Anyone old enough to recall fond memories of Rubik's Cubes, Family Ties, and Duran Duran likely remembers another '80s phenomenon: the VHS vs. Betamax war.
The two competing video-recording technologies emerged together in the 1970s, when Sony's
VHS technology quickly gained widespread acceptance, while Betamax followed a divergent path into obscurity. In 1988, with less than 5% of the market, Sony finally threw in the towel by announcing plans to market a VHS-based recorder. While the end came slowly, the decision would prove to be a death knell for the Betamax name.
Fast-forward to today. The growing popularity of high-definition television (HDTV) has fostered a new wave of recording technology, soon to supplant the VCR, and possibly even DVD. Again, two competing technologies are vying for acceptance, but this time Sony appears to be on the winning side.
The Blu-ray Disc Founders (not to be confused with the effusively painted Blue Man Group) is a consortium of 11 leading electronics firms. It has developed a superior optical disc known as the Blu-ray Disc (BD). As opposed to the red lasers currently used to produce DVDs, blue beams have a shorter wavelength, allowing for enhanced precision and more tightly compressed data. While a typical DVD holds 4.7 GB of information, a BD contains 27 GB -- enough storage for two hours of HDTV or 13 hours of standard television. Dual-layer discs under development will hold an astounding 54 GB. Aside from greater storage capacity, Blu-ray discs will also contain more interactive features.
In January, the world's two foremost computer manufacturers, Hewlett-Packard
The competing format, known as HD-DVD, is simultaneously under joint development by Toshiba and NEC. Though HD-DVD technology appears to be an underdog at this point, it has recently gained notoriety by winning the support of the DVD forum, a confederation of DVD-related companies.
As is the case with recordable DVD technology, yet another format war is looming. Ultimately, Hollywood film studios will decide the industry standard, and the accompanying flood of licensing revenues. Don't expect a decision soon. DVD sales remain brisk, and Hollywood has shown no inclination to change formats just yet. High-definition movies aren't expected to be released until 2006 or 2007. Blu-ray, however, has already earned an early endorsement from Columbia TriStar Pictures, which has committed to using the Blu-ray technology.
Investors looking to profit from the expected surge in BD sales may first want to consider the driving forces behind Blu-ray technology. The names include high-profile electronics companies such as Sony, as well as Matsushita, Hitachi
Further, with consumers clamoring for faster transfer speeds and storage capacity (two of the more notable advantages of BD technology), it's possible that the industry is headed to a point where BD sales will one day outstrip DVDs.
It's too early to call the game just yet, but this will be an interesting technological development to follow.
David Gardner recommended Dell Computer for subscribers of Motley Fool Stock Advisor . Since the April 2002 inaugural issue, David's stocks have returned a total average of 68.55%, compared to the S&P 500's 17.23% total average return over the same time frame. You can check out Stock Advisor with a six-month, money-back guarantee.
Fool contributor Nathan Slaughter recently replaced his six-year-old abacus-like computer with a new Dell, but he owns none of the companies listed.
