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Will Blu-ray DVDs be too expensive?

Spin, or real concerns?
For the most part, things like the technical details of the manufacturing process, of video compression and of disc formats are irrelevant to consumers. But 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 $16bn over seven years if HD DVD and Blu-ray were launched without a clear favourite, because without a clear-cut winner, consumers would be wary of buying one or the other.

Blu-ray has more clout right now thanks to backing from studios such as Warner Bros. and Paramount, which have said they would release films in both formats. No Blu-ray backer has made the same gesture toward HD DVD.

Manufacturers have been testing both technologies in their labs for months and are now gearing up for actual production. Sony Pictures announced earlier this month that it had made the first 'reference' disc of a Blu-ray movie, using a copy of Charlie's Angels: Full Throttle. It's now being shipped to player companies for testing.

"The Blu-ray technology and process is new," said Lyne Beauregard, director of communications at Cinram International, a large disc manufacturer in Toronto. "If the format is launched and grows, there will be multiple generations of equipment. As we refine it and find efficiencies, that will lower the cost."

Cinram's Beauregard said her company had a single Blu-ray production line up and running, compared with 12 new DVD lines that could also do HD DVD discs. She wouldn't provide cost comparisons.

The disc manufacturing executive critical of Blu-ray said his company's production test lines showed that Blu-ray production was far less efficient than HD DVD. Component costs, for example, are higher because they use different materials than DVDs, including a high-tech film layer currently produced only by Sony.

"The difference is significant," the executive said. "Those are real costs. I don't think the price will ever equalise."

He also said that both sides' promises to make 'hybrid' discs, with high-definition content on one side, and an ordinary DVD on the other, should be viewed with deep suspicion. Though it's feasible to combine the lowest-capacity HD DVD with DVD, Blu-ray and higher capacity HD DVD discs will be very expensive to meld with the standard format.

For now, since hard production data on the new technology remains scant, many of these comparisons rely on educated guesswork.

A recent white paper published online by Richard Marquardt, an engineer who served in top executive roles at disc replicators for years, predicted that retooling manufacturing plants for Blu-ray could cost up to $1bn worldwide, while existing DVD manufacturing capacity could be refitted for HD DVD for less than a tenth of that.

"Already-beleaguered CFOs will be challenged to raise -- and risk -- this significant amount of capital," Marquardt wrote.

His predictions were immediately challenged by Blu-ray supporters, who noted he is a close associate of Warren Lieberfarb, a Hollywood consultant who works closely with the HD DVD camp. In an interview with CNET.co.uk's sister site News.com, Marquardt said Lieberfarb had asked him to provide his thoughts on the manufacturing issues, but that he had no personal or financial stake in either side.

The real cost and quality issues will be apparent only when both formats hit the market next year.

"If we had made the determination solely based on cost, we would never have launched DVD," Sony's Alperovich said. "And that's absurd."