Format Wars - Blu-ray vs HD DVD

Stuart Andrews | 22 Sep 2006

Blu-ray and HD DVD players will come out fighting this year. We reveal which format is best placed to be DVD’s successor.

The emergence of High Definition TV and the increasing demands placed on PC storage mean the time is now ripe for a successor to DVD.
However, while the biggest players in the IT industry, the consumer electronics giants and the heads of Hollywood studios have put their best minds to work on the next-generation format, they haven’t come up with one successor, but two.

We’re in the middle of another ugly format war. One camp is pushing evolution, a format that develops on from DVD to make it easy for the industry and the consumers to make the change. The other is preaching revolution, a format offering higher capacities now and even more storage in the future. Both initiatives claim their victory is inevitable, but when Sony, Panasonic and Dell square off against Toshiba, Microsoft and Intel nothing can be so certain. This is the mother of all format wars. Let’s see what each format has to offer and how it will affect data storage and home entertainment over the next five years.

Some History
Format wars are nothing new. In the 1970s and early 1980s, Sony tussled with JVC and Matsushita over the video cassette standard and we all know the result: Sony’s Betamax stalled, while its rival, VHS, became the standard consumer video format for nearly two decades. In the early 1990s, Sony and Philips pitched their Multimedia CD Digital Video Disc specification against Toshiba and Pioneer’s Super Disc system. It was only at the end of 1995 that the two sides reached an agreement and DVD was born.

If only the fragile peace had lasted. The DVD-Video and DVD-ROM formats were released before a recordable format could be agreed. While the existing DVD Forum opted for a record-once standard (DVD-R) and two rewritable systems (DVD-RW and DVD-RAM), Sony and Philips pushed ahead with rival technologies (DVD+R and DVD+RW). Despite all the claims and counter claims, this format war was never won. PC writers and consumer DVD recorders embraced both systems and, in terms of media sales, the two remain neck and neck.

Yet by any standard, the DVD format has been a huge success. In the 10 years since it was launched, over 75 percent of UK households have bought a player and software sales have grown enormously year on year .

In the PC field, DVD has become equally ubiquitous: all but the cheapest budget systems now come with a DVD writer, while sales of recordable media more than doubled between 2004 and 2005, with an estimated 3.6 billion discs sold worldwide last year. That’s expected to rise to over 5 billion during 2006. But DVD can’t last forever and it came as little surprise when those searching for its successor also split into two rival camps. In February 2002, Sony, Philips, Pioneer, Hitachi, Matsushita, Sharp, LG, Thomson and Samsung announced Blu-ray Disc – a next-generation optical disc system similar to DVD, but using a blue/violet laser to read and write. In August 2002, Toshiba and NEC announced a rival system, Advanced Optical Disc (AOD), which was to be proposed to the DVD Forum as the legitimate follow-up to DVD. Tellingly, Blu-ray was never submitted to the forum, which, incidentally, Toshiba chaired. Its backers considered it a new technology, and nothing to do with the existing format.

In April 2003, Sony launched its BDZ-S77 Blu-ray disc recorder at just under $4000. The device used MPEG2 encoding to record two hours of high-definition satellite TV. One year later, Panasonic launched a similar model. In the meantime, AOD was under consideration by the DVD Forum – it was accepted in November 2003 and renamed HD DVD. At the time, the first drives and players were optimistically expected in late 2004. In fact, the first batch have only just arrived in the US and Japan.

Still, the fight was on, and by early 2005 most of the Hollywood studios, the consumer electronics manufacturers and the big names in IT had settled in one camp or the other. During that spring, peace talks hoped to engineer a one-standard compromise, but these broke down. For a while, Blu-ray seemed to have all the momentum, with support from more studios and industry heavyweights like Dell and HP. However, in September, Intel and Microsoft weighed in on the side of HD DVD, with an announcement that the format would be supported in Windows Vista. At January’s Consumer Electronics Show (CES), a line was drawn in the sand. Each camp showed off its hardware, promoted its Hollywood backers and announced exclusive software titles. Battle has commenced. On a fundamental level, both operate in the same way as CD – a laser scans the reflective surface of a disc, reading or writing data stored in the form of microscopic pits moulded into a substrate layer. What’s more, both are strictly speaking ‘blue ray’ products: each uses a blue/violet laser with a wavelength of 450nm, the advantage over the old 650nm red laser being that it’s possible to focus the laser spot with greater precision. You can fit more pits – and therefore more data – within a given area of disc, thus capacity and data rates increase.
But here the two formats diverge. The physical format of the HD DVD media is close to that of DVD; it’s the blue laser and some advanced data-processing techniques that give it the increased capacity. Blu-ray, however, uses an increased aperture lens on the laser to concentrate the beam into a cone, allowing for even smaller pits and so even more data. While this improves capacity, it also necessitates a thinner disc and smaller layer spacing – where DVD had a cover layer 0.6mm thick, Blu-ray has one of only 0.1mm. Originally, this meant the more fragile Blu-ray disc had to be protected by a cartridge, but this need has since been obviated by a specially developed coating.The difference in capacity is significant. An HD DVD-ROM or -R disc can hold 15GB of data per layer, meaning 30GB on a dual-layer disc or 60GB on a double-sided, dual-layer disc. HD DVD-RW, meanwhile, allows for only 20GB or 40GB total.

