JAPAN – Groups lead by Sony and Toshiba have failed to come to an agreement in their negotiations on a standard format for next-generation DVD technology, creating the potential for what some observers are calling “VHS and Betamax all over again.”The two parties cited time pressure as the primary reason that they are abandoning their talks. Toshiba plans to release its first HD-DVD drives to market in time for Christmas, meaning that production would need to begin within the next few weeks. Sony intends to put Blu-Ray drives in their new PlayStation 3 console, due to drop next year.

The Sony-led group is championing the Blu-Ray format while the Toshiba’s consortium backs HD-DVD. The primary difference is in the storage capacity and cover layer thickness, with the latter having especially significant implications for manufacturers.

Sony purports the storage capacity of their single layer disc to be 25GB, considerably more than a single layer HD-DVD can hold; reports of HD-DVD capacity vary between 15GB and 20GB. The difference is further amplified in the multi-layer discs supported by the two formats – Blu-Ray claims that their 8 layer discs will hold 200GB, and they have 300GB 10-12 layer discs in development, while HD-DVD’s largest capacity offering is a dual layer 30GB platter.

Cover layer thickness, the measure of how close the information on the disc is written to the surface of the disc, varies greatly between the competing formats. Blu-Ray has a cover layer thickness of 0.1mm, while HD DVD is 0.6mm, the same standard used by current DVDs. Consequently, the thicker Blu-Ray discs are more expensive to manufacture, as manufacturers will have to replace their old equipment in order to create the discs.

Both sides have pushed hard to get various industry-leading companies on board for their format; Sony has garnered support from 20th Century Fox, Lions Gate Entertainment Corp., and Universal Music Group, while Toshiba has agreed to develop their player in conjunction with Microsoft.

Some experts warn that the lack of a standard format for next-generation DVDs may wind up hurting manufacturers that opt to adopt one standard over the other early, and stifle consumer sales of the new players. Industry analysts say it could take years for either of the competing formats to secure enough market share to become the de facto standard.