Sony and Toshiba marshal their forces for another video war

A BITTER row between the Japanese companies Sony and Toshiba reached a new low at the weekend after Sony claimed the support of Japan Victor Company for its new Digital Video Disc (DVD), a proposed replacement for prerecorded video cassettes. But JVC denied it was in Sony's camp, eliciting crows of triumph from Toshiba. The dispute follows a similar scrap in January over the loyalty of Matsushita, maker of Panasonic.

The fight could lead to a replay of the Betamax-VHS video wars of the early 1980s. Both sides have accused the other of playing dirty in the battle to set a standard for a technology they hope will grab the lion's share of the multi-million pound video market. "Don't believe anything they say about us," said one.

Sony, which holds the basic patents for CD technology, and Philips, the Dutch electronics firm, are pushing a dual-layer, single-sided disc that can store enough data to hold a full-length feature film with a bit to spare. Toshiba has designed a system from scratch, avoiding Sony's key patents altogether. It can hold over 30 per cent more data on a pair of discs glued back to back, leaving room for two features, or a feature and a video game.

Although Sony disagrees most independent observers think Toshiba and its ally, Time-Warner, have the edge, at least for now. At the Toshiba product's launch in Hollywood, a parade of bosses from film studios and electronics manufacturers was led by Clint Eastwood, the actor and director. It now claims the support of 27 international companies, while most backers of Sony and Philips are smaller.

If the trend continues Sony could end up with a technology nobody wants - a repetition of the Betamax disaster. "Sony missed an amazing opportunity to make lots of money when VHS triumphed over Betamax in the early 1980s," said Paul Campbell, public relations manager for Sony Europe. "It took us down a peg or two and probably was the best thing that happened to our company."

Sony lost that battle because it tried to go it alone, retaining control of the technology. JVC distributed its VHS technology to a wide range of companies, so there was far more choice for consumers.

Mr Campbell insists that Sony tried hard to avoid making the same mistake this time. When Toshiba announced its standard, Sony evaluated it intensively for a month - prepared, if necessary, to drop its own project. "We immediately said if so many of the world's largest manufacturers think this is the way to go maybe we got it wrong, something the Sony of 10 years ago would not have done," he said.

But Sony concluded that production costs for Toshiba's standard would be too high, more than was justified by its extra storage capacity. Sony also argues it can cram more information in, using encoding software

Unless the two sides declare a truce, judgement will be left to customers. Ironically, both may lose. Some believe the idea of buying or renting a film will fall prey to interactive television.

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