Intermittent Issues:
HD and the Format Wars (2002-2005) Part 2
By Ben Gruchow
July 27, 2015
BoxOfficeProphets.com
Welcome back. We pick up where we left off in Part 1, which involved the genesis, development, and growing acrimony between parties as to which direction to take HD in for an optical consumer format. The two parties consisted of Sony, Columbia, Disney, and 20th Century Fox with the Blu-ray disc; and Toshiba, Universal, Warner Bros., and Paramount with HD-DVD. When we last left them, all negotiations to attempt a compromise and consolidated HD format had failed, and both formats were ramping up for release.
The Format War
Here’s the funny thing in all of this: Blu-ray and HD-DVD, when it came right down to it, really weren’t very dissimilar at all. Both formats utilized the blue-violet laser diode and the 405 nm wavelength; both formats were ultimately planned to offer dual-layer capacity. HD-DVD had the advantage of using a more familiar structure for pressing data; Blu-ray offered more raw storage space (in theory). The differences between the two formats were far more political than they were functional, but I think we’ve probably covered that enough. What it came down to, in the real world, was how each format was deployed.
HD-DVD was out first in April of 2006. The initial wave of releases included The Last Samurai, Million Dollar Baby, The Phantom of the Opera, and Serenity. Blu-ray followed that August with 50 First Dates, Hitch, House of Flying Daggers, Twister, Underworld: Evolution, xXx, The Fifth Element, and The Terminator.
Out of the gate, Blu-ray faltered considerably against HD-DVD in a qualitative sense. None of this had much to do with anything inherent to the Blu-ray format; prices for HD-DVD discs were perhaps slightly lower than Blu-ray, but you can easily chalk that up to aggressive marketing. It was instead down to an asterisk that Sony had left out of their talking points, and to smarter utilization of the HD-DVD storage space. The asterisk had to do with disc layers.
Blu-rays did not ship with a caddy, in order to maintain a familiar form factor. A Blu-ray on Day One of release looked identical to a DVD or CD. However, the underlying reason for the caddy’s existence hadn’t been addressed; the wider aperture of the laser lens meant more precise focus and more storage space, but it also meant that the data had to reside significantly closer to the disc’s surface than for CDs, DVDs - or even HD-DVDs, which utilized an aperture only slightly wider than a standard DVD’s. This left the Blu-ray disc more susceptible to damage, but it also meant that even a single-layer, 25-gigabyte disc was more prone to both manufacturing errors and read errors, due to less wiggle room when it came to divots on the layer. This was an issue that was mostly down to Blu-ray being a new technology, and new technology will almost always produce a lower yield of usable product at first.
Unfortunately, Blu-ray wasn’t being produced in a vacuum. HD-DVD’s manufacturing process was identical to existing DVDs. This meant not only a far lower incidence of manufacturing errors, but almost nonexistent read or compatibility errors with HD-DVD players. It also meant that the first wave of Blu-ray discs were single-layer, in order to avoid adding an extra data layer on top of one that was already problematic - not at all an indictment of the 25-gigabyte storage space still available, but a nullification of the Sony talking point that Blu-ray discs had more room to play with than HD-DVDs. In point of fact, HD-DVDs were being produced with dual layers from day one, and so had more usable storage space than a Blu-ray.
The entire storage-space talking point was sort of empty as an asset, anyway; Sony even admitted in the early days of Blu-ray that the majority of films weren’t going to need more than 25 gigabytes of space. HD video takes up more room than SD video, but not exponentially. In addition, video compression techniques and codecs had progressed a long way since the introduction of DVD. There are two main types of these techniques: lossy, to indicate that the compressed video is of perceptibly lower quality than the original; and lossless, which indicates that the compressed video looks identical to the original, even if it has been compressed and re-encoded.
MPEG-2 is the codec used for any and every DVD produced, and it’s a lossy one. The flaws in MPEG-2 encoding are most noticeable in the very early days of DVD; if you ever remember seeing swarms of blocky pixels on a DVD, particularly in darker areas of the image, you’re remembering a common MPEG-2 liability called macroblocking - the unsightly result of the codec being unable to properly handle the amount of visual information in that part of the video. Any subsequent video copies derived from that MPEG-2 would be even worse. Macroblocking and compression artifacts were common in early DVDs and still make their way into some newer DVDs.
MPEG-2 was unsuitable as a format for any original or master copies, but it was an acceptable format for the early days of DVD, when the majority of content was being played on SD screens. Once TVs started to grow in resolution and in size, the limitations of MPEG-2 encoding began to reveal themselves. The answer to this was something that I guarantee you all are intimately familiar with, even if you don’t know it yet: MPEG-4.
