The primary rival to Blu-ray Disc is HD DVD, championed by Toshiba, NEC Corporation, Microsoft, and Intel. HD DVD has a lower theoretical disc capacity per layer (15 GB vs 25 GB), but currently (as of 2006) benefits from lower manufacturing costs for both pre-recorded (ROM) and recordable media. Blu-ray Disc detractors believe that the 50 GB disc is unlikely to ever be cost effective, while Blu-ray Disc proponents expect BD media manufacturing costs to approach those of HD DVD, once production volume has ramped. The Blu-ray Disc version of the Adam Sandler movie Click was released on October 10, 2006 as the first ever dual-layer release. Sony's goal is to use 50 GB dual-layer discs to store up to nine hours of HD video content. Alternatively, studios releasing movies on Blu-ray Disc can choose to use VC-1 or H.264/AVC instead of MPEG-2 as an alternative way to put four hours of high-definition content on a (single layer) BD.
In terms of audio/video compression, Blu-ray Disc and HD DVD are similar on the surface: both support MPEG-2, VC-1, and H.264 for video compression, and Dolby Digital (AC-3), PCM, and DTS for audio compression. The first generation of Blu-ray Disc movies released used MPEG-2 (the standard currently used in DVDs, although encoded at a much higher video resolution and a much higher bit rate than those used on conventional DVDs), while initial HD DVDs releases used the more efficient VC-1 codec. Blu-ray Disc permit a higher maximum video bit rate, as well as potentially higher average bit rates (due to greater total disc capacity). In terms of audio, there are some differences. Blu-ray Disc allows conventional AC-3 audiotracks at 640 kbit/s, which is higher than DVD/HD DVD's maximum, 448 kbit/s. On the other hand, Dolby Digital Plus support is mandatory for standalone HD DVD players at a maximum of 3 Mbit/s, while optional for BD players and support upto a higher bitrate of 4.736 Mbit/s .
Both HD DVD and Blu-ray Disc support the 24p (traditional movie) frame rate, but technical implementations of this mode are different among the two formats. Blu-ray Disc supports 24p with its native timing, while HD DVD uses 30p timing for 24p (replacing missing frames with "repeat field flags").  There is no impact on picture resolution as a result of this, although repeated frames have been known to introduce subtle motion artifacts, especially in moving camera shots.
On November 29, 2004 four Hollywood studios (New Line Cinema, Paramount Pictures, Universal Studios and Warner Bros.) announced non-exclusive agreements to support HD DVD. Since that time, Paramount and Warner have chosen to release titles in both Blu-ray Disc and HD DVD, while Universal has since announced exclusive support for HD DVD.