Archive for May, 2012

Weekly News Roundup (27 May 2012)

Sunday, May 27th, 2012

Welcome to another WNR. Hope you’ve had a good week. Nothing else I really wanted to add in the intro, except I’ve been going through the backlog of Blu-ray titles I’ve purchased, but haven’t yet watched. Managed to do both Predator (yes, the edition with the bad transfer that has all the “shiny” skin) and Predator 2 in preparation for Predators (bought the three in a boxset), The Shining, Any Given Sunday, Contagion, and a bit of Star Wars Episode IV (going to watch them in the order 4, 5, 1, 2, 3, 6, as to avoid “spoilers”). An eclectic selection of flicks to be fair, but that’s the way I like it.

Better get the WNR out of the way so I’ll have time to randomly choose another movie to watch tonight.

Copyright

Starting with copyright news, the US Supreme Court has rejected university student and world’s second most famous download pirate Joel Tenenbaum a chance for his case to be heard.

US Supreme Court Building

The US Supreme Court is refusing to hear Joel Tenenbaum's case, but the damages rewarded against the Boston University student will most likely decrease anyway (photo credit: Mark Fischer @ Flickr, Creative Commons)

Tenenbaum wanted his day in highest court of the land to contest the awarding of what he, his lawyers, and even the original trial judge called an “unconstitutional” amount of damages. $675,000 for 30 songs, to be exact. It isn’t exactly a defeat though, because chances are that once the case gets back to the lower courts, the damages will still be reduced, but just not on constitutional grounds. Rather than unconstitutional, $22,500 per song may simply be unjustified for this kind of personal piracy (as the statutory figures being used in these cases were derived on the basis that these sorts of cases would normally be about commercial piracy – nobody had guessed that the RIAA would start suing single mothers and students). And you can tell these figures are unjustified because when you apply it to the RIAA’s own piracy estimates, it would most likely create an amount that exceeds all money in existence (remember when the RIAA’s calculations led to the damages in the LimeWire case to exceed $75 trillion? And that was just for one download service).

Since the original case, the RIAA has distanced itself from suing individuals, mostly because of the bad publicity, and also the fact that it deterred nobody from doing what they’ve always been doing. The MPAA is also going through its own “quiet contemplation” period after the ill-planned SOPA debacle, and MPAA boss Chris Dodd has been trying to soften the image of the lobby group ever since (most likely paving the way for another round of SOPA, or something like it, next year). The latest attempt has Dodd distancing the trade group from labelling video pirates as “thieves”, an analogy that doesn’t stack up no matter how you look at it. If anti-piracy is about education, then labelling most of your students as criminals before the first class even starts is probably a bad idea. This news story inspired me to find and post some classic anti-piracy ad campaigns from days gone by as part of our new and semi-regular “Picture of the Week” feature. The one that labels downloaders as supporters of terrorism will go down as symbolic of our post 9/11 world, but most of them assumes that people are only pirating because they don’t know it’s illegal. I don’t think that’s the case really, I think most people who pirate knows it isn’t 100% kosher (even small children know that getting something for free without paying for it is kind of sketchy), but simply don’t care or find some way to justify it (DRM, high prices, crappy content – Hollywood and the records industry have been really good at providing people with excuses not to pay for their stuff).

The rest of the news stories, all three of them, have to do with three ways being used to combat piracy. Following up on last week’s story about a new anti-BitTorrent technology called Pirate Pay, the Polish arm of security researchers CERT this week identified a new disturbing trend of BitTorrent poisoning that appears to be related to the Russian based anti-piracy technology. They theorize that these attacks, which could be illegal under existing cybersecurity laws, might be related to ongoing anti-piracy efforts, mainly because the target of these attacks have been the very Russian films that Pirate Pay is said to already have had success “protecting”. The legal aspect is certainly interesting and needs further examination I think. Two wrongs don’t make a right, so employing hacking and DDoS techniques for piracy protection doesn’t seem justified to me (and let’s not forget, mere allegations of which started the whole “Anonymous vs the world” war of last year). Still, you would expect that these sorts  of technological solution would only force more resilient sharing protocols to be developed in the future, and this arms race will only end up making piracy even harder to stop.

Google DMCA Takedown Stats

So many links taken down, but so many still remain, and more are added every day - is any of it worth the effort?

