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Old January 30th, 2008, 01:34 AM   #46
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The article states, "Should HD DVD lose the format war, Microsoft will have to start using Blu-ray Disc on the Xbox 360 in order to allow users to play high definition video games." This is plainly incorrect. XBox 360 does not need an HD-DVD or Blu-ray drive to deliver HD gaming.

Furthermore, Microsoft already offers a substantial selection of HD movie & TV content downloads via XBox Live. If anything, this sort of online delivery of HD material may trump both Blu-ray and HD-DVD.
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Old January 30th, 2008, 01:52 AM   #47
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Originally Posted by Jim Boda View Post
Sony is huge. They basically were able to subsidize the HD war w/ a huge 1.2 billion dollar loss over the past two years with their game machine. ( http://www.gamegrep.com/industry_new...tware_numbers/ )

Sony is giving it away..."...was primarily due to the loss arising from the strategic pricing of PS3 at points lower than its production cost ."
W/the exception of the Nintendo Wii, all game consoles sell for a loss at launch and may break even or turn a profit towards the end of it's life cycle. Accessories and games are where the profit lies. Microsoft has lost around 6 billion dollars so far between the Xbox and Xbox 360. The estimated repair costs for all the faulty 360's is over a billion dollars alone. Microsoft is not afraid to hemorrhage cash to get a foot hold in a market place it deems vital.


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Old January 30th, 2008, 01:59 AM   #48
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Originally Posted by C.S. Michael View Post
If anything, this sort of online delivery of HD material may trump both Blu-ray and HD-DVD.
Maybe someday, but DVDs currently trump downloads by a HUGE margin. This will only change when there is a fundamental technological advancement, new business model or social development. We already have the bandwidth to download SD. There are companies that currently provide the service. Tens of millions of people have broadband and are proficient enough with a computer to use it for downloads. There are boxes like VuDu and AppleTV as well as Media Center PCs that enable movie downloads, subscriptions and rentals that can be viewed on the television.

So, three questions:

- Why don't electronic downloads/subscriptions/rentals trump DVD sales/Netflix/rentals today?

- What is preventing downloads from winning today?

- What change on the horizon will alter the balance?

(C.S. I don't mean to pick on you. Many people predict that downloads are the future. The questions above are open to anybody. If there is a sea change on the horizon, I'd like to know. I'm open to the notion that things will change...)
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Old January 30th, 2008, 02:44 AM   #49
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Originally Posted by Jon Fairhurst View Post
Maybe someday, but DVDs currently trump downloads by a HUGE margin. This will only change when there is a fundamental technological advancement, new business model or social development. We already have the bandwidth to download SD. There are companies that currently provide the service. Tens of millions of people have broadband and are proficient enough with a computer to use it for downloads. There are boxes like VuDu and AppleTV as well as Media Center PCs that enable movie downloads, subscriptions and rentals that can be viewed on the television.

So, three questions:

- Why don't electronic downloads/subscriptions/rentals trump DVD sales/Netflix/rentals today?

- What is preventing downloads from winning today?

- What change on the horizon will alter the balance?

(C.S. I don't mean to pick on you. Many people predict that downloads are the future. The questions above are open to anybody. If there is a sea change on the horizon, I'd like to know. I'm open to the notion that things will change...)
I think the major hurdles are it's not convenient enough yet, the perceived value isn't there, and the void that iTunes and the iPod filled in the music world doesn't exist (or exists on a much smaller scale) in the video world. For example, 10,000 songs in your pocket sounds useful, but 10,000 movies in your pocket sounds pointless.

Video-on-demand has been "the next big thing" for like 15 years now but for one reason or another it has never caught on like the industry thought it would.