Developed in the late 1990s, MPEG-4 was conceived as a way to package higher-quality video in a smaller container; it was this format that the DVD Forum initially investigated for applying HD content to standard DVDs in 2002. MPEG-4 is a method of compression with multiple “faces” and manifestations, but the reigning king of all of them is the Advanced Video Codec, also known as AVC, also known as H.264. AVC/H.264 is everywhere now, but that’s a topic we’re going to save for Part 4 of this series. In 2002, AVC/H.264 went by a much more technical term: MPEG-4 Part 10. There’s a tremendous amount of technical data that we can go into to explain how this video coding standard is able to do what it does, but the broad strokes really tell the story of why it became relevant: by utilizing a different method of frame-based compression, MPEG-4 Part 10 was able to produce video quality comparable or superior to MPEG-2 at a substantially lower bitrate, with a far lower incidence of macroblocking and other compression artifacts.
And here, after all of this, is where we arrive at the other reason why Blu-ray stumbled in its initial outing: early Blu-ray discs did not use MPEG-4 Part 10 as the video encoding standard, but MPEG-2 at HD resolution; this was particularly true of Blu-rays released by Sony itself. The results were very mixed. MPEG-2 HD was superior to MPEG-2 SD, but it was still prone to wildly inconsistent results depending on how complicated the information in the frame being encoded was. MPEG-2’s biggest liability as an encoding standard comes with scenes of fast motion, or particle effects like snow or rain.
It is very possible to pop in an early Blu-ray disc (the most infamous was the 2006 Blu-ray version of The Fifth Element, but any visually complex film will do) and find a transfer that went from acceptably HD to surprisingly soft and low-resolution in the space of a few scenes. Macroblocking and compression artifacts were everywhere. The visual result of an inefficient MPEG-2 transfer was exacerbated by the tendency of early Blu-ray discs to feature uncompressed audio for the soundtrack, which ate up even more precious disc space. The additional demerit here is that many early Blu-ray discs lacked any of the special features included on their DVD counterparts; there was just enough space on a single-layer Blu-ray disc for an uncompressed audio stream and a movie in MPEG-2 HD.
HD-DVD, by comparison, went straight for AVC/H.264 compression, as well as a Microsoft-backed compression standard called VC-1. The difference in quality between the same title on first-generation HD-DVD and first-generation Blu-ray is noticeable, considering both formats had access to the exact same codecs. In addition, HD-DVD discs rarely (if ever) possessed a space-hogging uncompressed audio track, relying instead on high-bitrate versions of the Dolby Digital and DTS compressed audio tracks that DVDs had possessed for years.
A dedicated audio enthusiast with a bleeding-edge system might have noticed some difference between an uncompressed Blu-ray audio track and Dolby TrueHD or DTS-HD audio, but the three were very close in terms of audio quality. Even if the same could be said about the video (that only a dedicated enthusiast would notice the difference between an MPEG-2 HD transfer and a VC-1 or AVC transfer), HD-DVD pulled out a decisive win based on the storage space taken up alone, and movies released on HD-DVD usually had all of their special features intact (and sometimes also in HD).
Another personal note: Being a fairly hotheaded young individual who was willing to go to great lengths to ensure adherence to a director’s original creative vision, the qualitative difference between Blu-ray and HD-DVD was one of my two preferred arguments to start with Best Buy employees at the time - especially considering that Blu-ray, quite frankly, had the better marketing campaign. The other argument involved/involves the implementation of TruFilm, or TruMotion, or MotionFlow, or whatever ridiculous version of frame interpolation that HDTV manufacturers started sticking into their models and turning on by default, in a misguided attempt to cater to the misguided consumer who was concerned that movies didn’t look smooth enough in motion. I may still have my blood angried up about that one.
HD-DVD had the stronger start initially; sales were acceptably good, if slower than the comparable period during DVD’s launch: at the end of 2006, 120,000 dedicated HD-DVD players had been sold, compared to 25,000 dedicated Blu-ray players. Early Blu-ray players were also affected by slow loading times, expected read errors, and a stupendously high price tag (the first dedicated player, the Samsung BD-P1000, cost $1,000 at launch, while the first HD-DVD player from Toshiba cost half as much and presented no unique read errors or speed issues; back in the quaint old days of 1998, a new DVD player averaged about $350).
