Consumers and investors cheered an impending end to a format war for next-generation DVDs, with share gains for both Toshiba, on the verge of abandoning its HD DVD discs, and Sony, the leader of the rival Blu-ray camp.
Both formats have the space to hold high-definition movies, but growing support from Hollywood and big US retailers such as Wal-Mart Stores has given Blu-ray a crushing lead. However, overall sales so far have made up only a small portion of the $24 billion home DVD sector, as shoppers, faced with machines that played only one type of disc or the other, have held back.
Toshiba said today that no decisions had been made on HD DVD, but a company source told Reuters over the weekend that the company was in the final stage of planning its exit. An end to the war means consumers can now be sure they won’t be stuck with a 21st century equivalent of Betamax - Sony’s videotape technology that lost out to VHS in the 1980s - and should help accelerate the shift to the new DVD.
At the core of both formats are blue lasers, which have a shorter wavelength than red lasers used in current DVD equipment, enabling discs to hold up to five times as much data. Toshiba had billed its format as less costly for the industry as it allowed some existing DVD-making equipment to be reused, but Blu-ray allowed for more content to be packed onto each disc.
Toshiba will likely suffer losses of hundreds of millions of dollars to scrap production of its equipment and other steps to withdraw from the business. But analysts gave high marks to Toshiba’s quick move to pull the plug on HD DVD just two years after launching its first players. It took Sony more than a decade to quit Betamax.