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Old January 30th, 2008, 08:14 AM   #50
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Originally Posted by Jon Fairhurst View Post
Maybe someday, but DVDs currently trump downloads by a HUGE margin. This will only change when there is a fundamental technological advancement, new business model or social development. We already have the bandwidth to download SD. There are companies that currently provide the service. Tens of millions of people have broadband and are proficient enough with a computer to use it for downloads. There are boxes like VuDu and AppleTV as well as Media Center PCs that enable movie downloads, subscriptions and rentals that can be viewed on the television.

So, three questions:

- Why don't electronic downloads/subscriptions/rentals trump DVD sales/Netflix/rentals today?
It's too early.

1- The infrastructure isn't there.

a) Apple, et. al, still are feeling out/experimenting on the formula, etc to make this so.
b) the Net infrastructure is not ready for the bandwidth. And it does not help when in the USA, those who are supposed to provide it are lagging compared to other other countries.
c) this lag also brings with it higher cost, compared to other countries.

2- Unclear formation of consumer perception or concept of video viewing. Maybe the next generation will have this mind set in the future, but for now, it has not yet gelled for many. Many still psychologically feel that there is still a big difference in having a physical disc to "own" vs to merely stream it. It's like collecting stamps or rocks. Without that disc or media, there is a feeling

3- Lack of infrastructure again. If in time the streaming model should dominate, it won't happen if most homes are automatically wired (or wirelessly "wired") and can steream videos on demand, like opening tap water. If the consumer has to open a PC, log in, etc. This delay of gratification is bad for acceptance in the new "format."

4 - The content providers know how valuable they are. But they are not yet certain or unclear as to this new model. Hence, they would parlay the disc medium first, and see how the other guys are going to sell their contents in their own way.

5. To totally go via the Net for video, would miss out existing revenues. In the 3rd world and in other places, not everybody is wired. Discs will provide that revenue stream for these content providers. Also, it is still cheaper to buy
a player and the disc than for an entire country or state to wire their locality with the bandwidth required for streaming video.

6. The standards for streaming is still being contested. It may seem mpeg4 is it, or some other codec is it, but Apple for one would really like the entire world to use their own :-) And how does AVCHD going to play in this whole scheme? Would the other players just roll over and die without a fight? What about MS? .wmv may be weak, but hey, they wouldn't just take this without a say. Would it be possible to have a file format that can be compressed in higher bandwidth be streamable and can be smaller when sent to the web? And how will this be resolved?

Quote:
Originally Posted by Jon Fairhurst View Post
- What is preventing downloads from winning today?
Same answer as the previous.

Quote:
Originally Posted by Jon Fairhurst View Post
- What change on the horizon will alter the balance?

When the stake holders can address the points I have raised that's how its going to be played out.

Quote:
Originally Posted by Jon Fairhurst View Post
(C.S. I don't mean to pick on you. Many people predict that downloads are the future. The questions above are open to anybody. If there is a sea change on the horizon, I'd like to know. I'm open to the notion that things will change...)
Downloads can be the future. And it might be. But if the points I have raised aren't addressed, no matter how great the new machines are, as long as there is no affordable high bandwidth Internet connection in Delhi, then discs will still dominate.

Or the can co-exist. There is still a sociological/psychological reason for people to be able to touch or "own" something they can see and touch physically. Discs do that.

Or then maybe, even discs will be passe and are unwittingly a transition medium themselves. If the price of SSDs or CFs go down drastically, these SD/CFs are better mediums. They are small, can be made faster in time, can be scaled in storage size without having buy a new drive to read the new higher capacity discs. No alignment or calibration problems, easier to archive, etc. etc.
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Old January 31st, 2008, 05:56 AM   #51
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Mel,

Thank you very much for such an intelligent and articulate explanation as to why dowloading/streaming is a looooong way from being a practical alternative to physical discs. People just have no concept of how much bandwidth is necessary to download a two-hour movie in 1080p with TrueHD/DTS-HD MA/uncompressed 5.1 PCM audio. If we all started trying to do that at once, the Internet would come to a screeching halt! The current infrastructure simply couldn't handle it and the major telecoms are upgrading their equipment and cabling at a painful snail's pace. And I'm only referring to the U.S., much less the rest of the world!

