Stalemate seen in high-definition DVD war (Reuters)

LONDON (Reuters) - The battle between two hyped formats forhigh-definition DVD will confuse shoppers and turn many of themoff the whole technology, a London-based research firmpredicted on Friday.

Market research analyst Screen Digest also forecast thatonly $11 billion of the total $39 billion expected to be spenton video discs by 2010 in the United States, Europe and Japanwill be generated by the competing high-definition formats,Sony Corp.-backed (6758.T) Blu-ray and Toshiba-supported(6502.T) HD-DVD.

"The net result of the format war and the publicity it hasgenerated will be to dampen consumer appetite for the wholehigh definition disc category," Screen Digest analyst Ben Keensaid.

The DVD format exploded into a multi-billion-dollar globalindustry for movie and TV studios in large part because thelargely universal format delivered a more convenient way to ownmovies than its predecessor, the VHS videotape.

"This time both formats support similar features," saidGraham Sharpless, who wrote the report.

The new formats are being introduced just as DVD saleslevel off, after consumers built up libraries of their favoritemovies and TV shows at deeply discounted prices.

Electronics retailers, such as Best Buy and CompUSA arefrustrated by the raging format war, fearful of anotherdecade-long tussle similar to the one between VHS and Betamax.They have been predicting a lackluster Christmas sellingseason, expecting consumers to wait for one format to win out.

Screen Digest predicts that the two formats will co-existuntil a combined solution becomes cost-effective, rather thantaking the view that one will emerge victorious or that bothwill flop so badly as to be driven into extinction.

All of the Hollywood studios, except Universal, have saidthey will release movies on Blu-ray, with the first players andtitles having launched earlier this year.

While only three of the major studios have said they willrelease movies in HD-DVD, Microsoft Corp. (Nasdaq: - ) has thrownits weight behind the format, supporting it in the WindowsVista PC operating system and offering an external drive toconnect to its 360 game console.

Sony is incorporating Blu-ray into its Playstation 3 videogame console, due out later this year, to push its format intomore homes.

Screen Digest expects that 430,000 standalone Blu-ray andHD-DVD players and recorders will be sold in 2006 and 1.35million in 2007.

By 2010, it expects about 15 million U.S. households (21percent of homes with high-definition TV sets), 10 million inEurope (17 percent) and 2.5 million (7.4 percent) in Japan willhave bought a standalone unit, while 24 million, 23 million and15 million hi-definition disc enabled games consoles will havebeen sold.

As standalone units, a Samsung Blu-ray player sells forabout $1,000 and a Toshiba HD-DVD player for about $500.

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