Future of DVD mired in confusion - but does it matter?

This is definitely bad news for people waiting for high definition DVD movies. After all, Hollywood is not going to start selling many movies until they're certain that there will be enough customers with compatible drives.

On the other hand, it may not matter. Regardless of whether HD-DVD or Blu-Ray becomes the dominant standard, it has already been decided that both will use H.264 as their high-definition CODEC. So the encoding work (the biggest change from existing DVD production) will be the same for both. Given this, and the fact that mass-production of the physical media will probably be very inexpensive, there is no technical reason why studios couldn't ship movies in both formats until a clear winner is decided.

Remember back to the days when VCRs were the new toys on the block. There was a huge standards war going on between VHS and Beta. VHS ultimately won, but the studios didn't wait for a winner before releasing movies. They issued movies in both formats

One could probably argue that the cost of manufacturing video tape in two formats is equal to, if not more than, the cost of manufacturing video discs in two formats. Especially when both formats are using the same H.264 CODEC for the video content.

But it's not just about movies

All that being said, there is more to these high-capacity DVD standards than just selling movies. Both are going to be sold for use as data storage devices.

Right now, the theoretical maximum capacity for an HD-DVD disc is 45GB (using a 3-layer disc) and the theoretical maximum capacity for a Blu-Ray disc is 100GB (using a 4-layer disc.) Either one of these is much higher than the maximum capacity for recordable DVD media (about 9G for a 2-layer disc.)

For me, a 4-layer Blu-Ray drive makes the ideal backup device.

Currently, people who want to make full system backups have no good choice for the output medium. They can use tape drives, which are very expensive if you get one large enough to be useful (I paid $800 for a VXA-1 drive, which can record 33GB on tapes that cost about $60 each. Higher capacity drives can cost much more than this.) Or they can back-up to other hard drives, which cost less, but have other problems. (Like taking damage when dropped on the floor.) Any other backup solution (like DVDs) suffers from the problem that the media is much smaller than hard drive sizes, so you have to insert new media several times during the backup - making it so inconvenient that most people won't bother making backups at all.

Blu-Ray (or to a lesser extent, HD-DVD) solves this problem. The media capacities rival those of tape drives, and the prices will probably be much lower. Although nobody today is talking about pricing for these new DVD standards, I think we can expect them to follow the same trend that recordable DVD drives took - high prices at first, following by much lower prices in a few years. My prediction is that we should see the drives selling for around $300 after two years, and under $100 after five years. I think we can expect blank media to cost $20-40 at first, $5-15 after two years, and $2-6 after five years. Even at its most expensive point, I think this format will still cost less than what tape systems of comparable capacity cost right now.