Movie studios are currently battling it out over two HD media formats, HD-DVD and Blu-ray. Both formats wish to take the place of DVD, but as we have seen with the VHS/Betamax debacle, there can be only one winner.
While there are significant technical differences between the two formats, the most obvious disparity is in the amount of data each disc holds. A single layered Blu-ray disc holds 25GB compared to HD-DVD's 15GB. It is safe to assume that most commercial discs will be dual-layered, effectively doubling those storage sizes. Comparatively, a single layer of standard dual-layered DVD is about 4.7GB.
As you can see, Blu-ray is a much bigger leap from current DVD technology and is more likely to be used in the future than HD-DVD. On the other hand, HD-DVD is easier and cheaper to manufacture. It may also be able to offer the same quality as Blu-ray at a lower price, despite the smaller disc size.
Attempts were made to come to some sort of agreement between the two standards, but somewhat predictably those plans fell through because of both sides' obstinacy. In the end, the Blu-ray and HD-DVD camps were more concerned about the superiority of their own individual formats than about the convenience for the consumer.
This wouldn't be such a big deal if one of the formats looked set for defeat, but it doesn't look like that's happening anytime soon. Electronics behemoth Sony, the biggest proponent of the Blu-ray format, will be supporting it extensively with the PlayStation 3 (PS3). Their next-generation console will be able to play Blu-ray movies, and the games will ship on Blu-ray discs. The success of the PS3 (while admittedly quite likely) will greatly determine the popularity of Blu-ray discs in general.
Microsoft, along with several PC manufacturers, is backing the HD-DVD format instead. Recently, Microsoft announced an HD-DVD add-on drive for the Xbox 360. While the 360 won't run any games from HD-DVD discs, this optional drive will allow anyone with a 360 to view HD-DVD movies. With such strong support on both sides, it looks like this battle will be drawn out much longer than VHS/Betamax fiasco.
These new HD media formats are likely to be much more expensive than DVDs today. Back when the DVD format was new, the players cost upwards of $250, and the discs cost around $30.
We can expect the new Blu-ray and HD-DVD players to be similarly priced, although the discs are another story. Recently, Sony announced that Blu-ray movies will most likely go for around $30-40 at first. These prices seem to be getting out of hand.
Given that most new DVDs today cost under $20, I don't see how they can justify charging more than a $10 premium (more than 1.5 times) for the HD version. This is not the best way to spur the public to adopt their new technology, especially when most people will need to buy a new TV and disc player just to play these discs.
We haven't heard very much on the pricing on HD-DVD movies, but by all estimates, it should be slightly cheaper than the Blu-ray discs because the discs are easier to make.
Pricing is going to be a huge deciding factor for consumers, especially when faced with a cheaper DVD alternative. Consider the DVD box set for television shows, such as "The O.C." or "Desperate Housewives," one of the technology's biggest cash cows. Currently, a box containing a full season of 24 episodes will cost consumers around $50 at most stores.
For the HD version of the same box set to be successful, it can't be too much more than the standard DVD version. As a consumer myself, I wouldn't want to pay more than $20 extra for the HD version. Finding this balance will be key to the success of the Blu-ray and HD-DVD formats.