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Movie Studios Ask FCC for Help in Making Riskless Profits
Written by Video Savant   
Tuesday, 10 June 2008

First the DVR-bashing MPAA came for our pay-per-view (Golden Goose Genocide: Hollywood Guns for DVRed PPV), and not too many people noticed. Now those troglodytes at the MPAA are looking to block the DVRing of recently released movies appearing on subscription HDTV services.

Are we paying attention now?

ars technica reports:

At the request of theatrical film makers, the Federal Communications Commission on Friday quietly launched a proceeding on whether to let video program distributors remotely block consumers from recording recently released movies on their DVRs. The technology that does this is called Selectable Output Control (SOC), but the FCC restricts its use. The Motion Picture Association of America (MPAA) wants a waiver on that restriction in the case of high-definition movies broadcast prior to their release as DVDs.

This is all about the various "release windows," where Hollywood films start their commercial sojourn in the local cineplex, and eventually work their way to DVD, cable/satellite and network TV. The MPAA says its request for the do-not-record exemption is being made in order that it can provide these movies to satellite and cable sooner, without the risk that DVR usage will eat away at subsequent DVD, Blu-ray or download sales. Once those other releases take place, the MPAA says the do-not-record blocks would be lifted.

Uh huh.

Does anyone really believe this nonsense? If the movie studios are interested in releasing their products to the cable and satellite distribution chain earlier, it's not about altruism -- it's because they believe that doing so means there could be some extra money to be made. But clearly, the Hollywood bean-counters have done their risk analysis and they've determined that while there's definitely money laying unclaimed on the cable/satellite table, there's a possibility that taking this cash could mean less money from DVD/Blu-ray/download sales. So, blocking the use of DVRs with these early releases provides some protection.

A decade or two ago, Hollywood running to Congress asking for protection from itself would have been laughable. Today, it's business as usual -- and it's pathetic.

Michael Masnick has more on this story over at Techdirt. Check it out.

 
For Once and For All, Cable "a la Carte" is a Bad Idea
Written by Video Savant   
Wednesday, 04 June 2008

There are more than enough bad ideas enough to go around, But then, there are bad ideas that originate within our federal government, and while that means they tend to be fewer in number, they also tend not to die until some determined bureaucrat, legislator or judge figures out a way to foist them onto the American public.

So far, the FCC campaign for "a la carte" cable pricing, spearheaded by current FCC head Kevin Martin, is one of those bad ideas that has not yet morphed into the law of the land. But that doesn't keep Martin from coming back again and again with new twists on how to make it happen.

Martin's latest run against the ticking clock that is his term as FCC chairman would add a new wrinkle to a la carte pricing, in which cable companies would be allowed to drop from their expanded basic packages any channel where the programming provider required payment of more than 75 cents per month per subscriber. It appears that the thinking is that would result in lower prices for the most popular channels, and bring overall subscription prices down, which would presumably make it easier for cable companies to offer "a la carte" pricing.

While it's near enough impossible to argue against the desirability of lower cable TV prices, government intervention is anything but a sure-fire way of getting there. After all, the FCC has been responsible for regulating the cable industry for more than 20 years, and prices have consistently and impressively outpaced the Consumer Price Index during that reign. For example, the Bureau of Labor Statistics reports that cable TV prices have risen 77 percent since 1996, roughly twice the consumer inflation rate.

The problem with government and regulation is that it often starts with a flawed understanding of how markets and competition function, which leads to unintended consequences that typically make things worse, not better. There's plenty of evidence that this is true for the FCC and cable pricing.

