The Threat (and Promise) of "Digital Downloads"

 

With the death of HD DVD, many of the format's most ardent supporters are proposing that Blu-ray will similarly becomes extinct in the near future due to an upcoming onslaught of digital download services.  Some of these people are simply taking a page from the Microsoft playbook... whose main reason for supporting HD DVD appears to have been delaying Blu-ray's mass adoption until they had digital distribution ready to go.  Others, however, seem to be buying into the same hype they fell for with HD DVD, and I would like to set the record straight -- so that these same consumers don't get burned a second time.

Don't get me wrong, there is true potential for digital download success, and there are some benefits to both the consumer and the movie studios... but it is neither a replacement for Blu-ray discs nor the second coming of Christ some seem to think it is.

Let's take a look at the various forms of digital distribution and their potential place in the market:

VOD:

VOD, or "Video on Demand" is a service provided by many cable companies where customers can essentially "rent" new release movies that are streamed from the cable company to the customers' television sets.  This service is designed to go directly after the video rental market.

The benefits of VOD are that there is no additional equipment to buy and movie "rentals" begin immediately after choosing to rent them.  The downsides (currently) are that the cable companies compress the signal to such a degree that HD signals frequently macro-block and rarely look much better than a DVD... while SD signals look no better than any other digital cable signal.  These downsides are brought about largely by bandwidth limitations which will, over time, resolve themselves due to fiber-optical cabling being routed directly into customers' homes, as well as improvements in existing streaming techniques.

The question remains, however, whether the cable companies will choose to use the additional bandwidth to improve the quality of their releases, or to allow more titles to be offered.  There is certainly financial incentive, though, to keep the individual titles at the lowest bitrate possible, and to use any additional storage and bandwidth available toward offering additional titles.  The entire premise of VOD is that convenience trumps quality.  Most films aren't even shown in their original aspect ratio... with the cable companies favoring "reformatted for your TV" transfers.  While quality should improve somewhat over time... it is truly the convenience factor that the cable companies are selling.

Download Rental Services:

Rental services that download titles to a set-top box, video game system, or PC are just starting to emerge on the market in a major way.  The major services offered at this point are the XBox Live Marketplace, AppleTV, and Netflix "Watch Instantly."  These services, like VOD, have their sights targeted on the rental market.

The upside to these type of rental services is also convenience, and potentially, a larger portfolio of titles compared to VOD.  Unlike store rentals, these titles are also never "checked out," adding to the convenience factor.  The cost however, may be slightly higher than going to your local Blockbuster or Hollywood Video store, and the limitations are similar to VOD.

Quality is improving in the download rental service arena, with HD titles on Apple TV's service frequently besting the DVDs of the same title.  They still aren't anywhere close to the quality of Blu-ray discs, but they can be good enough for many consumers.

Download-to-Own Services:

Similar to the download rental services, download-to-own services such as "Amazon Unboxed" strive to provide convenience to the customer -- though they do this at the cost of quality and flexibility that physical media provides.

This is the type of service that is designed to truly challenge physical media such as Blu-ray disc.  Currently, most services are PC-based... severely limiting their appeal.  But in the future, download rental services are likely to expand into the download-to-own arena.

Again, though, the focus is on convenience over quality.  Even HD downloaded material is FAR below Blu-ray in quality, and while the quality will likely improve over time... it is still in the provider's financial interests to keep the total file size as small as possible.  As the consumer will need to store the material on his or her hard drive, it will also be in the consumers' interest to keep file size down as much as possible.

The other problems with the download-to-own model (for consumers at least) is that your ownership of any title is predicated on the existence of the service and is tied to your owned hardware.  You cannot "loan" a title to a friend... and if the service you subscribed to goes "bust" you run the risk of losing your purchased titles... especially if your player goes bad.

Conclusion:

The fact is we live in an immediate gratification society.  People want things immediately.  This certainly works to the advantage of digital distribution methods.  Many consumers value convenience over quality: that can be seen in the success of audio downloading and in VHS's dominance over Laserdisc.

Fortunately, though, all is not lost for connoisseurs of quality media, and those who would like to be able to watch films they purchase whenever they like.  Just as VOD didn't stop DVD from becoming the most successful media format in history, neither VOD or Digital Downloads seem likely to stop
Blu-ray from achieving widespread success.  Even the download-to-own model has far too many limitations and lacks the convenience factor of Blu-ray.  Add to that, bandwidth throttling and download caps being implemented by ISPs and the prospect of downloading feature-length HD video seems even less likely to make major inroads anytime soon.

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Criterion and Other Small Distributors Embrace Blu-ray

 

While all six major Hollywood studios have officially thrown their weight behind the Blu-ray format, the situation with smaller studios has been a bit more troubling. It's no secret that the entry price to put a title on Blu is higher than for DVD, while the potential revenue is currently lower.  However, as many consumers, especially home theatre afficionados, have started buying their titles on Blu-ray disc exclusively, there is still a good amount of additional revenue to be earned from a Blu-ray transfer.

This, of course, leaves smaller distributors in a fairly awkward position.  They want to make the move into Blu-ray, in order to start building a customer base among those who have already made the transition, but they don't want to pay the mastering costs for a title that will not sell.

With the format war over, though, many of the smaller distributors are starting to make the plunge. Over the last week, both Kino International (an independent and foreign film distributor) and Genius Products (distributor of Weinstien Co films on video) have announced their intentions to support the Blu-ray format.  Kino intends to bring "Fallen Angels" out as their inaugural title, while Genius has oddly decided to launch into the Blu-ray format with "Lonesome Dove."  Some may remember that initially Genius/Weinstien Co. were HD DVD backers though they haven't released any titles on that format in close to a year.

Perhaps even more exciting, at least for those who enjoy classic and avant garde films, The Criterion Collection has also announced their plans for the Blu-ray format.  Criterion first made a name for themselves by essentially creating the "special edition" laserdisc... and is often credited with the "invention" of director's commentaries, director/D.P.-approved transfers, and many other features that became commonplace on DVD years later.

While Criterion was able to release a number of high profile titles as Special Edition laserdiscs, their access to major films has deteriorated somewhat over the years as studios saw more revenue potential in releasing special edition DVDs themselves.  While Criterion does still have agreements to release selected major studio fare, the majority of their releases now are special editions of mainly smaller films that they deem important.  While Criterion's DVD releases almost always have an MSRP of at least $39.99 due to the extreme amount of bonus materials and costs involved in the remastering process, Criterion has surprised everyone by stating that their upcoming Blu-ray releases will be released at identical prices to their DVD counterparts!

The initial slate of Criterion Blu-ray discs is due to hit stores in October.  The scheduled titles are:

• The Third Man
• Bottle Rocket
• Chungking Express
• The Man Who Fell to Earth
• The Last Emperor
• El Norte
• The 400 Blows
• Gimme Shelter
• The Complete Monterey Pop
• Contempt
• Walkabout
• For All Mankind
• The Wages of Fear

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Opinion: Why Blu-ray Will Succeed

 

With the recent death of the competing HD DVD format, many brand loyalists (read: paid shills) have taken to proclaiming that digital downloads are the future, or that DVD will continue on forever as the media format of choice.  Granted, these same people predicted that HD DVD would win the format war, so their crystal balls are obviously in need of serious repair, but since the claims are being made, it's worth taking the time to refute the nonsense.

First of all, DVD sales are falling.  Already.  That's the primary reason a new format is deemed necessary by the studios.  DVD is 480p at its best.  There's no getting around it -- DVD is standard-def in a soon to be high-def world.  Consumers can already watch the news (CNN) in HD... why the hell would ANYONE want to watch Hollywood films in a lower quality than the nightly news?

While HDTV still has a long way to go before completely replacing SD sets, the upcoming U.S. "analog sunset" will help a great deal... as will the fact that major retailers, such as Bet Buy, have stopped carrying SD sets in larger display sizes.  HDTV is here now, and as consumers replace their existing sets, its popularity will continue to grow exponentially.

In the retail market, even upconverting DVD players have reached a point where the profits to both retailers and manufacturers are almost nonexistant.  There is essentially no motivation for salespeople or retailers to try to push upconverting DVD players on new HDTV purchasers.  Blu-ray players, on the other hand, still produce a significant profit for both stores and manufacturers.  Given that Blu-ray is TRULY HD, and not just upscaled SD... there is significant benefit to the consumer as well.  With the format war out of the way, stores are going to be pushing like-branded Blu-ray players to those customers shopping for HDTVs in a big way.  And consumers... seeing the huge picture quality advantages will take advantage of the "combo offers" made by retailers and will be buying into Blu-ray at the same time as they get their new HDTV.

