Disc manufacturers, equipment makers and resin suppliers are moving forward with two different optical media formats, without knowing which might achieve consumer acceptance.
Each camp backing one of two emerging formats seems passionate about its product, but that internal division is likely to cause confusion for consumers and slow the adoption cycle, said Frank LoVerme, vice president of sales and business developments with Deluxe Media Services Inc. in Burbank, Calif.
Service providers usually compete. But, said LoVerme, ``We do cooperate in matters such as this because it is important for us to protect what is a $26 billion [DVD] business [that] is projected to grow to something like $40 million by 2009.
``A lot of other distributors of content - television and satellite - would like to take a piece of that business,'' he said. ``It is incumbent on us to work together toward the launch of [high definition].''
Of the formats, LoVerme's firm, Deluxe, favors the Toshiba-backed HD DVD over its competition, the Sony-supported Blu-ray Disc.
``From a technical perspective, on at least the replicator's side, there are a lot of unanswered questions,'' said Dale Butrymowicz, vice president at equipment maker Singulus Technologies AG's Windsor, Conn., subsidiary. ``We are not getting clear indications from our customers.''
The executives were part of a panel that discussed the issue of optical disc formats at the Entertainment Media Expo, held Aug. 30-31 in Hollywood.
Cinram International Inc.'s Bill Mueller said combining Blu-ray Disc and HD DVD technologies is unlikely.
``From a physical standpoint, it is very difficult to adapt this hybrid,'' said Mueller, executive vice president of Cinram's U.S. operations in Nashville, Tenn. A Cinram pilot lab has tested both processes for more than three months.
News reports about the emerging formats are generating public expectations, but any compromise would be risky, said James Streynor, chairman and chief executive officer with test equipment maker Datarius Technologies Ltd. in Mitcheldean, England. The concept of a hybrid consumer player for Blu-ray and HD is ``challenging but not possible,'' he said.
LoVerme said meeting the needs of content holders is important but he sees a fiscal challenge. Butrymowicz said Singulus already is feeling pressures to lower new equipment prices.
``We are spending a lot of money on some development tools that are not commercially available,'' LoVerme said.
And disc manufacturers already have concerns about first-generation equipment becoming quickly obsolete.
``That is something at the back of everyone's mind,'' Mueller said. ``Will these first-generation systems accommodate to the rate of change,'' in which ``a six-second machine becomes a five-second machine becomes a four-second machine?''
The panel discussed other possible problems that could arise with the new technology. LoVerme said multiple formats would make returns a big issue, and Mueller agreed, noting that distribution facilities would need to manage more variations of stock-keeping units.
Mueller said theft will rise as a result of higher prices, with packages retailing for $30-$35.
``Maybe 5 percent are stolen now,'' he said. ``It will be higher on more pricey products.''