Tim Lee, at the Techdirt site, weighs in on this and explains why "a la carte" won't result in lower prices:

People imagine that an a la carte mandate would mean that if they're currently paying $50 per month for 50 channels, then they should be able to pay $1 per month for one channel. But that doesn't make any sense. Switching a given customer from 50 channels to 1 channel doesn't reduce costs (the other 49 channels would presumably still be produced for other viewers), so why should the customer expect a lower bill? If anything a switch to a la carte actually makes things more expensive because in some cases cable companies have to install new equipment and set up a more complicated ordering and billing system to keep track of who had signed up for which channels. In reality, what would happen is that the cost of each channel would go up a lot. Instead of $1/channel, cable companies might charge something like $8/channel, with each customer choosing 6 channels on average. The result would be that most people would pay about the same for a lot fewer channels.

It's a mistake to think of bundling as being "forced" to pay for channels we don't want. After all, non-sports fans don't get outraged about the fact that they're "forced" to take the sports section with their morning paper. The right way to think about it is that you're paying for the parts of the bundle that interest you, and the rest of the paper is a freebie that doesn't cost you anything extra. It would be silly to demand that newspapers price each section of their paper separately and let you do without the sections you don't want. It's equally silly to demand that cable companies not show you channels you're not interested in watching, since those aren't costing you anything either.

 
Is Blu-ray a Winner, Or a Stumbling, Bumbling Survivor?
Written by Video Savant   
Friday, 25 April 2008

There have been a number of recent research studies examining the current state of Sony's Blu-ray next-generation packaged media format, including one from Strategy Analytics a few weeks ago that was dissected here shortly after its release -- Is 29 Million Blu-ray Players by End-2008 Good News?

The key disconnect I found in the SA study is its forecast that 80% of all Blu-ray hardware sales this year are expected to be in the form of either PS3s or BD drives installed in desktop and laptop computers. Therefore, it was difficult to understand the basis for its conclusion that standalone Blu-ray players would suddenly become the leading contributor to BD sales beginning in 2009. This is sort of like a car that goes from 0 to 60 miles per hour in just 10 seconds, suddenly improving to 0-60 mph in less than 5 seconds, with the turning of calendar pages the only explanation offered for a massive change in performance.

Now, a new study by ABI Research suggests that PlayStation 3 will continue to be the main force for Blu-ray sales for another 5 years. As reported by Engadget HD:

Blu-ray still has a lot of convincing to do before ABI believes it's the future, mostly because of upconverting DVD players. According to the analyst's figures, while 35% of DVD players sold today (that low?) upconvert, 60% will by 2013 (again, that low?). The state of Blu-ray hardware going forward isn't to their liking either, with principal analyst Steve Wilson stating "studios better hope that people are playing movies on their PlayStations. Otherwise there's very little installed base." With PS3s accounting for 85% of Blu-ray players in 2008, ABI doesn't see things evening out until 2013, with high prices for dedicated players keeping sales volume lower than studios would like.

I'll concede that these sorts of research reports, in general, are notorious for getting things wrong, usually as a result of focusing on the predetermined needs and desires of the company underwriting or promoting the study, or by the researcher themselves, who are highly motivated to produce the sort of findings that generate widespread business and general news coverage. It's certainly possible that both Strategy Analytics and ABI Research have got it wrong, and that standalone Blu-ray sales are quietly gaining momentum and share against both PS3 consoles and upconverting, standard-definition DVD players.

But that's now how I'd bet things are actually going. And I think the key problem here is that after beating back the HD DVD challenge, Sony has taken a complacent "now we just build it, and they will come" approach to Blu-ray marketing. Maybe I'm missing the forest for all the trees, but about the only time I hear any mass market promotion of Blu-ray is the "...and now available in Blu-ray Disc" tagline added to TV advertisements for the weekly batch of new DVD releases.

And this seems especially strange to me, considering that Blu-ray promotion represents one of those made-in-heaven marketing opportunities, where promotion of one product (Blu-ray) provides positive and complementary promotion for a whole slew of other products, including Sony HDTVs, Sony A/V receivers, Tri-Star and Columbia Picture properties, and PlayStation hardware and software, among others.

