UPDATE: Microsoft denies that it is working on a single-use DVD format. Please see my follow-up report, Microsoft Denies Single-Play DVD Plans, for details.
In its latest bid to ingratiate itself with Hollywood dealmakers, Microsoft has created a new type of disposable DVD movie disc that can only be played back once. The new discs are designed to prevent copying and piracy, but it's unclear why consumers would embrace such a technology in an age of on-demand cable channels, cheap DVD movies, and movie rental services like Netflix.
Further damaging to the new format is that it will require a new type of DVD player, which will be in the market in early 2006. And let's not even tackle the environmental issues of a disc-based format that is designed to be used once and then thrown in the trash.
Despite the sheer silliness of this technology, Microsoft's efforts in the home entertainment market should not be underestimated. The company is making an enormous push right now to establish a beachhead in the movie industry before Apple Computer can create the partnerships it needs to unseat the software giant. Apple has already destroyed Microsoft's chances of dominating the digital music market, thanks to its successful iPod devices and the iTunes Music Store, though Microsoft still holds out hope for a coming generation of smart phones-based MP3 players.
The issue, of course, comes down to digital rights management (DRM). The new single-play DVD format that Microsoft will sell will utilize the company's DRM scheme and movie technology formats, not those of rivals. Microsoft hopes to establish its DRM technology as a global standard, which would neatly prevent the company from suffering an Apple-style defeat in the future. Today's Apple's FairPlay DRM technology is dominant in the market for legally purchased digital music.
Meanwhile, debates rage about Microsoft's controversial backing of HD-DVD as a next-generation DVD standard. After the rival Blu-ray group issued a stinging rebuttal to Microsoft's list of reasons why HD-DVD was allegedly superior to Blu-ray, major Microsoft partners such as HP and Dell reiterated their support for Blu-ray. And more companies continue to support Blu-ray over HD-DVD. Today, however, Paramount became the first movie company to announce that it would support both formats. Perhaps other movie companies will follow, though it's unlikely that Sony, a major Blu-ray backer, will ever issue its movies in HD-DVD format.