Toshiba says it doesn’t expect a single DVD format to emerge before its next-generation machines reach stores this fall, but the Blu-ray Disc Association said on Wednesday that negotiations may not be completely over.

The association is banking on the reported delays of HD-DVD rollouts for an opportunity to revive talks with Toshiba and the HD-DVD camp, said Marty Gordon, spokesperson for the association and the vice president for corporate alliances at Philips Electronics, which backs the Blu-ray standard.

Toshiba and Sony, who are heading their respective rival camps’ HD-DVD and Blu-ray, have been in a three-year format war for the next-generation, or high-definition DVDs and DVD players. Both standards promise better pictures and sound, plus higher storage capacities.

The two Japanese consumer electronics giants have been in talks to unify the format for months but have not come to any compromise. Both camps have spent millions of dollars to develop this technology for what In-Stat estimates is a $40-billion DVD market in 2005.

“There are widely reported delays with the release of HD-DVD, and if that is the case, we hope that might buy us more time for further discussion,” Mr. Gordon said. “From our perspective, we are very open to continuing the discussion.”

Scaling Back

Mr. Gordon was referring to a recent report in the Wall Street Journal that said the original rollout of HD-DVD hardware is likely to be delayed, and that HD-DVD-backing movie studios were quoted to be scaling back their plans for launch.

Toshiba President Atsutoshi Nishida said on Wednesday talks between Sony and his company were off. “We’ve been working towards unification. But talks are now stalled. We will press ahead with the product launch as planned,” he said in Tokyo in an interview with Reuters.

“Regrettably, two different types of products seem set to hit the market. But this is the kind of technology that will be around for five or 10 years. Efforts should be made continuously to make unification happen,” Mr. Nishida added.

Wolfgang Schlichting, an analyst with IDC, was not surprised that the two have currently failed to create a unified format. “The camps were too far apart for an easy compromise which each side would win,” Mr. Schlichting said.

Mr. Schlichting believes it’s unlikely for the two to eventually agree on one common format. “In the long run, one will be winning and the other will be losing,” he said. “Some products will try to bridge the two formats, but there is a price penalty for that.”

The entry of two different DVD formats in the market will lead to a great amount of confusion between customers as they decide which format to pick. Some expect a repeat of the chaos that ensued during the late 1970s when consumers were given the choice between VHS and Betamax video recorders.

No Front-Runner

Mr. Schlichting doesn’t believe that either HD-DVD or Blu-ray will become a mainstream format among consumers anytime soon, for reasons such as high prices and the need to have big and expensive high-definition televisions.

“(These are the reasons) why the majority of consumers will stick with DVD for a number of years,” said Mr. Schlichting. “For most end users, DVD is quite good for what they want to do.”

Although Mr. Nishida did not specify the retail price for Toshiba’s HD-DVD players, he suggested that they would cost below $1,000. “I guess it won’t sell if it carries a price tag of over $1,000,” he said.

The association’s Mr. Gordon declined to comment on the pricing of Blu-ray hardware and software, but said he expects it to launch next spring.

Vendors need to make copy protection and DRM easier to handle, which could not necessarily be convenient for end users, Mr. Schlichting said. “If it’s too cumbersome or restrictive in terms of handling the content,” he said, “then many users would rather stick with DVD, which they know and understand.”

Blu-ray has a storage capacity ranging between 25 to 50 gigabytes. Until recently, the storage capacity on HD-DVD discs was limited to 15 to 30 GB for a single- or double-layer disc, respectively. In May, Toshiba announced the development of a triple-layer HD-DVD disc with a capacity of 45 GB. But HD-DVD has other advantages. It costs less and is easier and faster to make.

Currently, Sony-backed Blu-ray is supported by consumer electronics and computer companies such as Dell, Hewlett-Packard, Panasonic, Pioneer, Samsung, Mitsubishi, Philips, LG, and Apple. Sony recently said it would incorporate Blu-ray technology into its next-generation gaming console, PlayStation 3.

Toshiba’s HD-DVD for the moment has only three major companies backing it: NEC, Sanyo, and Thomson.

Split Down the Middle

Both formats are lobbying to win support from movie studios. Studio backing is vital as the studios’ movies will end up being released on the format they support. However, the major studios are essentially split in their backing of the two camps.

The Blu-ray camp recently got two studios to side its format, 20th Century Fox and independent studio Lions Gate Films (see Fox Picks Blu-ray Format). Until 20th Century Fox’s move, HD-DVD had maintained an edge with the movie studios, garnering support from Warner Bros., Paramount Pictures, and Universal Pictures.

But now both formats appear to have an equal number of big studio backers, with 20th Century Fox joining Walt Disney and Sony Pictures Entertainment, a subsidiary of Sony, in the Blu-ray camp.