Home Entertainment Coordination Games: The DVD Wars


Looks like there's another fight heating up for home entertainment formats: HD-DVD vs. Blu-ray.

"The problem is that we're getting into another round of format wars and until it shakes out, consumers are not likely to buy much of anything," Michael Gartenberg, research director at Jupiter Media, told TechNewsWorld.

"Enthusiasts and getting to market first don't matter," he said. "The enthusiasts are going buy no matter what. If they pick the wrong format, they'll buy again. It's the mainstream that matters."

While DVD players a getting closer to making VHS a thing of the past, I think it's going to be a while before people buy into an even newer format for DVDs even if everyone comes to an agreement and picks a single format.

My quibble with the second quoted paragraph: actually, enthusiasts can matter a great deal, depending on what they're enthusiastic about. In the VHS v. Betamax fight, some early adopters heralded the higher quality of Betamax. But there were enough early adopters who cared a bit more about price and availability than overall quality, and out went Betamax. Of course, someone else had to sort of settle on a format to put in video stores, but if my memory serves, there were plenty of places that had movies in both formats. The Betamax players were just enough more expensive that my folks got a VHS player since they couldn't really see the difference in quality (and honestly didn't care that much about it -- their switch to DVD came when they realized they soon wouldn't be able to buy their favorite movies on VHS). So, if there are enough early-adopters who decided to care about some feature of Blu-ray over HD (or vice versa), it may well tip the scales in favor of one format or another.


It seems to be a general perception that format wars are a bad thing, because having one format only is more economically efficient. Do the competitive processes--in the media, and in the marketplace--yield important benefits to consumers?

Hmmm. I guess I've never viewed them as "bad" in and of themselves. What I usually hear is people evincing a disappointment that the format/style/type they preferred ended up being the "loser" in the format war. The classic case of the QWERTY keyboard is a good example. There appear to be any number of better ways to arrange a keyboard, but for whatever reason, here we are. The costs of transition aren't argued as being low (for instance, I can swith my keyboard to a Dvorak style in just a few seconds), so it would really make no sense that we keep inefficient things like the QWERTY keyboard unless there are some other sorts of efficiencies that people aren't accounting for.

(In terms of the keyboard itself, I tend to think this is because even those people who type moderately well still use a good deal of visual information. They can see the keyboard, and while they don't hunt-n-peck, there is some benefit to moving in ways that are visually reconizable. The Dvorak keyboard requires memorizing the keys and then attempting to IGNORE the markings on the keyboards we have. This is similar to the game played where someone writes the word RED in green marker and asks either "what color is the marker" or "what does that word say". A lot of people get it wrong because of the interaction between visual and verbal function.)

I don't care which format comes out. The movie companies, on the other hand, do care a great deal. Pick the wrong one and you've spent a lot of money on a turkey of a product. The decision will be, I think, based on a mix of customer preference and who can get the products out cheaper and to more areas. In that case, I do think the competition yields some benefits, since we end up with the one preferred by more people under a prodcution constraint. Which is how we got VHS over Betamax, I think.


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This page contains a single entry by published on December 10, 2004 2:35 PM.

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