You’ve probably noticed at your local electronics/household superstore or movie rental store that there are two colors of DVD cases in the high definition (HD) sales and rental areas: brown and blue.  The brown-striped cases contain HD movies in the HD DVD format, and the blue-striped cases contain HD movies in the Blu-Ray format.  Very shortly there will be but one color adorning the HD movie sales/rentals shelves.

Ever since HD movies and the players that play them came on the scene a few years ago, the HD DVD and Blu-Ray formats (more accurately, the companies behind each format) have been locked in a fierce battle to control the burgeoning HD media market.  HD DVD has been backed by Toshiba, Microsoft, and Universal, among others.  Blu-Ray by Sony, Apple, and Warner Bros., to name a few.

While Blu-Ray disks can hold twice the data of HD DVD disks, the quality of the actual HD movies contained on the disks is the same.  Why?  Because both HD DVD and Blu-Ray use the h.264 video codecs developed by Apple and the MPEG consortium.

While player prices have dropped dramatically in the last year – from over $1000 to around $400, competitive forces were a bit stymied by the public’s uncertainty as to which format would “win”.

Most of us have firsthand knowledge (or were told in stories whispered around the campfire) of the classic Betamax versus VHS battles of the early days of home video.  While Betamax video was technically superior, VHS won out, and Betamax players soon became museum pieces and doorstops.  Although the Betamax/VHS and HD DVD/Blu-Ray stories aren’t really that similar, today’s consumers don’t want to choose the wrong format to “invest” in.

So, who won?  This week Universal Studios (formerly in the HD DVD camp) announced that it would begin releasing their HD content exclusively in Blu-Ray.  Best Buy, Wal-Mart and NetFlicks announced that they would phase out HD DVD (the brown striped boxes).  Microsoft has announced deep discounting of the HD DVD accessory drives for its losing-money-hand-over-fist Xbox 360 game consoles.  And, in the final crushing blow, HD DVD’s main champion, Toshiba, announced this week that they are ceasing production of HD DVD players.

So, the winner (at least for physical media) is Blu-Ray.  However, the victory may be short-lived.  Why?  Online and over-the-air (cable) HD movie distribution.  Can anyone say “Apple TV”?