Earlier this week Wesley Novack posted a blog detailing the costs involved with producing high-definition media.  More importantly, he focuses on the cost difference between both media.

Novack notes that between three sources, the per-gigabyte cost of Blu-ray media runs between $0.045 and $0.056 per gigabyte while the per-gigabyte cost of HD DVD media runs between $0.064 and $0.077 per gigabyte.  Furthermore, Novack adds that single-layer media tends to lower this cost; most Blu-ray titles are single-layer and most HD DVD titles are dual-layer.

These figures actually tip the scales in favor of Blu-ray as the choice for authoring. However, none of these per-unit costs take into consideration the licensing, authoring and setup.  In part two of his analyses, Novack's sources indicate that these upfront costs actually level the playing field considerably.  By the end of his analysis, Novack claims the cost of producing single-layer Blu-ray and dual-layer HD DVD production costs are identical.

All data collected by Novack is limited to a relatively small scale; 10,000 disc batches.  Regardless of his methodology, economies of scale dictate that the cost per-gigabyte on SL BRD and DL HD DVD will remain the cheapest media as those two formats are the highest volume sellers right now. 

After all, let's consider that Neilson VideoScan claims Blu-ray outsold HD DVD almost three-to-one in January.  Even with the higher upfront costs, this will result in a lower cost to consumers in the long run. 

Unfortunately, none of this indicates that a winner will emerge from the format war anytime soon.  With two formats posting nearly identical costs for reasonable batches, the argument that one format would win on base cost alone isn't treading water right now.