Stalemate in Blu-ray/HD DVD Format War?

It’s still pretty early to make predictions about the high-definition DVD market, but that isn’t stopping market analysis firm Screen Digest, which in a new report somewhat boldly predicts that neither Blu-ray nor HD DVD formats will dominate the next-generation DVD battlefield, and that the fued is more likely to be resolved by dual-format equipment rather than by one side trouncing the other.

Screen Digest forecasts that about $39 billion will be spent on video disc in the United States by the year 2010, but only about $11 billion of that will be spend on high-definition formats. The rest will be standard, everyday DVDs. “The net effect of the format war and the publicity it has generated will be to dampen consumer appetite for the whole high-definition disc category,” said Screen Digest chief analyst Ben Keen in an interview. The report forecasts that few households will opt to replace their existing DVD libraries with high-definition versions of the same content as it becomes available. Further, Screen Digest forecasts fewer than half a million HD DVD or Blu-ray players will be sold in 2006; in 2007, the figure may rise to 1.35 million.

Blu-ray and HD DVD offer similar features to consumers; aside from current price differentials in players (Blu-ray players prices are almost double that of HD DVD players at the moment), Screen Digest notes that neither format offers compelling consumer features over the other. Thus, consumers have little motivation to choose one format over another in the way they migrated from VHS to DVD movies in the last decade.

Instead, Screen Digest predicts HD DVD and Blu-ray will coexist without either one rising to dominance—or overtaking standard DVDs—until dual-format solutions come to market and reach a price point which makes them easily accessible to consumers.

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