I Was Wrong About HD-DVDs

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I remember the good old college days in my dorm room, watching Dumb and Dumber on VHS instead of studying.

That was 2004, and I knew the decade-old VHS was on its last legs, but I had yet to switch over to the mainstream DVD world. Sure enough, the spool of film started to unravel mid-movie one night, and I was cradling the broken plastic tape much like the blind boy held his lifeless, broken-necked bird in the movie.

I looked at the crate of VHS tapes I brought to college that year and wondered in horror which one would be next. Ironically, life imitated art and my Jurassic Park tape died out next -- just like the film's dinosaur stars -- and I soon threw out my entire obtrusive and outdated VHS collection.

I learned that dying technology is similar to nature's survival of the fittest: Anything that's faster and sleeker is going to eat up all other competition. So was the case with the demise of VHS, which was wiped out by the thinner, quicker DVD. Now the DVD is the endangered species, thanks to the dawn of the high-definition Blu-ray disc.

With more than five times the storage capacity of traditional DVDs, Blu-ray currently sits at the top of the food chain.

Blu-ray's crystal-clear images, room for added features, and decrease in price over the years have all caused more Americans to jump onboard. About 15% of all consumers used a Blu-ray player in the six months ending in March, up from 9% last year, according to market research firm NPD Group, and 22% of all disc buyers bought at least one Blu-ray title.

Most of the major movie studios, including Disney (NYSE: DIS  ) , Paramount, and Sony (NYSE: SNE  ) , salivate at the chance to show off their explosions and beautiful actors in high-def and have released titles in the Blu-ray format.

But just a few years ago, it was unclear whether Toshiba's HD-DVD or Sony's Blu-ray format would succeed.

The Blu-ray-vs.-HD-DVD format fight reminded consumers of the 1970s and 80s war waged between videotape rivals VHS and BetaMax -- and we all know who won that one.

Everyone -- including me -- was unsure whether to stick with the familiar DVD format or to invest in a high-definition disc format, along with all the accompanying hardware. The entertainment industry was just as hesitant, wanting to choose the format that would become victorious.

Game-console makers also made bets on the dueling technologies. Microsoft's (Nasdaq: MSFT  ) Xbox360, which could read only DVDs, banked on a separate peripheral to play HD-DVDs. Sony's PlayStation 3 was able to play both DVDs and Blu-ray discs. To satisfy the consumers who didn't want a console, a new species of standalone high-def movie players emerged.

The movie studios, which were split between the HD-DVD and Blu-ray camps, eventually sided with Blu-ray. That sealed HD-DVD's fate and Toshiba surrendered, ceasing production of HD-DVDs in 2008.

Those who purchased Microsoft's $199 HD-DVD peripheral, HD-DVD movies and HD-DVD players, watched their investment value drop to zero overnight.

Despite the complete disappearance of HD-DVD technology from store shelves, DVDs still remain popular. Until high-definition TVs become more mainstream, DVDs and Blu-ray discs will continue to co-exist. Apple has yet to release a computer with a Blu-ray drive.

Now I'm looking ahead and sense that the next technology to replace Blu-ray could be invisible. My Apple-obsessed friend is a pioneer in the movement to eliminate all physical discs, and in doing so, he has freed up a lot of cabinet space. He downloads and streams everything through an older Mac he transformed into a media server. Now he can access all his music, movies, and podcasts from his TV, using his iPhone or iPad as a remote. (Con: That method is harder for people to set up, and the quality isn't as great as Blu-ray.)‪

"I can't remember the last time I bought a DVD," he said, "and I used to buy tons of them!"

That's a fact -- just a few months ago he had a 4-inch-thick case jampacked with DVDs. He sold a few, gave a few away, and donated others.

He did hang on to some Oscar-winning discs, for good reason -- in a few decades they will be the new collectable version of today's Grammy-winning vinyl records, and antique hunters will pay up big bucks. I suppose that will make a VHS tape the equivalent of a gramophone record.

Fool contributor Tierney Plumb holds no positions in any of the stocks mentioned. The Motley Fool owns shares of Microsoft and Apple. Motley Fool newsletter services have recommended buying shares of Apple, Walt Disney, and Microsoft, as well as creating bull call spread positions on Microsoft and Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 30, 2011, at 7:54 PM, DrKrizzle wrote:

    Guess what? SNE is starting yet another format/standards war for the next gen of HD, called 4K. It's basically the equivalent of 4 HDTV's tiled together into one screen. Ugh. Who knows how long that will take to settle, but I don't really see a need for it in the near future at least for the average consumer.

  • Report this Comment On December 01, 2011, at 10:53 AM, jpanspac wrote:

    That was a nice stroll down memory lane, I guess, but I'd rather have my 5 minutes back.

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