Table of Contents s101

Table of Contents

Executive Summary 1

Introduction 3-4

Statement of Need 4

Evaluation of Criteria 4-9

Analysis of Criteria 9

Conclusion and Final Recommendation 10

References 11-12

Appendices 13-14

1 Executive Summary

An intense battle between two emerging video formats has been dominating the world of electronics. Blu-Ray Disc (BD) and Digital Video Disc (DVD) have been competing among the top electronics companies in the world. Moreover, the battle has moved away from the traditional DVD format and towards the High Definition Digital Video Disc (HD-DVD). Many critics say that this dual is almost a replica of the battle between Betamax and Video Home

System (VHS) a few decades ago. Those companies who chose to side with Betamax saw eventual economic lag behind those who chose VHS. Companies do not want to make the same mistake nowadays. The consequences could be much worse. This report will compare the two video formats and decide which one is the better investment.

In making the decision between BD and HD-DVD, there are numerous criteria that need to be considered. The list of criteria includes storage capacity, market share, audio, cost, and much more. Each criterion is very important in the decision-making process. Each should be greatly considered when deciding which format to invest in. Each criterion is further evaluated and compared throughout the report. Tables and graphs at the end of the report will help make the comparisons more comprehensive.

In analyzing the list of criteria, it is clear that BD is the better technology to invest in. It is quite apparent that BD will take over the world of video. Sooner than later, DVD and HD-

DVD will no longer be around for any use. It is highly recommended that BD be chosen for investment. BD will prevail and run the electronics industry. Companies who choose HD-DVD will end up like those who chose Betamax in the 1970s. Those companies found themselves extremely behind. BD will induce major company growth and ensure competitive nature in the economy and in the industry of electronics and video.

2 Introduction

Newer technological formats for certain types of media have been evolving at an incredible rate. Currently, an immense battle exists between what is known as Digital Video

Disc (DVD) and Blu-Ray Disc (BD). Several critics say that this dual represents Video Home

System (VHS) versus Betamax all over again (“Showdown,” 2005, para. 4). Back in 1975, Sony first introduced the Betamax format. Only one year later, JVC introduced the VHS (“Betamax” vs. VHS, para. 1). Betamax and VHS were two very similar formats. A comparison of related criteria can be seen in Table 1. These two different technologies battled for about a decade, with

VHS finally prevailing in the end. Still today, people are in discussion as to why VHS beat out

Betamax. Several reasons have been uncovered that support this result. First of all, VHS was known to have an outstanding marketing campaign. In contrast, Sony was known to have marketing problems which allowed the VHS to establish itself. Secondly, VHS was simpler and cheaper to manufacture, which was certainly appealing to many companies. The most influential factor was the record times, which was 60 minutes for Betamax and 180 minutes for VHS

(“Betamax vs. VHS,” para 4). By 1984, 40 companies utilized VHS while only 12 utilized

Betamax (Sweany, 2006, para 7). The war ended in the late 1980s. Betamax ceased production in America in 1993 and ceased global production in 2002 (“Betamax vs. VHS,” para 8).

Nowadays, there is a newer battle- DVD vs. BD. In a sense, this is a misleading claim. The real battle exists between BD and High Definition (HD) DVD. The purpose of this report is to explain why companies should invest in one or the other. The first objective of the report will be to describe the need. Following the statement of need, the report will evaluate the necessary criteria involved with the decision-making process. Then, options will be introduced and

3 analyzed. This is intended to help convince any necessary persons that the recommendation is the best possible one. Lastly, the report will conclude with the final recommendation.

Statement of Need

The main controversy within this battle between HD-DVD and BD concerns the purchasing companies. No company or corporation will be able to fully invest in both technologies. The decision to invest in one or the other will determine several economic outcomes for a company. During a recently conducted survey among college students, 25 out of

25 claimed that they once owned a VCR. Only two out of 25 claimed that they have heard of

Betamax. This is a stunning statistic considering that the two emerged at about the same time.

