iHD less expensive than Blu-ray alternative, thanks to Vista, says HP

Fort Collins (CO) - The XML-based interactive functionality provision currently supported by HD DVD next-generation optical discs, will be an integral part of Windows Vista whether or not iHD-supportive optical discs come to market, an official of Hewlett-Packard told TG Daily. As a result, computer manufacturers will already be paying royalties on iHD, driving down their costs for adopting HD DVD over Blu-ray, the competing optical disc format that instead supports BD-J, an incompatible, Java-based alternative.

Josh Peterson, director of strategic alliances for the Optical Storage Solutions group of HP, is one of the company's two "point-people" making the unusual and, some would say, brave move of marshaling a complete U-turn in HP's stated position of just last month. As we reported on Friday, HP is taking a major gamble, and in so doing, perhaps spoiling the victory party that some analysts were preparing to throw for Blu-ray. Along with HP's general manager for personal storage, Maureen Weber, Peterson is saying that, for the good of the computer manufacturing industry, the Blu-ray Disc Association - of which HP is a founding member - should change its stance on iHD as well as mandatory managed copy, the guaranteed provision for users to make personal copies of licensed and legally-obtained content. Other Blu-ray members, including 20th Century-Fox and, as of last week, Warner Bros., are on record as opposing such guarantees in Blu-ray's AACS Internet-based copy protection system, saying studios should have the right to use tools that enable them to select not only which discs can be copied, but whose BD players can be used to copy them.

Peterson told us, as a direct result of our coverage last month of Microsoft's and Intel's joining the HD DVD Promotions Group, and his own subsequent defense of Blu-ray's stand on managed copy and BD-J, Microsoft and HP held face-to-face meetings on these topics for the first time.

HP's initial goal for those meetings, Peterson admitted to us, was to convince Microsoft to join the BDA. But Microsoft made very convincing arguments that persuaded the company to make its unprecedented change in stance. Now, HP is urging the BDA to make a similar shift, and soon, or else HP will be forced to join the HD DVD Promotions Group and, as an equal proponent of both sides, adopt a public position of neutrality. He revealed HP is currently negotiating with other prominent Blu-ray-supportive manufacturers, passing on Microsoft's arguments and urging them to make similar moves. He declined to provide names, but the two most prominent manufacturers in the Blu-ray camp besides HP are Dell and Apple.

The iHD "interactive layer," which Peterson says the most important point of contention now, was developed jointly by Microsoft and the Walt Disney Company, and offered at one point to the BDA. Last month, HP was among the supporters of BD-J, a Java-based alternative, which the BDA overwhelmingly selected for the interactive layer of Blu-ray Disc. At that time, Microsoft was publicly neutral with regard to iHD and BD-J.

Then after Microsoft's and Intel's joint announcement, Peterson said, HP learned that iHD was being built directly into Windows Vista, Microsoft's next-generation operating system, due to ship late next year. "Frankly, that gives a much more cost-effective implementation for us if iHD is the interactive application layer for the format," said Peterson. Whether an HP computer ends up containing an HD DVD or a Blu-ray disc component, he said, if that component supports iHD, it will be more cost-effective for HP to implement because Windows Vista will already support iHD. As an XML implementation, the iHD technology is not specific to optical discs; conceivably, iHD content can be delivered solely over the Internet. "Because we're already going to be paying for the operating system on all the PCs that we ship," remarked Peterson, "and that payment to the operating system includes support for the interactive layer, that saves us the royalty costs on that interactive layer. So we are certainly supportive of that, especially considering the millions and millions of systems that we ship every quarter."

HP had previously voiced support for BD-J, said Peterson, because of the overwhelming, perhaps unanimous (if you don't count multiple abstentions), support for BD-J among the BDA members. "When we made the side-by-side comparison of BD-J to iHD six months ago," he remarked, "it was apples and apples when it came to PC implementation, because Microsoft was neutral." But Microsoft's adoption of iHD as a part of Windows Vista changed the flavor of the fruit altogether. "It really gave us a much better picture, and things had changed since the last time we had evaluated the two technologies.

"Understanding the cost implications on our side of this choice by Microsoft," continued Peterson, "led to a revisit of our position when it comes to the interactive application layer...At the end of the day, it comes down to the cost of implementation, and the ultimate user experience. Whether it's a seamless experience within the operating system like iHD will be, or if it's a third-party add-in application, those are different user experiences and different costs of implementation. Certainly native support within the operating system is a huge benefit for us, and frankly, for the consumer."