Hybrids Are Where It's At

Whenever I think of the fight between Blu-ray and HD-DVD for high-resolution DVD dominance, I have a nasty flashback to the battle between Betamax and VHS formats for VCRs. We all know how that story ended, and it wasn't exactly friendly to consumers -- lots of people ended up with Betamax players and tapes that were obsolete. That's why I found headlines about Time Warner's (NYSE:TWX) Warner Bros. releasing a dual-format disc interesting. If consumers can have the best of both worlds, it should make consumer adoption of the high-definition technology seem far less risky.

To get you up to speed, the Blu-ray high-definition format is made by Sony (NYSE:SNE), while the more generically named (and self-explanatory) HD-DVD is made by Toshiba. Companies are lining up behind the different formats, in different camps; for an example, let's take a look at the movie studios. General Electric's (NYSE:GE) Universal only releases high-definition movies in HD-DVD, while Disney (NYSE:DIS), News Corp.'s (NYSE:NWS) Twentieth Century Fox, and Sony release their high-def movies only in Blu-ray. Then there's Viacom's (NYSE:VIA) Paramount and Warner Bros., which hedge their bets and back both formats.

When it comes to the high-definition DVD players, so far consumers also have to choose. There are other options for viewing as well, like game consoles, but they also fall into two camps. For example, you can play standard-format DVDs on Microsoft's (NASDAQ:MSFT) Xbox, but if you purchase a special attachment for about $200, you can watch HD-DVD movies. Not surprisingly, Sony's PlayStation 3 will only play Blu-ray.

Warner Bros.' move to provide a dual-format disc is interesting to say the least -- and not too surprising, since the company filed for a patent in September for a triple-layer disc, for viewing either of the HD formats or the current standard format, a nice move. And a little bit of its competitive impact is lost when you consider that dual-format players are in fact coming -- for example, LG Electronics is expected to launch a DVD player that plays both high-definition formats early this year.

It seems to me that any moves to embrace both formats make it easier for consumers to navigate this battle royale. After all, while people are snapping up high-definition televisions at a rapid rate, it stands to reason that many would be reluctant to choose a camp when it comes to the rival formats with the ghost of Betamax rattling around -- once burned, twice shy, you know. To get the high-def DVD revolution to move forward, it's good to hear that some companies are willing to deal with reality: choosing sides -- and trying to force consumers to pay big money to do the same -- is a strategically unwise, and maybe even downright dumb, move.

To learn more about this battle, which has been brewing for quite some time:

• Revisit Warner Bros.' patent application for a triple-layer hybrid disc.
• Flash back to delays for Blu-ray.
• Last spring, one Fool asked, "Are You Ready for High-Definition?"

Disney and Time Warner are both Motley Fool Stock Advisor picks. To see what other great companies have been recommended to subscribers of the newsletter, take a free 30-day all access pass.

Microsoft is a Motley Fool Inside Value recommendation.

Alyce Lomax does not own shares of any of the companies mentioned.