But then, the lack of effort by Sony to grow consumer awareness and demand for Blu-ray is pretty consistent with how the entire rollout of both Blu-ray and HD DVD was conducted. There was then -- and remains now -- very little focus on consumers. The format battle was ultimately fought and won almost entirely behind the scenes, with corporate politicking and financial enticements to studios being the blunt weapons of choice. Consumer reaction to HD DVD and Blu-ray was little more than a sideshow.

While there's no question that this strategy worked admirably well for Sony in eliminating the HD DVD challenge, it will not translate to a victory in the consumer marketplace. It's hard to understand how Sony could be dropping the ball so badly.

It seems that something has gone terribly wrong in the HDNA.

 
Equipment Maker Says Satellite Will Offer 1080p HD Content
Written by Video Savant   
Monday, 14 April 2008

If there's anything I've learned from more than 25 years of experience with broadcast (one-way) networks, you never have enough bandwidth to deliver all of the information you'd like to provide or that your customers expect. And while it's true that satellite operators such as DirecTV and DISH currently appear better positioned than cable in the bandwidth capacity stakes, I'd need more than rose-colored glasses to see that as anything other than a short-term aberration against the historical trend.

That's why I'm a bit skeptical about suggestions that satellite TV operators will begin be offering 1080p programming within the next 3 years. But that's what Eric Cooney, CEO of broadcast equipment manufacturer Tandberg, sees when he looks in his crystal ball, as reported by TV Predictions:

Cooney, whose company provides picture compression services, says satcasters are most likely to introduce 1080p because they have more system space than the cable operators.

"Today’s broadcasters have concentrated on 1080i or 720p and this will change. The Holy Grail is to shift to 1080p at 50/60 Hertz. Our current partners are asking us for this additional functionality in order to deliver a superb customer experience and operational advantage," he told Rapid TV News.

Make no mistake, I'm ready for DirecTV to start sending me 1080p programming. I hate interlaced video, regardless of the resolution, and I truly believe the biggest mistake made in the creation of the US ATSC system was to burden it with the tortured legacy of interlaced video formats. I also recognize the potential the competitive advantage here -- just look at the relatively new and growing focus on image quality that both satellite and cable competitors are making central to their advertising messages.

Still, I think this story is more about an equipment manufacturer talking up a market for future sales than meeting any near-term need by its clients. But this is one time I'd truly enjoy being proven wrong.

 
Wal-Mart, Amazon Offer Refunds to HD DVD Owners
Written by Video Savant   
Wednesday, 09 April 2008

Wal-Mart and Amazon have belatedly joined Circuit City and Best Buy in offering "make nice" refunds to their customers who purchased HD DVD players. Wal-Mart is offering a full refund but requires the return of the HD DVD player, while Amazon is providing just a $50 refund, but allows its customers to keep the players.

TV Predictions reports on the Wal-Mart refund plan:

Wal-Mart says HD DVD buyers need only to provide the player and their original receipt to get the refund; it's not necessary to return the box in which it came. The full refund offer is good until April 30.

And Gizmodo details the Amazon program:

Amazon is also doling out a $50 credit to anyone who bought Toshiba's folly after Feb. 23, 2008. Naturally, they're encouraging you to use it on a shiny new Blu-ray player, but you could use it to take advantage of their HD DVD fire sale. Unfortunately, they're not doing trade-ins, so this is all you're gonna get.

Note: Gizmodo is incorrectly reporting that the refund is available only on purchases that took place after Feb 23 of this year. In fact, Amazon is limiting the refund offer to purchases made before Feb 23, the day Toshiba announced that it was withdrawing support for the HD DVD format.

 
Pioneer Europe Adds LCD Panels, LCoS FP to Kuro Family
Written by Video Savant   
Tuesday, 08 April 2008

Gizmodo is reporting that Pioneer Europe has announced, as expected, the addition of a range of LCD flat panels to its popular Kuro brand products:

Pigs officially fly today: Plasma king Pioneer has announced their LCD lineup for Europe, and yep, they're getting the coveted Kuro distinction (equivalent to a "best TV on earth" badge) as is the already released KRF-9000FD LCOS projector. The 1080p LCD sets are on the smaller side (leaving big boy TVs to plasma) in 32, 37 and 46-inch sizes, with a 100hz frame mode and a "specially tuned" picture quality. But do they live up to Kuro?

