DVD Format Fight Looms over Toshiba-NEC Proposal

By Edmund Klamann TOKYO (Reuters) - Rivalry among industry titans over next-generation DVDs heated up on Monday when Japan's Toshiba and NEC said they
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By Edmund Klamann

TOKYO (Reuters) - Rivalry among industry titans over next-generationDVDs heated up on Monday when Japan's Toshiba and NEC said they wouldpropose a cheaper type of high-capacity disc incompatible with a formatadvanced by Sony and others.

Toshiba said its format for blue-laser DVDs, set to hit the marketnext year and able to store huge volumes of data thanks to blue light'sshort wavelength, was more compatible with existing red-laser DVDs andwould smooth the transition from red to blue.

"From the consumer's side, when a new type of player comes out, theystill want to be able to watch the DVDs they already own," said Toshibaspokeswoman Midori Suzuki.

"From the manufacturer's side, with our format they can use many ofthe same facilities they use to make existing DVDs, so costs are muchlower."

Despite such arguments for cost and convenience, the format would beincompatible with the Blu-ray standard for blue-laser DVDs unveiled inFebruary by Sony Corp, Panasonic brand maker Matsushita ElectricIndustrial Co and seven other electronics giants from Japan, SouthKorea and Europe.

The world's DVD equipment makers have already been hurt by afragmentation of formats for red-laser DVD recorders, blamed forhindering the take-off of that market.

Although DVD recorder sales have been strong in recent months,several industry executives have urged that blue-laser players andrecorders avoid the mistakes of their red-laser predecessors.


Toshiba's Suzuki played down concerns about a format war, sayingBlu-ray may be a logical next step in the longer term and Toshiba wasstill doing development work on that format.

"In the future, these two would not necessarily be competingstandards," she said.

"We don't have any concrete scenario, but we are working ondevelopment (of Blu-ray), and that will be the easier technology toimplement as storage capacity needs increase."

The Blu-ray format offers at least 23.3 gigabytes of storage on asingle side of a disc, enough for a two-hour movie in thehigh-definition format, compared with Toshiba's 15-20 gigabytes.

Red-laser DVDs typically hold about 4.7 gigabytes.

But the Blu-ray DVDs will require greater capital investment bymanufacturers and will feature protective cartridges and other quirksthat may make compatibility with existing products costly anddifficult.

Suzuki said technological advances, including image compressiontechniques and using semi-transparent materials to record two layers ofdata on a single disc side, meant that 15-20 gigabytes would initiallybe enough for recording high-definition motion pictures.

She added Toshiba and NEC were hoping to make a formal decision thisweek on submitting their format to the DVD Forum, an industry group ofmore than 230 companies that defines DVD format specifications and aimsto promote DVD use.

Toshiba, Japan's biggest chipmaker and a major player in DVDequipment, was one of the few Japanese electronics giants not to jointhe Blu-ray consortium.

A Sony spokeswoman said her company's commitment to Blu-ray wasunchanged and she declined to comment on whether the Toshiba-NEC formatwould pose a threat to acceptance of Blu-ray as an industrystandard.

The other members of the Blu-ray consortium are Japan's Hitachi Ltd,Pioneer Corp and Sharp Corp, South Korea's Samsung Electronics Co Ltdand LG Electronics Inc, Philips Electronics NV of the Netherlands andFrance's Thomson Multimedia.

Monday's news appeared to have little impact on the companies' shareprices, with Toshiba ending 0.9 percent higher at 447 yen, in line witha 1.05 percent gain in the Tokyo Stock Exchange's electrical machineryindex IELEC.

NEC ended 1.43 percent lower at 691 yen, while Sony was off 0.18percent at 5,540 yen.