Those companies that chose Betamax over VHS experienced great economic lag during the

1970s and 1980s. Those other companies that invested in VHS took a substantial lead in this industry. Modern companies do not want to be put in the same position as those companies that chose Betamax. The same mistake will be even more costly today. The current national and international economy is worth more than ever. Companies need to thoroughly evaluate all necessary criteria of both the HD-DVD and BD to make the best possible decision. Next, the report will evaluate the necessary criteria to making the decision between the two.

Criteria Blu-Ray Discs (BD) and HD-DVD Discs are both competing currently in who will be the successor to the DVD format for data storage and ultimately media usage. The battle between the two has been going on for a few years now, and there is still no winner of sorts or projection on who that winner will be. In this section I will highlight the different criteria of the Blu-Ray,

HD-DVD, and DVD disc formats, and rate which criteria are more important to the consumers than other criteria.

4 Storage Capacity

The first item I will be talking about is storage capacity. That is exactly how much data a disc can hold, and as we all know, the more storage capacity, the more likelihood that all the information needed for the movie, trailers, and bonus features can be put on one disc, not to mention we can store more personal files once the burning and recording drives become more common place.

Now, all the different formats are releasing or have released Dual-Layer, or even Triple-

Layer discs, and many have noted that you could go up to Four-Layer discs for any particular disc format. Having that said, The base single-layer discs will be most important for determining overall size, as they can all keep adding on layers, but eventually it will be the same outcome.

Table 2 will give you an exact size of each format for easier comparing.

Market Share

Market share is always a very important part of any business decision and this is no different. It is commonly known that the Blu-Ray format is supported by many more high- grossing movies than HD-DVD and has a much larger selection of viewing. Of the top ten box office films in 2006 all of them will be presented on Blu-Ray format.

While both HD-DVD and Blu-Ray do not have as much of a selection the older DVD, that is

simply because DVD has been around so much longer. Along with DVD format, almost

all of new movies released as a Blu-Ray or HD-DVD so they will catch up eventually. But

by contrasting Blu-Ray with HD-DVD you can see that BD holds a much better market

selection among movie titles.

Manufacturer Support

5 Blu-ray is supported on the hardware side by Apple, Denon, Hitachi, LG, Matsushita

(Panasonic), Pioneer, Philips, Samsung (also supports HD-DVD), Sharp, Sony, and Thomson

(Note: Thomson also supports HD-DVD). On the software side, Blu-ray is supported by Lions

Gate, MGM, Miramax, Twentieth Century Fox, Walt Disney Studios, and Warner (also supports

HD-DVD).

HD-DVD is supported on the hardware side by NEC, Onkyo, Samsung (also supports

Blu-ray) Sanyo, Thomson (Note: Thomson also supports Blu-ray), and Toshiba. On the software side, HD-DVD is supported by BCI, Dreamworks, New Line Cinema, Paramount Pictures, New

Line, Studio Canal, and Universal Pictures, and Warner (also supports Blu-ray). Microsoft has also lent its support to HD-DVD. As you can see both formats have a variety of companies backing their products. This is also a somewhat opinionated stance because different companies have different appeals to consumers, but the more big name high selling producers seems to be

Blu-Ray, with companies like Apple, Denon, LG, Panasonic, Pioneer, Philips, Sharp , Sony, 20th

Century Fox, and Disney as exclusives for its product. Who honestly does not love a good

Disney movie?

Backwards Compatibility

Backwards compatibility means that the players that support either Blu-Ray or HD-DVD can also be backwards compatible with the current DVDs that are also on the market. All HD-

DVD players are backwards compatible; however, until recently most Blu-Ray players were not.

Recently though, BD players have became backwards compatible with DVDs, and eventually all of them will become backwards compatible Sony has stated. So this has also become a non- issue.

6 It is important to note that Blu-Ray players and HD-DVD players are not compatible with each other, except for the small portion of Dual players, which are way too expensive and not feasible to continue producing when one player in the High Definition Disc wars will eventually win the battle.

Video Codec

Another very important aspect of the quality in a picture or speed of data transfer on a disc is the codec it uses to transfer the information from the source disc. Having a faster data transfer makes the information shown much clearer, and in better picture quality. Not too long ago, Blu-Ray was using the Mpeg2 codec where as HD-DVD was using the VC-1 codec. The

VC-1 is a much faster way of transferring data and Sony has acknowledged that recently and has made the newest Blu-Ray formats supporting the VC-1 codec as well. Since now they are both using the same speed codec, this is a non-factor.

