Is MS using consumers?

MS isnt trying to hurt the HD-DVD format.

But what they could have been doing is extend the format wars on purpose by giving more life to the HD-DVD format.

They probably had two reasons:

1) Counter Sony's BR and do damage on them as well as on the competitive console

2) If HD-DVD is doomed at least keep it alive enough to make BR fail with it as well, canceling out both next gen formats to satisfy their digital distribution plans.

So even if MS doesnt care about HD-DVD and wouldnt care if it fails they would still support it, not necessarily because they want it to win. Notice that the article doesnt say anything about MS's direct efforts to kill HD-DVD. They wont hurt it but if they can they might let it "die" by itself later.

Of course since MS isnt naive if that was their plan, they must have considered the other scenario as well. One which says that 2) fails and the next gen formats continue to live.

In that case they see fit to remain with the HD-DVD as long as possible and in case it survives, be able to enjoy the benefits from it with reason 1) still applying to hurt the competitor.

Taking out HD-DVD out of the game early gives both an edge to the competitor as well as strengthen even more the next gen format which as a result continues the broad usage of disk storage left by the DVD disks instead of abandoning it

 

Yeah, but it's just great fun to play devils advocate in these issues just to watch the knee jerk reactions that some posters seem programmed to make!!

 

The article is full of speculation but zero facts. I found this quote:

to be particularly obnoxious.

Microsoft has a vested interested in two parts of the high def formats: HDi and VC-1, both primarily from a tooling and platform perspective. That is, they make their money if either of those two gain traction. As well, they have secondary interests in blocking Blu-ray/PS3-combination and BD-J.

But I doubt anyone at Microsoft believes that downloadable content is in the near future. 10 years from now it's likely to be viable, but that allows for a high def disc format to succeed until then without eating into any market share that MS might be after.

I'm really happy with Microsoft's involvement; I think their encoding work helped drive Blu-ray to better standards. As it is, I own both the HD DVD add-on and a PS3. I am much more likely to buy a Blu-ray disc now than I was 6 months ago, primarily because their quality work increased, I believe directly because of the competition from HD DVD. (That and my PS3 is hooked up to my beautiful plasma. The high def formats treat blacks exquisitely. )

 

Digital distribution is inevitable.
That being said, it's still way early to start thinking about high definition entertainment and other space-hungry content download through the kind of "broadband" that 99% of the world enjoys right now.
It's just not fast enough for the average consumer to care about.

So, in the interest of the consumer, i stand with whichever optical format that "wins" the market faster (be it Blu-ray or HD-DVD), because some people can't wait a day or two to legally download and/or rent a single 1080p feature film, plus extras, etc.
Note that my broadband connection actually isn't that slow, right now it's hovering around the 16 Mbit/s mark on average.

 

Don't forget Microsoft was originally intending to put HD-DVD on Xbox360, so they probably have some cross licensing agreements relating to HD-DVD which brings in some money for them, and Microsoft had big plans for HD-DVD.

More importantly Microsoft were trying to establish a DRM monopoly for movies like Apple has with ipod music, the idea being that you could copy DRMed movies from HD-DVD to your computer hard drive on your Windows media server and then stream them to your other Windows PCs and Xboxes. This is the whole thrust of Vista. Of course Linux would not be able to do that because it is open source, and Apple Mac could be prevented from doing that because Microsoft would be able to block it by refusing to license certain patents or charging excessive royalties for them. This policy is already being implemented by Microsoft with the BBC
http://www.theregister.co.uk/2007/06/22/iplayer_osc_eu_ofcom/

The problem with this monopoly play for Microsoft is Bluray. Because Bluray DRM doesn't allow copying of the movie onto the hard drive (because the DRM is on the Bluray drive and not the computer), Microsoft can't control the DRM and get to decide which OS gets to play it and which doesn't, and poof goes Microsoft's dream of a monopoly. Even worse, the movie studios prefer DRM that doesn't involve copying onto the hard drive, because it is more secure, hence Microsoft's distain for Bluray (no built in support in Vista).

