The technology world is abuzz over last week’s Consumer Electronics Show, the annual exhibition of the world’s latest high-tech gizmos in Las Vegas. This year, CES was the front line of a fierce battle among the world’s entertainment and electronics giants to decide the next format for high-definition video. One camp, led by Toshiba, Universal Studios, and Microsoft, is pushing the HD-DVD, an upgrade to the traditional DVD that can hold up to 30 gigabytes of data, more than triple the amount stored on standard DVD discs. The other camp, led by Sony, Fox, Disney, and several consumer electronics manufacturers, are pushing the more ambitious Blu-ray format, with a capacity of up to 50 gigabytes.

The catch: Blu-ray discs won’t play in HD-DVD players and vice versa. For anyone over 30, this will trigger a sense of déjà vu—it isn’t the first time that the consumer electronics industry has failed to agree on a video standard. The last time it happened, in the 1980s, hundreds of thousands of consumers were forced to toss out their old Betamax VCRs when the VHS format became standard for videotapes.

There’s a real risk that the combination of consumer confusion and the rapid improvement of Internet-based distribution technologies will doom both formats to niche status.

The two camps, each desperate to avoid Betamax’s fate, held dueling press conferences. The more bullish of the two was the Blu-Ray camp, which declared its “victory as the premiere high definition DVD format of choice,” touting broad support from both Hollywood and the consumer electronics industry. But backers of HD-DVD were unbowed, announcing plans for hundreds of new titles in the next year.

Predicting the winner of this battle has become a popular pastime among technology pundits. But there’s a real risk that the combination of consumer confusion and the rapid improvement of Internet-based distribution technologies will doom both formats to niche status.

Last Tuesday, Apple announced that Parmount had joined Disney in offering movies for download via the iTunes store. As a result, Apple will soon have 250 movie titles available for download. And other companies are hot on Apple’s heels. Amazon unveiled a video-download service in September that was widely panned, but they are no doubt working to improve it. Netflix has long been rumored to be working on a download service of its own, which it may unveil in the coming months.

At the moment, the HD-DVD and Blu-Ray formats offer superior video quality to iTunes and most other download sites, but it won’t be difficult for download services to upgrade their video quality over time as consumers’ bandwidth increases. And a new Internet firm may take the HD video market by storm in the next couple of years. YouTube, the site that’s now synonymous with web-based video, is less than two years old. It’s reasonable to expect equally dramatic developments in the coming years, and some of them may offer high-quality video in direct competition with the HD-DVD and Blu-Ray formats.

Of course, neither format is likely to go away completely any time soon. Every PlayStation 3 includes a Blu-Ray drive, and Sony is hoping to sell tens of millions of them. If the PlayStation is a hit, there will be a significant market for Blu-Ray players for the foreseeable future. Likewise, Microsoft is offering a low-cost HD-DVD drive as an add-on to its XBox 360.

But consumers have far less reason to be invested in this fight than they did in the VCR fight of the 1980s. Virtually all of the 20th century’s media technologies are in decline. CD sales dropped 12 percent between 2004 and 2006. Newspapers have been losing subscribers since the 1980s. And Forbes reports that total DVD sales are expected to be flat in 2006, suggesting that home video may be starting down the same path. That suggests another analogy from the history of home video: maybe both Blu-Ray and HD-DVD are the second coming of the LaserDisc, the pricey, high-quality video format that was popular with hobbyists in the 1980s, but never caught on with the general public.

Timothy B. Lee is a policy analyst at the Show-Me Institute in Saint Louis and a regular contributor to the Technology Liberation Front.