The "keeping up with the Jones'" factor cannot be ignored either.  Prior to HD DVDs downfall, many consumers didn't want to risk being left with a soon-to-be-deceased format.  With that settled, and Blu-ray as the sole mainstream HD format going forward, it is now the "must have" product for technophiles and others who want to be ahead of the curve.  Soon, the trend will move to the average consumer, much as DVD did in the late 90s.  Soon enough, most consumers will know SOMEONE with a Blu-ray player that won't shut up about how much better it is than DVD, and will decide that they, too, need it.

As for "digitial downloads," the latest brainstorm from previous HD DVD supporters, I'll admit... it IS coming.  Is it a threat to Blu-ray?  No.  Digital downloads will make a dent in the rental market... that much is certain.  How much of a dent it makes has yet to be determined, and depends upon a number of factors such as cost, quality, and availability of high speed internet access for the consumer.  The digital download services currently available lack the quality and title availability of Blu-ray discs.  Worse, they cost more to rent than Blu-ray discs. There really is no upside, except, perhaps in convenience.  The quality will go up some, prices may come down a bit, but the overall strategy of digital downloads (and cable/satellite VOD as well) is to offer as much product as possible... not to provide the best viewing experience possible.  As such, the amount of content available will likely increase, but the quality of the actual product is unlikely to take a major turn for the better... especially compared to the quality of Blu-ray disc.

As for digital download services that provide an ownership model similar to that offered by Blu-ray disc or DVD, no successful service yet exists.  One or more are likely coming... but again, the quality of the transfer is sure to pale in comparison to Blu-ray, and any "bonus content" is sure to be left behind in an effort to minimize the bandwidth required to download the purchase.  For those who supported HD DVD due to its having less DRM than Blu-ray, be prepared for the apocalypse, as digital downloads will be chalk full of DRM, and will prevent you from doing things you CAN do with Blu-ray disc... such as loaning discs to friends or selling titles you no longer want. 

The other MAJOR problem for digital download services is that no retailer will be pushing for the technology.  Best Buy, Circuit City, Wal-Mart, etc. all have a major interest in preventing digital downloads from becoming a viable alternative to in-store sales of media.  Media... Bluray or DVD... provides profit to retailers and gets consumers into the store at which point they may be able to be sold on other products with an even higher profit potential.  Digital downloads and VOD services keep customers in their homes, and currently don't provide any revenue to major retailers, so their interests are completely at odds with potential providers.  To those who don't think the Best Buy's of this world have any influence over consumer trends... there is no hope for you.  To the realists in the audience, however... just know that what stores push is what sells.  I don't want to imply that consumers are sheep... but... it's pretty simple really.

In short, Blu-ray is THE future HD format, and there's not a whole lot the haters can do about it.  All the phophesizing and FUD in the world can't change the facts in the stores.  Those with an irrational hatred of certain companies will certainly hate the reality of the situation, but that alone won't change it.  The future is here.  And... "The future is Blu."

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Paramount/Dreamworks Announce Blu-ray Support!

 

Within two days of Toshiba's announcement that they would be discontinuing production and sales of the HD DVD format, the last of the HD DVD-supporting studios have now announced Blu-ray Disc plans going forward.

Universal, long Toshiba's chief ally, made their announcement of support for Blu-ray yesterday, and now today Paramount has sent a notice to The Hollywood Reporter that they, too, will be supporting the Blu-ray Disc standard:

"We are pleased that the industry is moving to a single high-definition format, as we believe it is in the best interest of the consumer," the statement reads. "As we look to (begin) releasing our titles on Blu-ray, we will monitor consumer adoption and determine our release plans accordingly."

No specific release plans dates were announced, but it is expected that the titles Paramount had previously released on Blu-ray Disc (and then pulled when the studio made a deal for HD DVD exclusivity) would be re-released to the retail market first, followed by announcements on new titles.

This means that all six of the major Hollywood studios officially support the Blu-ray Disc format, unifying Hollywood behind the next-gen optical format.  This should end the customer confusion that was associated with the "format war" and allow consumers to buy into the format with confidence that the format has the full support of Hollywood.

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Official Press Release: Toshiba Exiting HD DVD Business

 

Well, it's official now.  Toshiba is exiting the HD DVD business and will stop selling product in retail by the end of March.  This includes all HD DVD players, recorders, and PC drives.  No mention was made if they will make a Blu-ray Disc player in the near future or if they intend to stick with DVD for the time being.

Their official press release is shown in full below:

Toshiba Announces Discontinuation of HD DVD Businesses -- Company Remains Focused on Championing Consumer Access to High Definition Content

TOKYO--Toshiba Corporation today announced that it has undertaken a thorough review of its overall strategy for HD DVD and has decided it will no longer develop, manufacture and market HD DVD players and recorders. This decision has been made following recent major changes in the market. Toshiba will continue, however, to provide full product support and after-sales service for all owners of Toshiba HD DVD products.

HD DVD was developed to offer consumers access at an affordable price to high-quality, high definition content and prepare them for the digital convergence of tomorrow where the fusion of consumer electronics and IT will continue to progress.

"We carefully assessed the long-term impact of continuing the so-called 'next-generation format war' and concluded that a swift decision will best help the market develop," said Atsutoshi Nishida, President and CEO of Toshiba Corporation. "While we are disappointed for the company and more importantly, for the consumer, the real mass market opportunity for high definition content remains untapped and Toshiba is both able and determined to use our talent, technology and intellectual property to make digital convergence a reality."

Toshiba will continue to lead innovation, in a wide range of technologies that will drive mass market access to high definition content. These include high capacity NAND flash memory, small form factor hard disk drives, next generation CPUs, visual processing, and wireless and encryption technologies. The company expects to make forthcoming announcements around strategic progress in these convergence technologies.

Toshiba will begin to reduce shipments of HD DVD players and recorders to retail channels, aiming for cessation of these businesses by the end of March 2008. Toshiba also plans to end volume production of HD DVD disk drives for such applications as PCs and games in the same timeframe, yet will continue to make efforts to meet customer requirements. The company will continue to assess the position of notebook PCs with integrated HD DVD drives within the overall PC business relative to future market demand.

This decision will not impact on Toshiba's commitment to standard DVD, and the company will continue to market conventional DVD players and recorders. Toshiba intends to continue to contribute to the development of the DVD industry, as a member of the DVD Forum, an international organization with some 200 member companies, committed to the discussion and defining of optimum optical disc formats for the consumer and the related industries.

Toshiba also intends to maintain collaborative relations with the companies who joined with Toshiba in working to build up the HD DVD market, including Universal Studios, Paramount Pictures, and DreamWorks Animation and major Japanese and European content providers on the entertainment side, as well as leaders in the IT industry, including Microsoft, Intel, and HP. Toshiba will study possible collaboration with these companies for future business opportunities, utilizing the many assets generated through the development of HD DVD.

All that's left is to see announcements from Universal and Paramount/Dreamworks, which could come as early as later today.

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Rumor: Toshiba to Give Up High-def Format War Within the Next Few Weeks

 

The Hollywood Reporter is reporting that their sources are telling them Toshiba will be "pulling the plug" on the HD DVD format within the next few weeks. Given all the recent news of companies defecting the HD DVD camp, the move isn't all that surprising, though the speed at which the format war is ending is somewhat startling.

Since Warner Brothers announced they would be supporting the Blu-ray format exclusively in the future, Blu-ray has emerged as the clear winner in a format war that could have dragged on for considerable time. With Blu-ray now commanding over 80% exclusive studio support, there really doesn't appear to be any plays left in Toshiba's playbook. Despite their latest price cuts on players and 1/2 off sales on discs, the HD DVD camp only managed to grab 19% of disc sales last week, and only 28% of player sales.

In an out of character and fairly evasive manner, Toshiba's official response was:

Officially, no decision has been made, insists Jodi Sally, VP of Marketing for Toshiba America Consumer Products.... But she hinted that something's in the air.

Unofficially, however:

"An announcement is coming soon," said one source close to the HD DVD camp. "It could be a matter of weeks."

Perhaps more tellingly, however, is the deafening silence from other HD DVD supporters:

Several phone calls to Kevin Collins, Microsoft's normally accessible "HD DVD evangelist," were not returned. Nor were calls to Ken Graffeo, the Universal Studios Home Entertainment executive who doubles as co-president of the HD DVD North American Promotional Group.

When reporters can't get "Crazy Ken" on the line to talk about HD DVD, then its probably a safe bet that the end is near.

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Fallout From Warner's Blu-ray Exclusivity Announcment

... It's all over but the Shouting

 

Well, it's been an interesting 48 hours since Warner's war-ending announcement that they would be supporting the Blu-ray disc format exclusively, and dropping all support for the HD DVD format in May of this year.  Much has been stated, both officially and unofficially... so here's the rundown.

