With two competing blue laser DVD formats promising mases of storage on a single disc, Digit checked out which is likely to usurp the DVD and win the format wars.

One day, you'll watch movies at home on 5-inch discs that make today's DVDs look like VHS. The basic technology that will make this happen already exists - blue-light lasers that increase disc capacity, allowing one DVD to hold hours of HDTV-quality video. But what we don't know is which of the two blue-laser, HDTV-compatible formats will make it into your living room.

The two competing formats are Blu-ray and HD-DVD. If you remember the VHS versus Betamax war of the early 1980s, be prepared - a similar format war may be starting again.

And the war will be about more than just home video. Today's DVDs are a medium for computer software distribution, retail videos, and PC backups. So next-generation, blue-laser DVDs will have to do all these things as well. The first retail blue-laser units on the market - which are currently available only in Japan and cost loads - are set-top video recorders.

Meet the contestants

Those recorders all use the Blu-ray format - the format backed by Sony, Pioneer, Panasonic, HP, and other computer and consumer electronics companies. The competing format, HD-DVD, is primarily the product of Toshiba and NEC.

Earlier this year, the DVD Forum officially endorsed HD-DVD, although the decision was by no means unanimous. All of the major Blu-ray companies belong to the DVD Forum, and many of them have no current plans to back what they consider an upstart. And no company has yet announced an HD-DVD product, though Toshiba and NEC have shown prototypes.

Blu-ray was designed with an emphasis on capacity, HD-DVD targets compatibility. Blu-ray can hold about 50GB on a two-layer disc compared with HD-DVD's 30GB (by comparison, today's two-layer DVDs hold less than 9GB). But an HD-DVD disc is physically closer to today's DVDs, making it easier to manufacture discs in existing factories and to make drives that can read and write today's DVD and CD formats.

Not surprisingly, each side believes that its shortcoming is the more minor one. According to Andy Parson, a senior vice president at Pioneer and a major Blu-ray supporter, "The manufacturing process difference has been overstated. Sony believes they can use existing machines to make the discs."

What's more, Matsushita has already announced a Blu-ray recorder with CD/DVD support for the Japanese market.

As for HD-DVD's smaller storage capacity, Toshiba vice president Maciek Brezski says that the designers of HD-DVD "felt (that 30GB) was enough to get you what you needed."

"Both formats will offer excellent quality," says IDC analyst Wolfgang Schlichting. He says it is "questionable whether (backward compatibility) will translate into something important."

Does this mean war?

Everyone agrees on one thing: they don't want a format war, which would dampen consumer enthusiasm and slow market acceptance. The problem is that both groups see only one way to avoid war - Having their side win.

And no side can win without the support of the Hollywood studios, which - with one exception - have been reluctant to announce support for one format over the other. The exception, not surprisingly, is Sony-owned Columbia Pictures, which has publicly embraced its parent company's Blu-ray. In any case, the studios definitely don't want to have to support both formats, as that would increase manufacturing costs and inventory problems. For now, they're taking a wait-and-see approach.

Bob Chapek, president of the Disney subsidiary Buena Vista Home Entertainment, and president of the Digital Entertainment Group, last month compared the situation to an oncoming train wreck. "Will the two trains recognize each other? Will they stop before it's too late? Is there an option whereby both trains accomplish their objectives without a disastrous collision?"

Will the trains collide? IDC's Schlichting sees two possible scenarios. It will either be "similar to DVD, where the two come together - forced together by Hollywood - to agree on standards, or one camp gives up before they start selling product."

One solution no one believes likely is the one that ended the DVD battle: combo drives that play discs in either format. That was possible because DVD? and DVD-R/RW drives are mechanically very similar - supporting both formats is not much more complicated than adding extra firmware and paying another licencing fee.

But Blu-ray and HD-DVD drives are fundamentally different. A combo drive would probably require one set of arms and motors for Blu-ray and another set for HD-DVD. It's unlikely anyone will ever make such a combo drive that would be small enough to fit in a computer. Such a drive would be prohibitively expensive - existing Blu-ray drives cost $3,000 or more, and a combo drive could cost much more than that.

Will we ever see blue lasers?

Whatever format they come in, blue-laser DVDs aren't likely to appear in significant quantity before late 2005, at the earliest. And they probably won't be common, or inexpensively priced, in this decade.

The format war and high costs aren't the only reasons for the slow roll-out. According to Schlichting, "The market is not really ready. DVD is a good enough media technology."

It's possible that either format will become the laser disc of the current decade - a superior, expensive medium adopted exclusively by cinephiles. Only when HDTV sets are common, players are cheap, and one format is the unquestioned winner will discs in that format penetrate the mass market

And that's far from a sure thing. "In the worst case," Disney's Chapek warned in his speech, "both (formats) hang on, and we utterly confuse the mainstream consumer, providing the knockout blow to any hope of having a complete format conversion."