How and Why Is This Happening?

So why are HD DVD’s being made in Europe and why is Paramount/Dreamworks Animation dropping Blu-ray?

The Economist: Video Wars II - Can Toshiba's David Topple Sony's Goliath?

For a start, HD DVD is a cheaper system all around. Unlike Blu-ray, which has a much shallower (and therefore a more delicate) data layer, an HD DVD has its digital information etched deeper beneath the surface just like a conventional DVD—and can therefore be stamped out on much the same sort of equipment as a DVD. That translates into a larger profit margin for the studios.

Meanwhile, because of the robustness of the disc, HD DVD players have proved to be much cheaper to build. Models now start at $299, and are expected to fall to $199 by the coming holiday season. By contrast, basic Blu-ray players start at $449.

That’s not all. Engineers who’ve worked with both formats say Blu-ray is a pig to program. While extremely flexible, its programming language, BD-Java, requires lots of low-level code for even the simplest of instructions. The highly skilled programmers needed to do the job don’t exactly grow on trees. And because of the program’s complexity, even the best produce their share of bug-ridden software.

By comparison, writing software for HD DVD using Microsoft’s HDi interactive technology is a doddle—with one simple command doing the task of scores of lines of BD-Java. More importantly, HDi is the key to HD DVD’s better navigation around menus, and its instinctive ability to interact with the outside world.

- Tech.view/The Economist

Ars Technica: The economics of the next-generation DVD formats

The Blu-ray Disc Association (BDA) has long asserted that its Blu-ray (BD) format is superior to the rival HD DVD format, and BD’s "revolutionary" buzz has understandably caught the fancy of certain technologists. But CEOs should be wary, because what the BDA does not sufficiently address is what lies behind those assertions. The numbers are stark: manufacturing BD discs will require an estimated US$1.7 million cost per manufacturing line. Per line!

Then, each major manufacturing facility would require the implementation of a minimum of two mastering systems, at a minimum cost of US$2 million per system. DVD, at the height of its success, resulted in an estimated 600 manufacturing lines globally. Even allowing for a decline in systems costs over time as the manufacturing base expanded, the tab for radically overhauling the media manufacturing industry would approach a billion dollars worldwide or more. Already-beleaguered CFOs will be challenged to raise—and risk—this significant amount of capital.

Compare this to the estimated cost of retooling for the HD DVD format compared to BD. HD DVD is able to utilize virtually the entire existing manufacturing infrastructure. The cost of upgrading an existing DVD line is about US$150,000—less than a tenth the cost of a BD line. A DVD mastering system can be upgraded for US$145,000. Basically, HD DVD is a DVD-9—a version of DVD we have enormous manufacturing experience with already—with a denser pit structure.

Once people realize the hidden costs of the Blu-ray format, they will also realize the extent to which it actually endangers their very industry.

Blu-ray is the Emperor’s New Clothes—it advances the agendas of a few select companies instead of the markets and that of the consumer. No one—the studios, the disc manufacturers, the consumer electronics manufacturers—can afford a format war today.

- Rick Marquardt, former GM, Warner Advanced Media Operations,
via Ars Technica

BetaNews: HD DVD: Blu-ray Has Problems

The costs to convert a DVD production line is roughly 10 times the cost of conversion to HD DVD and the BD converted line can no longer make DVDs, therefore requiring two production lines. Quality control issues also exist, with limited BD manufacturing experience, the disc yield of a production run is lower than with either DVD or HD DVD; there are a lot more ‘coasters’ as the techies like to say. On top of all of this, hardcore programmers are required to code the interactivity and menu structures, not typical movie post production staff, and coding bugs abound like the loop that the ‘Dead Man’s Chest’ Liars game goes into with some BD players. Current, poorly executed retail pricing strategies might suggest to consumers that BD is cheaper: it is not.

Conclusion

Then everything comes together: unfaithful for convenience and cost. Maybe when one is away from home, one can get away with having a different wife in every port, who would know?

It’s a very old trick, that.

Collins points out that only two production facilities for 50GB Blu-ray Disc exist in the world, one in Japan, and on in Terre Haute, Idiana. So in addition to the other costs of BD manufacturing, local production is used to avoid the costs of having to produce discs in either Japan or the States and then ship them to Europe. Because of the costs of switching to BD production, few facilities in Europe have spent the coin to go BD.

So, what does this mean, strategically, to BD’s goal of taking over the (HD) world?

The marketers solution: get a foothold in the two countries that are effectively home base for BD companies, Japanese electronics manufacturers and US movie studios, lie through ones teeth about the availability of titles, create lots of marketing hype, and obscure the economic and technical limits of BD. Then once the foothold is established on home turf, expand and force out the competition in other markets.

We here in the States are having the wool pulled over our eyes.

Fortunately, as Mr. Collins kindly points out, unlike Blu-ray, HD DVD is region free. As long as the titles still have an English soundtrack, one doesn’t mind subtitles, or speaks the language these HD DVDs will work just fine in an American HD DVD player. Fortunately, many releases in non-English countries still seam to have the original English sound track.

Over the years, I have acquired quite a few imported CDs that were not available in the US. In looking through these web sites, I noticed a few titles from HD DVD supporters that I don’t recall seeing at US merchants. It looks like I will now be importing some movies as well.

So, what are you waiting for?

Go order yourself some European HD DVDs of some (supposedly) BD-only movies. My HD DVD copies of The Prestige, Terminator 2, and Total Recall should be arriving sometime next week.