If you can’t stop the BitTorrent downloads, then another thing to try would be to make finding torrents a bit harder. While those skilled at these kind of things have go-to websites, many others may still rely on good old Google to help them locate what they want. And with Google on a mission to be more transparent, they’ve recently released stats on the DMCA take-down requests they process, and it makes some interesting reading. I’ll leave you to read the whole article, as well as browse the stats, to get the full detail, but the big picture is that Google process a sh*t load of DMCA requests per month, and you may be surprised at who is the most active in this area. I would have expected the movie and TV industries to be spearheading this pointless DMCA crusade, but it’s actually Microsoft, with almost half of the links removed in the last month belonging to the Redmond based firm. But even with over 1.2 million take-downs happening every month, it feels like all of this is just a drop in the ocean compared to what’s actually needed to “wipe out” pirated content links on Google. And with hundreds of thousands, maybe even millions, probably spent every month on filing and processing notices, you can’t really say it has worked very well. I mean, anyone who wants to pirate Microsoft software can still do so easily, and the same with downloading the latest movies, music and games. This whack-a-mole approach clearly isn’t working.

What’s also not working is DRM, the very thing that should have prevented the pirated download from being uploaded in the first place. GOG.com, the purveyors of DRM-free goodies, obvious has a bias when it comes to all things DRM related, but it was very interesting to read about the DRM experience of releasing The Witcher 2 by GOG’s parent company, CD Projekt RED. The Witcher 2 was one of those rare games that was released without DRM, but at the same time, a boxed version that feature SecuROM DRM was also available. So it was interesting to find that the most pirated version was actually the DRM’d version of the game, with the DRM-free and easily shared copy basically left alone. So far from DRM protecting games from piracy, it has somehow managed to encourage piracy.

The theory that the developers  of the game came up with was that because the piracy scene was all about bragging rights, there’s was no challenge to simply re-package a DRM free game and upload it. But the fact of the matter is that even with industry standard DRM in place, the game was pirated, 4.5 million times actually, so you’d have to question what exactly DRM does other than to inconvenience paying customers. And it’s good to hear that CD Projekt RED aren’t worried about the massive number of pirated downloads in any case, because they know it has nothing to do with lost sales. In reality, it has more to do with people demoing the game, and some of those people will buy the game. Eventually.

So that’s three anti-piracy methods: stop the upload, stop the links to the download, and stop the download, and none of them proving effective so far at stopping anything. All the money and effort wasted on anti-piracy stuff would be better used to actually focus on creating quality content, and I bet that will have a greater effect on sales than anything else.

Well, that’s all I got for you this week. More next week!

Weekly News Roundup (20 May 2012)

Sunday, May 20th, 2012

Welcome to this slightly late edition of the WNR. Normally, I would link to the latest edition of the monthly NPD analysis here for your consumption, but as it turns out, neither Nintendo nor Sony decided to release hardware figures for the month. This means that there’s no NPD analysis for this month, an all too frequent occurrence lately. I’ll try to give you what I have in the gaming section.

Another fairly substantial news week, well in my opinion anyway, so let’s get started.

Copyright

In copyright news, let’s start with the MPAA’s response to the recent well publicized filtering of The Pirate Bay, happening as I type across Europe.

Unsurprisingly, the MPAA backed the recent court decisions around Europe to have The Pirate Bay blocked, and also rather unsurprisingly, spun this form of censorship as being ultimately good for the consumer. The reasoning, they say, is that by removing the threat of websites like The Pirate Bay, it gives the creative community more incentive to not only create, but also to “provide consumers with content when they want it”. Apparently, the mere fact that consumers want it is not enough of a reason for the “creative community” to cater to their needs, but you also need the right environment (although the real creative community, the artists and the like, usually have no power to decide how something is released, a decision that’s usually left to men in suits). This might at least be a point you could argue, but only if filtering actually works.

VHS Tape

If the MPAA had their way, this VHS tape would have never existed - photo by Jared C. Benedict, Creative Commons License

It’s also rich hearing it from the MPAA, considering their own history with innovations, to suggest that websites like The Pirate Bay are the only reason why they’ve not yet bothered to fulfil the needs of today’s consumers. Remember that these were the guys that were against the VCR, were for region control that barred consumers from getting content “when they want it”, and possibly still pretty angry at the whole Interweb thing. Apple, Netflix, Amazon have done much more to fulfil the consumer’s needs in recent times, and the interesting thing here is that all of these companies are tech companies, not film or music companies.

If anything, it’s BitTorrent and The Pirate Bay that has forced the industry to be more malleable to the demands of consumers. They can no longer afford to fool around with release windows (which are now far shorter than they were a decade ago), with region control (much less common on Blu-rays than compared to DVDs), with price control (note the ever decreasing price of discs), and they’re now forced to support services like Netflix, even if it means making less money. They’ve had to compete with the likes of The Pirate Bay out of necessity, but maybe they’re hoping censorship can allow them to turn back the clock, although  in my opinion – and if you’ll allow me to use another cliche – the genie may already be out of the bottle.

