Wal-Mart and Dell are testing the Solution Station by Dell in 15 Dallas stores, and they'll do things like repair PCs and set up home entertainment and wireless networking stuff sold by Wal-Mart. Wal-Mart and tech support just don't compute in my brain. On the bright side, I'm sure this'll mean lots of fun posts for the Consumerist crew. [WSJ]

*Flags of Our Fathers 2-Disc Special Edition in Blu-Ray - $15
*3:10 to Yuma in Blu-Ray - $15
*War in Blu-Ray - $15
*300 in Blu-Ray - $15
*Blood Diamond in Blu-Ray - $15
*Shooter in Blu-Ray - $15
*The Fifth Element in Blu-Ray - $15
*Training Day in Blu-Ray - $15
*The Last Samurai in Blu-Ray - $15
*A Knight's Tale in Blu-Ray - $15
*The Patriot in Blu-Ray - $15
*Syriana in Blu-Ray - $15

[Slick Deals]

The studios thought to have signed on Apple's dotted line include Fox, Walt Disney Studios, Warner Bros., Paramount, Universal, Sony Pictures, Lionsgate and New Line—all of whom have a rental deal with iTunes. Smaller houses, such as Magnolia and Image Entertainment are included, but MGM is out of the picture.

Most at risk from the news is, undoubtedly, Wal-Mart. Apple has already usurped the retail giant this year as the number one seller of music. Amazon and Microsoft, with their respective operations, Unbox and XBox Live Marketplace, are also expected to be affected. [Yahoo!]

Funai will be making, distributing and marketing TVs under the Philips and Magnavox brands in the US for the next five years, starting Sept. 1. They'll also get full access to Philips' R&D, including its Eco TV, but it's anyone's guess as to how much of its CES lineup will materialize now.. Here's the full press release:

April 8, 2008

PHILIPS TAKES DECISIVE STEPS TO IMPROVE PROFITABILITY OF ITS TELEVISION BUSINESS

• Philips will enter into a brand license agreement to transfer its North American consumer TV activities to Funai
• Philips will continue to take steps to improve profitability of its TV operations by further optimizing its supply base
• Charges of up to EUR 125 million will be taken during 2008 in connection with the above

Amsterdam, The Netherlands - Royal Philips Electronics (NYSE:PHG, AEX:PHI) and Funai Electric Co Ltd (TSE/OSE: 6839) of Japan today announced their intention to enter into a brand licensing agreement under which Funai will assume responsibility for the sourcing, distribution, marketing and sales of all Philips' consumer television activities in the United States and Canada. The five-year minimum agreement takes effect September 1, 2008 and stipulates Philips will receive royalty payments in exchange for Funai's right to exclusively use the Philips and Magnavox brand names for its consumer television offerings in North America during this period. This agreement secures continued presence of Philips and Magnavox branded TV's in North America in a model that safeguards Philips profitability in this highly competitive market.

Philips today also announced that it will continue to take steps to improve the financial performance of its television operations by further optimizing its existing global supply base and focusing its TV business on its strongest markets, especially in Europe and in key emerging countries. To cover for the costs associated with these additional steps, and the costs associated with the transfer of the company's North American TV activities to Funai, Philips will take total charges of up to EUR 125 million during 2008.

"The agreement with Funai and the other measures to improve profitability we are planning, follow our commitment that we would take decisive steps in addressing the unacceptable profitability levels in our TV business in 2008," Philips President and Chief Executive Officer Gerard Kleisterlee said. "We have an 18 year working relationship with Funai and are confident it is an excellent partner to implement this new model for Philips' television business in North America. This agreement will ensure a presence for Philips television in North America and uninterrupted access to innovative products for consumers."

Other Philips consumer business categories in North America are not affected by this agreement and will continue to be manufactured, marketed and sold by Philips. Philips' television position in the rest of the world is also unaffected by this partnership with Funai.

Funai will have access to Philips' world-class Research and Design experts to ensure Philips televisions deliver continuous innovation to consumers in both technology and form. These include the recently launched Design Collection and energy-efficient range of televisions dubbed the 'Eco TV'. Funai will be licensed on condition of compliance with Philips requirements on brand use, product quality, product design and provision of consumer care. Philips television sales in North America amounted to EUR 1 billion in 2007. Completion of this intended agreement is subject to any mandatory governmental regulatory approvals.

According to Tetsuro Funai, President and CEO of Funai Electric Co., Ltd, "Philips and Funai have a long history together, and we are proud to be the trusted partner charged with managing this important and high profile product category for Philips. As a premium brand, Philips will add lustre to our existing portfolio and consumers can continue to count on the Philips quality, design and innovation to which they have become accustomed. We look forward to working together to ensure a seamless transition of the business."