Blu-ray handles 25GB per layer, or 50GB on a dual-layer disc, whether BD-ROM, BD-R (write once) or BD-RE (rewritable). What’s more, the format is extensible – if you want more capacity, just add more layers. TDK has already demonstrated a four-layer 100GB disc and claimed that 200GB discs might eventually be possible. According to Sony’s digital development manager Adrian Northover-Smith, size always mattered in the Blu-ray camp. ‘With Blu-ray, we wanted to build a technology that was a lot more future-proof in terms of the length of the product cycle, he said. ‘By adding layers, we can match the market’s demand for capacity.’

In terms of speed, there’s no real difference. HD DVD has a base read/write speed of 36.5Mb/s; Blu-ray runs at 36Mb/sec, with movies streaming at 1.5x (54Mb/sec) and most early players and writers supporting 2x speeds (72Mb/sec). Early HD DVD drives are expected to match. So what about video quality? Again, there’s little to choose between the two formats, for the simple reason that both use the same three video codecs – MPEG4 AVC (also known as H.264), MPEG2 and Microsoft’s VC-1 (a variation on Windows Media Video 9). MPEG2 has a disadvantage in terms of larger file sizes, needing a bit-rate of 12 to 20Mb/s for a high-quality, high-definition picture that MPEG4 and VC-1 can achieve with 8Mb/sec or less. However, the studios and DVD-authoring houses are already familiar with MPEG2, and Sony has selected it for its own early Blu-ray releases. Other studios are free to make their own choices.

The other key factor is output resolution. All high-definition screens offer a base standard of 720p (1280 x 720, progressive scan), but some also offer 1080i (1920 x 1080, interlaced) or 1080p (the same resolution, but progressive scan). Whether 1080i is better than 720p is a moot point – you get more horizontal lines, but with the interlaced ‘flicker’ found on conventional TVs – but 1080p is rightly seen as the premium HD resolution, and nobody is promoting this harder than Sony. Where HD DVD stops at 1080i, Blu-ray goes up to 1080p, as does Sony’s forthcoming PlayStation 3 Blu-ray games console. 1080p sets are currently rare and expensive, but this could easily change during the product’s lifespan and add to Blu-ray’s allure in the high-end home cinema market.However, the technical differences aren’t the major issue here. The two formats diverge in other ways, and these differences go much wider. Why, for instance, did Microsoft back HD DVD? ‘We saw Blu-ray moving away from what we think will provide the best experience for consumers,’ says Kevin Unangst, director of Microsoft’s Windows Digital Media division, ‘including the guaranteed ability to make legal digital copies of the content for streaming around the home and an easy-to-use (and license) interactive layer.’

The same two factors – namely, support for what’s called ‘mandatory managed copy’ and Microsoft’s iHD interactive layer technology – prompted HP’s move from supporting Blu-ray only to supporting both formats.

The interactive layer is the software that enables interactive content (menus, commentary tracks, bonus features) to work with feature content (on a movie disc, the movie). For this, Microsoft and Disney designed a new technology called iHD, built on XML and having much in common with the XML-based presentation technologies in Windows Vista. But while HD DVD adopted iHD, Blu-ray employs an alternative technology, BD-J, based on Java. The two actually support similar features, such as the ability to layer interactive text and video on top of the movie during playback, allowing for a video commentary track or information pop-ups while the movie plays. However, the claim is that, while iHD made these features part of the specification, BD-J has made them optional. Not all Blu-ray players will support them and not all Blu-ray discs will include them.

The real cause of this particular dispute is three-fold. First, iHD is a better fit for Windows Vista – Microsoft was keen to demonstrate the new technology at work during Bill Gates’ keynote at the 2006 CES. Second, Microsoft clearly has no wish to use a standard based on Java. Third, and most importantly, there are licensing issues involved. If a manufacturer produces a Blu-ray drive, it has to pay licensing and other royalties for the use of Java – HP estimated the total cost at $30 per drive. With iHD, the technology is already there in Vista, limiting the fees that hardware manufacturers would have to pay.