And does piracy really affect revenue that much? A new research paper suggests that pre-release piracy, the worst kind according to the MPAA and RIAA, may actually help sales. The research paper by North Carolina State University’s Robert Hammond suggests that pre-release piracy may actually help album sales. No theory is given as to why this may be the case, but I suspect it’s because piracy has become just another way to advertise. This follow another study a couple of months ago which found no correlation between pre-release movie piracy and US movie ticket sales. Both studies seems to go against industry sponsored studies, and the common believe that, piracy, especially pre-release piracy, is costing the industry billions. But the industry has never really looked at the reasons why people prefer pirated content, instead, choosing to believe it’s simply a case of freeloaders “stealing” because they’re freeloaders.

People pirate because they might not have the money to pursue the legal alternatives; or they never felt it was worth the money and want to try it out for free; or they might feel piracy is more accessible than the legal alternatives; or they just like to get stuff for free, even if they have the money for it. Two of the above scenarios will not lead to any extra revenue, no matter how many websites you block, while one of them is clearly the fault of the content owner. Only the last scenario, probably the least likely (that people who have loads of money are shunning the likes of  iTunes and Blu-rays in favour of manually loading MP3s onto iPhones, and watching blurry movies on their laptops), derives any benefit from blocking out piracy altogether, which in itself is a fantastically unrealistic proposition (although I suspect Hollywood execs are used to the fantastically unrealistic, considering they produce so much of the same crap for our consumption).

Speaking of unrealistic propositions, Microsoft is providing funding to a Russian company working on a way to block BitTorrent downloads. With no details being available about how it works, and little detail about how it actually works in the real world, there’s not much one can actually say about it. Most of these types of blocks works by seeding fake data into streams, and this is not new. BitTorrent is incredibly adept at filtering out the bad and leaving the good, so while it may temporarily make downloads a pain, it won’t do it forever. At the end of the day, BitTorrent is just another file transfer protocol, so the problem with going after the protocol is that you’ll have a new and even more robust protocols to deal with later down the track. If you really want to solve the problem of piracy, you’ve got to go back and examine the reasons why people choose to pirate in the first place (and take note of the people who don’t have a valid legal alternative, due to regional restrictions or release windows, or unrealistic pricing, and maybe offer them a choice).

Diablo 3 - Error 37

The dreaded Error 37 plagued Diablo III on launch day, as it becomes the highest profile DRM-fail in the history of gaming

A lot of people saw it coming, but as expected, the launch of Diablo III turned into a DRM-tastic disaster for Blizzard this week. One of the most anticipated games of the year (or decade), with one of the most controversial DRM decisions in regards to the single player campaign, and a near simultaneous global launch – a recipe for disaster, unless Blizzard go beyond the call of duty to provide adequate servers for all. Unfortunately, they did not.

Back when Blizzard first announced the controversial DRM, they were keen to stress that it wasn’t piracy related. Rather, it was suppose to be a sort of elaborate anti-cheating system, although that seemed confusing at the time for a game that was always largely a single player experience. But as we now know more about the game, and especially the built-in Auction House system, it’s much more clear why Blizzard went with the “always-on” DRM approach (and they were right, it’s not about piracy, or at least not all about it). In order to ensure the subscription-free Diablo III doesn’t cannibalize Blizzard’s major subscription based property, WoW, and to take the “black market” trade for in-game items in-house, the Auction House system was devised as the solution. But in order for the market place to remain rational, cheating, hacking and other unfair tactics had to be stopped – the always-on DRM is Blizzard’s solution to this. It’s a valid explanation as to why it’s present, and why it may be needed, but having a valid, non anti-piracy related explanation, won’t please diehard fans, who were none too pleased with the Auction House addition in the first place. But Diablo III is the only Diablo game in town, so to speak, so it’s not as if they have a choice if they want their fix of Diablo (disclaimer: I’ve purchased Diablo, even though I should know better).

But for games where it’s easy to make the decision not to bother buying, I’d caution publishers against taking gamers for granted in this way. DRM should either not exist, or it should be invisible, as otherwise, it becomes a liability.

High Definition

Does the world need another physical media based format, even if it is a royalty free, open standard, based one?