If you wanna dump your HD DVDs, too, Best Buy will take them off your hands, but don't expect too much scratch for 'em ($2.70 a piece). But, their HD DVD apology offers are the most generous of anyone's (to make up for usually reaming you?), so for change, we actually hope you bought your HD DVD goods there. [WSJ]

After all, since then, iTunes has passed even Wal-Mart's massive moving power in its B&M stores to become the US's biggest music retailer. Plus, all Big Four have already signed on with Amazon for DRM-free music, making it the no. 2 digital retailer. At this point, they've either gotta step up or step aside. [Listening Post]

CUPERTINO, California—April 3, 2008—Apple® today announced that the iTunes® Store (www.itunes.com) surpassed Wal-Mart to become the number one music retailer in the US, based on the latest data from the NPD Group*. With over 50 million customers, iTunes has sold over four billion songs and features the world's largest music catalog of over six million songs.

"We launched iTunes less than five years ago, and it has now become the number one music retailer in the world," said Eddy Cue, Apple's vice president of iTunes. "We are thrilled, and would like to thank all of our customers for helping us reach this incredible milestone."

*Based on data from market research firm the NPD Group's MusicWatch survey that captures consumer reported past week unit purchases and counts one CD representing 12 tracks, excluding wireless transactions. The iTunes Store became the largest music retailer in the US based on the amount of music sold during January and February 2008.

Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award-winning computers, OS X operating system and iLife and professional applications. Apple is also spearheading the digital media revolution with its iPod portable music and video players and iTunes online store, and has entered the mobile phone market with its revolutionary iPhone.

I explicitly noted that the results may be somewhat inflated by gift cards, and I noted that other retailers on the list have gift cards, too—don't forget that fact. And a sale is a sale...This is a monumental event for Apple, because while the company may not be guaranteed the top spot for eternity—or even the following month—it is something many thought would never happened.

Apple also boasts 50 million iTunes customers and over 4 billion tracks sold. It's a nice celebratory email, based on solid facts, but it hides some serious insecurities: things might not remain this rosy for long.

More and more people will soon discover Amazon's download store, with higher-res, lower-priced non-DRM MP3s, plus automatic loading into iTunes. Many iPod owners will also be drawn to Wal-Mart's own increasingly busy download department, though in our Battlemodo we decided Amazon was the better bet.

You can't get just anything DRM-free yet, and iTunes still has some sweet exclusives, but with stronger support from all four major labels, Amazon is bound to overtake iTunes by and by, and Wal-Mart may easily expand its lead.

Apple's release:

iTunes Now Number Two Music Retailer in the US

iTunes Customers Top 50 Million

CUPERTINO, California—February 26, 2008—Apple® today announced that iTunes® (www.itunes.com) is now the number two music retailer in the US, behind only Wal-Mart, based on the latest data from the NPD Group*. Apple also announced that there are now over 50 million iTunes Store customers. iTunes has sold over four billion songs, with an incredible 20 million songs sold on Christmas Day 2007 alone, and offers the world's largest music catalog of over six million songs from all of the major and thousands of independent labels.

"We'd like to thank the over 50 million music lovers who have helped the iTunes Store reach this incredible milestone," said Eddy Cue, Apple's vice president of iTunes. "We continue to add great new features like iTunes Movie Rentals to give our customers even more reason to love iTunes."

Last month, Apple launched iTunes Movie Rentals featuring movies from all of the major movie studios including 20th Century Fox, The Walt Disney Studios, Warner Bros., Paramount, Universal Studios Home Entertainment, Sony Pictures Entertainment, Metro-Goldwyn-Mayer (MGM), Lionsgate and New Line Cinema. Users can rent movies and watch them on their PCs or Macs, all current generation iPods**, iPhone™ and on a widescreen TV with Apple TV®. iTunes Movie Rentals will offer over 1,000 titles by the end of this month, including over 100 titles in stunning high definition video with 5.1 Dolby Digital surround sound which users can rent directly from their widescreen TV using Apple TV.

iTunes 7.6 is available as a free download at www.itunes.com. iTunes Movie Rentals are available in the US only and are $2.99 (US) for library titles and $3.99 (US) for new releases, and high definition versions are priced just one dollar more with library titles at $3.99 (US) and new releases at $4.99 (US). Movie rentals from the iTunes Store for Mac® or Windows require iTunes 7.6. iTunes Movie Rentals require a valid credit card with a billing address in the country of purchase.

*Based on data from market research firm the NPD Group's MusicWatch survey that captures consumer reported past week unit purchases and counts one CD representing 12 tracks, excluding wireless transactions. The iTunes Music Store became the second-largest music retailer in the US after Wal-Mart, based on the amount of music sold during 2007.

**Movie rentals work on iPod classic, iPod nano with video and iPod touch.

Wal-Mart Moving Exclusively Toward Blu-ray Format Movies and Players

Bentonville, Ark., Feb. 15, 2008 - Wal-Mart Stores, U.S. today announces that its 4,000 Wal-Mart and Sam's Club stores will move forward this year with one hi-definition movie and hardware format: Blu-ray. The change will take place quickly over the next several months whereby the retailer will phase out HD DVD offerings and reorganize shelf space. By June, Wal-Mart stores, Sam's Clubs, www.walmart.com and www.samsclub.com will offer only Blu-ray movies and hardware machines, as well as standard definition movies and DVD players, and up converts.

