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Yes, greed. And bribery?

Hunt and I were left with the same question: How is this not a bribe? Well, according to Randy Friedberg, a partner at the intellectual property and entertainment law firm of Olshan Grundman LLP, it's not.

"This is business," he explained. "Bribery has to be an illegal payment by default, for favor or influence. The only way this could be wrongful would be if there were antitrust considerations. It's no different from AT&T making payments to Apple to get the iPhone. It's a win-win for both sides."

Friedberg doesn't think Microsoft is up to any of its old exclusionary games that got it into so much trouble in the 1990s. "Given Microsoft's anti-competitive problems, to do something that had antitrust implications would be extremely stupid for a company that's not stupid," he said.

Indeed, the deal is only for 18 months, and Hunt said there is plenty of wiggle room for both companies to get out if they want to.

Peter Berghammer, chairman of market research firm Future Formats, admits it looks funny, but concurs, "that's the way the industry works. That industry has a pretty good track record of back and forth."

Berghammer said that for now, neither format is gaining a lot of traction. "We haven't been convinced yet there is any incentive for consumers to move to one format or another, and a large portion of that is due to digital video recorders and on-demand downloads," he said.

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When DVD came out in 1997, there was no competition and certainly no equal. It was a clear and obvious improvement over VHS and standard definition TV. But now, in 2007, there's HBO and Showtime in high definition, high def content on demand from Comcast and other cable companies and downloadable movies from Netflix.

Having compared standard-definition DVD to high def, I can tell you that the difference is real and worth it. But depending on the drama that continues to unfold, it might not matter.

Berghammer believes there is "a very high possibility the split will kill both formats," and this deal doesn't help because it balances out Blu-ray's momentum, meaning the end to the war gets pushed back.

"It really was a good comeback to the whole Target deal, because that was a critical deal. It's so important to have those players our there in the supply chain," he said.

For Friedberg, it's just how the game is played. "The marketplace is deciding because you've got the better funded [party] paying to get the strategic advantage for their item. It happens all the time. I do think it needs to shake itself out, but I don't see it as dirty pool or illegal," he said.

Maybe not illegal but it stinks as badly as this foolish format war that no one wanted. Some day, this will make a great business school case study right alongside VHS-Betamax.

Andy Patrizio is a senior editor with internetnews.com.

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