Friday's Official Reaction

The first thing that happened (almost immediately) was that Toshiba issued a press release stating that they were "shocked" and "disappointed" by Warner's announcement, and that they would "assess the potential impact of this announcement with the other HD DVD partner companies and evaluate potential next steps."

While that was rather boilerplate on its face, the shocked statement is rather odd given the events behind the scenes.  Not having an immediate "plan B" was far more shocking to me than the Warner announcement (which nearly everyone had been expecting for some time now).  Regardless, the apparent "next step" they evaluated and decided on was to completely cancel the HD DVD PRG's press conference at CES as well as the individual interviews with reporters. 

Let the FUD Begin!

Well, that was what "officially" happened on Friday.  Unofficially, the war ended.  Blu-ray fans rejoiced... and HD DVD fans immediately reformed themselves into two camps.  The first camp readily accepted defeat and is at least glad that only one format will exist going forward.  While they all wish HD DVD had been the victorious format, they at least are glad that this nonsensical war will be brought to a close, and that hopefully more consumers will embrace high-definition media as a result.  The second camp... well... they let loose a tirade of legal threats and claims of bribery, and officially announced that they won't support Blu-ray no matter what.  It's hard to take these people seriously, but some of their claims are pervasive, so here's my quick rundown on the most ludicrous claims:

1) "HD DVD isn't dead." 

Yes, it is.  All the "ways we can still win this" are insane.  Toshiba isn't going to spend billions upon billions of dollars to try to salvage HD DVD at this point.  They may continue on a bit longer pretending to, but they aren't going to pony up the cash necessary to "buy" consumers, now that they've failed to buy movie studios.  Likewise, Universal and Paramount execs have no reason to continue supporting Toshiba's failed format.  They have contracts (at least Paramount does)... but those contracts have "outs," and you can bet they're looking at every option to get out as soon as possible.  These companies have investors to answer to... not format "fanboys."  The fact that neither studio has said anything to reaffirm its commitment to HD DVD since the Warner announcement is VERY telling.

2) "Warner wanted to go HD DVD... and Fox was ready to go to!"

Truth is, no one knows exactly what the motivations or desires of the various companies are/were, but here's essentially what we KNOW happened behind the scenes. 

Last August, Toshiba knew they needed to make a big play and take away some of Blu-rays studio support.  They approached Warner with a large offer if they would go HD DVD exclusive.  They were turned down.  Warner came out and said that they were interested in going format exclusive, but wasn't going to do it in the direction of extending the war indefinitely.  They wanted the war over.  Toshiba took their offer to Paramount, and Paramount accepted.  The Blu-ray companies didn't find out until it was too late, but decided that it was time to go on offense.

Starting in September, Sony began a long negotiating process with Warner to get their exclusivity.  Warner made it clear to all parties that they were going to make a decision after seeing the fourth quarter sales numbers.  Obviously, this made Blu-ray confident as sales of discs and total players (including the PS3) were heavily in their favor.  Toshiba knew it needed to make a play, and approached Warner again. 

By the end of December, it was clear that Blu-ray had the sales advantage as well as the studio support to continue as the single format, and Warner told Toshiba that they would not go HD DVD exclusive unless Toshiba could get one of the Blu-ray supporting studios to go with them.  Knowing that Sony and Disney wouldn't even talk with them, they approached Fox.  Fox accepted the meeting, and some negotiations took place.  Whether or not Fox really considered an offer, just wanted to see what Toshiba would offer, or was just playing Toshiba for fools, can't be clearly stated by anyone outside of Fox.  Regardless, in the end, Fox passed on the offer, and Warner announced Blu-ray exclusivity.

3) "Warner was paid million billion trillion kajillion dollars by Sony to go Blu-ray exclusive."

Who knows?  You don't... I don't.  There hasn't been ANYTHING in the press to indicate that this is so, unlike the widely reported figure paid to Paramount by Toshiba.  Speaking in a conference call with reporters, though, Warner Home Entertainment President Kevin Tsujihara, had this to say:

"The packaged media business is a $42 billion dollar business worldwide at the retail level, and we [Warner] have the largest market share of anybody.  From our perspective, the most important piece of this whole puzzle is, "How do we get growth back into this category?" That far outweighed anything else.  This [decision] was one hundred percent around what makes the most sense for the consumer, the retailer and the industry. This was not a bidding war. This was all about what was best, strategically, for us."

So, take that how you will, but it certainly doesn't appear that they were "bought."  One way or the other, though... does it really matter?

Post-Friday Events

Saturday was essentially silent for "official news," though much of the above rhetoric was discussed to no end, and rumor-spreading reached an all new level of art.

Sunday marked the beginning of the official CES press conferences.  Given the HD DVD PRG's pull-out from the event, many HD DVD fans who thought the format could continue in some form turned to Toshiba's press conference for news of how their beloved format would come back from the dead to claim the ultimate victory.

Instead, conference attendees were subjected to possibly the briefest press conference in CES history, followed by absolutely NO Q/A session.  First, the President of Toshiba came out and essentially read their press release regarding their disappointment at the Warner news.  Then, VP of A/V Marketing Jodi Sally (whose resume should hit Career Builder any time now)  came out practically in tears, telling the attendees: "As you can imagine this is a tough day for me... I expected to come here today to share the successes of HD DVD...  It's difficult for me to read all the pundits declare that HD DVD is dead, but we've been declared dead before."  According to Gizmodo, she appeared to be fighting very hard not to break down onstage.  I truly do feel sorry for her... if not the format her company supported.

And that was it.  No 4th gen HD DVD players shown.  No discussion of the path ahead.  No bringing out Paramount or Universal executives to reaffirm their companies' commitment to HD DVD.  In fact, no more mention of HD DVD what-so-ever.  Just a brief discussion of Toshiba's new LCD TVs.

And this is how a format dies... not with a concession speech, but with the format fading away into oblivion.

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It's Official! Warner is now Blu-ray exclusive!!!!

 

Wow... we all knew it was coming, but the timing is awesome.  Warner Brothers studios (and logically New Line as well) have made it official: they are going to be supporting Blu-ray exclusively from now on!

Warner has been one of the biggest releasing studios of Blu-ray content, and THE largest releaser of HD DVD content.  This will leave Paramount and Universal as the sole HD DVD-supporting studios left.

Under the new studio landscape, Blu-ray will have roughly 70% of all Hollywood revenue from films in its camp exclusively, while HD DVD will have less than 30%.  As far as actual title releases go (judging by past studio releases), Blu-ray will have an even bigger advantage.

According to Warner Brothers chairman Barry Meyer, "The window of opportunity for high-definition DVD could be missed if format confusion continues to linger. We believe that exclusively distributing in Blu-ray will further the potential for mass market success and ultimately benefit retailers, producers, and most importantly, consumers."

This is undoubtedly the biggest move to date in the ongoing Blu-ray vs. HD DVD format war, and it seems it will be only a matter of time until the few holdouts (Universal and Paramount) move to releasing their titles on the Blu-ray format.

For those who have purchased HD DVD players, Warner will continue bringing out titles in that format until May, 2008, though they won't be released until after their Blu-ray and HD DVD counterparts.

Expect a domino effect to take place with major retailers ditching the HD DVD format and the two remaining hold-out studios to begin releasing titles as well.  Paramount, which reportedly took $150 million in advertising incentives to go HD DVD-exclusive could have a problem, but they reportedly have several "outs" in their contract, so even they should be able to come around shortly.

Regardless of which video format you may have supported, most will agree that Warner choosing Blu-ray cements its victory and should allow the Blu-ray format to move forward as the high-definition industry standard.  For those HD DVD-supporters who somehow ended up on my blog, be sure to check out the Blu-ray player page accessible from the menu navigation on the right side of this page to determine what is the best way for you to join the winning team sooner rather than later.

Source

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How-to: Building (or upgrading) a PC for Blu-ray

 

With the Blu-ray PC revolution firmly upon us, more and more people are choosing to build their own Blu-ray capable PCs.  The components you choose can make or break your Blu-ray PC experience, though your needs will vary depending on if you're building a general purpose PC, a true home theatre PC, or an all-out gaming PC that also features Blu-ray playback.  I recently worked with Blu-ray.com forum member davowavo on building a new general purpose Blu-ray playback capable PC, and I would like to thank him for his suggestion to put together this guide, and especially for collecting much of our dialog that makes up a significant chunk of this guide.

 

Building new vs. Upgrading

The first thing many people wonder is whether they can upgrade an existing PC for Blu-ray playback or whether a new system will be called for.

