Format Floundering eXtended

The HD video format war was thought to be over. Back in February Toshiba accepted HD DVDs demise and announced it would step aside, allowing Sony’s Blue-ray to be the industry standard. This was thought a momentous victory for Sony, who’s Betamax had been defeated by JVCs VHS in the videotape format war in the 1970s.

The industry predicted that once a format was settled on, sales of HD video players would explode. Unfortunately this did not happen because the increase in price did not match the overall picture enhancement. To the average consumer, the increase in picture quality between a HDMI DVD player and Blue-ray is marginal, but the Blue-ray machines are still double the cost. 

Then the roof caved in this week as Toshiba shot back with its new XD-E500 that utilizes its new eXtended Detail Enhancement (XDE) technology, which upconverts standard DVD to 1080p. Many would suggest this will have no impact on the market because Blue-ray players do the exact same thing as well as allow customers to view true HD videos. I disagree. Instead I think this is the final nail in the coffin for Blue-ray for three reasons:

1. Price. The Toshiba machine is half the price of a Blue-ray player, making it the lowest cost option for maximizing standard DVD quality.
2. Confusion. Did you know Blue-ray players also upconvert standard DVDs? It is likely the masses will not and try to extend the life of their DVD libraries until forced to abandon them. The longer the standard DVD player is in a majority of households, the greater the certainty that Blue-ray will be skipped over for reason number three.
3. Online movie distribution. Netflix, Blockbuster and Amazon all offer movie download and streaming options today. Then of course there is the iTunes behemoth. There is no need for a DVD player when you can obtain movies online and sync them to your TV. The need and desire to own movies in a physical form has past.

As stated by Molly Wood on Buzz Out Loud, Blue-ray is evolutionary, not revolutionary. It is not the next groundbreaking technology, but merely an expensive upgrade. Whether it is video, articles or radio, all media is headed online. Digital distribution is the revolutionary technology and it is right around the corner.

Digital Immersion…We are Almost There

Today was a bonanza regarding distribution of digital content online. Google, RealNetworks, Sony and Amazon all had significant announcements that impact how consumers can access video series, music, movies and books respectively. They all break new ground in some respect.

Possibly the most interesting development is that of Google, who inked a deal for distribution of a new animated web series by Seth MacFarlane through its AdSense network. This strategy blurs the line of content and advertising on the web because the two minute length clips will appear in the space normally dedicated for advertising on sites. Additionally, it could provide a new distribution system for high quality produced series. I expect it will increase clicks (prior to each segment an advertisement will play), but I fear that if it is to successful we will be inundated with web series “ads.” In terms of distribution, I think a better model can be seen with Hulu, though I understand Google’s desperate desire to entice visitors to take a glance at the advertising ghetto portion of web pages.

Moving along, RealNetworks announced that its Rhapsody music service will now offer 5 million DRM free songs at 256k-bit rates. This means the mp3s will play on any device at a higher sound quality than those from iTunes. While this is similar to recent offerings from Amazon and Napster, Rhapsody will also provide full length streaming to Yahoo! Music, MTV.com and others.

Changing topics, Sony plans to test a new movie distribution model via its Bravia TVs. The company will allow consumers to view the movie Hancock on Bravia TVs with internet access before releasing it on DVD. This could be the precursor to the end of set top boxes and the ability to surf the web directly from your TV without a separate computer connection. Interesting. Lastly, Amazon’s Kindle got a boost with news that Princeton University will begin making its textbooks available for the digital reader. It is the fourth university to do, but I still question if consumers will ever embrace reading novels and longer text on screens rather than pages. While I am a digital enthusiast, I still prefer reading off of paper.