Yesterday was a tragic day for my beloved format. Best Buy announced that it would support Blu-ray as its preferred HD Movie technology and Netflix, the online DVD rental giant, announced that it would phase out its HD DVD rentals. If its any consolation, Netflix HD DVD and BD rentals represented a fraction on their rentals. So February 11, 2008 was a tough day for the format – where does this leave HD DVD owners. A close friend of mine and HD DVD owner decided yesterday to bail and buy a Samsung Blu-ray player. He does not know what format (update, it is a 2.0) and was unaware of the class action suit against Samsung for building defective Blu-ray players. He recently emailed me, I thought I would share his question and my response, because it is a question alot of bloggers and fanboyz are asking.

Friend: I will never understand why you are so loyal to a large corp just because you bought their product.

ILHDDVD: What do you mean?

Friend: oooh, blu-ray sucks … HD DVD is the only way to go …. blah blah blah …. fact – mainstream movies won’t be available on HDDVD in a few months.

ILHDDVD:  Ultimately, its a personal preference. And since you ask, I’ll give you mine

I think Blu-ray sucks because it is an overpriced incomplete format. I don’t want to spend money on a product that has a history of failure and will likely be obsolete and not able to take advantage of all features of future releases. Accordingly, if a movie that I really want to watch – like 3:10 to Yuma – is not available on HD DVD, I’ll watch it on VOD, PPV or download it through Xbox live. Alternatively, I’ll get the SD DVD and upconvert it. The point being that there are so many places to get movies from other than HD DVD or BD that I am comfortable with my abhorrance of BD, and the acceptance of HD DVD.

As I have watched countless HD DVDs and unconverted DVDs, one thing I have come to realize is that there are very few movies out there that really have the ability to look impressive enough in HD for me to want to get the HD DVD version and not upconvert. Nerd movies with lots of special effects, or Sci-fi movies can be impressive in HD. But there are instances, like with Dune, where the HD image blows ass. Most movies don’t need to be in HD, like Clockwork Orange, The Rundown, or Blades of Glory. I just don’t think the HD really adds anything to the movie that you would otherwise miss in an unconverted SD DVD. Sure it looks good, but there is not “WOW” factor. Movies like,  Transformers, however, and Miami Vice or Batman, I would not watch in any other format because the image is so impressive. Most movies look fine to me, and probably most consumers, in unconverted SD. caveat: obviously, if the HD DVD is the same price as a regular DVD, I’ll take the HD DVD. But as it is, Blu-ray discs are much more expensive than HD DVD discs and SD disc – by about $10 a disc (yes, the price fluxuates). One important thing, though, I really love the interactive menus and miss being able to access the menu and set bookmarks when I watch an SD DVD.

Also, BD is region coded, like DVD. BD also has an oppressive DRM scheme making copying the disc very very difficult. Someone will ultimately do it, but at that point, Sony is likely going to change their DRM scheme to address that crack. There has also been some discussion of Blu-rays use of Hard-coating – a technology used to protect the disc from scratches. See the Blu-ray media layer is closer to the surface of the disc which makes it more susceptible to scratches. Sony, TDK and I think 3M (but I could be wrong) have been developing a coating on an ongoing process to address this issue. Regardless of their work, BDs by their nature are more susceptible to damage than regular DVDs and HD DVD.

I like HD movies a lot, and I love my HD DVD player – I wish there were more titles available. But it comes down to value. I don’t think BD present a good enough value (unless you are a PS3 gamer) for the BD player or the BD movies to justify dealing with its short comings. HD DVD is complete and its price point and the price point of its movies are right where I want them to be. Do I think I own a paperweight? no. the HD DVD player can do so much more than play HD DVDs. It is our default DVD player. As far as studio support and titles available, if I want to watch a movie that is not in the HD DVD format, Ill VOD it, PPV it, buy it on Xbox Live or upconvert it – no need for me to get a BD player.

On January 2, 2008 I wrote the post below (after the link), hopeful that HD DVD would continue to grow at a rapid pace. Only a few short days later we were with the news of the Warner offensive. More recently, however, Steve Bass at PC World sent me into orbit with the quote:

…you’ll see that Toshiba appears to be dumping HD DVD players faster than Windows Vista users are switching to Macs.
Source

That quote is flawed in so many different respects. In fact the most recent numbers from NPD indicate that HD DVD gained 24% of the HD home video market in week three of January. These nubmers do not include sales from Amazon.com where the A30 is the highest ranking DVD player (including all SD DVD, HD DVD, and Blu-ray players) at #27 in electronics. I am still waiting to see the raw numbers.