The addition of LCD panels to Pioneer's product line-up has pretty much been a foregone conclusion ever since Sharp purchased roughly a 20% share of struggling Pioneer in 2007. But there's been much speculation about whether the Pioneer LCDs would fall under the Kuro brand umbrella -- and with good reason. Kuro is the Japanese word for black, and Pioneer's recent Kuro plasmas have set the standard for black level performance; on the other hand, middling black level is a long-standing Achilles Heel for LCD displays.

The more interesting bit of news coming from the Pioneer Europe press release is that the company is also adding an LCoS-based 1080p front projector to the Kuro family:

Developed specifically for cinephiles with a dedicated home cinema room, the KURO projector is configured for screen sizes starting from 60 inches. Aside from displaying signature KURO style cosmetics, it supports advanced calibration and is in line with the KURO benchmark of deep black levels and rich colours, resulting in the unmistakable look of film. It incorporates LCOS 1080p technology, producing the highest native contrast ratio. Based on 3 x 0.7 inch D-ILA, it boasts a wide lens shift capacity and dual HDMI 1.3 support.

The addition of the LCoS projector seems a bit of a non-sequiter in that this is neither a Pioneer nor Sharp area of technology expertise. Reading between the lines, it appears that the Pioneer projector is based on the well-regarded JVC line of "D-ILA" projectors. LCoS is a non-proprietary technology, but the two leading companies pushing LCoS products are Sony and JVC. Sony has branded its LCoS products "SXRD," while JVC has long used the "D-ILA" moniker (Digital Direct Drive Image Light Amplifier).

Gizmodo indicates that there's no definitive word on whether other Pioneer regions will be following the European lead in bringing LCD and LCoS Kuro products to market.

 
Bias Alert: Lights Out for Philips HDTV Sales in US Market
Written by Video Savant   
Tuesday, 08 April 2008

Gizmodo is reporting that the Dutch conglomerate Philips has taken the decision to exit the US television market:

If the rampant out- and cross-sourcing between LCD and plasma TV makers didn't tell you that it's a nasty and brutish time in the TV biz, this should: Philips is officially pulling out of the US market, and is licensing its brand name for TVs over to Funai -- best known for supplying Wal-Mart's Black Friday TVs and DVD players.

This might also tell you that Philips makes pretty crappy televisions.

This also feels like poetic payback for Philips foisting its Ambilight stupidity on US consumers, along with the insipid TV advertisements that it produced to promote its flat-panel displays with that so-called technology built in. While neutral bias lighting of certain types of televisions can be very beneficial, Philips' real-time, color-shifting Ambilight was an imaging science atrocity of the highest order.

Hopefully, Funai won't repeat Philips' mistakes by burdening its products and customers with Ambilight. But I'm not holding my breath...

For bias lighting done right, check out the Ideal-Lume line of products.

 
What's New (is Old): Mitsubishi Unveils Laser (DLP) TV
Written by Video Savant   
Tuesday, 08 April 2008

Over at the Robb Report web site, Geoffrey Morrison has an excellent write-up on Mitsubishi's introduction of its much ballyhooed Laser TV technology. What surprised me (and definitely diluted the "cool factor") is that Laser TV is just a rear-projection DLP with a seemingly more futuristic light source:

A regular DLP based rear-projection TV has a lamp (think light bulb) that creates the light. This light is focused down and shown through a rotating color filter wheel. Single chip DLP systems, like what is found in RPTVs, create sequential color. That is to say, at any given moment, only one color is on the screen. Because these colors change rapidly, your eye and brain blur them together so you see a full color image...

