Warner Brothers, part of Time Warner Inc. (NYSE: TWX), has decided that its HD material will only be released on the Sony (NYSE: SNE) supported Blu-ray format. That is bad news for Toshiba, which has championed the rival HD-DVD technology. According to Reuters "Warner Bros., Hollywood's biggest seller of DVDs, represents about 18 to 20 percent of sales in the United States and was one of the few studios that backed both formats."

While the news is good for Sony, it is hard to say whether it will speed high definition DVD adoption. The fact that there are two formats has confused consumers. This has likely kept them out of the market and forced them to rely on HD content delivered over cable and satellite. As a matter of fact, it may be a key to improved satellite TV subscription numbers.

The presence of two formats has likely also helped the new fiber-to-the-home products from telephone companies like Verizon Communications (NYSE: VZ). They have enough bandwidth to support a number of HDTV channels.

Sony may have gotten some good news, but consumers may have already turned elsewhere for high definition content.

Douglas A. McIntyre is an editor at 247wallst.com.

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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.

Time Warner set to profit from the DVD wars originally appeared on BloggingStocks on Thu, 04 Jan 2007 15:02:00 EST. Please see our terms for use of feeds.

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Will Blu-Ray debut on the next Apple Power Mac? originally appeared on BloggingStocks on Fri, 14 Jul 2006 15:17:00 EST. Please see our terms for use of feeds.