"We've listened to our customers, who are showing a clear preference toward Blu-ray products and movies with their purchases," said Gary Severson, senior vice president, Home Entertainment, Wal-Mart, U.S. "With the customers best interest in all we do, we wanted to share our decision and timeline with them as soon as possible, knowing it will help simplify their purchase decision, increase selection, and increase adoption long term. We anticipate enhancing our selection with continued great values in hi-definition Blu-ray products, so our customers can further enhance their entertainment experience at home."

Wal-Mart will continue to sell through remaining HD DVD product, but in less than 30 days customers will see a more predominant move toward Blu-ray in stores, clubs and online. As the nation's largest retailer, Wal-Mart thoughtfully reviewed all areas and impact in making its decision, and is excited to move forward with one format and share its future plans with customers.

Everex is holding back the Cloudbook for nearly a month to make "a couple of last-minute software tweaks," presumably to gOS, its Ubuntu-based Linux mutation. As long as it's more intuitive than the XO Laptop's OS, it should be in good shape—its biggest asset is its Wally World distribution channel, which might help secure a slice of a market already reaching saturation, at least judging by slowing Eee PC sales on Amazon. [CW]

If you're not kind of Richie Rich that can afford a super-cheap 1080p, the good news is that Vizio's 720p plasmas are cheaper still. The 32" VP324 will start at $689, two 42-inchers will list for $999 and the VP503, with 30,000:1 contrast ratio and HDMI 1.3 inputs, will list for $1,400. We can't wait to see next Black Friday's sale price on those. Jump for some excerpts from the press materials. [Vizio]

The two top-end models, the VW42LF [42-inch] and the VW46LF [46-inch], offer shoppers VIZIO's most economical 1080p solutions. They pack a punch with three HDMI v1.3, two component, composite and RGB connections and all black bezel construction. Each model includes a standard/HDTV/QAM combination tuner, closed caption, 3D Comb Filter, and 178-degree viewing angle. Offering the ultimate in convenience, the VW Series models have a detachable base to accommodate on-wall mounting. The new VW42LF and VW46LF will feature estimated selling prices of $1349 and $1749 respectively and will be available in the May/June time frame.

VIZIO VP322, VIZIO VP422, VIZIO VP423, VIZIO VP503 Rounding out VIZIO's family of plasma displays are the VP322, VP422, and VP423 all offering stunning 720p performance, rich deep black levels, outstanding color rendering and the latest connectivity options including HDMI version 1.3 inputs. All of VIZIO's high performance plasma's offer extremely fluid and uninterrupted motion, a significant advantage over LCD flat panels. Plasma TVs continue to be a leading choice for watching sporting events and action-packed movies.

The VP324 is a 32-inch set with 1024 X 720 resolution for consumers that would like the picture
qualities of plasma but in a small cabinet size. The set's exceptional 15,000:1 contrast ratio ensures
images have rich, deep blacks and brilliant colors providing a cost effective solution for displaying HD
broadcast content and playing HD-DVD and Blu-Ray discs, which can be connected to one of the three
HDMI video inputs.

The VP422/VP423 are VIZIO's 42-inch Plasma models with 1024 x 768 resolution, 20:000:1 contrast
ratio and two HDMI inputs. Two 42" models, the VP422 will sell in discount retailers such as Wal-Mart
and K-Mart and the VP423 will head for the shelves at club retailers such as Costco and Sam's Club,
as well as traditional consumer electronics retailers like Circuit City and Sears. Also providing two HDMI
inputs, the VP503 is a 50-inch plasma set that delivers a native resolution of 1365 x 768, is compatible with 1080p content, and displays a bright, rich image due to its 30,000:1 contrast ratio.

The new VIZIO VP324, VP422, VP423, and VP503 are expected in May or June 2008 with estimated
selling prices of $689, $999, $999 and $1399 respectively.

The big question for those of you who bravely bought in: Will my bastard child videos still work even with the permanent closed sign in the store's window?

The videos you purchased and downloaded are yours to keep. Yes, you can play your videos as many times as you wish on the computer you used to download the videos. Due to licensing restrictions, you cannot copy or transfer your video files and play them on a different computer.

The store's sudden death actually isn't too surprising even though it was less than a year old and the first one to sport content from the "big six" studios. Who thinks "Wal-Mart" when they think "video downloads," and wants to deal with a clusterfuck of DRM, WMV files and Windows and IE-only compatibility? (Not Hollywood types!) Besides, its goose might've been cooked anyway when iTunes finally snagged a video rental deal.

On the other hand, its online music store is still going strong, or at least going enough to try to pressure labels to sell MP3s through it, though it looks like Amazon has the upper hand (in more ways than one.) Let's hope they weren't taking any cues from their cubicle mates in the vid store department! [Wal-Mart, Thanks MarktMan!]

This was the year that DRM stopped cramping online music stores, and that's in some part due to Wal-Mart's insistence on selling DRM-free tunes. Together with Amazon, it's one of two major online retailers selling MP3 files. And while the MP3 store is still pretty lousy, Wal-Mart's push to have the last major-label holdouts drop DRM will be good for us all. If that happens, Wal-Mart's influence will at least have something to do with it.

