Time Warner Inc. (NYSE:TWX) may find itself acting as an arbiter in the DVD standard fighting between HD-DVD and Blu-ray. Its Warner Brothers division will unveil next week at the Consumer Electronics Show in Las Vegas a single videodisc that can play films and TV programs in both rival formats -- Blu-ray and HD-DVD. This is said to be the "Total HD Disc," and it makes one wonder just why industry giants are doing the same thing all over again. The New York Times has a story "New Disc May Sway DVD Wars" (registration required).

Toshiba, Microsoft Corp. (NASDAQ:MSFT), and others are behind the HD-DVD format and Blu-ray is essentially backed by Sony Corp. (NYSE:SNE) and friends. If either of these formats is going to work well it better learn some interoperability.

This seems like the same argument I recall from 25 or so years ago. Sony would have won out with Betamax over VHS if it hadn't been so greedy back in the 1970s and early 1980s. But it used too tight of a stranglehold and then demanded too much on licensing, so the "rest of the industry" banded together in an up-yours coalition format that became VHS. Betamax was smaller, had less degradation, and gave a better picture. Do I dare use a Windows versus Linux or a Windows versus Mac format as the same comparison? Or what about an iTunes format versus other MP3 formats? Right now the customer-base wants interoperability.

Consumers are buying cool gadgets. Most will never really understand the difference between the two formats of HD-DVD and Blu-ray DVD, and most won't care. All that will ultimately matter on this is the price, the "cool" factor, and how accessible the technology is. So if all the children are going to fight and not learn from history, then maybe an arbiter is needed. It looks like Time Warner has figured out another potential niche and slick revenue source.