In BD-J’s defence, it’s a more proven technology, already familiar to companies at work in the cable and satellite TV arena, and with established development and testing tools. The most curious thing about the whole business is that Disney helped develop iHD, while supporting the very format that rejected it. If this seems a thorny issue, it’s nothing compared to the controversy over managed copy. Both formats use a content protection system called AACS, which is a development of the old CSS system used in DVD, only offering more solid protection should the encryption codes of a player be cracked.

Blu-ray then goes one step further by adding two more security systems. The first, BD+, is a dynamic encryption scheme that enables studios a greater say in their encryption systems, to the point that – in the event of one becoming compromised – they can update it and flash the ROMs of Blu-ray players to match. The second, ROM Mark, is a digital watermarking technology, which embeds an untraceable, unique mark into pre-recorded Blu-ray discs, without which the material won’t play. As only licensed manufacturers will get the necessary equipment, this should put an end to counterfeit discs.

Now, one feature of AACS is ‘managed copy’ - the ability to make a licensed, rights-managed copy of the content on a disc – but this sits at the heart of an enormous conflict of interests. On the one hand, Hollywood, already burnt by a huge counterfeit DVD industry and the file-sharing menace, has made security its major priority and sees managed copy as a dangerous back door to leave open. As Paul O’Donovan, a principal analyst at Gartner, puts it: ‘Hollywood is very worried about a new high-definition video format being copied, and the studios are backing Blu-ray principally because they feel it is a more secure format.’ Microsoft and Intel, he suggests, have different interests: ‘They want to be the engine that powers future entertainment networks in the home.’ In this case, it’s essential that users can copy movie content to PC and share it with mobile players or other devices within the home. It’s this conflict that has split the camps so far apart. The DVD Forum has made managed copy a mandatory feature for HD DVD; all discs must allow it (albeit, not necessarily without charge). In Blu-ray, it’s simply an option and, some believe, one that BD+ and ROM Mark might actually ‘break’.

Early Blu-ray players, like Pioneer's BDP-HD1, are aimed squarely at the home cinema enthusiast market: the same people that adopted DVD during the first years of its lifecycle.

So, the real differences between HD DVD and Blu-ray are more ones of vision than technology. But which is most likely to win? In the PC sphere, HD DVD might seem the most logical choice. After all, it already has Microsoft, Intel and now HP backing it. Not so, thinks Paul O’Donovan: ‘At the end of the day, the fact that Microsoft and Intel support one format bears little consequence.’ Remember, Microsoft’s historical lack of native support for DVD never hurt either DVD or DVD+RW; the hardware manufacturers and third-party software developers stepped in to fill the gap.

Instead, O’Donovan puts success down to two factors: the reliability of the rewritable formats, and their capacity. ‘There’s a need to educate consumers about backing up their photos and other digital content. 50GB could hold a lot of digital photos and other media, and this could be a huge selling point for Blu-ray.’ This was certainly a factor in Dell’s support for the format, as Michael Dell made clear at this year’s CES: ‘Blu-ray is clearly the best choice for consumers,’ he suggested, because its potential for higher capacities could ‘preserve optical discs for the next 10 years.’

Not everyone agrees. ‘On the issue of capacity, there are claims and counter claims on both sides,’ argues Screen Digest chief analyst Ben Keen. ‘The claim that Blu-ray has greater capacity has yet to be demonstrated on a manufacturing basis.’ He’s not alone. Those in the HD DVD camp believe that Blu-ray’s technical innovations – the conical beam, the reduction in layer thickness – make it prone to manufacturing difficulties, leaving HD DVD the more reliable technology. Perhaps, but Panasonic has claimed that its pilot production line in Torrance, California, can pump out 50GB dual-layer BD-ROMs with 80 percent yield rates, and Sony’s Adrian Northover-Smith told us that he wasn’t aware of any problems with their plants’ manufacture of 50GB discs. Until commercial production starts, nobody will know for sure.

One thing is certain: Blu-ray will be first to market with rewritable PC drives. Admittedly, the technology has had a head start – Sony has been selling a $3000 SCSI burner based on Blu-ray since 2003 – and, of course, Samsung's Blu-ray drive is reviewed in this month's issue. Also, Pioneer’s BDR-101A, which writes single-layer BD-R and BD-RE discs and reads dual-layer BD-ROMs, should be available in the US by the time you read this, and Philips and will follow shortly with dual-layer writers. Sony VAIO desktops featuring Blu-ray drives are also expected by the summer. Although NEC announced an HD DVD-ROM drive in March and Toshiba has demonstrated an HD DVD-ROM Qosmio notebook, the first NEC HD DVD writer isn’t due until July.