Despite these early figures, the tide had turned in favor of Blu-ray only a few months after its introduction, although this wasn’t readily apparent at the time and HD-DVD production continued throughout 2007 and into 2008. The exact date of Blu-ray’s change in fortune was November 17, 2006, when Sony’s PlayStation 3 was released in North America. Microsoft’s competing console, the XBox 360, had been released the previous year; while an HD-DVD drive was offered for the 360 in 2006, it didn’t take off to the same degree. Sales of the HD-DVD drive add-on reached 150,000 units by the end of 2006; by comparison, sales of the PlayStation 3 hit nearly three times that number, with 400,000 sold through the same period. By virtue of the PlayStation 3 acting as a Trojan horse for the Blu-ray format, the user base now tilted heavily out of HD-DVD’s favor; there were 270,000 HD-DVD units in homes by the end of 2006, versus 425,000 Blu-ray units.
Around the end of 2006, Sony also got a handle on the major issues the Blu-ray format had faced at launch: discs were starting to be created with the AVC and VC-1 codecs, and a lab had finally developed a protective polymer coating for the Blu-ray disc that was simultaneously thin enough to be read through and yet harder than the protective coatings on DVDs or HD-DVDs. This enabled the pressing and production of dual-layer Blu-rays without the fear that a slight mishandling would damage the data. Finally, the Blu-ray player quality took a sizable step upward with the introduction of the PlayStation 3; not only was the console by far the most powerful of its generation, but the HD connectivity options and operational reliability of the Blu-ray drive were significantly more streamlined. It also helped that the best Blu-ray player on the market was launched at a price point between $500 and $600 - comparable to the initial HD-DVD players and significantly lower than the Samsung standalone Blu-ray player.
At the start of 2007, both formats were on roughly equal footing. Blu-ray had more studios supporting its format than HD-DVD did (having initially started with the exclusive support of Columbia Pictures, Walt Disney Pictures, and 20th Century Fox, Blu-ray gained support from Paramount and Warner Bros., which had previously been exclusive to HD-DVD), but the libraries for both formats were continuing to grow, and retailers continued to stock and advertise both formats.
There was evidence of HD-DVD’s decline at this point already, though; an imminent PlayStation 3 price cut was rumored for April of that year, which deterred potential XBox 360 customers (the actual price cut for the PS3 didn’t come about until July). The aforementioned broadening of support from Paramount and Warner Bros. (which owned the single largest library of titles) to Blu-ray lessened the sense of risk from more people who were on the fence. Paramount’s decision to move back to exclusive HD-DVD support in August was likely something of a neutered victory; at that point, the PS3 price cut did actually happen, and Paramount’s move (the second between the formats in six months) established that studio support for one format or another was fairly fluid, with the exception of Sony.
The key player in 2007 was Warner Bros.; as mentioned, they possessed the largest film library for any one studio. In addition, they had hedged their bets by supporting both formats at the beginning of the year. To illustrate this, they implemented a strategy in January, hopefully to be picked up by other studios, known as Total HD: a release that contained both Blu-ray and HD-DVD versions of the film in one package. At roughly the same time, LG Electronics released a player that read both HD-DVD and Blu-ray discs. There were rumors of Sony and Panasonic making a similar hybrid, but these never progressed beyond the initial stages.
Warner was perhaps the only studio big enough to get away with this kind of fence-sitting, as the HD format war had gotten fairly aggressive by this point; Blockbuster Video had announced it was dropping support for HD-DVD, under rumors that the Blu-ray Disc Association had paid them off to do so; similar rumors flew in regard to Paramount moving back to HD-DVD exclusivity. Blu-ray initiated a buy-one-get-one-free promotion in October of 2007; Toshiba countered by announcing and then releasing an HD-DVD player for $98 on Black Friday. Despite this (or perhaps because of it), no other studios signed on for the Total HD initiative, and Warner put it on ice in November of 2007. Meanwhile, the price cut for the Toshiba HD-DVD player, while effective in the short term, answered no questions as far as the format’s longer-term viability. No studios switched allegiance to HD-DVD as a result of the sale, and no retailers changed their mind about advertising it.
The Winner*
Roughly one month after the Toshiba HD-DVD player went on sale, and shortly after Warner “suspended” the Total HD initiative, the studio made a decision that turned out to have major ramifications. Their biggest domestic grosser of 2007, Harry Potter and the Order of the Phoenix, was released for home purchase and rental. Warner released two separate versions of the movie, one for each format. Here, though, the assets were different between the two: the HD-DVD version of the film possessed Warner’s “In-Movie Experience”, which consisted of roughly an hour of HD vignettes. Other than this, though, the remaining features on the HD-DVD version were in SD. The Blu-ray version of the movie got these features in HD, plus an additional 44-minute documentary in HD, at a slight price premium.
The Blu-ray version of Order of the Phoenix outsold the HD-DVD version by a considerable margin, the HD features evidently being a bigger draw for consumers than the In-Movie Experience. Shortly after, in January of 2008, Warner Bros. announced that they would be supporting Blu-ray exclusively. With this, the deal was all but done. The only studio exclusively backing HD-DVD was Universal, and the format now only had the additional support of Paramount and DreamWorks.
