Hybrids key to success of next-gen DVD

If there is one thing consumers do not like, it is being forced to choose between two expensive and mutually incompatible technologies.

This is why industry analyst Ovum believes that the announcements from LG and Warner Bros this week concerning hybrid HD-DVD and Blu-ray technologies are only the start.

Ovum welcomed the move by LG to introduce a DVD player capable of playing both standards and Warner Bros' launch of a disc capable of holding content in both formats.

Carl Gressum, a senior analyst at Ovum, claimed that this is good news for consumers, retailers, vendors and content providers.

"Consumers will benefit since there will be a unified product on the market, and there will be less need to understand the different technical specifications behind HD-DVD and Blu-ray," he said.

"In general, consumers want products and technologies that work out of the box, with no need to worry about device interoperability."

Vendors will have fewer incentives to be loyal to one format and may focus more on hybrid players in the longer run, according to the analyst.

Retailers are likely to appreciate a unified product such as a hybrid player, because there is less need to educate consumers as the product is more likely to work out of the box regardless of the disc media.

However, Gressum warned that the HD-DVD Forum and Blu-ray Association will be key in how the hybrid market develops, and much will depend on how they handle the product licensing.

"In the unlikely event that a Blu-ray or HD-DVD licence is universal, the licensor with the lowest price point has incentives to further reduce its pricing," he said.

"By doing so it increases the price delta from its single format product and up to the more expensive single format alternative, while increasing the relative price delta up to the hybrid player.

"This in turn makes the cheaper alternative a more compelling platform from a price point of view."

Content providers are likely to release on the cheapest disc format if hybrid players become popular, which could result in a licensing price war on the disc media to ensure backing from content providers, Gressum concluded.

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