So, inlight of news report like Mr. Bass’s and other retarded stories I thought I would address the differences between the VHS/Beta war and the current next gen home video market.

This war will not be won by studio support alone.

This is not the 80’s.VHS analogy is severly flawed. In the 80’s VHS and Beta had no other competition for home entertainment dollars – the war was only with those two formats. Today, the home video market is filled with competition: Video on Demand, Cable, Xbox Live, iTunes and a myriad of other sources including Chinese Pirates (aargh). Blu-ray and HD DVD have to conted with these convenience oriented retail points as well as with each other. A failure to recognize these elements could casue both formats to fail in all markets but high-end niche markets.

In order to gain market share and be the next home video format, overtaking DVD, Blu-ray and HD DVD need well more than the 4% of the home video marketshare their combined sales numbers presently possess.

HD DVD is in a position to prevail in the absense of studio support by selling HD DVD players simply as updated DVD players. That is market HD DVD players as DVD upconverting players with the capability of playing HD DVD discs at DVD player prices (which we are currently seeing). How does this work? Take my dad as an example. He is not interested in replacing his collection of 2000 DVDs for either format – but if he believes he could buy a DVD player that would upconvert and give him the option to play HD DVD movies he’d do it. Look at parents that primarily play kids movies on their DVD players – HD barely makes a difference for CGI animation or remastered Disney films. Finally, some movies, just are not well suited for HD – like romances, or “Beerfest”, and should only be released in SD for upconversion with a DolbyDigital track.

update: The NPD Group recognizes that both Blu-ray and HD DVD face still competition from upconverting DVD players. NPD analyst Ross Rubin said:

“Both camps face really strong competition from standard DVD up-converting models, which inexpensively render [consumers’] massive DVD libraries well on their TVs,” said Rubin, adding that such upconverting models can be found for sub-$100 pricing. “We’ve seen a consistent trend of the market responding to changes in price and promotion by both camps. So you’ll see a significant shift [in sales one way or the other] in response to the end of a promotion or the beginning of a new promotion.”

source

Toshiba is perfectly suited to take advantage of this market – get to it lads and lasses!

While Both formats can upconvert, with HD DVD in bed with the DVD forum, HD DVD is very well suited to market their players as such. In fact with the recent call by MPEG LA for a joint license, I would not be shocked if the DVD forum make HD DVD a spec standard in all DVD players. Toshiba may have missed the marketing boat by selling HD DVD as an alternative to DVD.

The point is that a format war between the two HD movie formats is a losing battle for both as customers will opt for convenience and what they know, DVDs on their shelves and Video on Demand.

Follow the link to the original post

Click to continue reading HD DVD Opinion: The Possible Future of HD DVD; Revisited

Just two short weeks ago a dagger was lodged between my heart and lungs when Warner Bros. announced that  it was defecting to Blu-ray exclusivity. Alot has been written since then about other major studios, Paramount and Universal, jumping on the defection bandwagon as well. Obviously I am biased towards HD DVD, for no other reason than it is a completely finished reasonably priced spec – compared to BD’s half-finished over-priced schema. Having time to read blogs, press releases and rumors it is clear to this author that the decision by Warner was bad for Warner and bad for next-gen optical formats. Ultimately, however, as I have previously stated, I think this move by Warner and others will hasten the delivery of on demand downloadable HD content; effectively switching the retail point to downloads. Here is why:

1) Consumers have not decided. Despite Warner’s assertions, consumers have not decided on a next Gen optical disc format. DVDs have only penetrated 4% of the marketplace. This is a pittance of any kind of marketshare and hardly enough to base any kind of marketing decision on. Here is a quote from Warner’s press release:

Warner Bros.’ move to exclusively release in the Blu-ray disc format is a strategic decision focused on the long term and the most direct way to give consumers what they want …

 How is Warner privy to what consumers want? I also thought consumers wanted choice.

…The window of opportunity for high-definition DVD could be missed if format confusion continues to linger. We believe that exclusively distributing in Blu-ray will further the potential for mass market success and ultimately benefit retailers, producers, and most importantly, consumers.

Yeah, the window of opportunity will be missed because Microsoft and even Netflix have moved more towards HD video downloads as the true next gen platform; that will sure benefit retailers.

Consumers have clearly chosen Blu-ray, and we believe that recognizing this preference is the right step in making this great home entertainment experience accessible to the widest possible audience.

