The market leadership contest of HD DVD providers will be determined by which alliances have the best access to large entertainment libraries as well as when they enter the market.

This is according to a recent report from Oyster Bay, N.Y.’s ABI Research.

Although the contest is expected to be joined in earnest by the middle of next year, according to Vamsi Sistla, director of residential entertainment technologies at ABI, the industry is already ramping for the challenge as evidenced by Sony’s recent purchase of MGM, which includes over 9000 movies in the MGM catalog, that has refocused attention on content ownership in the race for the next-generation DVD market share. Rival HD-DVD group already claims Warner Video, 20th Century Fox and Disney among its content providers.

Two camps, which are competing on technical and commercial grounds, are hoping to become the de facto standard for high-capacity DVDs. In one corner are Sony and Matsushita with their “Blu-ray” technology, and in the other is the HD-DVD group that includes Toshiba, NEC and others.

Although Sony was first to market with its HD-DVD player, Sanyo said recently it intends to build HD-DVD players, as well.

“In the longer term, vendors offering dual-standard players may be the biggest winners and in the short term early adopters might get shut out from the content on the competing format,” Sistla believes.

Initially Blu-ray disks contained more gigabytes than HD-DVD disks; but proponents of the latter replied with more efficient MPEG4 compression, meaning that HD-DVDs could store longer movies. Sony then adopted MPEG4 too, and next month will announce plans for 200MByte disks. While Blu-ray disks require completely new manufacturing plant, HD-DVDs being more similar to today’s DVDs, will be cheaper to manufacture.

From ElectronicNews