Using lasers as the light source simplifies this process. Three lasers, red, green, and blue, are expanded to fill the DMD chip. The color is still sequential, but the lasers can turn on and off faster than any color wheel, so the "rainbow" effect should be unnoticeable. Removing many of the lenses in the light path makes the light engine less expensive to produce, as well as more efficient. A less powerful light source can be used to create the same amount of brightness.

It's interesting to see the significant commitment Mitsubishi is making to Laser TV, especially when the tide seems to be definitively moving away from rear-projection form factors to flat panels. Still, as Morrison notes, there is a definite bang-for-buck consumer benefit for rear-projection HDTVs, and perhaps with Sony, Hitachi and others exiting this market segment this will turn out to be good, near-term business for Mitsubishi.

But with Laser TV sales roughly 6 months off into the future, it's likely that the anti-rear-projection mindset will spread to more HDTV buyers. In the end, it may be that Laser TV may have to settle for a niche in the front projection market.

But the best part of Morrison's article is his concise and convincing explanation of how Mitsubishi's "Twice the Color" marketing blather is not just hype, but hype that actually torpedoes picture quality:

Most modern displays are capable of reproducing all the colors available in the HDTV signal. Many are designed to reproduce more than that, creating "oversaturated" colors. In a store, these displays seem to have lots of color, and often get purchased over displays with more accurate colors. What happens is green grass is really green. Red apples are almost candy red. Again, perhaps not a big deal for the average consumer, but for those looking for a display that just shows what is in the original material ("as the director intended") this oversaturation of color is an artifact.

The problem, in effect, is in the signal. As good as HDTV is, it doesn't have the ability to encode all the colors that the human eye can see. New technologies, such as xvYCC aim to expand this limited color palette, but these are a long way away (if ever). This is because every step in the chain, from the transfer, to the encoding, to the decoding, to the transmission, to the display, all need to be xvYCC in order for it to work. Right now the only steps that are xvYCC are the display and the Blu-ray player (if you're lucky). So it's a useless feature at the moment.

Bravo, Mr. Morrison.

 
Is 29 Million Blu-ray Players by End-2008 Good News?
Written by Video Savant   
Wednesday, 26 March 2008

The web is abuzz today with news of a Strategy Analytics research report that predicts there will be more than 29 million Blu-ray players in consumer hands by the end of this year.

That sounds like it should be good news for anyone with a stake in the success of the Blu-ray format. But the fact is, the very report that paints such a rosy future for Blu-ray raises some serious concerns about that seemingly guaranteed success. I'll explain below why I think the Blu-ray glass is half empty, but first here's the key predictions from the Business Wire press release:

The Blu-ray Disc victory in its recent format war with HD-DVD will propel this technology into 29.4 million homes worldwide by the end of 2008, according to the latest research published by the Strategy Analytics Connected Home Devices service...

...[The] report predicts that global sales of Blu-ray devices will reach 18.8 million units in 2008, including 4 million stand-alone players, 13 million consoles and nearly 2 million PCs. By 2012, annual sales of all BD devices will reach 57.4 million units. The largest market will be in Europe, with 26.4 million, followed by the US (22.6 million) and Japan (8.4 million).

The elephant in the room here is the lopsided contribution that PlayStation3 game consoles are expected to continue to make to overall Blu-ray sales in 2008 -- approximately 7 out of every 10 new "Blu-ray players" to be sold in 2008 year are expected to be disguised as PlayStation 3 gaming consoles.

Make no mistake -- I really admire the PS3 "Trojan Horse" strategy and its critical role in forcing Toshiba and HD DVD off the battlefield. But that strategy doesn't make the cut as an end game. After all, the real value of the mythical Trojan Horse wasn't the deadly firepower of those hidden inside -- it was their ability to quietly open the fortress gates from within to allow entry to a larger invading force.

Taking this Illiad-inspired metaphor to the next step, you might say that Sony is having a really tough time on the enlistment front.

But just as unsettling is the idea that PCs with BD drives, a relatively new product category, will account for 2 million sales units, while sales of traditional, single-purpose dics players with Blu-ray technology will amount to a measly 4 million sales units.