The easiest way to check if your system has the necessary hardware to playback BD video is to run Cyberlink's BD/HD DVD advisor tool available here.  This will let you know if your graphics card, processor, memory, and OS are up to the task.  Now, if either your graphics or monitor are not HDCP compliant and connected via DVI or other digital cable you will fail that part of the test.  That's okay, as you can use VGA cabling to connect the monitor and avoid HDCP issues.  If any of the other major components doesn't show as "green" (or passed) then you will need to update those components as well if you choose to upgrade your system for Blu-ray playback.  If you want to see the exact system requirements for Blu-ray playback, you can also check out this link.

In general, if your PC is more than a couple of years old, it likely would require a major overhaul in order to support Blu-ray playback and an entirely new build might be a better option.  Newer systems, if they feature a supported video card, may need nothing more than a Blu-ray disc drive be added, in which case upgrading certainly makes far more sense.

 

Blu-ray Disc Drives

Whether you are upgrading or building a new system for Blu-ray playback or recording, you are definitely going to need a Blu-ray optical drive.  The BD drive landscape is changing frequently and new models are constantly coming out that are faster and cheaper than the earlier models.

You essentially have three choices for your BD drive.  You can get: 1) a drive that reads BD/DVD/CD media, 2) a drive that reads BD media, but can write to DVD/CD media, or 3) a drive that reads and writes to all those media, including BD.

If all you want is a reader, expect to pay a little shy of $200 for a Lite-on (or soon-to-be released Benq) read-only drive.  The "combo" format (reads BDs, writes DVDs and CDs) go for under $300 from Pioneer and ASUS.  Drives that can write to BD media generally go for $500-600 at retail from a wide variety of vendors.  The latest generation of these drives can usually write to 50GB discs, and can record single layer BD-Rs at 4x speed. Sony and Panasonic have an excellent new drive out for writing discs at 4x, as does Pioneer, though the Pioneer cannot record 50GB discs.  LG also makes a BD reader and BD writers that also can playback HD DVD discs, for those looking for that capability.  For a full list of all the available drives and their specs, check out my full list.

Whichever drive you pick, be sure to get either a retail drive or an OEM drive that includes the necessary playback software.  There's no sense in saving $20 by getting an OEM drive just to find out you need to shell out $100 for a full copy of PowerDVD Ultra.

 

Ideal Specs on a New Build

If you've decided to do a completely new PC build, you will want to look for the following specs at a minimum:

• Intel or AMD dual-core processor (at least 2Ghz for Intel or 2.2Ghz for AMD)
• ATI HD2400 or HD2600 series or Nvidia 8400, 8500, or 8600 series graphics card, to offload much of the video processing to the graphics card. The card needs at least 256MB of onboard RAM
• 1 GB RAM minimum (though with Vista 2 GB is definitely better)
• Windows XP SP2 or Windows Vista
• A large, high resolution monitor will, of course, make BD viewing a much better experience and allow you to see more of the inherent resolution of the video

If you are building a PC also to be used for gaming you will want to increase your specs accordingly:

• Faster dual core or quad core processor
• ATI HD3800 series or NVidia 8800GT -- the other Nvidia 8800 series cards and the ATI HD2900 series cards will work for BD playback, however they do not feature the more advanced video processing that these models and the lower end models shown above do, so Blu-ray playback will consume considerably more processing power than it otherwise would
• 2 GB RAM minimum

 

Specific Component Recommendations

This section is made up largely of components that davowavo and I discussed when he was in the process of designing an excellent general purpose PC that would also allow for great Blu-ray playback.  I don't really love or hate any specific companies, and your needs may well be different, depending on if your PC will have different uses, especially gaming.

CPU

The Core 2 line from Intel really does seem to be the undisputed champion when it comes to media playback. It's really hard to recommend anything else. The E6550 or E6750 are fantastic performers with 4MB cache that won't break the bank. You can certainly make due with less processing power, but those seem to be the best bang for the buck with plenty of room to spare in case your needs increase in the future. If you are building a true HTPC (ie, one that would be in your home theatre room connected to your HDTV), I would grab an OEM processor and get a decent "silent" heatsink/cooler. When it comes to HTPCs, every decibel counts.  Keep in mind that with a retail CPUs, a fan/heatsink is provided, but with an OEM CPU, it is not.

 

CPU FAN/HEATSINK

A retail stock CPU heatsink/fan will usually suffice for general purpose PC use, and is easier to install. The downside is that they won't keep the processor as cool and will be somewhat louder than the "silent" aftermarket option. If you were planning to overclock the processor, then the aftermarket options are definitely worth the investment.

If your case has the room, take a look at the Zalman CNPS9500 or the Thermaltake CL-P0114. Both have "silent" modes that do a fantastic job of keeping the processor cool with virtually no fan noise.

 

MOTHERBOARD

I would pair your CPU with a high quality Intel P35 or P965 chipset motherboard. Be sure to use DDR-2 if you go with P35 though; DDR-3 prices are outrageous, and don’t offer any real performance advantage in media playback. Many gamers swear by the Nvidia  Nforce chipsets, so if you are planning on building a gaming rig that is definitely an alternative to consider.  If you're not planning on  gaming, though, it's hard to beat the quality and stability of the Intel chipsets. I primarily use ASUS motherboards in my builds, but there are many vendors of quality boards out there.  Any time I'm building an HTPC, I always am sure to use a motherboard with a firewire port built-in; you never know when you'll want that on an HTPC.

Of the two Intel chipsets, the P35 is still quite new, and the drivers are still being updated regularly. That's the main downside, if there is one. The P965 has been out quite awhile and is a proven rock-solid stable chipset. The P35 hasn't shown any real signs of being a "problem" chipset, and I think will earn a similar reputation over time. The latest southbridge and other components are also included, as it's a newer model.

 

HARD DRIVES

Western Digital Raptors (10k drives) are incredibly fast, but cost a LOT per GB and run loud. They're great for servers and workstations, but for most purposes they're not really worth the cost. A new 7200rpm SATA drive will be quite a bit faster than one several years old, and can be had for dirt cheap compared to the Raptors.

In general, Seagate and Western Digital are the two top brands of hard drives. Make sure they are SATA, and ideally have 16MB cache for optimal performance.

If you have older EIDE drives that you want to use in a new system, keep in mind that many of the newer P35 motherboards only have a single EIDE channel. You can of course use converters to connect EIDE drives to the SATA ports, if need be.

On Newegg, you should be able to pull up several different EIDE to SATA converters for $9.99 to about $14.99. They're basically just a small circuit board that plugs into the EIDE port on your drive, and provides a SATA port to connect to the motherboard ports. If you go with a motherboard that has two EIDE ports you could avoid this issue (many of the P965 boards have two EIDE ports, but the newer P35 boards often only have one). One nice thing about using the converters though is that drives don't have to share the same channel as they did on EIDE.

 

RAM

2 GBs of RAM is the sweet spot for media playback (including BD) in Vista. Use more and you're really not going to get much of an improvement. Use less and you'll be risking video stuttering. Most of my builds use Corsair, but I know others who like Crucial. I would definitely stick with a quality brand, though.

I would consider going with DDR2 1066 instead of 800, even if it means loosening the timing's to 5-5-5-15 or so. From what I've seen on the Intel chipsets, the extra bus speed trumps tighter latency settings.

 

VIDEO CARDS

There are a lot of choices for video cards. Personally, for an HTPC that definitely won't be used for gaming, I prefer the Nvidia 8600GT. The PureVideoHD chipset does an excellent job of offloading AVC and MPEG-2 video decompression from the processor, and you can find models from ASUS and other vendors that are essentially silent, which is fantastic for HTPC use. If you find that you have A LOT of VC-1 titles (or if you also play HD DVDs), then the ATI 2600 series may be better for you as they can offload VC-1 video as well. The downside, though, is that the ATI cards don't offload nearly as much of the video decoding from AVC titles.

For anyone who wants a system for gaming as well, look to the Nvidia 8800GT or the new ATI3800 series -- which finally brings enhanced video processing to the higher-end cards.

For video playback only, 256MB of video RAM is fine. Presently any additional RAM doesn't really provide any improvement. Also, while there is definitely a difference in performance between the various types of GDDR RAM found on different cards, unless you're gaming you likely would never notice the difference.

 

MONITOR

One area where many people assume they will need to spend quite a bit of money is on replacing their monitor.  This may not be the case.  If you have the budget and the desk space, a new 23" - 27" 1920x1200 HDCP-compliant monitor is ideal for watching Blu-ray movies at full resolution.  This will also allow you to use a digital connection between the graphics card and the monitor as you will have a protected digital path.

