Early adopters relish the opportunity to try advanced optical media formats, but replicators face a daunting era with conflicting versions HD DVD and Blu-ray Disc.
For replicators, ``the main challenge is dealing with adoption rates and really trying to predict [volumes],'' said Mark Johnson, vice president of technology with the Technicolor Creative Services unit in Burbank, Calif.
In the retail marketplace, ``a big challenge faces the content providers alone in how you drive people to adopt these formats,'' Johnson said. ``There are some predictions that show it going through the roof immediately. Others suggest it may be more like color TV, which took a long time to be finally adopted.''
Months of delays have stalled market entry for each format, but it is possible dual-format players might make a difference.
``Consumers will jump on those [players] because they are cheap insurance about which format [discs] they buy,'' said Jim Taylor, general manager of the advanced technology group at Sonic Solutions in Novato, Calif. ``That will force everyone else in the industry to follow suit, and the format war will go away without any resolution.''
Johnson and Taylor discussed aspects of the competition in March 10 presentations and interviews in La Quinta, at the annual forum of the International Recording Media Association, based in Princeton, N.J.
Toshiba Corp.-backed HD DVD and Sony Corp.-supported Blu-ray Disc remain technically incompatible, and the two consortia that comprise equipment makers, content holders and disc manufacturers are going forward with plans for spring product introductions.
The adoption rate in the consumer community will determine how many discs have to be made, Johnson said.
The history for VHS videotape and DVDs provides a perspective, he said.
``There are something like 50,000 DVD titles vs. somewhere around 25,000 VHS titles. And it is largely because of the adoption rate of the video format,'' Johnson said.
Taylor believes the next-generation formats will succeed: ``probably both of them,'' he said. ``The market will put them together in spite of themselves.
``The question is how fast does the old format fall off and the new format come in?'' Taylor said. ``The good news for replicators is that there will be more business. More discs will be made. More money will be spent. But what are the proportions?
``At this point, nobody knows.''
Meanwhile, the upfront capital expenditures soar as all players in the supply chain prepare for a multiplicity of products.
Both formats require a huge investment, Johnson said.
``Both are early in the technology. We are working both paths. Everyone has gone both directions,'' he said.
The major replicators include Technicolor, based in Camarillo, Calif.; Cinram International Inc. of Scarborough, Ontario; JVC Disc America Co. of Tuscaloosa, Ala.; Deluxe Media Services Inc. of Vernon Hills, Ill.; and Memory-Tech Corp. of Tokyo.
``They have to make the capital expenditures now [for both formats] ... if they want to be able to service both of their sets of potential customers at same time as they keep their existing businesses going and manage that transition,'' Taylor said. ``That is the tricky part.''
Taylor's group licenses Sonic technology for digital media creation and playback to third-party software and hardware developers including Sony, Microsoft Corp., Time Warner Inc. and Adobe Systems Inc.
``For the last two years, I have had two teams of software engineers developing for two formats,'' he said.
``Technicolor and other companies are in the same boat, and that is reality,'' he added.
The battle lines have been drawn.
``Ultimately, I think it is a big surprise to manufacturers and everybody else that there are still two formats to be dealt with,'' Johnson said. ``That has really added a lot of challenges.''
Johnson agreed on each consortium's staying power: ``Both formats will stay around for a while, but [they] may have different niches.''