Well, whether you think one is needed or not, free software advocate (free as in freedom, not as in beer) Terry Hancock is going to make one. Dubbed “Lib-Ray”, it’s based on a MKV container, using the VP8 video codec, with an HTML5 based menu system, with everything stored on SD media. The name may sound similar, but this is definitely not a Blu-ray challenger (and not intended to be), although it could give independent filmmakers a nice standardized way to distribute a physical copy of their films, without having to pay the likes of Sony, Panasonic and Microsoft for the privilege. It’s not the worst idea in the world, although without real hardware support, the format will have a long and hard struggle for acceptance, even by the indie scene.

Gaming

Very much related to Blu-ray, but also very much a gaming related news item, was a former Microsoft boss’s take on the relative “success” of the Xbox 360, and why it actually happened.

Robbie Bach, the former president of Microsoft’s Entertainment & Devices Division, says that Sony’s ill planned and badly managed transition from the hugely successful PS2 (70% market share) to the expensive, delayed PS3 (30% market share) made it possible for the Xbox brand to triple its market share during the same period. The expense and delay had a lot to do with the inclusion of Blu-ray support for the PS3, although it did help Sony win the HD format wars.

Sony PlayStation 2

The PS2 dominated the video games market with 70% market share, but the transition to the PS3 was problematic for Sony, not just because developers were actively backing a second horse in the race - the Xbox 360

The ease in which developers could develop on the Xbox 360, compared to the PS3, also seems to be a factor (something that even Sony admits), but the same developers also had a vested interest in seeing Sony’s standing knocked down a peg or two – nobody wants to publish in a market with only one big player, and support and investment by publishers like Activision and EA, in Microsoft’s then new console, made it possible for a second major player to emerge, according to Bach. Of course at the time, nobody expected Nintendo to ultimately come up with the most popular console of this generation, but that didn’t really change the strategy for publishers much, as the Wii was never a serious platform revenue wise for them.

As mentioned earlier, lack of NPD hardware stats means our monthly NPD analysis is not going to happen, and so I’ll talk about it in brief here instead.

The Xbox 360 was the most popular home-based console for the month, with 42% market share amongst the home based console, selling 236,000 consoles (down 21% compared to the same month last year). This leaves 326,000 units sold between the other two, and using a similar split as last month for the Wii/PS3, then it’s about 214,500 for the PS3, and 111,500 for the Wii – but the split is probably a bit more even, as the Wii numbers looks too small, and Easter is usually kinder to the cheaper consoles.

Software wise, Prototype 2 dominated, but it looks like it sold less than 236,000 copies on all platforms combined, which is pretty weak for a top selling title. Kinect Star Wars was in second place, decent in terms of ranking, but still weak in terms of actual unit sales probably.

Hopefully, normality resumes for the NPD analysis next month, but we’ll have to wait and see.

And with that, we come to the end of another WNR. Hope you’ve had a good week, hope the next week will be better, and see you again in seven days.

Weekly News Roundup (13 May 2012)

Sunday, May 13th, 2012

Welcome to another edition of the WNR. As promised, the annual Blu-ray sales stats analysis has been posted, complete with lots of graphs that, really don’t say much. Glad to have gotten that out of the way for the year, and I wish more things could be annual ones, rather than ones that you’d had to do every week!

Monthly things are good too, and next week should see the next monthly installement of our captivating NPD US video game sales analysis (yes, even more captivating than the title of the piece). Xbox 360 is set to win the crown again for being the least suckiest console, in terms of sales, for April.

And Happy Mother’s Day to all the moms and mums out there, including my own!

A fairly quiet news week that had me struggling to find anything interesting to talk about, but let’s get started anyway on this fairly short WNR.

Copyright

In copyright news, with UK ISPs starting their filtering of The Pirate Bay, hacktivist group Anonymous, or rather, an offshoot of the “organisation”, decided that payback was necessary, and promptly DDoS attacked the website of Virgin Media, one of the first ISPs to implement the blocking.

Unfortunately for them, criticism of the attack came from the most unexpected source: The Pirate Bay! It’s not only that the choice of the target wasn’t that appropriate, as Virgin Media and other ISPs had been fighting the block in court, at their own expense, for some time now, but TPB also condemned all forms of denial of service attacks, saying that it’s just another form of censorship. The Pirate Bay believes that there are better ways to protest the blocking of the website, including setting up your own proxy, or by joining a local branch of The Pirate Party. The proxy thing is interesting, because a Dutch court has just ordered their country’s Pirate Party to shut down their reverse proxy for The Pirate Bay. With no such ruling yet in the UK and elsewhere, if enough people create their own proxies, then it may force the courts to rethink their stance, or at least it would make enforcing the ruling a right nightmare.