If you already have a reasonably large, high-resolution screen, however, you can continue using it on your new build.  If the monitor has an HDCP-compliant DVI port then you can connect the monitor to the system using DVI cabling. If the DVI port is NOT HDCP-compliant, you can use the analog VGA port at full resolution.

For example, if you have a 1680X1050 widescreen monitor, the video from a BD will be scaled directly from 1920x1080 to 1680x945 (16:9 shown within your 16:10 monitor), regardless of which connection you use. If titles start to use ICT (Image Constraint Token) in the future, those titles will be downscaled to 1/4 resolution, then scaled back up if you are using an analog VGA connection. If ICT is used, it is not expected until 2012 at the earliest. 

As for the resolution on that example monitor, here’s the easiest way to look at it:

Blu-ray disc: 1920x1080 = 2,073,600 pixels

Your screen: 1680x945 = 1,587,600 pixels

Regular DVD (NTSC): 720x480 = 345,600 pixels

So, while you're not getting full 1080p resolution, you are getting about 60% more than 720p and you can see about 4.5 times the resolution of a regular DVD.

 

SOUNDCARD

Most modern integrated HD-Audio solutions should be fine for watching BDs. Under Vista, Microsoft has largely done away with the hard accelerated audio that made Creative so famous. That said, there are still some excellent soundcards out there that put out fantastic quality audio. Just think about the quality of your speakers or your audio system before dumping money on a soundcard that may not make much if any difference.

If you're budget is tight, a sound card is the first thing I would consider doing without. If you get a motherboard with a good HDAudio codec, there's not much of a reason presently to get a soundcard on an HTPC. The creative X-Fi series is good... and I use one in my main PC... but for HTPC use, most of what it brings to the table is unnecessary. However, if cost isn't an issue, and sound quality is of the utmost importance to you, then an X-Fi is not a bad choice (just avoid the X-Fi Xtreme Audio, which isn't really an X-Fi).

Probably the best audio card for pure audio quality right now is the Auzentech X-Meridian, though it comes at a fairly steep price ($200 MSRP). The card is geared exclusively for HTPC use and puts out some of the best quality audio you can get, without all the hardware-assisted gaming stuff of Creative's line. Auzentech also has lower end models that perform very well for HTPC use as well.

If you do decide to go with an X-Fi, I would avoid the Xtreme Audio. It's not really an X-Fi….it just took the name of the rest of the series. It uses a "special" driver that lacks all the X-Fi options present for all the other cards. The other X-Fi cards all do very well, though. I think you can get an Xtreme music for pretty cheap, most places.

 

SPEAKERS

I firmly believe that speakers need to be properly auditioned prior to purchase, though with PC speakers that may not be possible.  If you are building an HTPC then you probably don't need speakers as you will be connecting the sound card directly into your audio receiver.  For everyone else, again, I recommend auditioning speakers if at all possible.  There are some great 5.1 (and 2.1) PC speaker systems out there... and there are some real dogs.

I have the Promedia 2.1. The 2.1 Max's are the new version and should be every bit as good. I have a friend with the GMX's... they're very good speakers also... in a different package.
5.1 is fantastic for Blu-ray, of course, but it depends on whether your PC area can really accomodate it. The Promedia 5.1's are pretty expensive. I know Logitech makes some good 5.1's at a somewhat lower price point.

For those looking for some reference speakers, NHT Hifi has a new 2.1 solution available that is absolutely fantastic.  The pricing, however, is somewhat less so.  (Note: the price on the 2.1 package has recently dropped to $699, though the volume control module still costs another $190).

 

OPERATING SYSTEM

The big debate, of course, is XP versus Vista.  If you have a slower PC, then definitely stick with XP. It may be your only choice, depending on your hardware. I wouldn't even think of going Vista unless you have a decent processor, at least 1GB of RAM, and a graphics card/igp capable of running aero. To really have a great experience with Vista, then 2 GB RAM and a dual-core processor are ideal.

Beyond that, if you have the system for it, Vista provides an excellent user experience (if you turn off UAC), particularly for basic tasks, media playback, and internet surfing. Where it falls short of its promise is in gaming. Hardcore PC gamers should definitely either stick with XP for now, or dual-boot both. There are Vista-only games coded to DirectX 10 coming out now, but for the most part, the additional RAM and processing requirements of the OS will slow down most other games -- and, even if it's only slightly, it's enough to annoy many hardcore gamers.

As for the teething pains, those were very real early on. At this point, virtually every piece of recent hardware has stable drivers available for Vista, and most recent software has been fully compatibility-tested with Vista. You definitely should be running with all the updates installed (Microsoft has provided a ton of updates that address various issues, including application compatibility), but unless you use older -- or custom software you shouldn't have many problems with Vista. This is really the sticking point with businesses, as it is with any new OS release. SP1, due early next year, should provide a major boost to application compatibility and fixing the few remaining issues with the OS.

Personally, I run Vista-64 on both of my main systems and haven't had any real issues for many months now. The new Media Center is fantastic for DVDs and TV tuners. For BD, you do need additional software for playback, but both major BD playback solutions work terrifically under Vista.

As for the different versions of Vista, I highly recommend going with Home Premium.  Vista Ultimate costs a lot more for nothing most people will ever need, and Vista Basic lacks...well…pretty much everything.  Vista Business is a great choice for businesses, but lacks Media Center, leaving it lacking for HTPC use.

As for 32-bit vs. 64-bit Vista, most people will never know the difference. Most any hardware you get now fully supports both, and all the media software works fine either way. If you think you'd ever want to expand the system with another couple GB of RAM, then definitely go with Vista-64. If you get an X-Fi soundcard and want to use Creative's DVD-Audio application, then go Vista-32 as it doesn't support Vista-64.

Personally, I use Vista-64 on all my systems, but my HTPC builds for others have been mixed, depending on what people want, and what-all their system is to be used for. For the most part, it's just a matter of personal preference. You shouldn't have any issues with either.

I don't generally recommend everyone upgrade to Vista right away, but if you have the system for it, and if gaming isn't your top priority, then Vista definitely has more going for it than against it.

 

FAQ

Q: I want to connect my new PC to my HDTV or an existing monitor, but the new graphics cards only have DVI outputs.

A: Most cards now have dual-DVI outputs. Usually both of the outputs are DVI-I outputs, which means they are actually analog capable outputs once you connect the included DVI-VGA adapter. The little adapter isn't actually "converting" the digital signal to analog, it is just a port adapter. The video card knows if the adapter is in place and sends the signal as analog instead of digital. I've yet to see a dual-DVI video card that didn't come with at least one adapter for this purpose.

The HDMI spec is basically just DVI video (with HDCP compliance) with various support for audio signals depending on HDMI revision. Some video cards come with DVI to HDMI adapters, or you can buy them separately, or get cables with a DVI port on one end and an HDMI port on the other. All work just fine as long as the video card supports HDCP (which all the ones I mentioned earlier do).
Nonetheless, dealing with the audio portion of HDMI is more problematic. If you want to send the audio over HDMI cabling, there are various solutions that allow this.

However, all of them at the moment are dealing with passing the coax/optical digital output over HDMI... which means there is no multichannel PCM, Dolby TrueHD, or DTS-HD available with this resolution. It also means that you can just as easily run an optical cable directly from the soundcard to the receiver, and bypass any potential problems with delays or sound quality that could arise from sending the audio through the video card’s circuitry.

 

Q: What software do I need to playback Blu-ray movies?

There are currently 2 main software solutions for playing back Blu-ray video on PCs -- Cyberlink PowerDVD (BD or Ultra editions) and Intervideo WinDVD (BD edition).  Intervideo's solution is not sold directly to consumers and is generally only found on pre-built systems from major manufacturers.  Most Blu-ray disc burners come with PowerDVD BD edition, and end users can purchase PowerDVD Ultra edition if they want more full-featured software.  Arcsoft also has a playback solution in the works, however it is still in beta.

One word of caution: PowerDVD (like all the standalone BD players) gets updated frequently to add support for new titles, etc. Be wary of any new update, though. Usually, they're great and do what they're supposed to. However, occasionally they release an update that breaks more than it fixes. When you see a new update, it's a good idea to check boards (either at Blu-ray.com or at Cyberlink's site) to see if others have been having any problems with it. A quick glance should let you know; there's an uproar anytime there's a problem.

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How-to: Obtaining Service on a PS3

 

While much has been written about the various hardware problems of Microsoft's Xbox 360 game console, and the process for getting one repaired, Sony's track record with the PS3 has been fairly phenomenal, and there's not a lot written about what actually happens when one goes bad.