This year has also seen the prices of HD DVD and Blu-ray players drop significantly, thanks in part to Wal-Mart's pressures. Wal-Mart's size gives them huge influence over the industry, and earlier this year when it went around that Wal-Mart was pushing for cheapo HD DVD players it gave the then-suffering HD DVD camp a shot in the arm. The push for cheaper players makes us happy.

In addition to using its influence to bring down pricing in the HD disc war, it also used it to try and break up Microsoft's Windows dominance by introducing a $200 Linux gPC to their generally non-techy clientele. It was a ballsy move, one clearly motivated by desire to sell cheaper computers over the desire to stick it to Microsoft, but stick it to Redmond it did. There's no bigger retailer out there who has the power to introduce an alternate OS to the masses and make it seem friendly, and that's just what Wal-Mart did. (Of course, we think the reason the gPC sold out so fast was because of Linux fanboys in search of cauldrons for their potions, but you never know.)

Things aren't all forward-thinking at Wal-Mart, though. They still do a lot of the stuff that's earned them a horrible reputation for years now. They refuse to carry movies and CDs that they deem "inappropriate," at times arbitrarily pulling products from shelves—or at least that's how it seems. Consumers should get to choose what they want to buy; they don't need retailers to act as babysitters and decide what is and isn't appropriate.

As for the brutal labor practices, there's still a lot we think is totally uncool to, but to be fair, Wal-Mart is introducing a much-improved health care plan next month. Still, don't look for the reputation of Wal-Mart retail jobs to get a lot better anytime soon. Everybody knows the store is full of miserable employees half-assedly serving miserable customers.

So kudos, Wal-Mart, for being more forward-thinking in the tech department than I would have ever expected. Keep it up! When the gigantic, faceless companies that make up the RIAA and the MPAA want anti-consumer practices to become the norm, we need other gigantic, faceless companies to stand up to them, and if it's gonna be you I'll take it. And if you're gonna make next-gen disc players cheaper for everyone, I'll thank you for that. But I'll still never set foot in one of your stores. I'll admit to cautiously admiring some of your moves from afar but your reduced letter grade is because of the human cost: you really should treat your employees better.

Final Grade: C

[Gizmodo's Year-End Report Cards]

Honolulu Mayor Mufi Hannemann was none too happy about the ID, even though the card's photo is really a hologram alternating between "Fogell" to "McLovin" (to be fair, I'm of age and I'd love to carry that bad boy in my wallet). So Wal-Mart pulled the film from its seven Hawaii locations. And then sub-21-year-olds turned back to their ways of purchasing good fake IDs and, in some cases, bypassing the temptations of alcohol altogether for abstinence and whippets. [thnt] Thanks Colin!

What's For Sale
Much to the joy of the record labels, Wal-Mart and Amazon.com both offer staggered pricing on their wares (as opposed to iTunes which generally supports flat rates for its songs and albums). On Wal-Mart's site, there's a menu on the upper left that lets you sort through albums that cost $7.88, $5.88 or $3.88, and there's also a selection of $2.24 "hit packs." What doesn't make sense is that elsewhere on the page, albums are offered for $5.64 and $4.70, and if you dig around on the site you'll find even more arbitrary pricing. Albums generally top out at $9.44 from what I saw, while single tracks cost 94 or 88 cents.
Amazon's albums also range in price. Just looking at the selection of Nirvana albums shows that you can pay only $5.99 for In Utero, but the price jumps to $7.99 for Nevermind and $9.97 for Bleach. The single tracks aren't uniformly priced here, either, with some tracks costing 99 cents and some 89 cents, even on the same album. Like Wal-Mart, you can browse by price here, but it sticks to dollar ranges ($5 to $5.99, $6 to $6.99, etc.) so it makes more sense than Wal-Mart's arbitrary menu.
Comparison Shopping
How do the prices compare between the sites? Well, from my unscientific sampling, Amazon seems to be the cheaper choice. All of Nirvana's albums, for example, are $9.22 on Wal-Mart, and that's for the censored versions. The listings for the uncensored versions all say "Not available for download. Buy this on CD from Walmart.com." No, no I won't.

Other price discrepancies include Air's Pocket Symphony ($8.99 on Amazon, $9.22 on Wal-Mart), Broken Social Scene's self-titled album ($7.99 on amazon, $9.44 on Wal-Mart), and A Love Supreme by John Coltrane ($8.97 on Amazon, $9.22 on Wal-Mart). More often than not, the prices are better on Amazon.

And a lot of albums that are on Amazon aren't available at all on Wal-Mart. Boxer by The National? Nope, no albums from The National at all on Wal-Mart, nor of Smog. In the Aeroplane Over the Sea by Neutral Milk Hotel, Sound of Silver by LCD Soundsystem and Horn of Plenty by Grizzly Bear are all available on Amazon and missing from Wal-Mart as well.