The issue of cinema release windows has been raised recently, in relation to revenue and piracy. But for a long time now, a small war has been brewing between cinema operators and movie studios over the length of theatrical runs. Up to 90% of revenue from ticket sales during the first week of a theatrical release goes to the movie studios, with the share slowly decreasing over the typical 17 week release window. What this means is that, for movie studios, a shorter release window makes little difference to them financially, while it may be a huge thing for cinema operators. And when you add web piracy to the mix, where longer windows may encourage more piracy, as the disc rental, sell-through and digitally distributed versions of the movie fails to materialise quickly enough for today’s “I want it now” consumers, some of which will seek out piracy as an alternative – so there’s definitely extra incentive for studios to want a shorter theatrical run. Which is why the CEO of Time Warner predicted this week that, in a bid to fight piracy, theatrical release windows will need to be shortened, while DVD and Blu-ray prices will have to be lowered as well.

I don’t really have a problem with the latter, since value proposition wise, buying discs has started to feel like bad value compared to services  like subscription streaming. But perhaps with cinema release windows, a fairer profit sharing regime might be needed to ensure cinema operators don’t lose out, while cinema operators may also need to do more to get the same amount of “bum on seats” in a shorter period if release windows need to be shortened  (a price reduction would help, and would also help directly reduce piracy at the same time).

IPR Copyright Warning

The new warning screen you'll soon see on DVDs and Blu-rays, giving people more incentive to actually download movies

And while cheaper discs would definitely help to fight piracy, the issue of convenience also plays a key part these days. A pet hate amongst even disc lovers are those unskippable sections at the start of the disc. You know, the studios trailer, copyright notices, anti-piracy trailer, “on home video” trailers, “coming to a cinema near you” trailers, a promo for Blu-ray, more studio trailers, then you get to the main menu to start the movie, and some legal liability notices, and then and only then does the movie start (and it usually starts with another studio trailer). Copyright notices are probably the worst of the bunch, as at least, some trailers can be interesting (but still very annoying if unskippable). Unfortunately, things are about to get worse, as the MPAA and their allies in the War Against Downloads have decided to double the number of potentially unskippable copyright messages on discs. The new screen will feature the tag line “Piracy is not a victimless crime”, and leaving aside the point that I don’t think anyone actually thinks it is, it’s not really true is it. Lots of cases of piracy is completely victimless, and even sometimes beneficial to the very victims that the message is referring to.

But the message is beside the point. The point is that movie buyers, you know, the people that do the right thing, are actually being punished for doing so, especially since the pirated version would most definitely have removed these warnings, or made them easily skippable. And if you want to make people aware of the copyright issues, there are much better ideas that are already being deployed in other countries. For example, in the UK, some Blu-rays provide a “thank-you” message that applaud buyers for doing the right thing, while still relatively ineffective (a case of  preaching to the converted, perhaps), it does at least portray a more positive message than “you might be going to prison for 5 years”. Now I’m not saying that convenience is the only reason people are downloading pirated movies, but if something is free and easy to get to and use, while the paid for one is less accessible and less consumer friendly, then it does make the decision a lot easier.

And I think this is pretty much the reason behind comedian Louis CK’s little DRM-free experiment last year, in which he sold a show of his for $5 on his website, and did it without bothering with any sort of DRM. Sure, the show was pirated (it’s not as if DRM would have prevented it), but it also made a million dollars in a couple of weeks, and people who paid for it had just as usable of a copy of the show as the people who had downloaded it. Louis is back at it again though, this time releasing a couple of audio-only shows in the same method, and at the same price (which may hurt sales a bit, I suspect).

High Definition

Things like DRM also adds to the licensing cost of implementing playback support, and it’s partly the reason why Windows 8 will remove native DVD playback from the list of standard features that come with the upcoming OS.

Not only that, the standard “home premium” equivalent version of Windows 8 (simply called “Windows 8”) will not have support for media center either, so you’ll have to spring for the “Pro” version to have it as a (paid) option.

Windows 8 Metro

Windows 8, the standard release, won't have DVD playback built-in - Microsoft says that people are no longer interested in disc based movie playback on PCs - do you agree?

So of course, this means Blu-ray playback support is not going to be included either. Microsoft says the declining of interest in disc based movie playback and the steep licensing fees are the reasons for the exclusion. That may very well be true, but Microsoft also has its own digital distribution strategy, so that may be the cynic’s view of why it’s happening.

But there will still be commercial options for DVD and Blu-ray on Windows 8, and there may even be a free alternative too via VLC, and you’re probably better off using those solutions anyway.