Well, my system didn't exactly "go bad," but it is a launch 60GB system, which runs somewhat loud at times and frequently produces graphical glitches after extended gameplay.  It really isn't anything too severe, and probably wouldn't even be considered defective by some video game system manufacturers, but since my warranty was about to expire, I decided to see what Sony would do for me.

I placed a call to Sony's support hotline at 1-800-345-7669 (in the U.S.).  The tech I spoke with had me run through their standard "this should fix everything" scripting, which basically consists of ensuring you're running the latest system software, and restoring the system (which involves deleting everything on it except for the system software).  Now I knew (and the tech likely did as well) that this would have no effect on my problem, but I've dealt with tech support with other companies enough to know that they always have a script of things they are required to try before actually replacing your hardware.  I was given a ticket number and advised to call back if the problem persisted.

Of course, it did persist, so I called back, explained the situation to the tech, and straight away requested that they replace or fix the system.  The tech saw that the earlier tech had gone through their "fix-all" measures and put up no fight.  He explained the process and advised that he would send a "box" to place my system in for shipping.  He told me to back everything up, as I would be getting an "exchange system," not my original, back.

As most people have never had to deal with Sony on a system replacement, I'll go into some more detail on the process.  Right after speaking with the tech, I received an email explaining what components Sony wanted sent back.  Those components are:

• PS3 system
• power cord
• Six-axis controller
• controller charging cable
• ethernet cable
• Composite video cable

While these are the components that came with the system, if you didn't save the box, you may have a problem here.  After all many people are using the included wireless internet instead of the ethernet connection, and using a composite video/audio cable to connect a PS3 is damn near criminal.  Sadly, the directions don't specify what to do if you don't have any of these components.  As I had saved the PS3 box, it didn't much matter to me.  For in-warranty replacement, you will also need to send a copy of your store receipt (or other allowable proof of purchase) for warranty verification.

The box is sent via 3-day UPS, and you can check the progress if the shipment online if you like.  Inside the box is another set of directions along with pictures showing you how to place the system and accessories with the box.  Another UPS label (this time for overnight delivery) is included for you to send the system back to Sony.  This is fantastic service from Sony.  Not only are they paying to ship you a special box to ship the system back in... they also cover the shipping costs back to them (and overnight UPS at that).

As you can see from the pictures, the system fits nicely within a special protective bag that and is held in place by tight fitting styrofoam padding. A separate compartment holds all of the cables and the controller they request you ship back.

Sony even includes a piece of packing tape to seal the box prior to returning.  The box then just needs to be dropped off at any UPS shipping facility for overnight shipment back to Sony.

The instructions state that it takes 3-5 business days from the day they receive your defective system until you receive a replacement system from Sony.  This is very impressive time, and you are provided with tracking numbers to track the shipment to and from UPS as well as a link to check the status of the exchange with Sony.

Everything went extremely smoothly for me.  The tracking number (on the shipment to Sony) registered that evening and showed delivered the following day.  Two days later I received another email informing me that a replacement system had been shipped to me.  This package is shipped UPS three day and requires an adult (21 years or older) to sign for the package.  UPS called and left a voicemail with a reminder the day before delivery to let me know the delivery would occur and an adult would need to sign for the package.

The package came as promised... another simple brown box.  Once opened, it's pretty much identical to what was sent out, although a different system is included (refurbished, though looking like new) and the accessories are packed within a separate plastic bag.

Overall, the packaging and the service from Sony are both fantastic.  I sent my system out on a Monday, and received my new system the following Tueday, and the whole process was about as hassle-free as could be.  My new system seems to be working great so far and it's great that it came before the major Blu-ray and PS3 game withdrawl pains set in.  The new system was also blemish-free and even had the cellophane protecting the top cover as new systems do.

Depending on how long you've had your PS3, your new system will have either the remainder of your original 1 year warranty on it or a 90-day warranty (whichever would expire later).  In the end, I was quite happy with the service I received from Sony, and am actually glad I didn't spend the extra $100 on the store warranty initially.  Getting the system replacement from Sony not only saved me $100, but was probably less of a hassle than trying to exchange in-store would have been.

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Rant: Why Blu-ray Manufacturer's Don't Need to Give Away Free Players

 

Some people -- mainly those on the red side, but some on the Blu as well -- seem to feel that this is the only issue in this format "war," or at least the main one that will end up mattering. Personally, I just don't see how this is the case. If the goal is to get a Blu-ray player into the home of everyone in the world in 2007, then yes, substantially lowering the player prices would be a necessity. But manufacturers are looking at the situation long-term, and their instincts have proven right thus far.

No new media format has EVER fallen in price as fast as HD DVD has. There are many reasons why... the main one being that R&D costs don't recoup themselves within the first six months of a new product. Massive price cuts like Toshiba has done are the tactics of the desperate... not of the successful. If Toshiba had any other major manufacturers on board making HD DVD players they quite simply couldn't lower prices as quickly as they have (for no other manufacturer would be willing to take the financial "hit" Toshiba is), and by cutting their margins down to nothing (or selling at a loss) they are essentially guaranteeing that no other major manufacturer will join their camp.

The BDA has MANY manufacturers producing players, and if one member started selling players below cost, many other manufacturers would likely jump ship overnight. The manufacturers are all doing a fantastic job at lowering component and prodcution costs as each generation passes, but releasing below-cost players would kill other companies, and set consumer expectations so that others might never be able to profit from player sales.

You can already see this with Toshiba. There is already a feeling that spending more than $100 on an HD DVD player is just dumb for the consumer, and for a store to charge more than $200 for a player is highway robbery. And of course, you'd better get a half dozen or more free movies in the deal. Why in the world would ANY other company want to make these things given the non-existant profit potential at those prices. HD DVD is no longer fighting to become the next generation replacement for DVD... it is fighting just to keep the competition from doing the same. Toshiba is earning far too much from regular DVD to let BD replace it, and they're going to insane lengths to prevent that from happening.

The position the BDA is in affords them the ability to proceed with an eye on the end-game. This isn't "make it or break it" time for BD as it is for HD DVD. BD has, for all intents and purposes, already made it. There are approximately 6 million PS3's in people's homes worldwide. Now, at this point, only a minority of those are actually being used to watch BD movies on, but as time goes on, that will certainly change. And, as PS3 sales grow, the potential market for HD DVD continues to shrink. After all, whether someone uses their PS3 for BD movies or not, there's virtually no chance of them completely foregoing the BD movie capabilities of the PS3 and then going out and buying an HD DVD player. It would make NO sense to do so.

As it stands, no matter what Toshiba does with their player pricing, Blu-ray standalones sell just about the same as HD DVD standalones, though the cost of the cheapest models are substantially higher for Blu-ray. And, of course, that's only in the U.S. -- worldwide Blu-ray player sales far exceed HD DVD player sales. Likewise, Blu-ray recorders, Blu-ray PC drives, Blu-ray camcorders, and, oh yeah the PS3, FAR outsell there HD DVD counterparts (where such counterparts even exist).

Again, Blu-ray is setting itself up to be the next (and possibly last) major optical disc format. It's uses go far beyond movie playback already. That's not a promise of recorders and other uses scheduled for some time in the distant future as with HD DVD, that's all here NOW. And there hasn't even been a real push by Toshiba or Microsoft lately to attempt to counter Blu-ray as an overall disc medium... just in the movie realm.

As far as Warner is concerned, there's WAY too much speculation on what they may be thinking, and about how they are going to look at one metric but not any others, etc. Warner isn't going to make a decision without having ALL the data... they're not stupid. Most importantly, they know what the effect will be of them choosing a side. If they go HD DVD exclusive, it would produce a stalemate, and we'd all be stuck with combo players as the norm. If they stay neutral, the war will eventually work itself out, and they won't be "to blame" one way or the other. If they go Blu-ray exclusive, they will effectively end this war within a fairly short time frame, but will enrage many early adopters who chose HD DVD. Whatever they choose to do they will pick a metric to cite as their reasoning, but the actual decision will have little to do with player prices, or attach rates, or anything else everyone cites. It will be based on what role they really want to play in this format war. Until they decide that, we should all just be happy to know that we're winning, and have been for some time. The other side will continue to make desperate plays, but, as we're already seeing, they don't seem to make a bit of difference in terms of actual sales. So let them. And just pity the poor people who buy a dirt cheap HD DVD player and find that they have nothing to play on it a couple of years from now.

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Save HD DVD Petition!

 

(Note: Before people who know me think I've lost my mind, this is a joke.  If you read it and don't get the joke, or are so offended you threw something at your computer monitor, keep in mind by accessing this page you agree to the hold harmless agreement found in the terms of use on the main page of this blog.  To everyone else, feel free to add your signature to this all important petition in the comments field below.)

