There is nothing wrong with the products so we aren't accepting returns from customers ... [Customers] understood that there were two competing formats and understood that one of them would probably prevail ... so they made the decision to go with HD-DVD... [Toshiba will] assist customers in understanding the benefits of the products.

Here we know better. Software is the ingredient that turns content into quicksilver, shifting in time and place to the device we desire, at the moment we choose. Apple has mastered this alchemy, and others like Microsoft and Amazon.com are studying the fast; but to Sony it remains a dark art.

Online video remains immensely fragmented. Should you download a video on Xbox Live? Buy it on Amazon.com's Unbox via your TiVo set-top? Rent it on iTunes, and broadcast it to your flat-screen display with an Apple TV? The choices seem endless, and endlessly confusing. But none of them, I'd note, market themselves based on a format. The format, if any, is broadband, and a set of standardized audio/video connectors. The rest is fungible.

There will no doubt be a shakeout among online-video stores. If nothing else kills off the weaker players, consumers will rapidly tire of purchasing the same movies again and again. A rack of DVDs on the shelf provides a reassuring sense of permanence. Perhaps physical media will make a comeback. Warren Lieberfarb, who helped invent the DVD at Warner Bros. and now consults for Toshiba on HD-DVD, predicts that flash-memory devices might be sold in stores preloaded with video.

Sony actually had that idea, I believe, with its MagicGate memory sticks. Another nonstandard format, tied to hardware, with buggy software. The same complaints are being made about Blu-ray, with its ever-shifting specification requiring firmware updates. Sony, drenched in blood, stands victorious in the optical-disc format battle. Too bad the war is now being waged in another theater.

Bay later explained that his rant was spurred by a dinner conversation with a few "Blu-ray owners" who were upset over the announcement. He "over reacted [sic]." He then sat down and watched 300 on HD-DVD and declared himself a convert. Good news. He's back on the Paramount bandwagon, spouting something about $200 HD players and that he "liked what he heard." Was it the sound of money? Cause he's reconsidering his rash decision about Transformers 2 as well.

Money was definitely a motivator for the Viacom-owned studio, Paramount's CTO has confessed. Though perhaps not in the way some think. Alan Bell praised HD-DVD's cheapness, which he attributes to the fact that the HD-DVD standard is more settled, making it less expensive to produce both discs and players. He also claimed Paramount liked various technical features in HD-DVD. Of course, the $150 million in marketing dollars Paramount received from a consortium of HD-DVD supporters doesn't look that cheap.

Paramount studio exec Rob Moore's argument that HD-DVDs are cheaper and therefore more appealing to consumers is moot. Consumers willing to drop $400 on a standalone Blu-ray player aren't going to be swayed by a few dollars. What is going to influence them is the number of movies offered in each format. The dueling HD disc types are already both hindered by a "why upgrade?" mentality. Consumers, by and large, are waiting to see which format will die before committing. Prolonging the battle may temporarily line Paramount's pockets, but ultimately, the stalemate just gives digital distribution of movies more time to catch up.

While it might not have proven to be the best course of action in hindsight, we seriously doubt that Kevin Rose's decision to pull the story revealing the HD-DVD key was selling out or intentionally betraying the community. A number of people have pointed out that HD-DVD is a Digg sponsor, and have used that fact to level such charges at Kevin.

We have sponsors too, but that doesn't ever mean we'd sell out our readers or alter our content because of those sponsors. Kevin has equally shown nothing but commitment to the Digg's users, community, and site's integrity. People should hear out his explanation for this move before wholesale trashing Digg's founder.

That said, tonight's been a watermark in social media, even just looking at the ingenious (and often hilarious) variations users have come up with to cram the key into headlines, comments and users invites. Personal favorite so far: "Digg deleted my hard drive for posting the HD-DVD KEY! Now my hard drive refuses to write in binary. I get Error Code: 09-F9-11-02-9D-74-E3-5B-D8-41-56-C5-63-56-88-C0 . Oh, noz."

– Matt Buchanan

Update, Kevin responds: Digg This: 09-f9-11-02-9d-74-e3-5b-d8-41-56-c5-63-56-88-c0 [Digg Blog]
Digg's Explanation [Digg Blog]
Thanks, Slacker