Slow traction for Blu-Ray
Not much has changed since the HD-DVD format met its demise several months ago. Adoption continues to be slow. And not surprising, since players are still at $400+. They need to be at $200 or below (a milestone HD-DVD hardware had already reached). But according to Sony that won’t happen until the end of next year, at best. In the meantime, most U.S. consumers have at least one DVD player in their house, and many are fairly content with the quality. Sure, an upgrade would be nice, the picture looks great in the store, but not $400 nice. If you have that kind of money to burn on tech and you’re not a gamer, it will go towards iPods or iPhones first.
Sony is not exactly quaking in its boots. HD-DVD is no longer a threat, so Blu-Ray’s competition in the long run is digital distribution via set-top boxes. Right now, HD-quality digital distribution is not a big threat to the Blu-Ray format due to bandwidth constraints and lower margins for the studios on digital VOD rentals vs. higher margins on Blu-Ray discs. Perhaps the biggest threat to Blu-Ray is consumer indifference toward HD-quality content. That gives digital distribution stakeholders some breathing room.
So what’s the bottom line? Much to the dismay of technophiles and video quality purists, Standard Definition is a survivor and may continue to be on extended life support for some time. The extinction of the standard definition DVD is not in sight.
What Hollywood can learn from the music industry
Wired has a good commentary on the lessons Hollywood should learn from the music industry. The article points out the folly of the music industry’s strategy to fight piracy while not providing a suitable alternative for consumers. Their obsession with DRM and focus on lawsuits did little to stop piracy. Similarly, movie studios should take a cue and realize that DRM and release windows limit consumer choice. These restrictions may do more to encourage piracy than stop it.
There are a lot of reasons why Hollywood has been slow to open its doors to the digital world (legacy licensing agreements, the ubiquity of the DVD format, the Wal-Mart factor, to name a few). But consumers are paying big money for video-enabled devices, and they’re using them. A recent study suggests that 18% of Internet users regularly use portable devices to watch video. That’s a huge jump from the prior year (8%). Until now the threat of video piracy has been limited by the fact that a) most people don’t want to watch video on their computers and b) they have a difficult time transferring downloaded video to the living room where they really want to watch. The shift in video consumption toward personal devices could be a tipping point for video piracy. If content availability and DRM hurdles remain as constricting as they are today, piracy offers an attractive option for some. To quote the conclusion of the Wired article, “A tidal wave is just what digital delivery brings — a tsunami of content, illegal and otherwise… locks can make you feel safer, but they won’t keep you from drowning in a tidal wave.”
Blu-ray wins. Yawn.
Blu-ray has all but won with Warner’s recent abandonment of HD-DVD. Some are declaring this a victory for consumers, as it resolves the format war dispute. In the long run, maybe. In the short run, not so much. I just had to tell my dad to return the $199 HD-DVD player he just bought, and I went over his Blu-Ray options with him. He could buy Samsung’s poorly reviewed entry-level Blu-Ray for $330 (65% more than he paid for the HD-DVD player). Next least expensive option was to fork over $400 for a Playstation 3 (hint: my dad is not exactly the GTA IV type). All other options were more than $400. He’s going to wait it out. Most other consumers will too, until players fall to the sub-$200 level.
Settling on an HD format is a victory for consumers, but most of us aren’t celebrating just yet.
Comcast & Panasonic unveil portable DVR that’s ugly as sin
For all the talk of Comcast’s new open platform tru2way, the device they chose to lead with is not going to win many advocates. It’s a portable DVR player which you can take with you to catch up on your backlog of shows.
Problems:
1) Yuk. Ugly. Looks like something Tandy would have put out in 1986.
2) Too big.
3) How will shows get recorded while I’m on the road with my entire DVR?
4) Only 60GB in the hard drive? Whachoo talkin about Willis? Much smaller iPods come with double that capacity.
It would make a lot more sense to provide a decent, high-capacity HD DVR and USB-enable the thing, then allow people to use USB keys to integrate with a much more streamlined device (or just allow that device to sync with the DVR via USB). I’m thinking an iPod Touch on steroids for on-the-go.
Yorke to musicians: don’t let the labels rob you
David Byrne interviews Thom Yorke on the future of music in the latest Wired. Some interesting tidbits from the Radiohead front-man.
Byrne: Are you making money on the download of In Rainbows?
Yorke: In terms of digital income, we’ve made more money out of this record than out of all the other Radiohead albums put together, forever — in terms of anything on the Net. And that’s nuts. It’s partly due to the fact that EMI wasn’t giving us any money for digital sales.
Byrne: What advice do you have for bands that are just getting started?
