The high definition video format war isn't over. It has just begun...

Recently, a new format has popped up that, in a year or so, might make the Blu-Ray look like the Betamax

Toshiba conceded the HD video disc battle this week and announced its HD-DVD formatted products were no longer going to be manufactured. It had little choice after a string of defeats, started by Warner choosing to go with Blu-Ray exclusively and concluding when the US's biggest retailer, Wal Mart, backed out of the HD DVD format.

So, Blu-Ray is the winner, right?

Not so fast.

Recently, a new format has popped up that, in a year or so, might make the Blu-Ray look like the Betamax. Downloadable movies are the new IT THING.

AppleTV started delivering movies in HD format directly to the living room this month. While it isn't 1080 format (yet), the reviews that have been coming in are quite favorable. Additionally, the price (barrier to entry) is much better both for the players. US$225-325 for AppleTV vs. US$400-500 for Blu-Ray.

Blu-Ray offers some traditional benefits that many will appreciate like unlimited amount of playing and higher quality video. The physical media that you can carry around and play for years and years will also appeal to many people. The benefits of instant ordering and playing from the couch are going to be hard to beat, however. Also, it is very difficult and legally questionable to get your HD content off of a Blu-Ray Disc for storage or backup on a hard drive.

It isn't just Apple that is betting on downloadable movies. Microsoft is there too. Many have speculated that Microsoft's main purpose for putting the HD-DVD into the XBox 360 was to draw out the HD Disk format war which would eventually draw more people to its own downloadable formats. Indeed, Apple has yet to offer a HD formatted disk option in any of its machines - even the expensive, high end workstations.

Dlink, NetGear and Linksys are all making AppleTV competitiors that can play downloadable HD format movies including movies from Microsoft's downloadable service. These products while very cool are still a little rough around the edges compared to Apple's product.

Amazon and Netflix (coming very soon) are also in the downloadable format game with HD movie downloads.

And don't forget the cable companies. They want a piece of this action as well and are already offering HD content on demand.

Finally, 3rd party cross platform software products like XBMC are also allowing people to watch their content right from their couch on TV attached computers.

When you look at the HD format wars this way, the Blu-Ray (or specifically physical disc) camp seems to be the serious long term underdog. With a US$400 price of entry and significant per-title cost, consumers want the format that will be around in 5 years, not something that will be obsolete in 1-2 years.

With Internet speeds increasing (A 100Mbps fiber connection is faster than a Blu-Ray read speed 36Mbs-72Mbs) and the ability to download full 1080 HD movies on the horizon. Portability concerns are being addressed as well. Apple is makes their content able to play on any device connected to the AppleTV account.

While Blu-Ray currently offers the best viewing experience and other benefits in storage and archival areas, its recent win vs. HD DVD is only the begining of the HD fight - a fight which I think Blu-Ray will eventually lose.

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Seth Weintraub

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