Personally, I like to pretend Windows Media Player doesn’t exist.

And on that note, we end this week’s WNR. See you next week.

Blu-ray: The State of Play – May 2012

Wednesday, May 9th, 2012

Welcome to another edition of our annual Blu-ray sales analysis. Since our last analysis, we’ve had the milestone releases of Star Wars (always an important milestone for any video format), WB finally putting us out of our misery by releasing the Extended cut of Lord of the Rings and the conclusion of the Harry Potter saga. With Internet based streaming more popular than ever, and with home video revenue stabilizing after a turbulent couple of years, it will be interesting to have a look at how Blu-ray has done this past year.

The data used in this analysis derives from our weekly updates, based on figures released by Home Media Magazine. Some of the historical figures you’ll see have also been adjusted, due to slight tweaking of the metrics used by HMM to create these sets of data, although the changes have been very subtle and does not change the bigger picture in any way.

We’ll structure this analysis in pretty much the same way as the last one, although there are a couple of new graphs introduced in this analysis, focusing on actual raw revenue figures for Blu-ray.

The first set of graphs show Blu-ray market share through the four year period that I have tracked them, with the release milestones pointed out.

Blu-ray Sales Percentage - 4 May 2008 to 21 April 2012 - Click to see larger version

Blu-ray Sales Percentage – 4 May 2008 to 21 April 2012 – Click to see larger version

A graph that’s always getting wider, here we can see the 4 year period in which Blu-ray market share has been tracked. Market share is defined as the percentage of sales belonging to Blu-ray compared to all discs sales (which includes both Blu-ray and DVD). So for example, the Blu-ray market share figure as of 21th April 2012 is 26.08%, it means that this percentage of all disc sales belonged to the Blu-ray format (and inversely, this suggests DVD market share is at 73.92%). The last of these above 4 distinct graphs is the last 52 weeks period that this analysis will be talking about. One thing you’ll notice about these set of graphs, compared to the same set last year, is the new vertical scale being used – this is to take into account a new record for Blu-ray market share, set in the weeks following the release of Star Wars and during the week that The Lion King was released. The record now stands at 40.22%, up from the 28% that was set in the last 52 week period (by another Disney release, Beauty and the Beast – of course, both Disney releases inject a kind of performance enhanced doping into the Blu-ray stats, as these were exclusively released as Blu-ray combos and all sales were credited to Blu-ray, even though the DVD version was included in the package). What this graph shows is that the performance of Blu-ray market share is still very much dependent on specific releases, with popular catalog releases such as Star Wars and the Disney classic often being better for market share, than say major hits (with the exceptions being the kind of movie Blu-ray is made for: action, Sci-Fi and anything that benefits from the improved visuals and aurals).

The next set of graphs show the market share as one continuous graph, as well as the growth rate when comparing one week’s market share with the market share figure of the same week a year ago (so if week 32 in 2010 had a Blu-ray market share figure of 15%, and week 32 in 2011 had a market share figure of 20%, the growth would be: (20 – 15) / 15 => 33%).

Blu-ray Market Share - May 2008 to April 2012

Blu-ray Market Share – May 2008 to April 2012

Blu-ray Market Share Growth - May 2008 to April 2012

Blu-ray Market Share Growth – May 2008 to April 2012

The upwards trajectory of Blu-ray market share is pretty evident in the first graph above, but the slowing down of the growth is also pretty evident in the second graph. Last year this time, the trend graph stopped at just above 20%, while a year later, it stops just above 25%. The addition of an annual addition of 5% to the market share has been repeated for the last 3 years already, with a slight slowdown, so chances are, we’ll be looking at Blu-ray at an average of closer to 30% this time next year. The lack of really enticing new releases in the last couple of month hasn’t helped market share growth, and growth was always going to slow as Blu-ray market share approaches the magic 50% mark (when passed, it will signal Blu-ray’s “victory” over DVD as the dominant home video format).

Below is a new graph I’ve introduced to this analysis, and it shows Blu-ray growth, but for raw revenue, rather than market share.

Blu-ray Revenue Growth - May 2008 to April 2012

Blu-ray Revenue Growth – January 2010 to April 2012

With less data being available than the equivalent graph for Blu-ray market share, the trend here is harder to see, and more volatile. But revenue is always a bit more volatile, as you can see the violent spikes indicate the a major release milestone for the format. The effect of the recent drought of A-list releases can be seen quite clearly towards the end of the above graph, as revenue growth drops below 0% (ie. a revenue decline). As a comparison, revenue growth for the first 16 weeks of 2011 averaged 33.24%, while for the same period in 2012, it only averaged 14.45%.

