Props
@Chops for the palette cleanser. I don't know how much the following corporate nerd story falls into conspiracy since a lot of it is documented, but then, conspiracy theories always have a lot of documentation, don't they?
Not wanting to repeat the VHS vs. Betamax fiasco from the 80s, the media industry lined up behind DVDs as the replacement media of choice in the 90s, and sold gazillions of them. People spent untold amounts of money replacing their VHS tapes and expanding their collections. Sony helped adoption significantly by giving DVD capabilities to the Playstation 2. When high definition television started to become a thing, two high-definition disc standards emerged: Blu-Ray and HD-DVD.
Sony created Blu-Ray, and Toshiba made HD-DVD. Both companies knew whoever created and controlled the standard, made the money. So both companies went looking for support from the media powerhouses. Studios split to about 40% Blu-Ray (including Fox Studios), 20% HD-DVD (including Universal Studios and much of the porn industry), and about 40% for both (including Warner).
As another holiday season came and went in the mid 2000s with no clear winner, Warner decided to push for HD-DVD because it didn't like Sony's royalty structure, and told Toshiba that if Toshiba could get another major backer, Warner would officially back HD-DVD and dump Blu-Ray. Toshiba landed Fox Studios, but at the last minue, Sony paid Fox $120M to stay with Blu-Ray. So Toshiba pursued Paramount instead, to the tune of $150M.
But Warner stayed on the fence. Going HD-DVD would solidify a stalemate (and stall consumer spending), and going with Blu-Ray would all but seal the deal for the format Warner didn't want. Consumers kept waiting, not wanting to buy heavily into the "wrong" format.
Seemingly out of nowhere, Microsoft announced an XBox 360 add-on HD-DVD unit. Suddenly, one of the big two console makers (remember that Nintendo hadn't made its comeback yet) looked like it was going to blow up the HD-DVD market. Now the "HD Wars" were in full swing. Except they weren't.
With improving broadband infrastructure, streaming media continued to drop in cost and improve in quality. Microsoft learned a lot of lessons from all of the mistakes and growing pains it went through for network connectivity on the original XBox, and Sony was just starting to dip their foot into the network waters with the Playstation 2, so Microsoft was already a full generation ahead of Sony in terms of console network connectivity and community management. Microsoft knew that if they could stall the "HD wars", they would buy enough time for streaming media to overtake disc-based media as the avenue of choice for movies, music, and games. Microsoft wanted to retain control of the distribution medium for its content, and streaming/downloads were the answer. Microsoft found a willing partner in Apple.
In the mid-to-late 2000s, Apple stopped including disc drives with their computers. No DVDs, no Blu-Ray, no HD-DVD, no nothing. Remember that while relatively few Macs got sold compared to PCs, higher end Macs often got used for media content creation. Apple claimed the future was streaming and downloads (and was happy to feature the iTunes store as a venue for such). Remember that Steve Jobs was a majority stockholder in Disney after Disney bought out Pixar. Amazon and Google kept to themselves during this development, happy to let Microsoft and Apple stall the HD wars. While Microsoft HD-DVD player sales were abysmal, the plan worked -- consumers never really entered the HD wars, and neither format really took off.
Eventually, Blu-Ray became the "winner", but by that time everyone from Netflix to Pandora and Spotify to Google and Amazon and even Nintendo and Blizzard leveraged the internet for streaming and game downloading. The era of disc-based diminished into a minor business.
The next time you watch a movie online, remember that Microsoft used the popularity of the XBox 360 to scare a nation into holding on to their money until the internet got good enough for people to pay for downloads and streams, making us skip Toshiba's and Sony's plans for distributing high-def content on more plastic discs.
Edit: credit to
Robert X. Cringely for a fair bit of the information here.
