More Electronics Firms Join Debate to End DVD War.

More Electronics Firms Join Debate to End DVD War
Fri Apr 22, 2005 08:08 AM ET

By Lucas van Grinsven, European Technology Correspondent

AMSTERDAM (Reuters) - More electronics companies have joined talks
between Japan's Sony Corp. and Toshiba Corp. to develop a common
format for next-generation DVDs and end a fierce battle, industry
sources said on Friday.

Other key companies involved in the format war, including Matsushita's
Panasonic and Netherlands-based Philips are also studying ways to end
the three-year stand-off that is threatening to stifle the industry's
growth.

But sources close to the electronics companies said it was still early
days, and that the discussions would take a long time, while adding
that a positive outcome was not guaranteed.

"Discussions are taking place, but it's very complex, both in terms of
technology but also because so many companies have a stake in this,"
one source told Reuters.

At the core of both formats are blue lasers, which have a shorter
wavelength than the red lasers used in current DVD equipment, enabling
thinner lines and higher density of information on a single 12
centimeter disc.

Higher storage DVDs are needed for high-definition movies and
television. The companies which contribute to the next DVD standard
can expect hundreds of millions, or even billions of euros (dollars)
in royalty income over coming decades.

Panasonic said the Blu-ray standard it supports is the best format for
next generation optical disc, but a spokesman added his firm "remains
open to adopting appropriate technologies for the best interest of
consumers and the marketplace."

Philips declined to comment.

Sony and Toshiba said on Thursday they would work toward a common
format in order to avoid a drawn-out fight that would confuse
consumers and hinder the industry's development, just like the spat
between the VHS and Betamax video tape formats two decades ago.

In an interview with Reuters earlier this month in France, Yukinori
Kawauchi, the general manager in charge of the new format for Sony,
had said his company was "open to discussions" on creating a single
technology standard.

NEW CHIEF EXECUTIVES

The about-turn coincides with the recent appointment of new chief
executives at both Sony and Toshiba who do not have a strong personal
interest in either format and can be more flexible.

The Blu-ray technology is backed by a group including Sony, Dell Inc.,
Samsung Electronics Co. Ltd., Philips Electronics NV and Matsushita.

Toshiba, with NEC Corp. and Sanyo Electric Co. Ltd., has been
promoting a technology called HD DVD.

Electronics companies hope the technology will spark a new wave of
purchases for DVD players, and Hollywood's movie studios hope to
benefit from a new round of buying of advanced DVDs.

Unlike the original DVD format dispute between 1993 and 1995, which
was eventually resolved in a few months when the Sony-Philips camp
agreed to develop a single standard with a camp around Toshiba and
Warner, the current alliances involve many more companies, including
those from the personal computer industry and Hollywood.

"There's a lot of powerplay internally. The managers may like the idea
of a single standard, but the companies don't want to throw away
everything they have developed," one source said.

Sony and Toshiba have reportedly already begun briefing Walt Disney
Co. and other Hollywood movie studios for approval of a unified
standard, paving the way for the signing of an agreement between the
rival camps.

A unified format would be favorable for profitability across the
industry because consumers would be more comfortable about buying
next-generation products and manufacturers could achieve lower
production costs.

The different formats for recordable DVDs, which were developed in the
late 1990s, have made drives more expensive.

While the discussions to unify the format take place, preparations to
introduce different HD-DVD and Blu-ray equipment later this year
continue, the companies have said. (Additional reporting by Nathan
Layne in Tokyo)

http://www.reuters.com/audi/newsArti...ryID=8265 870






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