Sony Group's Mid-Term Corporate Strategy Meeting (PS3 video store = summer 2008)

[wco81]

Problem is, you're locked into a device and service, as in the case of iPod and their Fairplay DRM.

If you collect a lot of movies on a PS3 with a 60 GB drive, what happens when that hard drive crashes or you want to move onto a new console?

You can certainly transfer the movies again to a new drive or PS4. But what if the service goes out of business? Isn't that what happened with PlaysForSure? People who bought songs using the old DRM are out of luck now that even a big company like MS decided to change their strategy in favor of a new service/brand with different DRM?

 

[wco81]

Nav,

Why check MovieLink or CinemaNow? iTunes is suppose to have the widest selection of movies for rent and a growing collection of "HD" (technically HD in resolution but low bitrates) movies for download or rent.

Of course, you'd have to run cable from the iMac to view them on your TV. If iTunes selection and pricing holds up, you could always pick up an AppleTV later.

However, Netflix just came out with a $99 box made by a small startup out here called Roku. The service is available to any Netflix subscriber. That is, you don't pay anything extra above what you pay for DVD/Blu-Ray rentals.

But the selection is suppose to be very limited. I think it's a licensing issue with studios. So mostly older movies and TV shows.

Supposedly there will be better boxes coming for the service and Netflix will probably try to secure licenses for more content which they can stream.

 

[patsu]

I forgot to say something important about these digital distribution services.

There are isolated success stories where an interactive cable operator earned more revenue from marketing related products to the audience. This is somewhat related to the tru2way platform I mentioned in a few posts. As long as there is a way for the consumers to respond to the content, there is an oppourtunity to sell them stuff.

Sony are apparently not signed with any content providers but themselves at the moment. That said, with one of the largest film libraries in the world, it's not a big worry for a launching service. The first titles will be all Sony. They've already shot the films and made their money and covered costs. They have negligible distribution overhead unlike disks. Almost all the takings of download is gonna be profit for them. I'd call that highly profitable, in terms of margins anyhow.

Shifty, see archie4oz's post.

Problem is, you're locked into a device and service, as in the case of iPod and their Fairplay DRM.

If you collect a lot of movies on a PS3 with a 60 GB drive, what happens when that hard drive crashes or you want to move onto a new console?

You can certainly transfer the movies again to a new drive or PS4. But what if the service goes out of business? Isn't that what happened with PlaysForSure? People who bought songs using the old DRM are out of luck now that even a big company like MS decided to change their strategy in favor of a new service/brand with different DRM?

There are always downsides to any value proposition. if they are able to finetune the price, they should be able to get some subscribers. Whether or not this is enough is a separate question altogether. The operators also have to worry about churn rate in general (just like Cellphone operators).

EDIT: Given that Sony took so long to roll out a service, I think it may be worthwhile to give them the necessary lead time. They will need to fiddle with the technologies, scale up the service and also experiment with content and business models.

 

[patsu]

It takes a Crisis

Okay... corporate story time. Sony giving itself a pat on the back for the Blu-ray victory, and how they won it:
http://www.forbes.com/technology/forbes/2008/0811/096.html

Let's get to work on the Playstation front. Need more joined forces. Please don't delay:
* Home beta
* The Last Guy
* Valkyria Chronicles
* Naruto
* Resistance 2
* LittleBigPlanet
* Tie video DRM to PSN id instead of PS3 id
* Cheaper Blu-ray movies [size=-2]Thank you very much[/size]

 

[eastmen]

all of those are going to come out on time . I have no idea about the drm and the cheaper bluray movies . We will see on those .

The only delay rumor i'm hearing (from a friend that works at necca ) is killzone 2 but its a matter of months that it will be delayed.

 

[patsu]

Isn't KZ2 a Feb 2009 title ?

 

[tirminyl]

all of those are going to come out on time . I have no idea about the drm and the cheaper bluray movies . We will see on those .

The only delay rumor i'm hearing (from a friend that works at necca ) is killzone 2 but its a matter of months that it will be delayed.

Another delay for KZ2? It was already pushed back to Feb 09 due to the packed fall schedule (ahem...Resistance 2 ). The rest of the time can be used to polish the game.

Okay... corporate story time. Sony giving itself a pat on the back for the Blu-ray victory, and how they won it:
http://www.forbes.com/technology/forbes/2008/0811/096.html

Let's get to work on the Playstation front. Need more joined forces. Please don't delay:
* Home beta
* The Last Guy
* Valkyria Chronicles
* Naruto
* Resistance 2
* LittleBigPlanet
* Tie video DRM to PSN id instead of PS3 id
* Cheaper Blu-ray movies [size=-2]Thank you very much[/size]

You have nothing to worry about regarding R2, Insomniac always hit their dates....I can't speak about the others

I read this article earlier today and I enjoyed it. I am glad to see Sony pull all of it's divisions together. I wish this was something my company would do as well. We develop all these software solutions for our customers but use none of our own solutions in our other products. Integrating their products to work with each other can only strengthen the company and make their users happy

 

[Shifty Geezer]

* Tie video DRM to PSN id instead of PS3 id

So you can movie share the same as PSN game sharing? I can't see the movie companies going a bundle on that. Netflix's deal on XB360 only works because everyone sharing the movie has to pay a subscription.

 

[patsu]

If they have a proper DRM system, they should be able to disable sharing for selected (type of) titles.

 

[Shifty Geezer]

How? You mean don't allow anything but the user account to show the film? I s'pose that might be enough, but in my case I have two friends accounts on my PS3 and I can swap to them. Any film bought by one, I could download to my machine through their account and watch if it was PSN ID linked. There's no way of preventing that which I can see.