The mixed signals now are most likely because Microsoft has realised that HD-DVD will lose the format war, so as a monopoly enhancer, it isn't going to be useful. Still, they will probably try to delay Bluray's victory as long as possible just to hurt Sony.

 

You need to back this up with a link. It's been debunked too many times to take your word on it.

This is called managed copy and as far as I know falls under the umbrella for HD DVD licensing and is not proprietary to any specific OS. If you know otherwise, I'm happy to learn more...

This is not new. Microsoft has had a DRM offering for how long? Using that in relationship to anything else is simply stating the obvious: some companies desire DRM for their IP; some companies desire to offer that DRM.

Blu-ray could offer mandatory copy as easily as HD DVD, but they may choose not to. This has more to do with studio pressure on the Blu-ray side than any "monopoly" play by Microsoft. But admittedly, I base that on reading Amir's (and others) posts at AVS. Even though they have a strong bias, I still can't help but believe mandatory copy is more consumer friendly than "no copy allowed".

 

That's true, I think, in the sense that if one format or the other gain a dominant market position, then movies studios wouldn't really go along with a digital distribution system. For example, they might offer download of films from their back catalogs, while releasing new ones on shrink-wrapped optical disc only. From a consumer-acceptance standpoint I don't think the success of a digital distribution requires the failure of HD-DVD and Blu-Ray. Plenty people will use it simply because it's more convinient--provided that films they want to watch are available.

 

What makes you think that? I would think studios would go wherever the money is.

 

There was never any question that HD DVD would not be ready in time for a 2005 launch of Xbox 360. So unless the speculation was more around Microsoft delaying their launch in order to include an HD DVD player, then I treat those "frequent press reprots" as rumors or executives misspeaking. Another point is the Elite, which could have included an HD DVD player but didn't. The extent of the Microsoft support appears to be on the tooling side and releasing the add-on.

Further, your original point was to suggest that Microsoft had cross-licensing deals:

I believe they make licensing money off of VC-1 and HDi. On the Blu-ray side, they also make money on VC-1.

I'm not sure why you insist on making it bigger than what it needs to be. Microsoft is a desktop app company. That's their entire ecosystem. So of course they will want to support the format that enables desktop app scenarios. Making it about patents and DRM and lock-in are all just secondary issues. In fact, I'm not entirely sure what DRM is used in managed copy. Do you have information to suggest that it is MS DRM? I found this relevant link:

Assuming you can prove that AACS requires Microsoft DRM, I don't believe Microsoft gets to set licensing fees. There is some body that does this, based on a pool of members, since many companies likely have respective patents for the entire tech stack. I believe AACS is lumped in with HD DVD licensing (which MPEG LA is handling some/all? of it: link).

I'll just finish with another quote from that article, since I think it sums it up:

 

I'm confused here (well else than the parts where most of it just seems to be out to make Microsoft look like some evil company)

The DRM & Encryption scheme is the same for BluRay and HD DVD besides technical details of whats allowed to be done its still the same algorithms. I mean hell both BluRay and HD DVD are using the exact same encryption key as was found out when they broke it over at Doom9.

 

Blu-ray has an additional layer of protection, calld BD+, but both use AACS so that news doesn't surprise me.

 

I agree with Sis that the studios will go digital distribution if/whenever it makes (more) money for them. I also agree with the notion that if the studios have an alternative (viable and healthy) plan, they are in a better position to negotiate with any digital distribution pure play. Secondly, they would prefer to play on a platform within their control as opposed to via a third party like iTunes (i.e., They can control strateigic marketing issues like pricing).

Finally Blu-ray is more than hi-def and large storage space. In my limited understanding, BD-Live (in Profile 2.0) is essentially based on Java and its network classes. This may imply that should Blu-ray become popular, it could also evolve into a digital distribution form (another Profile) using existing Blu-ray mechanisms. In due time, a strong and ambitious BDA can compete with MS's digital distribution platform.