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Old January 31st, 2008, 12:28 PM   #52
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HD DVD player sales up again. From IMDb.com:

"HD DVD Sales Rebound
Apparently reassured by statements from Universal and Paramount/DreamWorks that they have no plans to follow the lead of Warner Bros. in abandoning Toshiba's HD DVD high-definition video system, sales of HD DVD players rebounded during the week ended Jan. 19. As reported by the Video Business website, HD DVD players accounted for 33 percent of all high-definition units sold during the week, up from just 7 percent a week earlier. However, the same week saw price cuts of $100-$200 dollars for the HD DVD players, which may have contributed to the rise in sales. Nevertheless, tech research firm Gartner predicted that Toshiba's price cutting "may prolong HD DVD's life a little, but the limited line-up of film titles will inflict fatal damage on the format." Paramount and Universal account for only 30 percent of all HD movies sold."

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Old January 31st, 2008, 12:45 PM   #53
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I agree that consumers like owning tangible objects, and discs fit the bill. And that there are bandwidth challenges ahead.

That said, consumers have embraced rent-by-mail services like Netflix in which there is no tangible ownership of any disc. Itís not hard to envision a movie download service whereby consumers pay a flat fee ($19.95 or whatever) in exchange for HD movie downloads. There would be usage restrictions (ie. maybe a cap on the number of new releases per month, movies expire 48 hours after download, etc.), but it would essentially provide all the benefits of Netflix without the snailmail.

Microsoft already has a foundation in place with Xbox Live, which has over 10 million paying members (by comparison, Netflix has 7.5 million members). XBox Live now offers HD (720p) TV & movie downloads, but they are charging on an ala carte basis. IMHO they (along with Apple / iTunes) need to tweak the business model to improve the value proposition for consumers. I think a flat monthly fee would be more attractive.

Note that Netflix is now developing its own set-top box with LG. This will compete with AppleTV, Xbox 360, and Vudu. Itís said that Netflix subscribers will pay nothing extra for this service (other than the cost of the hardware). So if you are a Netflix subscriber, you will be able to simply download movies straight to your TV. http://blog.wired.com/business/2008/...x-partner.html

The revolution won't happen overnight, but in the States it may not be so far away. This is something that will play out over the next several years. If and when download services offer better value than discs, consumers will likely follow.
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Old January 31st, 2008, 12:53 PM   #54
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The Vudu device (www.vudu.com) is one of the coolest gadgets I've used in a while. I really enjoy downloading movies and watching them. A lot of the popular films have a couple of minutes cached in the 250 GB drive, so when I purchase or rent one, it usually can be viewed at once.

My Internet connection is DSL at 6 mbps, but I average around 4. It's perfect. The Bourne trilogy in HD looks fantastic.

I still love DVDs, but when studios start to release movies with special features for Vudu, Apple TV, etc., I'll probably drop DVD purchases like I dropped CD buys.

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Old January 31st, 2008, 01:03 PM   #55
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People just have no concept of how much bandwidth is necessary to download a two-hour movie in 1080p with TrueHD/DTS-HD MA/uncompressed 5.1 PCM audio.
You don't need "HiDef DVD" quality though you just need "good enough" for it to be successful in the main stream. Of course there will be people who want better quality and those people will still buy the discs just like people who want better audio quality still buy CD as opposed to downloading from the iTMS or Amazon.

I don't think physical media will disappear for a long, long time, but it's market share will drop significantly as it co-exists w/downloadable content.


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Old January 31st, 2008, 02:11 PM   #56
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I don't think physical media will disappear for a long, long time, but it's market share will drop significantly as it co-exists w/downloadable content.
Many people make the market share comment. With the market share ratio at about 99 to 1, of course the market share of packaged media will fall. The questions are, how far? and how soon?

