Is MS using consumers?

I think it's in the culture. The movies studios would rather have a smaller pie that they fully own rather than a large pie that they only partly own. A transition to a digital distribution system would mean yielding a lot of control. If they could stick with the DVD model, they would.

 

I couldn't read through all this conspiracy theory nonsense, but what caught my eye was the idea of someone saying MS screwed others by offering a cheap player. That's a very odd thing to say when the player actually costs the price of a 360 along WITH the drive. The reason the HD-DVD drive is so cheap is because it basically does very little on its own. It reads the disc and a couple other things, but the 360 does all the real work. This whole idea is just nonsense. Reminds me of all the fools who believed one moran that said 9/11 had to be an inside job because the towers couldn't have collapsed like that.....wannabe market people are just as bad as wannabe engineers.

 

What do credentials have to do with it? Its a simple fact that the HD DVD add-on is a dumb, passive optical drive with all the processing being done on the 360; of course its going to be cheaper [on its own].

 

If you look at what MS has done with their HD-DVD support is sent mix signals and have not FULLY supported HD-DVD. Follow me here...in the beginning they championied the idea that the add on was to give the consumer choices and not push a format on them but yet if that was truely the case that should offer both HD-DVD and BLU-RAY add ons.

Then they change that tune and said that they would only support HD-DVD but when it came to get out the elite addition to the 360 line...NO!! HD-DVD support.

IF you add up the actions MS has made with HD-DVD up to this point..easily one can say that MS does'nt fully support the format and if you go an extra step it could be said that MS is useing the HD-DVD format to prolong the format war thus neutralizing blu-ray in their goal of having digital distrubition be tha main source of HD content.

 

By this account, Sony screwed the BDA by offering the PS3 at a lower price than existing players, forced the other CE's to crash their prices inorder to compete with the PS3, which is STILL the best BR player one can buy. Not only does it suppot a wide range of desireable features in a BR player, it's Java performance blows away the stand alone players and from recollection it's the ONLY player on the market that has possibility of being Profile 1.1 compliant.

Let's shed a collective tear for: LG, Samsung, Pioneer and ofcourse the only other company who loves BluRay possible more than Sony: Panasonic.

Trying to get a grasp of the war by reading garbage articles as such isn't the best of ideas.

 

I don't know how popular digital distribution will be. To make it convenient, they have to cut bitrates down and offer it as HD, because the storage and bandwith costs don't support 30 or 50 GB encodes for online distribution.

Plus broadband access in the US, the biggest market, just isn't ready for huge downloads on a massive scale.

So if they offer say 12 Mbps encodes as 1080p with the best audio available (and that's what the encoder vendor -- we know who -- are claiming is possible), then you really will not be able to differentiate it from DVDs.

Another key is pricing. Studios won't price it cheaper just because it's online. They don't want their packaged media business to be undermined. In their perfect world, they have growing packaged media sales as well as new incremental revenues from online. Just look at the music business. CD sales are dropping while online sales are booming but the record companies aren't satisfied, even though online should give them much higher margins.

So if they charge $30 for a Blu-Ray or HD-DVD disc and online downloads is about the same price, what will consumers get? Well for one thing, even if online downloads of "HD" movies are only 5 GB, they need a big hard drive with backup as well as big pipes.

The nerds with media servers might prefer the download but most people would rather have actual physical packaging if they're going to pay $30 (or even $15) to buy a movie.

As for competing against DVD, I think there were concerns by the studios that sales growth may have leveled off. In the last year or two, some big titles like Shrek had to be taken back because they projected much higher sales than what materialized.

So I think studios aren't putting all their eggs in DVD, which may account for why they jumped aboard the high-def discs much earlier than they did the DVD.

If they do day and date releases on high-def at the same time as DVD, gradually the sales should migrate. People keep citing not even 20% HDTV penetration but that can't be true anymore -- HDTV sales growth have been in the high double-digit for a few years now, with annual unit shipments approaching 10 million units -- probably have broken that by now.

 

I'm not sure what else Microsoft could do. They've offered up considerable encoding support and offered an inexpensive add-on. Including an HD DVD drive inside a 360 is likely price-prohibitive.

I guess I just don't get it; I'm not trying to argue that Microsoft is altruistic here. I just want to see something more than "because studios want control" or "because Microsoft wants control".

 

Isn't this good for consumers ? Why should we cry ?

As Steve Jobs put it, "If we don't do it, someone will. I'd rather we do it to ourselves than someone else" (He was refering to iPhone possibly cannibalizing iPod).

