Next Generation DVD – Change at the Speed of Slow

"You've got to be very careful if you don't know where you're going, because you might not get there." – Yogi Berra, Baseball Hall of Fame Player/Coach

Every year we have a sports season – baseball, football, basketball, soccer, etc – a definite beginning and end. A winner. A loser.

In the PC/CE industry we have…Moore’s Law. We have an ever changing landscape of technology change. We have the mercurial wants, needs, desires of consumers. We love watching the industry push and shove to be in front of the competition with claims, counterclaims…threats, counterthreats…brags, counterbrags.

Nothing is more typical of this today than the desire to entertain us – you know the consumer. The folks who pay for the tickets to the game. Specifically the HD DVD team…the BD team…the everything over the Internet team. They’re all running the bases and have more points on the scoreboard…just ask them!

“Why buy good luggage? You only use it when you travel.” Why buy highdef burners, players, discs when you can’t copy, save, share, use the content when you want, where you want, how you want? Maybe consumers aren’t ready to play!

The optical entertainment game started about 30 years ago and we’ve been improving the game ever since.

Snapshot History
While baseball may be the U.S. pastime and soccer the ROWs pastime, technology “advances” are our pastime.

To understand the optical game, you need to understand its past. So here are some highlights:

1977-- Philips began work to replace vinyl records with the MiniRack, MiniDisc, Compact Rack or what they ultimately called the Compact Cassette

1979-- they…held a press conference. Japan’s MITI (Ministry of Industry & Tech) wanted a single next generation audio disc so Philips/Sony did something unprecedented in the PC/CE industry…they agreed

In ’82 the 1st CD player was shown and shortly Abba knocked out the first CD. Player cost about $1000. CD replaced vinyl, replaced cassettes, replaced 8, 5.25, 3.5-in floppies. CD kick started the digital age!

By 2000 more than 480 million CD players, burners were in use around the globe, more being shipped every day. CD replication had reached 11.04 billion discs (3.89 billion pirate copies) and CDR sales had peaked at 2.455 billion discs

1996-- industry – entertainment, IT, CE – decide it is time to replace the floppy, VHS, yes CD with high capacity single best solution for:

• Movie quality
  
• 5:1 sound
  
• 2-hrs video
  
• 3-5 languages, multi aspect ratios
  
• Copy protection (aahh yeah!!)
  
• AV/PC format
  
• Backward CD read compatibility
  
• Write-once/rewritable
  
• File system for all content, random access
  
• Capacity growth
  
• Cheap drive/media
  

’97, 98, 99-- DVD-R, DVD+R, DVD-RAM, DVD-RW, DVD+RW burners introduced, demoed, press conferenced, introduced, demoed, press conferenced

2000 --Sony decided they needed to sell something, anything so they threw all of the “ideal solutions” into a single box, cheap boxes emerged

2003-- industry decided to raise the stakes (for the consumer) said HD DVD (highdef DVD) was the next winning standard

CES 2006 --Toshiba introduced BD player and over 200 fantastic titles would be available to EOY. Philips introduced their BD counteroffer BD (blu-ray disc) solution. Both about $1000

2nd, 3rd, 4th gen products have been announced and an LG combo for about $1200.

Aug 2007 prices for the two flavors had dropped to $299, $499 respectively, Amazon was offering eight free titles with any purchase

The Other Option
The Webbies claim the game is already over and they won! Like our kid they’re downloading everything from the Net and throwing it on their system. Why buy an old-fashioned disc when you can download it?

Yeah…

• 2 hr HD movie download with DSL, low bit rate less than a day, high bit rate 2 days
  
• Cable download low bit rate 9 hrs, high bit rate less than a day
  
• Satellite download low bit rate 16 hrs, high bit rate 1.5 days
  

Mental, Physical Game
We can move geeks and early adopters pretty fast. They’ll buy the next great thing even before it’s a thing. Regular consumers – you know where the volumes are created – it takes them awhile…a long while!

DVD was the fastest technology ever introduced to the consumer (we love repeating that!) and it took eight years to receive 50% household penetration! It was clearly better than tape…you could see the difference…BAM!!!

Visited Best Buy or Wal-Mart to look at the next great solutions side-by-side? Asked a technical sales person to tell/show you the difference? They look at you and give you a Yogiism… “I wish I had an answer to that, because I'm tired of answering that question.”

Consumer’s Answer
Forget our kid, geeks, early adopters who let their notebooks run all night downloading a movie or get their news on YouTube. The volume sales go to folks who want to watch a movie, want to play it in multiple locations, want to just watch the game. For them, "Baseball is 90% mental -- the other half is physical."

The industry was lucky with DVD. The mental, physical game made it easy to determine a winner:

• better picture
  
• better business archiving storage
  
• more storage capacity (up to 8.5GB)
  
• burners, media got cheap…real fast
  

Moving to the new playing field is tougher…not impossible, just tougher. And it’s going to take longer. Why? The “industry” is busy telling the folks in the bleachers what they want:

• superb video
  
• director’s cuts, outtakes, control of the movie, actor’s voice overs, interactive game sites, even better protection (DRM), new hardware/software/content, did we mention DRM?
  

Start the freakin game!

Good Enough
So if you can’t show us then we’re pretty happy with the game that is being played right now. You know the one with 10s of thousands of titles. The one with millions of players, recorders, burners in use around the globe. The one with really cheap media available. Simply want to sit down after a hellacious day at the office with friends, family and …watch a movie!

For Tellywood, highdef blue disc technology is all about more, richer content, more added features, better DRM. For consumers discs are all about slouching on the couch or slipping into the chair and watching a worthwhile movie.

Sure we’re creating, capturing, replicating content faster than ever (IDC notes there will be a 6x increase in the next four years).

But the kid’s YouTube entries are about 20MB. Our ppts are 10MB. Our 500 digital photos are under 600MB. Our home movies (taking out all the bad shots and segments the wife says don’t make her look beautiful) are about 800MB. Our HD TV timeshift shows are (less ads) are about 2.4GB.

Is it any wonder that industry players who want to make their shareholder numbers today are knocking out more and more DVD burners (they also do CDs…ya know!)? Is it any wonder that folks who go to the stores are buying single, 10-packs and spindles of CDs/DVDs?

The sweeping change from CD to DVD to Blue isn’t being slowed by team differences. That’s part of the game. The teams are playing against each other as hard as they can using every hook, crook, sneaky play they can think of and it isn’t working because…it isn’t about them! Slump? They aren’t in a slump they just ain’t hitting. As Yogi said, "You can observe a lot just by watching."

Somebody – everybody -- has to get out of the dugout, get off the field, go into the stands and listen to the crowd…all of the crowd.

You’ll see folks like our kid downloading movies…posting to MySpace…tending to his crops on Second Life…researching a paper that is due next week…downloading more MP3 songs…IMing a friend in Boston…

Us? We’re going to watch some of Yogi’s old game highlights.

As Yogi said, it ain’t over till its over and the technology that gets left behind can only say one thing…”we made too many wrong mistakes.”

Oh, and the llllloooonnnngggg term highdef winner once the game really starts for the crowd?

It’s the content…the games…the titles…the capacity !