So a portion of the 4% of the home video market indicates a clear choice? Someone tell me I am wrong here, but I don’t think either format has enough market penetration to establish a preference. This is like predicting Mike Huckabee will win the GOP nomination because he won Iowa- just stupid. If Warner banks its long term success on figures related to only 4% of the home movie market and uses the same numbers to determine that “customers have decided” then they have sealed their own fate.

2) Improper Influence on the Marketplace. Warner’s move was dictated by increasing rumors and speculation on the internets that the format war would be over if a major studio announced an exclusive format decision. Clearly, Warner thinks that by going blu-ray it can effectively determine which products the marketplace will use in the future. From their press release:

Today’s decision by Warner Bros. to distribute in a single format comes at the right time and is the best decision both for consumers and Time Warner.

Says who? Warner thinks its best for consumers? What’s best for consumers is a complete product at an affordable price – exactly what Blu-Ray is not.

A two-format landscape has led to consumer confusion and indifference toward high definition, which has kept the technology from reaching mass adoption and becoming the important revenue stream that it can be for the industry …

No. No. No. A two format landscape leads to competition which, in turn leads to better products and better prices. What has led to more confusion is this decision by Warner. Prior to the announcement by Warner people were leaning either way – many fence sitters I know were leaning HD DVD or Blu-Ray. I heard more about indecision and indifference about the format war after Warner’s decision than I did before. At least with the competition each format had a fighting chance.

Additionally, it is arrogant to think that Warner can “win the war” for one side or another; that they can sling their big sack around and the lemmings will follow. Warner would benefit regardless of which format won, they would sell their movies in HD DVD or Blu-ray. Warner just decided lob tis sack around and tell the consumers which format to support

3) Keeps Prices High. Less competition means higher prices and less quality. Supply, dmand and prices are driven by market forces. when a third party intervenes to affect the natural market forces pandemoneum ensues! Well, maybe not pandemoneum, but higher prices and less competition for sure. Warner has done just this. By prematurely using its big sack to attempt to end the war Warner has intervened and stated what format it thinks is best for the consumer. In a free-market, however, the consumer should decide. Ultimately, with higher prices and shittier quality, the consumer will suffer and will likely shift their money to the more affordable format: downloads.

4) DRM – This is one of the unsung factors in Warners decision. Blu-ray is a more DRM driven format. Blu-Ray imposes multiple DRM schemes including country coding. Publishers and content owners like this, consumers do not. HD DVD has a AACS scheme, but it lacks a country code (optional) and has already been ‘cracked’. Consumers like this. With Paramount and Universal rumored to be jumping on the Blue-Ray bandwagon one can only assume that the big draw is massive consumer hated DRM. How’s is that for what consumers want Warner?

By elevating Blu-ray to the winners position, you are in effect supporting the spread of DRM. This may ultimately backfire with a grassroots campagin against Blu-ray and its DRM scheme.

When Blu-ray takes over and HD DVD is gone from the landscape (if that occurs) I don’t want to hear any of the fan boys bitching about how locked down Blu-ray is. You had your chance, until Warner took it away.

If Paramount and Universal do go exclusive Blu-ray it will be a sad day for the marketplace, competition and consumers. Such a move would signal a certain death for HD DVD. Additionally, the rise of DRM in the home video market will be fodder for bloggers and pirates all around the world.

5) Horrible Trade Name. “High Definition Blu-Ray Disc” is a horrible name. First, why exclude the ‘e’ from Blu. Digg searches reveal that many that submit stories to Digg think its spelt “Blue-Ray“. Additionally, it adds consumer confusion to a marketplace that understands DVD to stand for “Digital video Disc” (it relly means Digital Versatile Disc). Further, HD DVD speaks for itself – High Definition DVD. Blu-ray is a crappy … crappy tradename. They can’t use DVD until the DVD forum let’s them. Ha ha.

Let me know what you think about my opinions. Writing this froma wooden shack in northern California does not mean I am correct. It just means I will hate your opinion. But I want to hear it anyway.

The war is on.

Only 2 days after Warner jumped ship for Blu-Ray, Jodi Sally, vice president of marketing for digital audio and video at Toshiba America Consumer Products, points out that There are 1,000,000 Million HD DVD Players in the marketplace. Yes Warner, the consumer has spoken. This represents 49.3% of the players for high definition discs sold as of December 22. Sony has 29.4% marketshare. This does not include PS3’s and Toshiba’s numbers do not include the 360 add-on (its not a standalone player) of which we know there are about 300k.