 

Everyone sign my HD DVD petition, and email it to all the BD-supporting companies with your signature:

 

We, the undersigned HD DVD zealots demand that your consumer electronics company, movie studio, or stores support our format of choice for the following reasons:

1) We purchased HD DVD players, knowing full well that your company supported the rival format, on the natural assumption that our single purchase would immediately cause your multinational corporation to rethink its long-term business strategy to agree with our decision,

2) We are the customers, and customers are always right. Now, we don't buy your company's products or shop at your stores, and we spend every waking moment trashing your company on online message boards, but we still feel we have the right to demand action of you, without any promise that we would ever purchase your products in the future,

and

3) We believe that it is far more important for you to agree with our political agenda than for your company to make any money, or for this HD format "war" to end so that consumers may buy the rival format in confidence. Really, we want both formats to fail so that HD downloads can take over, which you company will make no money from, but Microsoft (the undeniably greatest corporation to ever rule the world) would profit nicely from. Hopefully, this will allow them to continue fixing all my defective XBox 360's that seem to break on a monthly basis.

Now, you have sided with "the other side" in this battle, so let us explain what is wrong with your logic:

1) High definition video should not require more space than an mp3. We have it on good authority that Microsoft is developing an improved VC-1 codec that will allow 300 hours of 1080p video to fit on a floppy disc. All this nonsense about bitrate and storage capacity is just FUD spouted by those who actually want HD optical discs to succeed. As we already stated, we do not, and 50GB is far too much to download... which is what we really want to do.

2) Sales don't matter. Sure, your internal research might show that Blu-ray disc sales are over twice that of HD DVD sales, and thus you may feel comfortable in your position. But see, according to our own made up research, all you should really care about are "attach rates," something that you always forget to mention in all of your investor reports and market analysis. The perfectly logical reason for this is that you will have far fewer customers, but they might buy more. This would allow you to close stores and fire employees as you would only need to have stores around those few people who are buying the discs. See. Less sales, but less overhead as well! Sure, it may not make sense to your accountants, but seriously... we've decided this matters. Also, in order to calculate the attach rate, please count every PS3 that has been produced worldwide as a BD player, and compare that the number of BD sales in the US. See how outrageously low that attach rate is... and it's all because the PS3 is a Blu-ray disc player.

3) Which brings us to... the PS3 is NOT a Blu-ray disc player, and the other side needs to stop claiming it as one. We certainly don't and never would (except when calculating point 2... then they all count... even if they're made for other parts of the world).

4) Price of players is the only thing that matters. And the price of discs doesn't matter at all. This certainly goes without saying, but cheap Chinese players available in various cool lead-based colors will undoubtedly win the "war" for HD DVD. Toshiba has dropped prices an unprecedented number of times... and look how well it's worked! (Again, look at our claimed attach rate, not the actual sales.) We're right around the corner from the onslaught. That's why we feel so confident that we're starting this position to demand your support.

So, for all of these reasons, we demand that your company support our format. If you don't we will continue trashing your company online. If you do we promise to love you until all the HD DVD combo discs fail to play in your player (which they will fail... they've shown that), and then we'll go back to hating you. But, hey, it could be a nice couple of months.

Signed:

__HD DVD Zealot #1____________________________________

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Making Sense of the BD-R/RE Revisions

 

If you're confused (like most everyone else) about the recent statements involving recordable Blu-ray disc playback in set top players, read on to get a better understanding.

First things first: a description of the different BD-RE (Blu-ray disc rewriteable) and BD-R (Blu-ray disc recordable) spec versions.

BD-RE 1.0 -- PDD -- The original "Blu-ray product", first released in 2003.  These discs were encased in cartridges and aren't compatible with final Blu-ray products.  The format is still used in certain professional equipment, though it has been redubbed Professional Data Disc (PDD).

BD-RE 2.0 and BD-R 1.0 -- BDAV Format -- Supports HD-Video and simple menus stored on BD-R/RE media

BD-RE 2.1 and BD-R 1.1 -- BDMV Format -- Supports HD-Video and full menu system/JAVA applications to be stored BD-R/RE media

BD-RE 3.0 and BD-R 2.0 -- BDMV Format with AACS support -- Supports HD-video and full menu system/JAVA applications to be stored on BD-R/RE media with AACS copy protection available

The physical discs used for BD-RE 2.1 and BD-RE 2.0 are the exact same, as are the BD-R 1.1 and BD-R 1.0 discs.  The difference is in which mode the discs are recorded, BDMV or BDAV.  Much has been made recently of certain set top players being unable to play the BDMV discs.  The reason for this is that the newer AACS-supported spec has now been finalized, and for new players to be allowed to play BD-RE 2.1/BD-R 1.1 discs, they MUST also be able to playback BD-RE 3.0/BD-R 2.0 discs.  What this means for users is that until and unless manufacturers put out firmware updates that allow those players to correctly handle the new media, they cannot allow the playback of the old media. 

This is annoying to many users, who were not well-informed about this upcoming change before it happened, though in all likelihood, it is only a short-term problem.  Adding compatibility for the new media is reportedly a fairly simple process for manufacturer's, though there does not seem to be much media available at this time with which to perform tests.  Currently, the PS3 and Corel's Intervideo PC application are reported to be able to handle the new formats, though set top box compatibility is unknown for any of those players. In any event, a firmware update will almost certainly be required for any set top player to read the new media correctly.

The bigger question, however, is what is going to be happening with the existing media and PC burners on the market?  Can current burners be updated to support writing to the new media?  Will the new media essentially replace the existing media in the marketplace?  If the answer to the first question is yes, then second question would likely also be answered yes as there wouldn't be much reason for the older-spec'ed media to continue to exist.  If current burners can't be made to work with the new media, however, then it seems very likely that both types of media will need to coexist, likely causing considerable confusion for consumers. 

More than likely, in that scenario, we would have media labeled "BD-R/RE for Video" that conform to the new specs and discs labeled "BD-R/RE for Data" that conform to existing specs.  This wouldn't be the end of the world, by any means, but retailers likely won't like the additional product they would need to stock and the overall confusion of the situation.  It certainly wouldn't be unprecedented, however: recordable CD's are available in standard and "music" versions that are supposed to be required by Audio CD recording devices.  Also, the DVD-R/RW spec calls for a special "DVD-R/RW For Authoring" specification, though that media was never made mandatory for the purpose for which it was created.

Whatever scenario ends up playing out, it definitely doesn't seem to be the "bad" news originally proclaimed by HD DVD fans, though additional confusion in the market certainly isn't welcome.

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Opinion: What in the World is Universal Thinking?

 

Many have been predicting for some time now that Universal was preparing to go neutral and start releasing Blu-ray titles.  Reports that the BDA and various Blu-ray proponents had spoken with Universal and made various offers have popped up with increasing frequency over the last several months.  And yet... thus far, Universal still remains the only major studio not to release titles on the Blu-ray format.

In an interview with Scott Hettrick, recently posted to the Hollywood in Hi-Def website, Universal Pictures' president Craig Kornblau explained and defended the studios' seemingly bizarre reluctance to embrace the Blu-ray format.  In the interview Kornblau acknowledges, for the first time, that if Universal were to start releasing discs on the Blu-ray format it would have a "serious, if not life threatening impact on the future of HD DVD." 

This indicates that Kornblau knows that Universal is almost single-handedly prolonging the "format war" that, by most accounts, is preventing the widespread consumer adoption of high definition optical discs.  One reason for this, also admitted to for the first time, is that Universal is receiving compensation for remaining HD DVD exclusive, as well as for releasing extras specific to the XBOX 360 system.  This in itself isn't really a surprise, but given the deep pockets of the BDA, it seems reasonable that they could likely receive significant compensation just for releasing titles on Blu-ray disc as well.

As Universal, like all the studios who support Blu-ray exclusively (you know, Sony/MGM, Fox, Buena Vista/Disney, Lionsgate, Starz, etc.), originally wanted to avoid a format war, they initially chose just one high definition format to release on.  Unlike all those others, however, Universal sided with HD DVD.  It isn't entirely clear why Universal made that initial decision, however cost factors and interactivity features are mentioned as two leading reasons. 

The situation since those initial alliances formed has changed considerably, of course.  The other major studios who were initially in the HD DVD camp (Warner Brothers and Paramount) both decided to go "format neutral" and release on both formats, and Blu-ray has taken a commanding lead over HD DVD.  So, why, then, would a company who never wanted a format war be single-handedly prolonging one?

