Weekly News Roundup (16 November 2008)

Sorry for a lack of the usual weekly blog post. There were quite a few things I wanted to blog about, including my new computer and the drama that went with that, the October NPD figures as well, plus a few other things, but due to the first thing I mentioned (new computer drama), I just didn’t have the time. Basically, I bought a new computer but the RAM was faulty, and I didn’t get it resolved until Friday, and I’ve been busy installing everything since then. It’s settled down a bit now, and I’m actually typing this on my new Intel E8500 computer, so hopefully normality will return soon.

CopyrightLet’s start with copyright news. If you live in Britain, then think of two other people that also live in Britain. Then at least one of you is an online pirate, according to the MPAA that is. I don’t know why the MPAA wants to brag about this, because if everybody is doing it, then it shows the problem is not that some people are dishonest, but rather, there’s a much bigger problem. Perhaps it’s the high prices, poor release schedules, the lack of legal alternatives and many other possible explanations. 

The owner of IsoHunt expands upon this point further by saying that it isn’t the copyright infringers that are in the wrong, but the law itself is the problem. The law currently fails to distinguish between several important differences, such as offering torrent files versus hosting actual pirated material, and whether sharing  1% of a file constitutes the same kind of piracy as sharing 100% of the file through P2P. And then there’s a whole bunch of stuff that’s perfectly legal, but still treated in the same way as the worst of piracy.  

Will the Obama administration help to preserve Net Neutrality?

Will the Obama administration help to preserve Net Neutrality?

A sign that real change may be coming to Washington DC, President-Elect Obama’s transition team will hand over the job of reviewing the FCC to two Net Neutrality advocates. This is great news for the fight for Net Neutrality, to prevent media companies from dictating what we can and cannot do with *our* Internet. Let’s hope this is signs of things to come, because the White House has for too long been in the pockets of those whose greed will ultimately be their undoing. All eyes will be on who Obama will pick to be the copyright czar, that newly created position by the Bush administration to grant the MPAA an office at the White House. If Obama picks a consumer friendly advocate to fill this position, then that will truly mean the battle-lines have been drawn and for once, the White House may be on our side. Change we need, indeed (but don’t be too disappointed if nothing happens, as is the way with Washington politics).

Microsoft has launched their US online store. Why is this in the copyright news section? Well, the store now allows for downloads for their popular software titles, instead of using the traditional CD/DVD model. This is a step in the right direction one feels, but the step is far too small coming from Microsoft as the downloads are offered at the same price as the DVD version. Drop the price of Windows Vista by half, and I think you’ll see Vista piracy drop dramatically. With my new computer purchase, I was eligible to get the OEM version of Vista for about half the price of the retail version. While the OEM version is limited to one computer, and it only comes with either the 32 or 64 bit version (I opted for the 64 bit one due to my system having 4 GB of RAM), and it lacks full support that comes with the retail version, the lower price more than makes up for it. Now if Microsoft can do something similar with downloads, then their online store might get a few more customers. Still with Microsoft, they also started banning a whole bunch of Xbox 360’s for using pirated games. Some are easy to spot, because they play games that haven’t even been released yet. And this time, it’s not only Xbox Live accounts getting banned, but also the Xbox 360 console itself – if you see cheap “too good to be true” Xbox 360’s on sale at eBay or something, beware. Xbox 360 piracy, and console piracy in general, is less of a problem than PC piracy. But there are probably only half a dozen must have games each year, plus many of them go on sale for peanuts without a short amount of time, so there’s really no need to pirate console games. I wager that people spend a lot more on DVDs than on games, but one good game can offer 10, 20 times the entertainment of a typical movie, at only about 3 or 4 times the price (at release). 

High DefinitionOnto Blu-ray news now, this holiday season is bringing mixed news for the only HD disc format left (this is the first holiday season where Blu-ray has been the sole HD format). While the spate of new Blu-ray releases will surely sell incredibly well to existing users, it’s the adoption of the format by new users that have the Blu-ray people worried. The price drops, discount hardware and movie deals are now happening on a scale I’ve never seen before, and without considering other circumstances, this would be a great time to Buy-Blu™. Unfortunately, those “other circumstances” happens to be the greatest economic downturn in nearly 100 years, so if there was a worse time to promote a new more expensive and optional format (competing against a firmly established budget alternative), this would be it.