[I am not keen to talk about whether MS uses the consumers, but I am curious about BDA's moves]

 

For me Bill Hunt's column at The Digital Bits pretty much nailed the whole HD-DVD and Blu-Ray situation.

http://www.thedigitalbits.com/articles/soapbox/soap060107.html

It created a lot of controvesy over at AVS forum and Home Theatre Forum the two main places where I follow the whole HD thing. Many people there accused Bill of being on Sony's payroll.

Out of all the forums I visit, B3D is the only one where I care enough to still try and debate this stuff.

I posted a link to a post at AVS, where an individual was kind enough to cut through the FUD and debunk the whole Sony is Blu-Ray myth.

http://forum.beyond3d.com/showpost.php?p=946187&postcount=22

This is still something that refuses to die, so I though it was worth posting again.

I am biased towards Blu-Ray because I own a PS3, and it suits me if Blu-Ray discs are a success and I don't have to invest in more hardware to buy certain movies.

I have followed the HD formats very closely as I am a movie buff first and a game player second.

It strikes me as Bill Hunt explains in his piece that both Toshiba and Microsoft have been a little dishonest about HD-DVD as a format.

In my opinion Toshiba's whole strategy with HD-DVD has actually been about protecting it's DVD royalties and confounding the adoption of HD technology.

Once the major CE manufactures (Philips, Panasonic, Sony, Pioneer, Samsung, etc) decided to break with the DVD forum and form the Blu-Ray group, Toshiba had no choice but to fight them. But Toshiba knew that without any other CE manufacturers it would not be able to compete, so HD-DVD just had to spoil the Blu-Ray launch, not actually be viable long term product.

It also suited Microsoft if HD content was delayed, not just because of the competition between the Xbox360 and PS3, but because a standard definition derived movie download service would be much easier to launch than one that had to compete with 1080p content. MS and Toshiba appeared to have colluded with each other in an attempt to do anything they could to destroy Blu-Ray despite the format having the majority backing of most CE manufacturers and Hollywood studios.

The irony of all this is that HD-DVD is actually a great product.

I think there will be a great business book written about the HD-DVD vs Blu-Ray format war in the future where a lot of the dirty tricks from both sides will be revealled.

In light of Blockbusters recent decision to back only Blu-Ray, it looks like the format has done enough to survive and perhaps take-off in the 4th Quarter.

Whereas HD-DVD has no-where to go. No other CE manufacturers will touch the format, and the one exculsive studio, Universal has already release the bulk of it's best titles, with few new hits from this year bolster the format. Things look bleak indeed.

 

I think there was early on, that is why Bill Gates is quoted as saying so. When it became aparant that it wasn't going to be ready on time, it was dropped.

I can't really understand what you are arguing about here. Microsoft and other patent holders involved in HD-DVD and Bluray would have to have patent cross licensing deals with other patent holders and an agreement on split of royalties chargable on HD players. They would have to do this to prevent any one patent holder from holding the rest to ransom at a future stage. The cross licensing deals with the HD player won't cover cross licensing deals with OS vendors, and if Microsoft has been smart, the copy to hard drive feature of HD-DVD is certain to contain Microsoft patents, including some necessary PC client side patents not present in the HD-DVD player cross license. A separate deal will need to be made for OS manufacturers who want to implement copy to disk feature, and since neither Apple nor Linux have patents that Microsoft requires to implement the copy to disk feature, they will have to license it on whatever terms Microsoft chooses to give them. They will probably charge Apple higher royalties and refuse to license it for Linux.

This is quite normal practice for patented video codecs. Linux isn't shipped with Flash, Realplayer, Apple Quicktime or Windows media player codecs for licensing reasons, and although Flash players and Realplayer are downloadable free for Linux, Windows Media player and Apple Quicktime Player aren't because Microsoft and Apple either refuse to license them out for Linux or make licensing cumbersome or very expensive, simply because Linux is a competitor to both (note the 100% corelation between whether the vendor makes an OS and whether they are willing to license). Microsoft was expecting to do this with HD-DVD copy to disk, Apple knows it and went for Bluray where it is on par with Microsoft because it can license it on equal terms with Microsoft because no copy to disk exists. Microsoft knows it will be able to leverage copy to disk to it's advantage, so it goes for HD-DVD. It is that simple and that straight forward.