According to Craig Kornblau, the answer is that Universal has had a change of heart.  They now actually embrace the format war, and believe it to be good for both studios and consumers.  According to Kornblau, player prices have fallen much more quickly due to the format war than they would have without it.  While this case could be made (and it is often is by HD DVD proponents), the reality is that it's a hard claim to back up -- and it becomes a preposterous claim once you figure that in order to watch movies from all studios you actually need two players.

These frank admissions on behalf of Universal are definitely a change of pace for Universal, but most likely comes as a result of a spurt of bad news lately.  Most notably, at the recent EMA conference, Universal Executive Vice President for Marketing, Ken Graffeo, implied that Universal's parent company, GE, was putting significant pressure on the heads of Universal to rethink their high definition optical disc strategy.  Worse, an attendee specifically asked about the possible release of the Steven Spielberg titles that had been announced as "coming soon to HD DVD" earlier this year by Universal, only to be retracted shortly after, and an apology to Spielberg issued.  Hi reply (as quoted by Bill Hunt):

In regards to the Spielberg... [sic] Steven wanted to wait for DVD till there was a higher penetration for that. [Sic] Right now, with 100... 200,000 players and 150,000... he wants to wait till there's more penetration. Because... you know when you do release... and Jaws was the first Steven Spielberg that we came out with, and at that time we released we sold a million units. More than we'd ever sold on VHS. But you have to have, sort of like... I don't want to say critical mass, because you had close to 3 or 4 million households that had players... but it's too early now. And I think we have to work very close with our filmmakers because they have a very big part in what we do.

Aside from not being at all prepared for the question and stumbling over himself, it actually was a fairly sensical answer.  There simply aren't enough players out there for Spielberg to allow his films to be released yet.  The implication was that neither HD DVD nor Blu-ray would get any Spielberg films any time soon.

That answer held for roughly a week, until Sony announced that Close Encounters of the Third Kind was going to be released this fall as a special edition Blu-ray set, complete with three versions of the film (using seamless branching no less), a transfer approved by Spielberg himself, and an exclusive interview the director made especially for the Blu-ray release.  So, it seems, it's not that neither format has reached "critical mass" yet, it's just that HD DVD hasn't -- and, unless something big happens soon, it never will.

If Universal were the world's biggest movie studio, their unabashed egotism could perhaps pay off.  Unfortunately for them, they most definitely aren't.  In fact, of the six "major" movie studios, Universal ranks... 6th.  In 2006, they made up 10.9% of the North American film revenue, barely half of what Sony made.  As of 7/29/07, they were tracking to do even worse this year, making up just 9.1% of film revenue, again pulling in only half the revenue of larger studios such as Sony and Paramount.  Though the film "The Bourne Ultimatum" will undoubtedly help Universal's struggling film revenue, it still won't be nearly enough to bring them up to the ranks of the bigger studios.

In many ways, Universal's downfall is rather tragic.  At one time, film master's such as Steven Spielberg released exclusively with Universal, but in recent years their revenues have tumbled.  A myriad of executive shakeups have taken place, none doing anything to restore the stature of the company.  While "mini-major studios" (such as Lionsgate, Dreamworks, and New Line) and larger studios independent assets (like Sony Pictures Classics and Fox Searchlight) have come to represent a larger and larger portion of the gross film revenue, Universal is risking getting left behind in the "new Hollywood."

Given their struggling fortunes, the plan to remain format exclusive with the HD DVD format seems like just another bizarre decision in a growing line of bizarre decisions.  Given the current state of the studio, as well as that of the format war, it seems unlikely that Universal will be able to continue their posturing for too much longer.  Unless the financial "assistance" they are receiving from Microsoft and Toshiba is truly a phenomenal amount, the sales of Blu-ray discs this holiday season will almost certainly force Universal into a position where releasing on Blu-ray becomes a business necessity, whether certain executives within the company like it or not.

In the meantime, we'll all just have fun watching the numbers and debating exactly when Universal will come to its senses and end this "war" once and for all.

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Opinion: Has the PS3 turned a Corner?

 

Many in the media have been opining the failure of the PS3 since it's release.  With record-high hardware pricing (for a "MAJOR" system) and few games in the months after launch, it's not hard to understand why.  Many people, myself included, have always held that the incredible technology built into the system more than justified its cost, and would serve Sony well in the long term.  We knew from the beginning that the incredible cell processor, Blu-ray disc storage, true 1080p graphics potential, HDMI video and audio output, and a mandatory hard drive, made the PS3 the most amazing piece of home entertainment hardware ever created.  But the marketing machine at Microsoft went into full force as soon as the PS3 was released, decrying the high price (note that they then released a system or $479 that still didn't have hardware comparable to the PS3)   and lack of game releases (how many titles were available for the 360 at launch again?).  The media picked up the story and ran with it, also adding the third-party exclusives that Sony seemed to be losing.  Sales of the system slowed to an anemic level as games kept getting pushed back and rumors of a price cut ran rampant.  Things were not looking good for SCE.

Then, an amazing thing happened.  Sony, the company known most for its boisterous statements of superiority, and longstanding policy of corporate secrecy, had an amazing and immediate change of course.  Faced with a slow-selling $600 system, corporate leadership started acting with a newfound sense of humility.  More impressively, they put forth a big effort to "get the word out" about upcoming games and ideas they had for the new system.  They started an official blog, giving details of upcoming titles and interviews with corporate brass and game developers.  They started showing off "beta" material, most notably the innovative PlayStation Home social-networking concept due in final form this fall.  Suddenly, the media started to change, noting this newfound openness, and the PS3's role in leading the Blu-ray move format to a decisive victory against its HD DVD rival.

But sales were still below expectations, and it didn't appear they were likely to improve until this fall with the huge slate of titles due... and potentially a price drop.  Sony again shocked everyone by not waiting out the summer to "see what happened."  Starting this past Monday they officially dropped the price of the 60GB PS3 by $100 and announced a new $599 model with a larger hard drive and copy of Motorstorm.  Overnight sales jumped on Amazon.com 2800%, and the PS3 system became the number one selling video game item on all of Amazon.com.

In an incredible twist of fate, just as Sony was building momentum, Microsoft's good press came to a crashing halt.  In interviews with retailers, DailyTech found that store's estimated as many as 33% of XBox 360's were defective!  Asking the same about PS3's, word came back that it was at or under 1%.  The mass media picked this up as a consumer-interest story, and usually brought back up Microsoft's ever-lowering sales forecasts in the process.  Microsoft had to respond by offering to extend the XBox 360 warranty to 3 years (just for RROD errors though) -- a move that supposedly will cost the company $1.1 billion.  Perhaps due to this new expenditure, Microsoft has not dropped the price of their system in response to Sony's move.

And to top it all off, this week is the E3 conference--and by all accounts, Sony hit it out of the park!  They put an end to rumors of Metal Gear Solid 4 coming to the XBox 360 -- confirming it as a PS3 exclusive.  And in a surprise move, they also announced that Unreal Tournament 3 would be a timed exclusive for the PS3 -- and that Epic was reengineering the Unreal 3 engine to take advantage of the power of the PS3, so that other game developers can have a top-of-the-line development platform for the over 100 games that are already announced based on that engine.  In addition they announced the acquisition of NCSoft, a developer of MMOGs (massively multiplayer online games), all of whose future titles will be PS3 exclusives.  In total, they announced 200 Blu-ray disc games for the PS3 due out by the end of the year. 

Even better, they showed that they are listening to their customers!  The E3 press conference was chock full of games, games, and more games.  Demos, trailers, you name it.  Gone were the days of wild claims of system benchmarks that mean little if anything in the real world.  They have taken to heart the message that gamers don't care what you say about a game or system... they want you to show them.  And show them Sony did.  And the results have wowed every gaming publication out there.  They also showed how the input of consumers (beta-testers) for their upcoming Home release was being listened to, and improvements were being made constantly based on consumer suggestions.

With Blu-ray dominating its HD DVD rival, an amazing slate of upcoming games, and an early price drop, has the announcement of the death of the PS3 been premature?  It certainly appears that way.  Sales of the PSP went up 90% with a $30 price drop.  Sony expects much greater returns on the $100 PS3 price drop, and rightfully so.  Sony expects to ship 11 million consoles in 2007, and if they are able to make (and more importantly sell) that many, they will catch up to the XBox 360's year long headstart early next year.  And from there, who knows.  120 million PS2 owners are still due for an upgrade.  Unlike Microsoft's "burn it down and start fresh" strategy with their XBox line, Sony still actively supports their PS2 system, 7 years after its release.  New hit games are being released for the PS2 all the time.  What was the last major XBox 1 title to be released?  Anyone?  Anyone?  Bueller?  Remember that if you're thinking about buying a 360.  Do you really want to buy a new system every four years because Microsoft stops licensing games for their existing platform?  No?  Me either.

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