Yet that is the essence of market dominance. Every company dreams about it (even Apple)... this is not to say MS used the consumers (In that sense, every company uses the consumers).

 

The early titles using VC-1 received raved reviews while more recent ones haven't been as stellar.

There's a belief that MS hand-encoded those early titles, if not hold the studio hands.

They may not be doing so any longer.

That's not saying they're trying to undermine HD-DVD or packaged media in favor of online downloads.

Just that the early VC-1 titles were not typical of the way movies would be encoded over the long run.

But maybe if they really want online, they'll try to do whatever it takes to get the best results, even if using really low bitrates and lossy audio.

 

wco81, you summarized a lot of good points that need to be accounted for when thinking about digital distribution. I did want to add that the Xbox 360 is currently doing some of what you describe at a much lower cost than Blu-ray or HD DVD. But local storage limitations, bandwidth issues, and lower bit-rate do affect the final end user experience, as you note in your post. I would only add that there is certainly a "good enough" experience that I believe Microsoft is attempting to find with the Xbox 360's video marketplace. However, I believe it will not generate any significant revenue in the next 5-10 years, regardless of meaningless press reports indicating it is second only to Apples iTunes service, both being negligible even in niche market standards.

 

I actually trimmed a sentence at the end that said, basically: "Companies want control and want to make money; I want to see some argument that goes beyond the obvious." I see a leap between MS wanting dominance and MS shunting high def disk formats in order to achieve dominance in downloadable content services. I'd like someone to make that connection.

 

What are you talking about? The latest batch of Universal catalog titles dont' look as great because Universal never went back and re mastered them.

The Matrix Trilogy, Planet Earth set are quite recent and easily on top of the PQ chain. A codec is just one tool to make a picture look great. The quality of the master and skill of the compressionist are just as critical. Seeing that you spend a fair bit on time on AVS, I'd think you'd grasp that by now

 

My comments are strictly in response to those claiming that somehow MS releasing the add on hurt the other CE's.

For a consumer like me, this war has been great! I get top quality and price. No complaints here.

 

I think you missed the point. One, people buying the hd-dvd add-on is a different demographic audience than those buying stand alone player. Clearly, the 360 is a game console 1st, with a hd-dvd add-on it's a hd-dvd player secondary.

You can buy BR drive for the the PC. So is Sony killing BR? No, different target audience. You can buy a PS3 as a BR player, is Sony killing their BR stand alone player market? No.

 

I have the Planet Earth Blu-Ray and haven't watched a lot of it but so far that I've seen, it's disappointing. I've seen parts of the desert ep. and the ice ep.

People are saying some of those weren't transfered in HD or under some extreme conditions, they dind't have the best cameras. Then there is the reported low bitrates used on Discovery HD.

 

Actually the connection has been made - many times.

I think the above wording from the US DOJ no less, makes Microsoft's current business strategy clear. This is nothing new, Microsoft has been found guilty of exactly this before in US and EU anti-trust convictions, and numerous private lawsuits which were settled by Microsoft for billions of dollars damages. To be fair to Microsoft, this is exactly what other players like Apple are also trying to do, but because Microsoft has a market monopoly, it is able to implement anti-competitive policies successfully.

Agreed, but does buying an AACS license give you the right to use the patents associated with the license in any application eg. a software only player, or an OS with DRM built in? Is the AACS license charge worded so that it applies on a per HD-DVD and per Drive basis, so that it can't be licensed for software players or OSes which are supplied separate from the drive (ie. not embedded), for which that a separate patent license would be required from Microsoft? Are there any additional patents not included in the AACS patent which are required for use in an OS - for example a requirement that if the code is not embedded in a hardware player, then certain additional requirements, for which Microsoft holds patents which are not included in AACS, must be complied with (for security reasons of course)? If Microsoft is smart and if it's intentions are as stated by the DOJ above - and it is, it would have done all this, and this quite simply the reason Microsoft prefers HD-DVD.

 

The problem with that question, is that none of the people who bought the add-on are going admit they have been screwed over - if only because they'll feel silly doing so. I thought it was common knowledge that MS wasnt massively bothered about HD DVD. One thing that would annoy me if I had bought it, would be if the format ends up dying completely, because then its a virtually obselete box only useful for films already purchased. At least the PS3 can still be used for games (and I think people forget how useful this feature could become five years down the road), but with its studio support Blu-Ray was never likely to die.

Still I think the article is ahead of itself when talking about HD downloads. Broadband speeds are nowhere fast/reliable enough to be downloading 15-30GB films.

 

The XBox Video Marketplace is pretty a much sideshow though. The centerpiece in Microsoft's strategy in this regard is really IPTV.