When you add it all up, nearly 80% of 2008 "Blu-ray" sales are actually products that are first and foremost something other than a device designed to watch a Blu-ray movie. Strategy Analytics actually predicts that standalone Blu-ray players will be the main contributor for Blu-ray sales from 2009 onward, but no further details are available in the press release and the full text of the research report is only available by subscription.

It hard to see what's going to propel this fundamental change in fortunes for Blu-ray, seemingly overnight. Hopefully Strategy Analytics or Sony have the magic formula in hand.

 
Patent Filing Hints at Addition of DVR Features for Apple TV
Written by Video Savant   
Monday, 24 March 2008

AppleInsider recently reported on a patent filing by Apple Inc. that indicates the company may be planning to add DVR capabilities to its slow-to-gain-traction Apple TV product:

A series of Apple patent filings published this week reveal a version of the Apple TV media device capable of browsing and recording live television programming in addition to serving up pre-aired content from the company's iTunes Store.

Originally filed back in October of 2006, the filings clearly show considerable work on the part of the electronics maker to create an alternative to products like the TiVo digital video recorder (DVR), complete with a searchable on-screen guide and configurable touch-based remote control device that would serve as a portable program guide.

While I don't own any type of Apple product, I believe that a DVR product infused with Apple's world-class design and usability expertise could be an interesting and welcome addition to the DVR marketplace. TiVo seems to get all the media and online praise when it comes to DVRs, but I always felt that TiVo sacrificed utility and power in favor of ease of use. In effect, TiVo panders to the technophobic and gives short shrift to more savvy consumers.

So, it would be interesting to see how Apple might tilt the balance toward the DVR power user, without leaving the casual user in the dust -- it seems to me that this is what Apple does best.

But I suspect that the chances of Apple actually delivering a mainstream DVR product are close to zero. The best DVRs are joined at the hip to a content delivery system, as evidenced by the fact that TiVo's brightest moments -- both financially and from a product realization standpoint -- occurred during its partnership with DirecTV. It's little wonder that TiVo has struggled mightily since its relationship with DirecTV headed south.

Apart from the iPhone, Apple has no history of playing nice with others, and even a souped-up Apple TV with Apple-inspired DVR wizardry would be a non-starter if all it does is record and play back over-the-air TV and iTunes store content.

Still, it's interesting to ponder the possibilities...and I highly recommend checking out the complete AppleInsider article for the user interface illustrations.

 
Blu-ray Named in ITC Patent Complaint by Columbia Prof
Written by Video Savant   
Friday, 21 March 2008

ZDNet is reporting that a Columbia University professor has filed a complaint with the US International Trade Commission, claiming that several companies and related products, including Sony's Blu-ray technology, are infringing a patent she controls:

The U.S. International Trade Commission will launch an investigation into Sony and about 30 other companies on possible patent infringements related to Blu-ray disc players and other products.

The commission said Thursday on its Web site that the products involved are short-wavelength light-emitting diodes and laser diodes used in such electronics as handheld mobile devices, traffic lights, and high-definition DVD players.

The move is based on a complaint filed in February by Gertrude Neumark Rothschild, a Columbia University professor emeritus who is seeking to block imports into the United States of a range of products that she said were infringing her patent.

At this point it's impossible to know whether this complaint has any merit, or whether this will actually cause practical problems for Sony and the other companies named in the complaint. But this news fits a general trend, where patents are brandished like weapons, with more and more companies threatened with legal action in the hope of a quick and hefty payout. Some companies have even begun to build patent portfolios with the primary goal of creating a deterrent against patent warfare by competitors.

As an aside, I highly recommend the excellent Techdirt web site for anyone who's interested in really understanding the purpose and importance of patents and copyrights for society, and how recent legal and legislative developments are seriously undermining those ideals.

March 24 Update:  Techdirt provides more background on this story, in particular a possible explanation of why this is a complaint filed via the US ITC, not a lawsuit.

 
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