Circuit City filling for bankruptcy could have a negative effect on Blu-ray sales

Circuit City filling for bankruptcy could have a negative effect on Blu-ray sales

With Circuit City filing for Chapter 11, other electronic stores such as Best buy reporting this is the worst holiday sales period they’ve seen in 42 years of retailing, this Christmas is turning blue rather than Blu. I personally think the BDA are doing all the right things at the moment. Lowering hardware prices, lowering movie prices, not relying as much on the PS3 (the PS3 hasn’t dropped in price to tempt consumers away from standalones) and plenty of good titles. But certainly there are external factors they cannot control. Right now, Blu-ray is living off the early adopter and PS3 crowd, the hard-core fans that will buy everything that comes their way, money being no object (relatively). And that’s reflected in the sales stats too, with titles that appeal to these types of consumers selling like hotcakes (do people still eat hotcakes?), while the more mainstream titles such as comedies or kids films doing quite poorly in comparison (a 94% to 6% DVD to Blu-ray sales ratio for this week’s Kung Fu Panda, for example, but as high as 17% for Iron Man). This holiday season will have to be about pushing Blu-ray mainstream, but it’s harder and harder now that people don’t have the cash or confidence to spend.

The other threat to Blu-ray is digital delivery. Here in Australia, video rental giants Video Ezy and Blockbusters are setting up download kiosks in their stores to allow people to download movies. This is the same Blockbusters that have been doing a lot of work to promote Blu-ray here in Australia, but this could signify a change in strategy. But one thing I will say is that Blu-ray players are perfect platforms to host online download services, and it might just be the trojan horse needed to make digital delivery mainstream.

Toshiba, their first holiday season without a HD format to support, are going full steam with their “upscaling is better than real HD” pitch. This time, it’s an HDTV that has the upscaling built-in; you don’t even need an upscaling DVD player anymore. Perversely, these TVs use the same processing chip as found in the most popular Blu-ray player so far, the Sony PS3. If you can remember from earlier in the year, Toshiba purchased Sony’s Cell processor manufacturing plant, and they said it at the time that they want to be the Cell to all forms of home electronics. And it’s not only Toshiba that is using the Cell processor, Leadtek are coming out with a PC graphics card powered by the Cell processor. That’s an interesting concept, and I will be very interested to see the benchmark scores for it.

Don't be tricked into buying expensive HDMI cable

Don't be tricked into buying expensive HDMI cable

And to round-up the HD news, have you ever had an experience where you are pressured by salespeople to buy expensive HDMI cable? The same con has been here forever with component cables, but at least it made some sort of sense with these analogue cables. But with these digital “picture or no picture” cables, there’s almost no difference between a $20 cable and a $200 one.  It makes as much sense as a computer salesperson trying to sell you expensive USB cable because it will prevent data loss. For most people who do not need 20m HDMI cables, there’s almost no advantage to buying expensive cable over cheap ones. The expensive ones may have better build quality, but if you buy a cheap one that break, you can replace it 10 times and still end up spending less. So don’t fall for the con. Buy reasonably priced HDMI cables that still have warranties and certification, and save the money on buying better equipment or more movies 

GamingAnd finally onto gaming, the October NPD figures are out and I will analyse them early next week. The results prove quite positive for the Wi as usual, while the lower priced Xbox 360 sold almost 2:1 compared to the PS3, which actually dropped in sales compared to last month (usually never happens, this close to the holiday shopping season). Sony will go on about how their year-to-year increase (October 2008 compared to October 2007) is the biggest out of the 3 consoles, but our NPD analysis started around this time last year and I have the full analysis right here for October 2007. So yes, the PS3 increased 57% in sales compared to the same month last year, but PS3 sales were absolutely dismal last year this time (last out of all consoles, including the PS2), and it was outsold by the Xbox 360 by a 3:1 margin and by a 4:1 margin with the Wii (which is still outselling it by almost exactly the same margin). The biggest worry has to be the sale decrease compared to the September, despite LittleBigPlanet being released. LBP also didn’t do very well in the sales charts either, barely commanding a place in the top 10 which was once again dominated by the Xbox 360 (5 out of the top 10 titles, including the number one, and platform exclusive, Fable II) and the Wii with the rest.

The price cuts for the Xbox 360 are happening all around the World, including Australia. What I found interesting was a quote from Microsoft’s marketing manager:

You can buy a Wii and an Xbox 360 for less than a PS3, or you can buy an Xbox 360 and a stand-alone Blu-ray player for less than a PS3

You can clearly see Microsoft’s marketing strategy here, and they are not ashamed at all to mention the Wii and even standalone Blu-ray players, and quite clearly position the Xbox 360 as a companion to both of these devices, rather than a competitor. If you can’t beat them, drop prices so you can join them, I guess is what this means. And with the holiday season, you can pick up an even cheaper Xbox 360, for example get a new Xbox 360 plus Rock Band for only $199 from Dell’s Black Friday special. That’s a sweet deal, if you can get your hands on it.

Okay, that’s all I have time for this week. Once I finish installing my new computer, I will hopefully have the NPD analysis up and have time to scour the net for more worthy news items. See you next week.


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