The looming format war over smart TV: Is this the 2014 version of VHS versus Betamax?

The looming format war over smart TV: Is this the 2014 version of VHS versus Betamax?

One of the more interesting developments out of this year’s International Consumer Electronics Show in Las Vegas is a potential format war over smart TVs.

In a nutshell, a format war is when a number of mutually incompatible technologies compete against each other in the marketplace.

Perhaps the best know example of a format war happened during the early 1980s, when video cassette recorders first hit the market. JVC’s video format, known as VHS, competed head-to-head against Sony’s format, which was known as Betamax.

Video cassettes designed for Betamax decks did not work with VHS recorders, and vice-versa.

While Betamax was generally regarded as the superior technology, many consumers opted for the cheaper VHS recorders and tapes. In the end, VHS eventually became the industry standard – eventually leaving Betamax owners with expensive door stops.

The ongoing battle between Mac and PC or iPhone and Android are other examples of format wars. In both cases, while the technologies continue to compete, one in each industry (PC and Android, respectively) has emerged as a de-facto industry standard.

Then there were the battles between Sony Blu-ray and Toshiba’s HD-DVD, or MMCD against DVD – again, one format ended up the clear winner in each battle.

It appears a similar battle could be about to happen in the smart TV market.

Samsung, the industry leader, has announced its smart TVs will use its Tizen operating system. LG is opting to go with its own platform, called webOS, while Panasonic has partnered with Mozilla to bring Firefox OS to TV screens. Meanwhile Sony (along with others) has previously announced a partnership with Google.

And, as if the market weren’t already crowded enough, there’s the looming spectre of Apple’s long-rumoured plans to release a smart TV of its own.

Being the owner of the format that eventually becomes the industry standard is a potentially lucrative proposition for each of the companies involved.

Smart TVs offer consumers the convenience of not having to hook up any other devices to their TV – such as a set-top-box, DVD player or video game console – in order to enjoy movies, games or apps.

Getting even a small percentage of those download sales each year could potentially be worth billions of dollars in revenue to the company that wins the format war.

However, format wars also pose risks for consumers, manufacturers and other businesses.

For consumers – especially early adopters – there’s a risk you will be stuck with the technology that loses the format war. As anyone who ever purchased a Betamax deck will surely agree, this is not a fun proposition (unless, of course, you like the idea of owning an expensive door-stop).

For TV manufacturers, consumer confusion (and the risk of being stuck with a “Betamax”) could mean potential customers will hold off on buying until a clear winner emerges. The worst case scenario here is that consumer apathy will cause all the options to fail in the marketplace, as happened to both SACD and DVD-Audio, which at one point competed to be the high-end replacement for CDs.

As for other businesses, especially those that publish content for smart TVs, there is the extra headache of making sure everything is compatible with two or more different formats rather than just one. Anyone who has ever built a mobile website will know what that’s like.

Whoever wins, the battle between the smart TV formats is already shaping up to be one of the more interesting tech stories of 2014.


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