Yorke: Well, first and foremost, you don’t sign a huge record contract that strips you of all your digital rights, so that when you do sell something on iTunes you get absolutely zero. That would be the first priority. If you’re an emerging artist, it must be frightening at the moment. Then again, I don’t see a downside at all to big record companies not having access to new artists, because they have no idea what to do with them now anyway.
As unsigned artists (both new undiscovered artists and recently liberated big acts) take Yorke’s advice to dis-intermediate the big labels, it will cause a sea change in the music industry’s value chain. The four major labels control most of the revenue in that business (90% by some measures). It’s theirs to lose…. and lose they will.
NIN remixes site does it right
Recently launched by Trent Reznor, Remix.nin.com is the best template I’ve seen of a fan-focused and fan-driven music experience. The music is available for download as original multitrack audio source files for people to download and remix at will. Thousands of versions have been produced by amateur musicians. As with any large collection of music, some tracks are better than others.
What the site excels at is allowing you to find, listen to, and subscribe to tracks that you actually like. The site is all Flash and has a lot of bells and whistles. To find tracks, you can score and sort remixes by 10 different mood scales (recognizable vs. non-recognizable, humorous vs. serious, ethereal vs. cacophonous, etc.). The playlists are all dynamic (Highest Rated Today, Most Popular of all time, Newest, etc.) and are driven by the fan base. The bonus is that all the dynamic playlists are syndicated via RSS or (even better) via Podcasts that automatically download to iTunes or your iPod. You can find and consume new music however and wherever you want.
Even if artists don’t “open source” their music to fans, music retailers and aggregators could take a cue from this site in terms of the flexibility with which users can discover and consume music. The music industry (and most retail-oriented businesses) still try to sell music via traditional merchandising (iTunes is no exception). But as the trend of “long tail” music consumption continues and web interfaces evolve, consumers will win even as the music industry’s oligopoly wanes.
iPhone browser market share
Net Applications released data showing that the iPhone has already passed up Windows CE in terms of browser share. On one hand, this is a phenomenal feat given iPhone has only been around for 5 months vs. Windows CE for 10 years. There are many, many more Windows CE devices out there but as ComputerWorld points out, the iPhone has the benefit of a better browsing experience and unlimited data plans. However, as one commenter points out, mobile devices make up <0.25% of the entire browser market. iPhone may be destined to be a big fish, but it’s still a very small pond.
If Microsoft launched the iPod
Found an amusing parody that pokes fun at the difference between Microsoft and Apple in the product management department.
It’s amazing how well Apple’s approach works (in a word: simplicity). Why is it that so few companies emulate Apple’s approach? My take is that product management is generally more often feature-focused than user-focused. This is especially true at large companies, where many stakeholders insert their preferences into the product development process. Most of these stakeholders are not in tune with the customer (even if they think they are), because they don’t invest the time watching customers. And when they do, they draw sweeping conclusions from a sample size of 2. The end-product is then destined to become a mish-mash of trade-offs made to keep corporate stakeholders happy (all of whom have varying opinions, motivations, and priorities). This is just the nature of large organizations, and it takes a lot of leadership from the very top (sustained over a long period of time) to infuse a focus on the customer into a company’s culture.
Voting on Facebook News Feed stories
If this rumor is true, Facebook users may soon have more control over their News Feed, Digg-style. Currently, Facebook’s algorithm is the primary determinant over which of the 0.2% of its News Feed story candidates goes on your Feed. Yes, there are controls letting users tweak their Feed by story type, but not at such a granular level as this.
(note: “Vote Now” added later by ValleyWag for effect). What would be innovative is if Facebook allowed this information to increase the relevance of its ads. Seth Godin points out that Facebook potentially faces the the Hotmail problem, where users have no say in the ads they see. Google doesn’t face the same issue, because their entire model revolves around delivering relevant ads based on user intent. The better Facebook understands the intent of its users, the more effectively it can deliver advertising that is relevant to its users.
sub-$200 HD-DVD player
Apparently Wal-Mart is offering Toshiba’s A2 HD-DVD player for $198. Pricescan’s trend graph on the product shows just how quickly hardware prices have come down (green = lowest price, blue = average price, red = highest price).
The entry level Blu-ray player shows a similar trend but notice the current price level of $400, which is not low enough for mass consumer adoption.
Playstation 3 sales and studio support has given Blu-Ray an early lead in the war. But HD-DVD will continue to gain traction from the demand side. The real question is, does anyone care? 80% of consumers already have a regular DVD player, and there isn’t much data to suggest that consumers are unhappy watching standard definition DVD’s on HDTV’s. Hard to believe from a video snob’s standpoint, but maybe upscaled 480p is “good enough”.
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