That’s alot of people out there that Warner just left in the cold. The worst thing about what Warner did was that it was so unilateral. Warner thinks that it is the Gorilla and can single handedly determine who wins this format war. Unfortunately, it may. In doing so, however, it will have stifled competition and restricted options to a spec that is incomplete. Buying a BD player right now is as big a risk as buying HD DVD player: You invest $500 in a player that has half the capabilities of the complete HD DVD spec and which won’t be able to maximize on benefits of future BD movies.

The news hit hard yesterday afternoon. It was like getting dumped by the hottest girl in school. I am still not over it. I want to call her up and convince her to reconsider her horrible decision. Warner is that stipud little bitch and I can’t dwell on her decision any longer. I need to think about the future and why the battle with her other suitor (Blu-Ray) is a little shit disturber who does not love her … Rather than this about this I have considered the many reasons why the “war” is not over and how HD DVD can still make a stand. More importantly, how can I convince my wife to continue to purchase HD DVDs. Regardless, HD DVD is a completed format so I do not intend to buy a BD player until Sony says the spec is final.

This is not the death blow. Its pretty damn close, but there are still some studios on board and some major backers, like Microsoft – to say nothing of the hundreds of thousands of loyal early adopters. If Toshiba wants to keep HD DVD here is what it could do:

HD DVD Downloads

Regardless of the war the future is HD movie downloads. Microsoft has been moving towards this with XBOX and in fact offers HD movie rentals through its Xbox Live service (XBL). These ‘rentals’ however expire and do not offer the bonus features or audio that make HD DVD great.

Toshiba and Microsft could partner together to overcome this obstacle and make HD DVD downloads an acceptable reality. To start Microsoft and Toshiba could offer full HD DVD content with a Netflix type subscription model. Here is how it would work:
Toshiba and its partners could sell, at little margin, HD DVD burners for PCs and an XBOX 360 add on for dirt cheap prices ($199). Downloaders could then access a torrent based download service to download the 50Gig files – probably run by Microsoft. This service should be subscription based (like Zune and Netflix) and offer a value to the consumer; either $10-$15 a download or a monhtly subscription fee. The files would be secured either through a system similar to the Zune and iTunes systems, or some new system that only allows a limited number of burns. (This would be a necessary evil to keep the copyright owners on board). The the downloader can burn it to his/her value priced HD DVD media with his/her value priced HD DVD burner.

Access the Nerd/Geek Users

The key for HD DVD is penetration. If HD DVD can so penetrate the market with media readers and media, there is a very viable possibility that HD DVD can make a comeback – or, that is, – that BD will fade away.

Let’s face it, geeks and nerds drive technology. Geeks and nerds are cheap or are funded by their parents. If Toshiba can offer media and burners for PCs at prices which undercut BD there will be a swell of adoption by nerds. Also, if there are HD DVD burners in PCs, Nerds and lay users can use the media to burn HD videos. This will in turn drive movie sales. This model is based on the market penetration of DVDs.

Work with Blu-Ray, Abandon HDi

Toshiba has a completed standard, and, therefore, a better standard. Early on Toshiba and sony worked together to try and come up with one format and avoid a war. The talks fell apart when Microsoft and Toshiba insisted that the format utilize Microsoft’s HDi technology. Toshiba could abandon that stance and again work with Sony to develop a unified format.

Conclusions

Its all about price and value to the consumer and puffing to Sony. Sony sold more PS3 players. Clearly Sony considers the PS3 a Blu-Ray player first. HD DVD has sold more HD DVD players, not counting 360 addons, but apparently that does not matter. Also, HD DVD players are cheaper. Taking HD DVD out of the market is worse for the consumer. Having two formats battle right now is working to drive prices down. The only reason BD is viable is because gaming on the PS3 blows. If Toshiba can drive affordable media and players into the homes – like Sony did with the totally overpriced and shitty PS3 – then there is a fighting chance.

the future is undobtedly with HD downloads. Toshiba can speed up time and work with Microsoft right now to deliver HD downloads and burning. That, I think, is the best solution.

Until then, here are the relevant press releases/news posts

December 10, 2007, Warner DENIES any thought of going Exclusive Blu-Ray
January 4, 2008, Time Warner Press Release: Warner Goes Blu-Ray exclusive
January 4, 2007, Toshiba snaps back with Press Release – threatens lawsuit, says more sales
Warner deines a Sony payoff to go blu

Let me know what you think in the comments.