readying a player that will read both Blu-ray discs and DVDs and will appear in stores by year's end.

Quoting unnamed sources, Yomiuri Shimbun reported over the weekend that Toshiba had been thinking of developing yet another technology to combat Blu-ray but gave up the ghost because of the huge growing market for Blu-ray players and discs.

The company will start with play-only models but may consider a recordable Blu-ray player if market demand calls for it, the newspaper said. Toshiba's entry into the Blu-ray arena would mark the last holdout among all the major electronics manufacturers.

Toshiba fought long and hard in its two-year battle promoting HD DVD over Blu-ray, finally admitting defeat in early last year. Since then, the tech world has wondered if and when Toshiba would unveil a Blu-ray player.

Online research firm Futuresource released a study Monday that discussed the relative success Blu-ray is enjoying right now in Western Europe.

According to the report, Blu-ray disc sales are up significantly in Europe so far this holiday season, and based on its findings, it believes the strong sales will continue through 2009. In fact, it believes European Blu-ray sales will triple during 2009, seeing 2.5 million players enter homes next year. Similar results are being witnessed in the U.S.

But that's not all. A release last week claimed the latest Batman film, The Dark Knight, witnessed sales of 1.7 million Blu-ray units, representing the most popular Blu-ray title of all-time.

Quite impressive, eh? Well, what if I told you that worldwide combined DVD and Blu-ray sales of The Dark Knight totaled 13.5 million units? Suddenly, that 1.7 million Blu-ray unit mark doesn't look so hot next to the 11.8 million DVDs that were sold, huh?

Of course, we shouldn't expect Blu-ray to catch up anytime soon. According to Futuresource in a study it released earlier this year, Blu-ray isn't expected to outsell DVD until 2012. And even then, Blu-ray will control just a bit more than 50 percent of media sales with DVD coming in around 45 percent to 50 percent. In other words, DVDs will still be a major force four years from now.

Based on all that information, can we honestly sit here and say that Blu-ray has a chance at becoming the success DVD is?

I just don't see it.

YouTube announced Thursday that it has launched a new landing page to corral all the high-definition video uploaded to the site.

Along with the new page, YouTube's HD player now launches in a widescreen window that takes up the majority of the browser window. YouTube posted an FAQ on how to how to encode HD videos and how to avoid "windowboxing"--images that are surrounded by black bars.

The video-sharing site quietly rolled out HD-enabled videos earlier this month by adding a "watch in HD" option where the "watch in high quality" option usually appears. Last month, the site began expanding the viewable width of all videos appearing on the site, creating an image like that of a movie theater screen or high-definition television.

The site is also testing three new landing pages dedicated to the popular categories of news, movies, and music. Each page will be populated with the most popular content on the site related to that category, YouTube explained on a company blog:

The news page will be populated with breaking stories from around the world as well as news drawn from the Google News service; music will feature rising videos alongside playlists dedicated to different genres; movies will showcase some of the most popular short and full-length movies on YouTube today.

The popular "Where the Hell is Matt?" video looks stunning in HD:

(Credit: YouTube)

Updated at 9:15 a.m. PDT with background on the DVD format wars.

Research firm In-Stat has declared a "winner" in the DVD format wars between Blu-ray and HD DVD. And the winner is...

Blu-ray.

In-Stat, in a research report released Wednesday, noted that the Blu-ray and HD DVD format war ended in the early part of the year, and that Blu-ray recorder and player sales are expected to reach 5 million by the end of the year.

With the death of HD DVD earlier this year, some took it a step further, saying Blu-ray's top-dog spot may be short-lived should digital downloads replace the need for Blu-ray discs. But for now, Blu-ray is expected to enjoy its position.

In February, Toshiba said it would stop making HD DVD products, following a two-year war between the HD DVD and Blu-ray formats. Shortly thereafter, the three movie studios that were then still supporting HD DVD withdrew their support and declared they would get behind Blu-ray.

Sales of DVD players and recorders worldwide hit 142 million units last year, according to the market research firm. This year, In-Stat expects a decline in the DVD hardware market because of saturation in some markets and also because DVD recorders failed to grab consumers' interest as DVD players did.

What isn't clear is whether Blu-ray's growth will make up for the decline of HD DVD sales by the time digital downloads of movies become pervasive.

Blu-ray's adoption rate is hampered by the price of the players, according to In-Stat.

Two years ago, a Toshiba DVD player cost $500 to $800, while the cheapest Blu-ray player ran nearly $1,000.