You've also got to be careful, because some albums available on Amazon in MP3 are only available on Wal-Mart's site in locked-down 128kbps WMA. Wal-Mart does have the decency to state whether or not a track "Plays on iPod," though, so you're cool if you pay attention. See the Band of Horses' Cease to Begin example here: Praising Amazon over Wal-Mart isn't the same as saying Amazon's selection is amazing. A lot of times they don't have the complete catalog of an artist (Grizzly Bear's newer Yellow House isn't available on either, for example). And obviously you won't find anything from Sony or Warner on there.

But by and large, the selection on Amazon, especially of independent label artists, is clearly superior to Wal-Mart's. And not having to deal with WMA results mixed in with your MP3 searches is much better.

What About Design?
Both stores borrow liberally from iTunes' layout. There are genres on the right, top songs on the left, and featured stuff in the middle. Both have search results that feature tracks in a lower pane and menus above. Both allow you to click on any of the columns to go right to that artist or album as well. The Amazon version feels a bit more elegant to me, but it really is a personal preference: in terms of functionality, neither one really beats the other.
For downloading, Amazon requires both Windows and Mac users to first install a small program called, conveniently enough, the Amazon MP3 Downloader. Once you install it, when you select the song or album you want to download, and the rest happens automatically. By default, the MP3 Downloader sticks it in your music folder and then imports it to iTunes for you, which is convenient. However, for someone like me, who keeps his entire music collection on a different hard drive in meticulously organized folders, it's a little annoying to not be able to choose where each file goes rather than just selecting one default place. For people who just dump everything in their iTunes music folder, however, it's cake.
Wal-Mart also has a program for downloading songs that requires a scary ActiveX script to install—and yes, unlike Amazon's, this thing is only available to Windows XP and Vista PC users. No Macs allowed. The Download Manager is harder to install too, with IE fighting you every step of the way to get it running.

It works a lot like Amazon's program, hiding in your task bar and waiting to be loaded up with songs by the site, but there are fewer preferences. I couldn't even find an option letting me pick a download destination. It only gives you an option to add it to your Windows Media Library, which is useless to me, but later I discovered a "Wal-Mart Purchased Media" playlist in iTunes. When it finishes, it gives you the option to play the song, which if you do opens the song in Windows Media Player regardless of what your default MP3 player is. Worst of all, I had to search for the location of the downloaded file itself. It ended up in My Documents/My Music/Downloads/Artist/Album, again, totally pointless for my purposes. Not having the ability to select a destination folder is bad design; not telling people where to find their freshly paid-for music is idiotic.

And the Winner Is...
The fact that Wal-Mart forced me to use Internet Explorer (and only works on Windows) is enough for me to never use it (Seriously, Wal-Mart? Seriously?). Beyond that, the prices, selection and downloader were all better at Amazon. It'll be familiar to anyone who's used to iTunes and easy for people who've never bought music online before, which should help them out greatly with their upcoming billion-song giveaway. In the end, which do I suggest? Amazon, to be sure.

What about iTunes?
The real question is whether or not I'd willingly switch to either store from iTunes, if format wasn't an issue. The answer, from a strict functionality standpoint, is "no." The fact that iTunes is a standalone program that also plays all your music makes it a far more elegant solution than either Wal-Mart or Amazon. There's no extra program to download, there's no worrying about where the songs go, and there's no dealing with browsers.

However, the pricing in Amazon's (and Wal-Mart's to a lesser degree) store is very competitive, oftentimes significantly cheaper than iTunes. Combine that with the fact that you get MP3 files that'll play on more devices than Apple's AAC, and you've got a serious contender in Amazon's store, especially for the cheap and anal . It just depends if you're willing to leave iTunes to go to the store. [Amazon.com; Wal-Mart]

In my recent research into the two sides of the format war, I have tried hard to steer clear of marketing mumbo jumbo on both sides, and examine real issues. As I shared in The State of Blu-ray, there's growing disarray among Blu-ray's hardware makers and confusion about hardware versions and player capabilities. HD DVD has by contrast proven to be surprisingly elegant—at the moment best demonstrated by comparing both versions of Harry Potter and the Order of the Phoenix. There's far less confusion and potential backstabbing, but that is to be expected: There are only two household names leading the charge on the hardware side, Toshiba and Microsoft, and they are not engaged in any sort of infighting. Toshiba was one of the companies most involved with the original DVD patents, and creating HD DVD as a blue-laser extension of DVD made good business sense, though not to Sony and others who were left out of that revenue stream. Regardless of its strong roots, HD DVD is run by a smaller posse with less overall reach, so keeping things clear and tight amounts to a survival tactic.