Microsoft makes money out of licensing patents required by both HD-DVD and bluray, but it's a pittance comapred to it's main revenue stream which are it's OS and Office suites monopolies. Indeed these are the only two profitable devisions of Microsoft. All the others make perennial big losses. The huge profits (80%+) of these divisions is due to their leverage of their market monopoly. Understandably Microsoft's business strategy revolves around leveraging this monopoly in any way it can to gain market advantage, which is why it keeps falling foul of annti-trust lawsuits.

I am not making a big a big deal about this, just stating the simple and obvious fact as to why Microsoft is backing HD-DVD rather than Bluray, which you don't seem to accept. It is because the DRM used on HD-DVD allows copy to hard drive so that the OS manages the DRM. If the OS manages the DRM, Microsoft can leverage that to it's own market advantage because it is an OS company with a lot of patents.

As far as having to use Microsoft DRM, the answer is no. As far as having to license Microsoft patents the answer is yes. You don't have to cross license patents with Microsoft if Microsoft has no patents. Microsoft has certainly patented a lot of things to do with DRM. Unless Microsoft has been very stupid about what they patented, it is a certainty that in order to implement the DRM on an OS, you would have to license Microsoft patents. These patents have a cross licensing deal for use on HD-players, but if Microsoft has been smart, these will not cover competing OSes.

As I said the the cross licensing agreement is between the members of each consortium and this as with all cross licensing agreements fixes the royalties and percent cut of royalties each member gets. However Linux is not represented on the board of either, and Apple chose to go with Bluray, probably because it lacked any patents that either board would need to cross license. For patent licensing outside the agreement covered by the board agreement, Microsoft can set whatever terms it wants or can get agreement for. Having the DRM done on the player is therefore advantageous for both Apple and Linux, since the OS isn't involved in the DRM.

 

I agree with his prediction: either Blu-ray will one or neither. Though I still firmly believe that the best either format can hope for his niche status. There's just not a compelling enough difference between anamorphic widescreen on DVD and the high def formats, at least to the casual consumer where most think stretched SD content is "high def". Though the third option is that these universal players become standard.

Same here, though I started out with the HD DVD add on. However, I only buy HD if the title is exclusive to that format and its one I absolutely don't want to wait for.

But that's the thing. HD DVD does exactly what MS (by way of Amir at AVS) and Toshiba have said. Lower on the technical specs but able to deliver HD content. For that reason alone, I struggle with looking for ulterior motives. They accomplished what they said they set out to do.

 

As I said earlier, this mandatory managed copy is covered by AACS, which is either covered in the blanket HD DVD license or a seperate one, but either way it's fixed. MS doesn't control the license, though they may make a very small amount on licenses given the overall number of patent holders.

So what am I arguing? I disagree that it's about DRM or monopoly lock in (ignoring the quagmire issue of open source OSes and their ability to create a DRM environment). I disagree that it's about money from patents--I just don't believe there is much to be made there. To me, it's about pushing VC-1 and the Microsoft tooling. About pushing HDi and the Microsoft tooling. Secondary motivations are around shunting penetration of PS3. Finally, I disagree with the central theme of this thread, that Microsoft is "using" consumers or attempting to ruin the high def disc format. There's nothing to back this theory up but plenty of public reasons why Microsoft may have wanted to back HD DVD.

 

Well, his first two reasons are pretty compelling, but problem I have is that this quote:

"fueling a format war in the meantime creates consumer confusion that hastens the demise of discs and the advent of mainstream downloading"

contains a non-sequitor. Creating consumer confusion or even destroying the high def disc format does not do anything for mainstream downloading. The only thing that will bring the advent of mainstream disc downloading is much higher bandwidth availability and consumer demand.