Detente in High-Def DVD Wars?

Sony (NYSE: SNE), which has spent the past year touting the Blu-ray high-definition video storage format and rallying other companies to its cause, hinted that it may be amenable to working with its rival format, HD DVD, in some fashion.

At a news conference today, Ryoji Chubachi, head of Sony's electronic components and manufacturing businesses, had this to say: "Listening to the voice of the consumers, having two rival formats is disappointing, and we haven't totally given up on the possibility of integration or compromise."

Chubachi is slated to become president of Sony on June 22, a fact that gives his comments more weight. Exactly what he meant, however, is open to debate.

What Does He Mean?

"It's not clear what the implication of these remarks might be," Michael Gartenberg, senior analyst at Jupiter Media, told TechNewsWorld. "The question that Sony is looking at is, having been through these type of format wars in the past, is this really something that's going to benefit them going forward?"

The comments could not have been well-received by Blu-ray's other backers, who include Hewlett-Packard (NYSE: HPQ), Hitachi (NYSE: HIT), Mitsubishi, Panasonic, Pioneer and Samsung. Apple (Nasdaq: AAPL) announced March 5 that it, too, would join the Blue-ray Disc Association. Rival HD DVD is backed by NEC (Nasdaq: NIPNY) and Toshiba, among others.

High-definition formats offer higher-resolution imagines and sound, and the DVDs themselves can hold a lot more information.

The problem with competing formats is that adoption of either technology can be delayed.

"There's going to be a fair amount of soul-searching by various parties going forward," Gartenberg said. "Nobody wants to create a situation that slows consumer adoption instead of speeding it. Most consumers have learned to take a wait and see approach with new formats."

Slowing Adoption

The battle could also create a Catch-22: Content providers don't want to step into either format too deeply until there's a clear consumer demand for one or the other, while the demand for a format doesn't materialize until there's content to buy.

"Sony was co-founder of the compact disc and certainly understands the value proposition of getting everyone to agree on a platform," Gartenberg said. "It will be very fascinating as it plays out of the rest of this year."

Enthusiasts, he said, may even buy both platforms, but average consumers are likely to wait it out to see which becomes the preferred format.