Microsoft Wins Place on High-Def Videodiscs

Developers of high-definition DVDs have embraced technology from Microsoft Corp. to squeeze more video onto discs, marking another win for the software powerhouse in its drive to expand beyond the personal computer.

The decision by the Blu-ray Disc Assn. is the latest sign of progress in Microsoft’s efforts to gain a foothold in the entertainment industry. The Redmond, Wash.-based company has won more support from consumer electronics manufacturers than Hollywood but is gradually laying the foundation for a world of personal entertainment that can be powered entirely by its products.

The association’s decision, which is expected to be announced today, will affect a new generation of discs and players that can display much more detailed pictures than today’s DVDs.

In a replay of the battle between VHS and Betamax, two different types of high-definition discs -- Blu-ray and HD-DVD -- are expected to start competing for sales in the U.S. as early as next year.

By requiring “VC-1” video technology developed by Microsoft to be included in all Blu-ray disc players, the association is mirroring a move made earlier this year by the HD-DVD forces. And with support from both camps, Microsoft will stay in the game regardless of which standard wins in the marketplace.

The Blu-ray and HD-DVD endorsements won’t force Hollywood to use Microsoft’s technology, which is merely one of three options for compressing video onto the next-generation discs. But they give Microsoft its biggest opportunity to date to participate in the home video market, which generates much of Hollywood’s profits.

Microsoft is expected to collect a significant share of the licensing fees that manufacturers and studios are likely to pay for using VC-1, even though the company handed over control of the technology earlier this year to the Society of Motion Picture and Television Engineers. That group oversees technologies designated as industry standards for video.

“We are extremely pleased that Blu-ray has chosen [VC-1] as a mandatory compression technology for its format,” said Amir Majidimehr, corporate vice president of Microsoft’s Windows Digital Media Division. Still, he added that Microsoft would give equal support to “the emerging high-definition video formats that deliver new possibilities for content providers and consumers.”

Microsoft’s anti-piracy technology is already in widespread use by online music and movie services, with the notable exception of Apple Computer Inc.’s iTunes Music Store. Computer manufacturers are using Microsoft’s software to try to displace VCRs and set-top boxes with entertainment-oriented PCs. And consumer-electronics companies are teaming with Microsoft to bring digital audio and video from the Internet to portable devices.

Backers of Blu-ray discs -- which include Sony Corp., Pioneer Corp., Matsushita Electric Industrial Co. and Hewlett-Packard Co. -- say they can hold six times as much data as today’s DVDs, and 66% more than an HD-DVD. As for supporters of HD-DVD, including Toshiba Corp., NEC Corp. and Sanyo Electric Co., they argue that it will be easier to adapt today’s DVD production plants to HD-DVD than Blu-ray, making their discs much less expensive to produce.

Both groups would require player manufacturers to support three technologies for compressing video digitally. MPEG-2 would be the primary video format, while VC-1 or an advanced version of MPEG-4 could be used to squeeze more material onto the disc. The MPEG-2 and MPEG-4 technologies were developed by the Moving Picture Experts Group.

Andy Parsons, a senior vice president of Pioneer, said the decision to include VC-1 was based in part on discussions with the Hollywood studios, which “wanted a lot of flexibility.” VC-1 and MPEG-4 enable studios to put up to eight hours of high-definition video on a Blu-ray disc, almost twice as much as MPEG-2, said Richard Doherty, director of professional audio-video at Panasonic.