HD DVD has three things going for it that Blu-ray doesn't:
1. Players at lower prices
There's no doubt that price is the deciding factor in an embarrassing number of consumer-electronics purchases, and HD DVD—Toshiba's players—have been priced lower than Blu-ray players from Sony, Samsung, Pioneer and others. At the beginning of November, Wal-Mart dropped the entry-level Toshiba to $99 and apparently sold around 90,000.
2. A finished spec with fully compatible players
Whereas Blu-ray bewilders me with future capability promises and current competing standards, the HD DVD spec is by contrast remarkably sound. Every player meets certain standards, and while there's no requirement for 1080p video like in Blu-ray, there is a consistent requirement of internet connectivity, dual-tuner playback and local storage, which disc makers are now using for fun—and useful—interactivity. It is also becoming typical for combo discs to be released with DVD on one side and HD DVD on the other, making them eminently more compatible. (Blu-ray can't do this.)
3. Coalition members who are not in direct competition
It's easy for the HD DVD camp to work together, since there are very few who have traditionally competed in the marketplace. Because of pricing and product positioning, Toshiba and Microsoft don't vie for the same customers at all. And as others begin to market HD DVD players of their own, they approach different customers in different ways. Of course, you could argue that competition among Blu-ray's supporters is a good thing, but it has not yet led to the holy grail of competition: discounted pricing.

Who is joining HD DVD?
Many people can name five hardware partners in the Blu-ray camp (Hint: if they start with P or S, they're in). Nobody knows who else is getting into HD DVD besides its main founders, Toshiba and Microsoft, but in fact, other HD DVD players are already starting to hit the market. Here are three key players:
• Onkyo DV-HD805 ($900): distingushing characteristics include a Silicon Optix HQV Reon VX processor for upscaling old-school DVD content, and internal support for Dolby True HD and DTS Master HD Audio for natively outputting full-resolution sound. It's certainly a tweaker's special, and only makes sense if your speakers cost much much more.
• Samsung BD-UP5000 Duo ($800): Since this upcoming device
famously has stated support for Blu-ray discs that Sony and Pioneer won't be able to play, it's easy to forget that it's also billed as a fully compliant HD DVD player. But the reviews say it's a winner in both arenas.
• Venturer SHD7000 player ($200): Who? Exactly. That's what they said about Apex Digital when it came out with the super cheap DVD player. Venturer is living up to its name as the first cheap Chinese player to infiltrate American retailers but signs say it will not be the last.

What about Microsoft?
Microsoft's role in HD DVD may seem a bit mysterious. Besides selling the Xbox 360 HD DVD add-on drive, Microsoft helped write the HD DVD video spec, including VC-1 compression. It also licenses the HDi runtime engine, developed with Toshiba, that enables interactivity on Toshiba players and those of other licensees. HD DVD players don't have to have HDi, but at the moment, it's obviously the software with the most momentum. And software is the key to HD DVD's current successes.

Toshiba's HD-A1 and HD-XA1 players, rolled out first in the spring of 2006, were based on a 2.4GHz Pentium PC architecture, in other words, real hogs. The second generation players were moving on a 900MHz Celeron, and the third-generation HD-A3 has a 333MHz MIPS chip. The funny thing is, menus move quicker on the much more affordable third gen, because of Microsoft's improvements on the back end.

In a tear-down evaluation, industrial analyst iSuppli determined that the components of that first $599 Toshiba player actually cost the maker $674 before manufacturing, accessories and packaging. Though neither Microsoft nor Toshiba would acknowledge any losses, Kevin Collins, head of HD DVD promotion for Microsoft, said, "I don't know if they are losing money or breaking even," adding, "We work together to minimize cost." Jodi Sally, VP of marketing at Toshiba America Consumer Products, echoed: "All of this speculation that we're losing money is just speculation," she said. Working with Microsoft, "we've transitioned our lines three times to lower costs. I can't comment on profitability, but we have increased cost production and efficiency."

So whether you are using a Toshiba player or an Xbox 360, you are watching HD DVDs using a hardware/operating-system combo developed in large part by Microsoft. Given the fact that Microsoft isn't always known for stable and intuitive user experiences, it is even more amusing to see Blu-ray and HD DVD side by side.

Compare One Movie on Both Formats
When I compared Warner's Harry Potter and the Order of the Phoenix discs, the Blu-ray edition in a PS3 and the HD DVD in an Xbox 360, the differences were startling. Never mind that the HD DVD has an entire online component that the Blu-ray can't yet implement, with features such as mobile downloads and user-organized live screenings. Never mind that you could watch the entire HD DVD with pop-up actor-commentary windows on screen—if Warner had implemented this in the Harry Potter Blu-ray, it would have been compatible with exactly one currently shipping Blu-ray player.

The surprising thing was, even when you compared the exact same experiences, the HD DVD behaved much better. Every so often an icon appears in the top left corner of the screen, indicating a behind-the-scenes featurette about that particular scene. On the HD DVD, you click it, watch what you want to, then click Enter again to return to the point you left off in the main movie. With the Blu-ray, the system had no way of returning you to the movie; it could only dump you in the featurette menu, where you were stuck watching more of those. Sure, these problems could be Warner's programmers, and not a format issue, but Warner is going for as similar an experience on both, and it clearly can't do everything on Blu-ray that it can on HD DVD. Just have a look at the back of each disc:

The difference is still less subtle when comparing the two editions of 300:

As I discussed previously, Blu-ray has specifications for picture-in-picture, but to date, only one Blu-ray player that has shipped, the Panasonic DMP-BD30, will be able to handle the discs when they start making their way to stores in early 2008. Except for some rumblings from Daewoo, nobody has promised an internet-connected Blu-ray player, while all HD DVD players can. (Samsung's hybrid BD-UP5000 Duo has Ethernet, but only for HD DVD.)