The last two set of graphs shows a comparison of weekly market share figures with the same figure from a year ago, and the same comparison but with revenue figures.

Blu-ray Sales Market Share: 2008/11 versus 2009/12 Comparison (May to April)

Blu-ray Sales Market Share: 2008/11 versus 2009/12 Comparison (May to April)

Blu-ray Sales Revenue: 2010/11 versus 2001/12 Comparison (January to April)

Blu-ray Sales Revenue: 2010/11 versus 2011/12 Comparison (January to April)

The slowing growth of Blu-ray shows up in the above graphs as the gap between the same weeks, a year apart, shrinks, and even reverses, depending on the calibre of the release in the two compared weeks. What is interesting is that the revenue graph shows the seasonal nature of home video revenue, with the holiday period having a “tent-pole” effect for the rest of the year. The difference between the top market share graph and the bottom revenue graph (where growth appears a bit more evident with market share than with revenue) is due to the fact that DVD revenue has shrunk during the same period, which has allowed Blu-ray market share to rise, without needing a similar rise in revenue terms. The decline in DVD, therefore, is not just solely due to the emergence of Blu-ray, but also other external factors (mostly Internet based digital distribution).

The conclusion is therefore very expected. Blu-ray revenue and market share continues to grow steadily, albeit at a slowing pace, but it will be the calibre of releases that will determine when Blu-ray will take the next step forwards towards becoming the dominant home video disc format. 2011 was a relatively weak year at the box office (and hence, the late 2011 and early 2012 releases being somewhat average), but 2012 already looks like a bumper year for movies thanks to the likes of The Hunger Games, The Avenger, Prometheus, The Dark Knight Rises and the next Bond movie, Skyfall, it bodes well for the second half of 2012, and the start of 2013, for Blu-ray.

Weekly News Roundup (6 May 2012)

Sunday, May 6th, 2012

Hope you had a good Star Wars Day on May the 4th. Unfortunately, I totally forgot about it, as otherwise it would have been a great occasion to finally watch my Star Wars Blu-rays, which I had been saving until my TV problem had been solved (which it was, last week).

You know how three of Digital Digest’s URL were removed from Google due to a bogus DMCA complaint? Nearly 6 weeks later, all three of the removed URLs have finally been reinstated. It could have happened a bit sooner, but Google messed up my first counter-notification and failed to process it, forcing me to re-submit one about 2 weeks ago, which was finally processed this week. Luckily, none of the URLs were bringing in a lot of traffic from Google to cause any major disruptions, but it could very well turned out to be an expensive problem, but not expensive enough to actually warrant getting  lawyers involved!

A pretty good news week, not that all the news was good news, but just that there were plenty of interesting news items to write about, so let’s get started.

Copyright

We start with news of the blocking of The Pirate Bay in the UK, something that had been coming admittedly, but the required court order was finally handed down this week.

A good number of UK ISPs will have to start blocking access to The Pirate Bay within the next couple of weeks, with some ISPs having already activated their filters. The filtering appears to be in the form of both a DNS filter, and an IP filter. The DNS filter will make sure typing thepiratebay.org (or thepiratebay.se) will no longer resolve to the correct IP address for the website, and the IP filter will ensure that even if you knew the IP address, you won’t be able to access the website.

VPNReactor

A VPN service is a worth investment if you value your privacy, or want to access geo-locked legal content, but there are also free (albeit limited) alternatives such as VPNReactor

Of course, this kind of filtering is easily circumvented. By changing to a un-filtered DNS server, such as the ones provided for free by OpenDNS or even Google, it will allow the TPB domains to fully resolve. But this doesn’t really help in the case where the IP address has also been filtered, and so you’ll have to rely on VPNs or proxies to get your TBP fix. Generally speaking, using VPNs for BitTorrent is a good idea these days, as even if you can access TPB and get the Magnet links needed, chances are, your BitTorrent activities (for popular torrents) are still being monitored by one or more agencies (some to involve you in a mass lawsuit, others as part of ‘graduated response’ monitoring regimes). With the right VPN service though, your BitTorrent speed shouldn’t be affected too much, while your activities should now be anonymized. But do check to make sure what the VPN service’s privacy policies are, as some openly state they will hand over server logs to third parties upon request, which kind of makes it pointless if privacy is your biggest concern. VPNs also have the added bonus of allowing you to access geo-locked content from places like Hulu and Netflix, if they offer the option to choose the country where your “fake” IP address comes from.

