Sony on Tuesday dismissed concerns about the future of its next-generation DVD standard after Intel and Microsoft threw their weight behind a competing format championed by rival Japanese electronics group Toshiba.
Intel and Microsoft confirmed a report in some editions of Monday’s FT that they were endorsing Toshiba’s HD-DVD standard over Sony’s Blu-ray Disc.
There would be “no impact” from Microsoft and Intel’s stated support for HD-DVD, Sony said on Tuesday, arguing that, among other things, its format offered better copyright protection.
The decision by the personal computer industry’s two most influential companies to back HD-DVD poses another major challenge for Sony’s chief executive Sir Howard Stringer - less than a week after he announced a restructuring package aimed chiefly at reviving the group’s struggling core consumer electronics division.
The division has been hit by the company’s failure to capitalise on booming demand for flat-screen TVs and by the success of Apple’s portable digital music player, the iPod.
Analysts said that, while the Microsoft and Intel move was unfortunate for Sony, the support of content providers such as movie studios was more important. “It’s positive for Toshiba but it’s not decisive,” said Carlos Dimas, electronics analyst at CLSA in Tokyo. “What is going to decide the race is the content providersbecause they have to find the right technology in terms of IP [intellectual property] management and also in terms of economic efficiency.” Even if Microsoft supported HD-DVD, it would not be difficult to write software to enable PCs to use the Blu-ray standard, he said.
Paul O’Donovan, analyst at Gartner, said even the backing of Microsoft and Intel did not give HD-DVD the commercial edge over Blu-ray. “The DVD recorder and games console market will be a much bigger driver than the PC market. A PC is fine for writing a movie or backing it up, but ultimately you want to play it on a DVD player.”
The fact that Sony’s new PlayStation console would include a Blu-ray DVD player, was a major boost for the format.
Mr O’Donovan also said computer industry backing could turn studios against the format. “If these HD-DVD drives are mainly ending up inside PCs, that is where they are going to be copied. Hollywood is likely to go with whichever format is least copiable.”
Hollywood has split over the issue, with Time Warner, Viacom, Paramount and NBC Universal supporting HD-DVD, and Walt Disney, 20th Century Fox, Sony Pictures and MGM, owned by Sony, backing Blu-ray.
“I think that we are heading to a major format war,” Mr Dimas said.
llegal copying has been widely supported by content providers.”
Toshiba on Tuesday that the endorsement of Intel and Microsoft was likely to make HD-DVD the standard next-generation DVD.