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Blu-ray DVD: Higher Production Costs Likely.

One-Shot Scot
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Blu-ray DVD format facing cost questions
Complex production methods may lead to higher prices

Tuesday, November 29, 2005

Sony Corp.'s Blu-ray disc technology appears to be the front-runner in the
race to develop next-generation DVDs, but some movie studios and
manufacturers worry that Blu-ray discs will be difficult to produce and
could mean higher prices for consumers.

For more than a year, a bitter public relations war has been waged between
supporters of Blu-ray and a rival technology backed by Toshiba Corp. known
as HD DVD. Both are high-capacity discs that will support the distribution
of high-definition versions of movies, with much better picture quality than
is possible with today's DVDs.

Blu-ray is winning the PR war, with most major movie studios agreeing to
release films in the format next year. That has led to new concerns about
mass production of DVDs in the new format, which represents a major break
with past DVD and CD techniques.

In at least one test, according to a top manufacturing executive who asked
to remain anonymous, a manufacturing line for HD DVD discs produced nearly
twice as many usable discs as a similar line pumping out the Blu-ray format.
That translates into higher costs for Blu-ray producers. Moreover, component
costs for Blu-ray can be nearly double HD DVD costs, the executive said.

The prospect of a next-generation DVD format war, similar to the battle
between VHS and Sony's Betamax in the mid-1970s, has chilled the industry.
Analysts at Sanford Bernstein estimated that media companies could
collectively lose as much as $16 billion over seven years if HD DVD and
Blu-ray were both introduced.

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