Audio Specifications

There are different audio specifications for both the Blu-Ray format and the HD-DVD format. All HD-DVD players are required to use all of the following: Dolby Digital Plus, Dolby

TrueHD, DTS-HD, Uncompressed PCM, as well as standard Dolby Digital and DTS. Only

Dolby Digital, DTS, and Uncompressed PCM are required for Blu-Ray players. However,

Dolby Digital Plus, Dolby TrueHD, and DTS-HD are optional. While some may say that Blu-

Ray players are cutting cost by making this optional, it really makes the BD players become much more flexible in what audio encoding they choose to use, by not having to encode every disc with perhaps every encoding out there.

Disc Properties

7 The type of disc that is used is also important. The type of disc that is used for Blu-Ray is a completely new format of enhanced data storage. HD-DVD is based on the original DVD and is just an upgraded version of that format. While the Blu-Ray format is much more impressive in its capabilities, the HD-DVD is more streamlined which does not require nearly as much retooling for manufacturers to be able to produce on these. The advantage goes to HD-

DVD in the short run for ease of set-up and cost; however, in the long run it goes to BD because of the superior technology and performance capability.

One of the most important aspects of any business decision is cost. Because of the new technology that Blu-Ray is, the manufacturers have to completely retool their facilities in order to produce the Blu Ray disc. This causes an increased cost in the short run for the Blu-Ray players. Most HD-DVD players can be purchased today at about $250 and up where as the BD players have just started to crack the 500 dollar plateau and the most inexpensive BD player being the Sony BDP-S300 player coming in at $439 from Amazon.com. While this is a significant difference, Sony has stated it is working extremely hard on closing the gap between the two. As the developmental cost and start up cost required to produce the Blu-Ray players and discs start falling the prices will start reaching towards its HD-DVD counter part. The cost of Blu-Ray movies and HD-DVD movies are very similar and range from around $5 to $10 more than the regular DVD movie price.

Pixel Count

An important portion of viewing television or watching a movie is the pixel count that the source is compatible with. With both HD-DVD and Blu-Ray they can support the highest pixel

8 count currently available which is 1080p, or 1920 x 1080 pixels. That’s a lot of pixels. Because both HD-DVD and BD both support the same, this issue is a non-factor also.

Networking Capability

Both Blu-Ray and HD-DVD players are capable of networking with each other but for

HD-DVD players it is required where as for BD players it is an optional feature. This means that for those that have no use in it they can save money and buy a simpler Blu-Ray player than if it was a requirement. Most consumers that watch movies do not need their movie player to use networking.

Criteria Analysis

Basically, the Blu-Ray Disc is the obvious choice for any corporation. Each criterion does favor Blu-Ray technology in the long run. First of all, BD contains a larger storage capacity, which is the major perk of this format. Also, currently BD holds a larger market share.

Since neither technology is really backwards compatible, deciding over this factor would be irrational. This is where the cost analysis can play its role. Although HD-DVDs and HD-DVD players are cheaper now, BD prices will continue to decrease as BD technology engulfs the electronics industry. Investing now in BD technology will benefit any corporation who chooses to do so. In addition to these criteria, BD also further favors networking. This is a very influential factor. BDs also possess better audio flexibility and quality. In summary, it is obvious that any person simply enjoying a movie should choose the HD-DVD format. However, from a corporate standpoint, it is clear that investing in the BD format is the better decision. If typical technological trends take their course, then BDs will prove to become less expensive and more widely used. BD technology is clearly the better investment.

Conclusion

9 This report has specifically identified two different types of video formats- the Blu-Ray

and the HD DVD. With a “format war” emerging between the two discs, choosing one

over the other is a difficult task. Much like years before, where there was a Betamax vs.

VHS battle, this “format war” will decide which format will win over the other, making it

the main product produced. Both types of discs have many benefits, some similar to the

other, but some are different. In search for the best disc, surveys and research were

conducted to find the best results.

