Act III, Where All Sides Kiss And Make Up

"At this point, I'd say it's probably about 50/50 whether the companies will come to the bargaining table and reach a compromise," Sonic Solutions' Jim Taylor predicted, "or whether egos and greed will prevail and they'll try to duke it out in the marketplace, in hopes of winning a bigger pie."

Taylor cites the perceived low consumer demand for a higher-definition disc format, as substantiated by a JupiterResearch report late last June that revealed only six percent of online consumers polled had an interest in replacing the DVDs they already own. Taylor believes there will be a growing demand for high-def DVD content as HD receivers become more commonplace. However, he warned, "I think one of the biggest dangers to the DVD industry is that, if there are two competing formats that push customers away, then they'll find alternatives. They'll look for HD delivered over Internet or IPTV or broadcast satellite or video-on-demand and other formats, and that could be hugely detrimental to the entire packaged media industry."

Philip V. W. Dodds gave Tom's Hardware Guide his specific, detailed prediction for the remainder of the decade: "Before the end of this year, there will be an announcement that everybody's in agreement, but they won't be, really. And then by late spring, early summer of next year, they will have worked out the key bits, and then they're going to do a drive to a product release for later in the year, which will come out and people will review, but product will be sparse."

The wild card, stated Dodds, is the opinion of the major movie studios whose political backing lends both psychological and financial support to the BDA's and the DVD Forum's efforts. He believes the studios realize they can't afford to take a risk on two competing standards, especially when a growing percentage of their revenue from major releases - perhaps, in the future, a majority of it - comes from DVD publication and not cinematic releases. "The DVD release is now a growing - and eventually a greater - part of how they get their revenue back. The ticket sales are dropping, continually. There's just a huge amount at stake here, so I think [the various proponents] are going to be gathering in rooms and clearing their throats and saying, 'I'm not happy about this, but we do have to agree.'"

Dodds added that, following the prevailing high-def standard's introduction into the market, three to five years may yet pass before the current DVD format is phased out. As for the movie studios whose support substantiates these technologies - for technical or, more frequently, other reasons - Dodds believes these "dinosaurs," as he calls them, need to recognize they can't control the medium of distribution in the same way they did in the prior decade. "With the Internet and with broadband, they are vulnerable," he said. "They cannot have the same degree of distribution control that they once had. They haven't done what Apple has done, which is to create an alternative business model for content with iPod, and [to convince content providers] this is going to be different now. I don't think the studios get this yet."