 

[patsu]

If they lock it to the PSN id, it means people can backup their purchases or redownload -- which is fair use.

In your case (multiple accounts sharing 1 PS3), it's no different from locking the movie to the PS3 hardware id. So I don't think they are losing anything by locking the movie to PSN id. What they may want to prevent is people sharing a PSN account across multiple PS3s. In which case, they can either introduce a iTunes-like mechanism to limit sharing to n PS3s, or to limit the number of PSN account transfers.

 

[slider]

If they have a proper DRM system, they should be able to disable sharing for selected (type of) titles.

Much like how Warhawk and GT5: Prologue are locked to your account? That'd work for me. Even though I'm in Europe and realise the Vid Store is a while off the current system just doesn't click my buttons.

 

[manux]

Much like how Warhawk and GT5: Prologue are locked to your account? That'd work for me. Even though I'm in Europe and realise the Vid Store is a while off the current system just doesn't click my buttons.

Prologue can be shared. Warhawk cannot be shared.

 

[JPT]

Okay... corporate story time. Sony giving itself a pat on the back for the Blu-ray victory, and how they won it:
http://www.forbes.com/technology/forbes/2008/0811/096.html

Found that article quite interesting/enlightening, its good for Sony if they are able to become more cooperative in house.
Its tough when your colleagues "down the hall" just is not in sync with what your department is doing and visa versa.

 

[oramay]

Can't Warhawk be shared to some extent? I seem to recall the limitation is sharing parties can't play within 24 hours of each other.

 

[slider]

Prologue can be shared. Warhawk cannot be shared.

Ahh, cool. Thanks.

Can't Warhawk be shared to some extent? I seem to recall the limitation is sharing parties can't play within 24 hours of each other.

I recently set up my account details on my brother's PS3. Was able to DL Warhawk and even managed to play for one session (on both his and my own accounts on his machine). But since then I haven't been able to. So, to answer your question... umm, I don't know.

That 24 hours thing led me to this on Gamespot: http://uk.gamespot.com/news/6177766.html

Sorry for the OT. Kind of relevant to possible revisions on the video store maybe...

 

[Carl B]

* Tie video DRM to PSN id instead of PS3 id

That definitely won't happen, people would share like crazy and the studios are not down for that. This is the norm in the world of DRM anyway (iTunes). If you lose it, you've lost it. Which is why for video purchases, it just doesn't make as much sense. The entire industry would need to soften up on the matter first.

* Cheaper Blu-ray movies

That's not really up to Sony, and indeed would defy the entire reason that the studios wanted a high-def format to begin with (higher margins to DVD). I'm expecting BD to be sold at a respectable premium for some time to come.


************************************************************

I read the article; like with most things Sony-corporate related, I had mixed feelings on it. There were some interesting 'slice of time' insights for sure, but I don't think the author is otherwise very familiar with the goings-ons in the recent years. One thing I found interesting was the whole Gerstner mentoring; that was quite surprising for any number of reasons. Ultimately I'm of course a Kutaragi fan, and can't help but note that most of the technology initiatives that Stringer is credited for began with Kutaragi's hand. One thing that Stringer obviously has achieved though, and it's crucially important, is the breaking down of Sony's silo'd mentality... so so counter-productive for things to be that way. That was always a goal of the KK as well, but Stringer used the carrot where Kutaragi would have used the stick.

 

[Carl B]

...that is the price I paid for HD DVD/DVD combo discs there is no way I am paying that for BD only...

I hear ya, but remember back in the day the combos used to cost about $5 more than the BDs. They made the move to price matching later in the game when everyone was throwing harder and harder punches. Now that the format war is over, it's going to be a period of margin-reaping for the victor (those victors indirectly being the studios as well).

As for the good deal on Weeds, well... probably a benefit of not enough Weeds interest in Blu nation.

 

[wco81]

Mad Men Season 1 box set has same price for BD as DVD.

Most viewers saw the show only in SD too.

It varies by studio. During the format war, Blu-Ray detractors kept harping about greater manufacturing costs. But the selling prices were no higher than HD-DVD.

BD pricing seems more driven by the discretion of various studios than by manufacturing costs.

If BD prices fall to DVD levels, this whole video download discussion would be moot, at least for another decade.

OTOH, if video download pricing was much less than DVD or BD for that matter, then the discussion would be very much relevant.

 

[Carl B]

BD pricing seems more driven by the discretion of various studios than by manufacturing costs.

The manufacturing cost differential is like a ~$1 spread, so yeah. The studios can do at retail whatever they please without too much concern for which format costs more to replicate. In the future as the margins get squeezed (and volumes ramp), it's a bigger concern, but in the future the replication costs will have dropped as well.

If BD prices fall to DVD levels, this whole video download discussion would be moot, at least for another decade.

OTOH, if video download pricing was much less than DVD or BD for that matter, then the discussion would be very much relevant.

The major problem with digital distribution is the disparity of systems. These downloads use standards, but they're not themselves *a* standard. The various DRM schemes keep them from operating across a broad enough set of devices to let them be anymore than a niche in the market.

Apple I think goes above and beyond the term 'niche' here, but it's still not the same scope of ubiquity that can be achieved with something like a CD or DVD.

Hopefully in the future something will be hammered out, but until then I definitely hope the digital copy thing proliferates on Blu-ray, because I think it's a great compromise/value-add that ensures physical retained ownership. I don't know that I see all the studios adopting it broadly though at the end of the day.