Blu-ray Surges Ahead in Hi Def DVD Wars

In some ways, the fight is a replay of the VHS versus Betamax battle of the 1980s. This time, however, the Sony product appears to have prevailed. Revenge is sweet for Sony, which lost the Betamax vs. VHS wars. "The overwhelming industry opinion is that this decides the format battle in favor of Blu-ray," said Richard Doherty, research director at the Envisioneering Group, a market research firm in Seaford, N.Y.

Behind the studio's decision are industrywide fears about the sagging home entertainment market, which has bruised the movie industry in recent years as piracy, competition from video games and the Internet, and soaring costs have cut into profitability. Analysts predict that domestic DVD sales fell by nearly 3 percent in 2007, partly because of confusion in the marketplace over the various formats.

HD DVD, however, is not dead. Two major studios, Paramount Pictures and Universal Pictures, have deals in place to continue releasing their movies exclusively on HD DVD, as does DreamWorks Animation. Warner Brothers, part of Time Warner, will also continue to release its titles on both formats until the end of May. But by supporting Blu-ray, Warner Brothers, the largest player in the $42 billion global home entertainment market, makes it next to impossible for HD DVD to recover the early momentum it achieved.

While the specifics of the Blu-ray and HD DVD skirmish might be of interest only to insiders, the consequences of deciding a winner are not. Consumers have been largely sitting on the sidelines, waiting to buy high-definition players until they see which will have the most titles available. Retailers have been complaining about having to devote space to three kinds of DVDs. And the movie business has delayed tapping a lucrative new market worth billions. High-definition discs sell for a 25 percent premium.