In the decision of the best disc, we have looked at different aspects of the discs:

1. Blu-Rays hold 25 GB in comparison to HD DVD’s 15 GB.

2. Rewritable Blu-Rays can record material and play back content at the same time.

3. The costs of producing HD DVDs are cheaper than producing Blu-Rays only

temporarily. This trend will change and lead to Blu-Rays becoming more efficient.

4. Blu-Rays have a higher transfer rate and a faster recording speed than the HD DVD.

5. Blu-Rays have a .1mm protective layer and HD DVD’s have a .6mm protective layer.

6. Blu-Rays have a hard coat to compensate for its .1mm layer, and the HD DVD relies

on its 0.6 mm layer to protect it from damage.

7. Both discs have support from many different companies, but Blu-Ray seems to have

more support currently.

In conclusion, the better investment is, by far, Blu-Ray technology. Investing in Blu-Ray

technology will spur greater sales and growth in the long run.

References

(2005). Showdown: Blu-Ray vs. HD-DVD, The. Retrieved October 29, 2007, from

http://forum.ecoustics.com/bbs/messages/34579/129058.html

(2006). Blu-Ray vs. HD-DVD Fact vs. Fiction. Retrieved October 30, 2007, from

http://www.hometheaterblog.com/hometheater/2006/06/bluray_vs_hddvd.html

(2007). Blu-Ray vs. HD-DVD in Next Generation Game Consoles. Retrieved November 1, 2007,

from http://www.roughlydrafted.com/2007/08/27/blu-ray-vs-hd-dvd-in-next-generation-

game-consoles/

(2007). Blu-Ray vs. HD-DVD: Sony Says the War Has Just Begun. Retrieved October 30, 2007,

from http://blogs.business2.com/utilitybelt/2007/06/bluray_vs_hd_dv.html

(2007). DVD. Retrieved October 31, 2007, from http://en.wikipedia.org/wiki/DVD

Betamax vs. VHS Format War, The. Retrieved October 29, 2007, from

http://www.mediacollege.com/video/format/compare/betamax-vhs.html

Block, Ryan. (2005). Blu-Ray vs. HD-DVD: State of Division. Retrieved November 1, 2007,

from http://www.engadget.com/2005/09/19/blu-ray-vs-hd-dvd-state-of-the-s-union-s-

division/

Costa, Dan. (2006). Blu-Ray vs. HD-DVD: What You Need To Know. Retrieved November 1,

2007, from http://www.pcmag.com/article2/0,2704,1982533,00.asp

Ramsay, Randolph. (2007). Blu-Ray vs. HD-DVD: Which Video Format is for You? Retrieved

October 30, 2007, from http://www.cnet.com.au/dvdpvr/0,239035801,240091380,00.htm

11 Sweany, Sean. (2006). Betamax vs. VHS: an old-school technology battle. Retrieved October 29,

2007, from

http://media.www.ndsmcobserver.com/media/storage/paper660/news/2006/04/26/Scene/

Betamax.Vs.Vhs.An.OldSchool.Technology.Battle-1877682.shtml

Zyber, Joshua. (2007). Commentary: Specs vs. Reality. Retrieved October 30, 2007, from

http://www.highdefdigest.com/news/show/Joshua_Zyber/Commentary:_Specs_vs._Realit

y/1096

12 Table 1: Betamax vs. VHS

Betamax VHS Year Introduced 1975 1976 Companies Sony, Toshiba, Sanyo, JVC, Matsushita NEC, Aina, Pioneer (Panasonic), Hitachi, Mitsubishi, Sharp, Akai Tape Width 12.70 mm 12.70 mm Tape Speed 1.873 cm/s 3.335 cm/s Record Time* 60 minutes 180 minutes Special Features Audio-Only Mode Long Play Mode (LP)

Table 2: Disc Format

Disc Format Blu-Ray HD-DVD DVD

Single Layer 25 Gb 15 Gb 4.7 Gb

Dual Layer 50 Gb 30 Gb 7.95 Gb

Triple Layer 75 Gb* 45 Gb N/A

Four Layer 100 Gb* 60 Gb* N/A