Dreamworks to hop on the Blu-ray bandwagon?
http://www.guardian.co.uk/business/story/0,3604,1372274,00.html
Sony, the Japanese electronics and entertainment group, has approached arch-rival Toshiba in an attempt to prevent a damaging format war over their next-generation DVDs.
Toshiba, which is preparing to launch its own high-definition DVD player as soon as next Christmas, rebuffed the offer to work together, however, setting in train a worldwide battle for consumers.
The overtures were made by senior Japanese executives at Sony over the past few weeks. They follow similar, successful talks in 1994, when the industry agreed a standard format for the launch of DVDs.
They also came as Toshiba was finalising support from three major movie studios - Warner Bros, Paramount Pictures and Universal for its own technology - called, somewhat confusingly, HD-DVD.
The support of such content providers is vital in encouraging consumers to buy the next-generation discs. Sony has signed up its own big guns, with Disney announcing its decision to adopt Sony's Blu-ray technology last week.
Dreamworks, the studio behind animated hits Shrek and Shark's Tale, is also poised to back Blu-ray, joining Sony's own in-house movie studio and MGM.
The stakes are high for the electronics and entertainment industries. The video format war that developed 20 years ago, in which Sony's Betamax technology lost out to JVC's VHS to become the industry standard, infuriated consumers and cost the losers millions. Toshiba expects sales of its HD-DVDs to hit £1.5bn by 2010. The new players offer better picture quality, especially on the increasingly popular wide-screen televisions, as well as far greater storage and interactivity. For the industry, they also have the added advantage of preventing piracy.
Although most commentary has focused on films, of equal significance is the hugely lucrative games market. PlayStation 3, the new version of Sony's games console due out by early 2006, will come equipped for Blu-ray DVDs. XBox 2, the latest version of Microsoft's rival to PlayStation, will be released some time next year.
Although publicly neutral on the new format, the software giant would have to spend more to develop XBox to work with Blu-ray. It is expected to be compatible with Toshiba's system.
Few publicly support a format war. Although most movie studios have now backed one format or another, they have not signed exclusive deals, leaving the way open for an agreement.
Anti-trust groups in the United States and elsewhere are likely to watch the battle carefully for signs of harm to the consumer. The VHS-Betamax battle harmed consumers, as those who bought Betamax were later forced to buy new machines once it became clear all new releases would be in VHS format.
Few in the industry are immune to the echoes of the older battle. Like Betamax, Sony's Blu-ray is widely considered to be better with greater storage capacity.