Potential reasons for this defection by Warner Bros. to Blu-ray exclusivity varied, although one common factoid involves a payout to Warner from the Blu-ray Disc Association of between $400 and $500 million. The most detailed “dirty” reason for the defection came from Gizmodo, which indicated that Warner originally intended to go HD-DVD exclusive, but saw increasing hardware and movie sales for Blu-ray as a potential liability. As a result, they advised Toshiba that, if another studio came on board as HD-DVD exclusive, Warner would drop its support for Blu-ray.
HD-DVD did receive a notice of intent from another studio, 20th Century Fox, claiming that they would also make the switch. Fox, however, backed out of the deal at the last second (shades of another payout from the Blu-ray Disc Association were indicated here, to the decidedly smaller sum of $120 million); without another studio willing to make the switch, Warner dropped the format and went Blu-ray exclusive, receiving a payout as they did so.
The reason why this happened was ultimately irrelevant; Warner’s switch precipitated the bottom falling out from underneath HD-DVD. Toshiba slashed prices for players again, but it had little impact on ownership and no impact on studio affiliation. New Line Cinema, then in the middle of being absorbed into Warner Bros., defected from the format after releasing a single film on HD-DVD, Pan’s Labyrinth. Netflix, which had up to that point been supporting both formats, went Blu-ray exclusive. In February of 2008, Best Buy went Blu-ray. Target stores had already gone with Blu-ray. Finally, Walmart went Blu-ray exclusive on February 15th; four days later, Toshiba announced the end of development or support for HD-DVD. The final studio film to be released in the format was Twister - the first film to be released on DVD. Blu-ray won the HD format war, a little over three years after it first took shape.
*Except for This Part
There’s a saying: “A hundred percent of zero is still zero.” I’m honestly not sure where I heard it, and it seems a little harsh to use that here. I like this version of the saying better: “The best of the Twilight movies is still a Twilight movie.”
When DVD took off, it really took off. The comparisons between VHS and DVD in home entertainment, and the clear advantage that DVD had in just about every way except for initial cost of ownership, were visible to the most disinterested layman. I remember walking through a Best Buy in 1997 and seeing a massive demo unit for DVD set up. A clip from the first tornado sequence in Twister was being used, and the effect on the consumer was noticeable: People walking by stopped and stared, almost as a matter of habit. The widescreen image, the clarity, and especially the Dolby Digital 5.1 audio—as an experience, it was head and shoulders above not only the version of Twister that had been available on VHS for six months by that point, but above virtually anything else outside of an actual movie theater. I bring up this anecdote to strike a contrast between SD home theater and HD home theater, and the visible differences between the two, and the very different rate of adoption for SD-to-HD versus analog-to-digital.
Blu-ray may have won the format war, but that victory doesn’t mean much when the average consumer looks at it and legitimately can’t tell the difference between a Blu-ray and a DVD, or if they can tell the difference and don’t care. HD is a smaller relative leap from DVD than DVD was from VHS - whereas it’s easy to impress upon a potential buyer the change from two-channel analog sound to six-channel digital sound, it’s less so when you’re trying to convince said buyer of the advantages inherent in eight channels instead of six, or 5 Mbps (the average Dolby TrueHD bitrate) instead of 448 kbps (the high end of Dolby Digital 5.1 bitrate).
If you have two gigantic HD screens side-by-side in front of you, with one playing a DVD and the other playing a Blu-ray, it gets easier to show off the difference. You’re talking about a very controlled environment, though, and hypothesizing that a 32-inch HDTV is going to show any noticeable difference between the two formats. Exacerbating this is the fact that, by 2008, the average DVD player had gotten awfully good with upscaling.
Upscaling is a less-evil manifestation of interpolation; instead of creating artificial frames to smooth motion, it creates artificial lines of resolution to simulate a higher-definition image. At its best, with a properly mastered DVD, upscaling makes it difficult to tell the difference between a DVD and a Blu-ray image unless you possess a very large screen, or unless you’re actively looking for fidelity in fine detail - strands of hair or the texture of fabric.
The Blu-ray format has matured and improved since 2008, and it is still by far the apex predator when the priority is the best audiovisual experience. Obsolescence of the format isn’t here or nearby, but it’s in sight. As of 2015, Blu-ray’s kind-of-sort-of successor has already been announced: Blu-ray 4K, to match up with 4K HDTVs. We will talk more about both of these things in a future installment of Intermittent Issues. Thank you for sticking it out through over 6,000 words with us, and we’ll be back with Part 3 soon.