Early drives are expected to be expensive, but competition from Taiwanese manufacturers is certain to drive down prices. Some, like BenQ, have already announced support for one format or another – a BD-RE drive was on show at the company’s CES stand. Others, such as Lite-On, are expected to produce separate drives for each format.

Sadly, having a drive that does both looks unlikely; even if the technical differences in the read/write heads and media didn’t make it difficult on a practical level, the licensing agreements and specifications involved make it impossible unless some compromise can be brokered.

As far as software goes, the big names are hedging their bets. Nero 7 supports authoring of HD DVD and Blu-ray, while Nero’s ShowTime software offers playback for both. It’s a similar story for Ulead, with its MovieFactory product, and InterVideo and CyberLink. Meanwhile, Sonic Solutions has announced Blu-ray and HD DVD support for its Roxio line of products and its own authoring tools for HD DVD. In other words, adopters of either format won’t be left out in the cold. Even Microsoft’s Unangst told us: ‘We have no plans to develop native Windows Vista components for the Blu-ray format, but that doesn’t preclude third-party companies from doing so... nor does it preclude us from updating Windows Vista with additional support in the future.’

The Frontline
Blu-ray has the critical mass of the world’s biggest electronics brand names, but HD DVD has the edge on pricing. Toshiba’s $499 HD-A1 player will sell for half the price of a comparable Blu-ray player; something Screen Digest’s Keen calls ‘an aggressive opening salvo from the HD DVD camp’. In addition, HD DVD seems to have the Chinese DVD player manufacturers onboard, with two leading names, Amoi Electronics and JiangKui, already at work on hardware. When you bear in mind the way the influx of cheap Chinese players helped revolutionise the DVD player market, this could be a significant boost. Sony’s Adrian Northover-Smith isn’t worried. ‘Yes, price points are important, but they do evolve very quickly,’ he told us, adding that prices of Blu-ray players will drop ‘as soon as we get the numbers in terms of manufacturing capacity’.

While more studios have promised exclusive support for Blu-ray than its rival, both camps will have strong software to sell. At CES, Warner Home Video, Paramount, Universal, HBO and New Line all announced HD DVD titles, including big hitters like Harry Potter and the Goblet of Fire, Batman Begins and The Matrix. Blu-ray can counter that with a range of exclusives from Disney, 20th Century Fox, MGM, Lionsgate and Sony, including Terminator 2, Fantastic Four, Kill Bill Vol.1 and House of Flying Daggers. Paramount has played it safe by serving both camps, with a line-up including Mission Impossible 3, Lara Croft: Tomb Raider and U2: Rattle and Hum. While the differences in the laser pickup mean neither format is necessarily backwards compatible, all players announced so far support the old DVD format, with the output upscaled to high-definition resolutions.

But perhaps it won’t be movie software that has the final say. Many see Sony’s forthcoming PlayStation 3 console – expected to sell for $500 to $600 – as a Trojan Horse that may win the battle overnight (perhaps that’s why Microsoft has announced an external HD DVD-ROM drive for its own Xbox 360 console). But if this is a winning strategy for Sony, it’s not without its risks, particularly looking at the recently announce $800-plus price tag. While this could cause some division in the Blu-ray camp, Gartner’s Paul O’Donovan feels it’s nothing to worry about. ‘The PlayStation 3 is aimed at a very different market. If you’re an audiophile or videophile, you want the best piece of kit for the job,’ he argues. Adrian Northover-Smith doesn’t see the problem. ‘We don’t anticipate it [PlayStation 3] knocking into the standalone market,’ he told us. Keen disagrees: ‘You’ll find that other manufacturers will draw on the experience of PlayStation 2 and say that people didn’t buy it as a DVD player. However, PlayStation 3 is different. Sony has designed it to be far more of a general entertainment device than a gaming device.’

In the end, such agendas are very much the issue. Do you buy into the Microsoft/Intel vision of the networked home, with content managed and distributed using Windows PCs, or into a more traditional vision centred around more traditional consumer electronics hardware? Microsoft knows what it wants: ‘For us, it’s not the physical format,’ Bill Gates told college newspaper The Daily Princetonian last autumn. ‘This is the last physical format there will ever be. Everything’s going to be streamed directly or on a hard disk.’ In other words, HD DVD just holds the fort until digital distribution goes mainstream. For Sony, the other CE firms and the studios, this isn’t such a comfortable vision: there are too many questions about unauthorised use, illegal distribution, how you make money, how you sell hardware and maintain retail channels when there is no physical product to buy. Either way, this formats war is almost impossible to call.

Content owners are very excited about the possibilities of the interactive layer, which enables commentary, tracks, menus and bonus features.

Sonic Solutions' Professional Products Group - one of the founding members of the HD Authoring Alliance - has given an early look at the interactive features we can expect on next-generation discs.