The Hollywood Factor
Studio support was once Blu-ray's ace in the hole—none of this technical crap matters when the movies you want to watch aren't available in a given format—but ever since Paramount and DreamWorks announced exclusive publishing on HD DVD, even Sony chairman Howard Stringer feels a bit shaken. (Fox, Disney, Sony and others are still Blu-ray stalwarts of course.) Some say there's dirty dealing afoot, specifically alleging that Microsoft and the HD DVD group paid $150 million or so to Paramount and DreamWorks to go exclusive. When Michael Bay made these bribery accusations again the other day, along with the accusation that Microsoft was using HD DVD to destabilize Blu-ray in favor of downloads, Jordi Ribas, GM of the HD DVD Group at Microsoft responded:

Microsoft provided no financial incentives to Paramount or DreamWorks. Michael Bay's additional comments about our commitment to HD DVD are similarly unfounded. We have major technology investments in HD DVD...and have more than 100 staff at Microsoft dedicated to the success of HD DVD.

The not-so-secret secret is that a CH-DVD player is an HD DVD player whose laser is set at a different modulation. While you could never play an HD DVD on a CH-DVD player, it is physically more or less the same product. Manufacturing can happen side by side, using the same components such as processors and optical pick-ups.

The funny thing is, HD DVD is known to be region-free—discs from one country can play in HD DVD players from another country. Many discs available on Blu-ray in the US are available on HD DVD elsewhere, making for a higher chance of piracy or at least quasi-legal trade. In our mind, CH-DVD can be an answer to that, an anti-piracy measure coming from a root technological difference. "I guess you could call it a region control," said Collins, "but the Chinese just want to have their own format." Whether this separate-but-equal policy helps the format burgeon, or whether rampant piracy itself is a sign of a healthy format, is for us all to find out.

The upshot of CH-DVD is that, if and when the time is right, China could flood the US market with cheap HD DVD players. Meanwhile, because of this deal, the likelihood of a similar Blu-ray flood gets slimmer. The Venturer is here; keep your eyes peeled at Wal-Mart, Target and other discount big boxes for the next models.

Does the China threat faze Toshiba? It's nice being the one in the spotlight, but Toshiba is well aware that it will soon share the stage with competitors. "There's always a business for a Tier 1 brand in HD DVD players the way there is with DVD players," says Sally. Increased competition will come at the higher end, with combo players from Samsung, LG and possibly Denon, and the premium Onkyo I mentioned above. All of this is good news to Toshiba. Sally adds, "Increasing household penetration of HD DVD players is good overall for the format and for the software [movie] sales."

Black Friday Stalemate
On Black Friday 2007, both the Blu-ray and HD DVD camps released numbers saying they were the overwhelming winner. HD DVD announced it had reached 750,000 in total home penetration (including the Xbox 360 drive). Blu-ray said that it had 2.4 million homes, presumably including PS3. Microsoft argues that all Xbox 360 HD DVD drive purchasers are using them to play HD DVD movies, while not all PS3 buyers are using the game system to play Blu-ray discs. While this is obviously true, there is only unreliable guess work to determine exactly how successful the PS3's Blu-ray drive actually is.

The point is, the format war is far from over, and it's wrong to write off HD DVD now just because it has fewer major japanese manufacturing giants 100% behind it. There's still some time before this whole thing shakes out, but because of the organization and proper planning of the HD DVD camp, Blu-ray no longer looks anything like the predestined victor that it once seemed.

That's a lot of MP3s, and it sure would be a better giveaway if more tracks were available. And with Sony rumored to be close to making the plunge, that leaves stodgy old Warner remaining, stubbornly clinging on to a dying technology.

Good plan, Warner! I'm sure that your forward-thinking (in)actions will only make more and more sense with time and eventually everyone will see that things were better in the good old days, dismantle the internet, and all go laugh about it at the local soda fountain. Also, you will be out of business. [Ars Technica

Having Toshiba back a cheap player would be better for Wal-Mart, seeing as Venturer outsources their tech support and may not be equipped to handle the support needs for a relatively new (and possibly frequently-updated) format like HD DVD.

Even though Toshiba's been hitting near the $200 point with big bargains and HD DVD giveaways, a player you can actually pick up for that much will be a big boost this holiday season. And if Toshiba can get players into people's houses—think the PlayStation 3 approach to Trojan horsing Blu-ray in—movies are sure to follow. [High Def Forum via PC World]

Is this low-end HDTV brand—the Q2 LCD-TV sales champ in North America charming Joe Sixpack with its tongue-in-cheek ad campaign? Or are consumers destined to choose quality over value, no matter how riotous Vizio's ads may be?

