Next gen DVD formats ready to go toe-to-toe

The war for control of the next-generation DVD is approaching a critical juncture: During the first week of the new year, in Las Vegas at the Consumer Electronics Show, companies championing the two competing high-definition DVD standards — Blu-ray and HD-DVD — will unveil their lineups of new players and movie titles.

There are growing signs, though, that the battle for supremacy in this multibillion-dollar market may yield a hollow victory. As electronics makers, technology companies and Hollywood studios haggle over the fine points of their formats, consumers are quickly finding alternatives to buying and renting packaged DVDs, high definition or otherwise.

"While they fight, Rome is burning," said Robert Heiblim, an independent consultant to electronics companies. "High-definition video-on-demand and digital video recorders are compelling, and people will say, 'Why do I need it?' " when considering whether to buy a high-definition player.

The fight between the Blu-ray and HD-DVD groups is based on different views of what consumers want. The HD-DVD camp, led by Toshiba, assumes that consumers will buy high-definition DVDs and players, but only at the right price. So it is improving existing DVD technology, which can be done cheaply and quickly.

The Blu-ray group figures that something brand-new is needed to get consumers interested, so it is developing discs with enough capacity to allow for innovative features in the future.

Both sides agree, however, that now is the time to introduce high-definition DVD discs and players. Sales of high-definition televisions, with their sleek design and superior picture and sound quality, are soaring, and the major networks are broadcasting more programs in high definition.

Game console makers like Sony see high-definition video games as a way to increase sales, and Hollywood hopes that high-definition discs will offset slumping sales of current-generation DVDs in the $19 billion prepackaged disc market.

Yet the alternatives to these new players and DVDs are growing by the day. The most promising is the on-demand programming, both standard and high definition, being offered by cable companies. The percentage of cable customers who watch on-demand television has doubled in the past year, to 23 percent, according to the Leichtman Research Group.