Wal-Mart sells a few discs. :) They started a download service a year ago with HP doing the back end. HP backed out of the deal, forcing Wal-Mart to make a do-over. Clearly, it's not much of a business today. And I don't think Wal-Mart believes it to be huge in the near term. My guess is that they're just hedging their bets. They have enough clout with the studios, and the development/operational costs are so small for them that it's cheap insurance.
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Old January 31st, 2008, 03:43 PM   #57
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I think this war will be moot once flash memory becomes even more affordable. I don't think it's too far off, you will be able to own a small(think Ipod) device or 2 with a mini HDMI-type port that you can just take down to Walmart(or online store) and upload movies to for 10 or 20 bucks each. All the copy protection would be on the device in the form of encryption, I mean how far off are 100+ gig flash devices and once they are available on the cheap it will eliminate the player entirely. It will do to the DVD market what the Ipod has done to the CD. Sure the device may cost more than the CD, but since it's replacing the player as well it won't matter. If the storage was in the terabyte range then a whole library of movies could be stored on it.


This will be a good thing, imagine how many miles high all the CD/DVD's ever produced would stack up(probably reach the moon). Might see it in 5 years maybe, give or take, the only thing that could hold it back is a stubborn industry unwilling to give up discs and the infrastructure they created to support them.
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Old January 31st, 2008, 03:57 PM   #58
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The Vudu has an HDMI port, which is great. But until the studios allow special features with downloadable movies, I think downloadable rentals are going to be king for a while. It's nice not to have to go to the video store or wait for Netflix to show up.

But I'll say it again, watching the Bourne trilogy in HD on the Vudu is very similar to watching the HD DVD. I am impressed!

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Old February 1st, 2008, 02:43 AM   #59
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Of course there will be people who want better quality and those people will still buy the discs just like people who want better audio quality still buy CD as opposed to downloading from the iTMS or Amazon.-A
Obviously, I fall into that category! I didn't buy a 70" 1080p TV and a 7.1 speaker sound system just to watch "good enough." And I like having that library of discs lining the back wall of my home theater. Besides, as I mentioned earlier in this thread, I tend to watch certain movies and TV shows over and over again to study how the directors, editors, DP's, and sound engineers did what they did. Downloading would likely never be an acceptable solution for me unless I could burn the files to disc. DRM would likely make that impractical, if not impossible.

I do understand the concept of "good enough" though, when dealing with the masses. I'm a network consultant specializing in Microsoft solutions. I readily admit that Microsoft didn't get to where they are by being the best. They beat their competitors by being just "good enough" at a competitive price point, with a pretty talented marketing division. But that's a whole other discussion.
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Old February 1st, 2008, 12:25 PM   #60
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Personally, I like being able to take my disc to a friend's house for biweekly movie nights. Or to take a disc to my parents' or in-laws' house. Or anywhere else. Until something portable comes along that's universal (e.g. DVDs) and easy to transport (e.g., DVDs), and is durable/permanent (e.g., DVDs) then the disc is not gonna go away. We use Netflix for the "we'll see that on DVD" movies, and we buy the DVDs for movies we really like and for other stuff that doesn't come out in the theatre.

Relate this to eBooks & the paperless office, with respect to what consumers want. People like to be able to hold things, see them, feel them. The paperless office has generated more paper than the non-paperless office used to. When I get an eBook, I print it out. Can't really take my computer to the...umm, well, you get the idea. Driving down the road, I (or my wife) can watch a movie (portable DVD player) or read a book (on paper). Or listen to one of 10,000 MP3s (iPod). I see tons of cars everyday with the DVD players making the kids happy (I have a fairly long commute). Until whatever technology comes along is as easy to use as a disc and as portable as a disc and as durable as a disc, most people are going to stay with the disc.

Personally, I hate watching movies on my computer. My couch is SOOOO much more comfortable, and my TV quite a bit bigger than my computer monitors....

Just my $.02. I like discs...
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