Rip-Off Of There's a certain fast-food quality to this ad—wasn't there a Mickey D's commercial some years back in which the actors searched for any ol' excuse to cram Quarter Pounders down their gullets? The comparison may be particularly apt because Vizios are meant to be somewhat disposable—not quite iPod disposable, perhaps, but I don't think anyone expects their Vizio Gallevia 42" is going to last for the ages. Hey, at a mere $599 per basic set, why not upgrade every few years?

The Spin "Vizio is making HDTV a possibility for everyone," the narrator quips at the commercial's end, thereby encapsulating the brand's entire philosophy in a mere 20 syllables. Everyone's been waiting around for LCD prices to drop, but progress has been painfully slow. Sure, they've come down a little, but all-too-rarely into three-digit territory, which is what 85 percent of consumers would consider remotely affordable. Now here comes Vizio—under the slogan "Where Vision Meets Value"—offering sets that cost less than half of comparably sized Samsungs or Sharps. Now, everyone knows they're gonna have to upgrade from tube sets sooner rather than later, especially with the end of analog television (theoretically) less than two years away. Vizio is one of the first brands to make us short-armed, deep-pocket types think, "Huh, why not make the move now?" After all, it's not like Samsung et al. appear in a hurry to manufacture truly affordable HDTV options.

Counterspin Notice how they don't actually show you any images flickering on those Vizio sets? Makes you wonder if they've got some quality issues to hide. And they do, of course—even satisfied consumers have noted such woes as color bleed and underwhelming backlighting (particularly on those over-42" sets). I don't think Vizio will argue that its sets performs as well as those of higher-end competitors; their argument, instead, is that there's no point in paying twice as much for performance that's just, say, 20 percent better. In other words, it's the classic value-brand argument. But raise your hand if you haven't wished, at least once, that you paid for the "real thing" instead of the private label alternative. Anyone?

Takeaway Vizio's mediocre specs will never impress the Gizmodo crowd, but the general public begs to differ: The brand's LCD-TV shipments were up a whopping 76.4 percent last quarter. Vizios are being end-cabbed at Wal-Marts nationwide, which means they'll get a first look from a lot of consumers—and those consumers, having heard for years that you've got to spend upwards of $1,000 for a big-screen HDTV, will be duly impressed. But Vizio shouldn't get too comfortable with its recent success—as Dell or Gateway know well, budget-conscious consumers will turn on you if the service isn't there. And already there are some grumblings about poor retail-level warranties—Costco has gotten a lot of flack—and an unusually high number of returns due to defects. Folks may be willing to put up with a little color bleed for the sake of joining the HDTV Club, but they might not countenance being placed on hold for 58 minutes while trying to return their malfunctioning Maximus.

Hype-O-Meter 6.5 (out of 10). Not a highly imaginative ad, but effective at communicating Vizio's core message. However, I still can't help thinking about the passer-by who'll get squashed by the TV tumbling off the balcony. A ghoulish touch to an otherwise lighthearted spot.

Brendan I. Koerner is a contributing editor at Wired and a columnist for both The New York Times and Slate. His Hype Sheet column appears every Thursday on Gizmodo.

Read more Hype Sheet

A band I've never heard of called Cartel will be locked up inside this spherical-domed tent on one of New York City's piers for 20 days to record an album while 23 cameras stream footage to the Web. It's the usual invasion of privacy: night vision in the bedroom, a shower cam, and something called a "KFC cam" in kitchen.

While it will be a decent test of Adobe's new Flash Media Encoder, we doubt that's why a bunch of 13-year-old girls will sit outside the bubble, screaming and crying while their moms wonder where they went wrong. Anyway, these are all matters to keep in mind when you devise your own bubble using the blueprints and renderings below. (Cameras and desperate fame seekers sold separately.)

A word of advice to Cartel: See how your name is the same size as Wal-Mart's? That's a sure sign you should fire your agent. Good luck in the bubble! – Wilson Rothman

Dr Pepper Hopes MTV Show Will Sell Soda [AP]

On top of granting more and better shelf space to big-name releases like Justin Timberlake over say, Mike Patton's latest work, and skewing sales that way, Sam Walton's legacy flat-out refuses to sell certain titles. And matching the 20 percent plunge in CD sales this year, it's planning to shrink store real estate dedicated to music by an equal amount. Best Buy's also cutting down on the amount of space it gives CDs, so expect the number of titles they carry—8,000 to 20,000, versus defunct Tower Records' up to 100,000—to be cut as well.

Result? Big name, mainstream sludge will be pushed even harder by default. As space shrinks, so does choice.

Online stores have unlimited shelf space. They carry an unlimited quantity of millions of titles. While they're no substitute for dropping by your local record store, increasingly they're looking like the most viable way to keep choice alive in the music industry. Even just the iTunes home page has way more variety than the weekly promo displays at Target.

All of this adds up to yet another reason why the Big Four and other labels need to drop DRM to spur music sales online—it's for their own good, really. If they're still interested in keeping the industry alive, at any rate. – Matt Buchanan

Can Music Survive Inside the Big Box? [Wall Street Journal via Consumerist]
Image via Flickr