The news of the block made headlines around the world, and as such, actually drove more traffic to The Pirate Bay. And with plenty of articles and blogs covering the possible solutions to the block, I wonder if all this has done is to actually make more people aware of TPB. And rather than scare them into not using BitTorrent, it may have only helped to push them to make the extra effort to conceal their activities. It could end all rather badly for future anti-piracy efforts if the trend towards VPNs and other anonymizers continue.

And ISPs are also well aware that these kinds of filtering will largely be pointless, and many are now calling on the entertainment industry to find other more effective ways to combat piracy, rather than scapegoating everything on ISPs. A better way, according to ISP Virgin Media, would be to offer more “compelling legal alternatives”. They specifically named Spotify, as the lawsuit that resulted in the blocking was a music industry led one, but it applies just the same to home video. And as you’ll see later in this WNR, consumers have already started to embrace these “compelling legal alternatives” by voting with their hard earned cash.

There's no place like home T-shirt

An IP address is not a person, just like the owner of a phone account is not necessarily the person that made a specific phone call, a judge says

A very interesting legal development happened across the Atlantic too this week, as a New York judge finally took the time to write a detailed ruling on why IP address evidence by themselves are not sufficient to identify individuals. Judge Gary Brown used the same phone account analogy that I’ve used in the past, but hit the bullseye by comparing the use of this type of IP address evidence to an individual who pays the telephone bill being linked with a specific phone call. Judge Brown also raised another interesting point regarding the widespread use of Wi-Fi routers, but not in the traditional “hijacking” scenario where unauthorized use of your Wi-Fi connection may have been responsible for the infringing actions. What the popularity of Wi-Fi does mean, according to Judge Brown, is that it proves more and more authorized individuals are sharing the same Internet account, and this again makes it hard to ascertain just who actually performed the action that broke the law. The copyright groups will argue that, as the owner of the connection, they are always liable for how it’s used even if they’re not at all aware of how it is being used (say goodbye to Wi-Fi hotspots), but again, this doesn’t seem to apply to phone accounts (otherwise, payphones wouldn’t exist because the owners of the payphones would be liable for all illegal activities being conducted on these phones).

I believe the the lack of a deeper understanding of technology by the judiciary has been responsible for the misuse of IP address as evidence, something that copyright groups have been more than willing to exploit. But as the technical proficiency of judges improve, I think we’ll see a lot of these accepted notions challenged. For one, I would like a further examination of the role data transfer and usage plays in infringement, in that how much data must be downloaded (and uploaded) before infringement actually occurs, and how the data has been used. For example, if I attempted to download an infringing file , say from RapidShare, and that download stopped at 95% (thus making the file completely useless), have I committed copyright infringement? And if I make a successful download but never use the file, am I still liable (even though I’ve done no harm to anyone). For uploads, if I only uploaded a single bit of data to a BitTorrent swarm (let’s say, a single zero), am I just as guilty as someone who’s been seeding for weeks?

If Hollywood want to continue their obsession with finding a legal solution to the web piracy problem, instead of focusing on innovation, then these are the issues that need to be cleared up.

High Definition

There are some encouraging signs that, despite the piracy problem, home video revenue is on the rise again, and it’s largely thanks to the Internet.

The biggest rise came in the area of subscription streaming, with an amazing 545.5% increase in revenue in just a year. Of course, a lot of it comes from disc rental subscribers transitioning to digital, and disc rental revenue was expectedly down, but all this shows, and it’s something that I alluded to earlier in this post, is that consumers are making the choice towards streaming. It could be because it’s convenient, or it’s good value considering how much content you have access to “on tap”, but probably because of both, and it shows that people are happy to use the Internet for legal videos, even if it costs money.

The only thing streaming can’t do effectively right now is to offer ubiquitous high quality HD streaming. The minimum broadband requirement for semi-decent HD that you’d want to watch on your 60″ TV seems to hover around the 10 Mbps mark, and while that’s achievable for many, it also means that a large chunk of their connection has been saturated, and by just a single video stream. Here in Australia, those with 10 Mbps or higher are probably in the minority. Until most homes are capable of receiving at least two such streams at the same time without saturating connections, I think Blu-ray will still have to carry the majority of “HD bits” being delivered to people’s homes. And accordingly, the latest sales results still shows Blu-ray sales rising. With the decline of DVD sales also slowing down, it has allowed the HD format to offset most of the revenue losses (overall, revenue was only down 1% from a year ago for disc based sales).

So to make HD streaming, and possibly even Blu-ray quality streaming, a reality, what we need now is a faster Internet network for everyone. One of the ways to deliver it is via high speed fiber (or fibre, depending on where you’re from), and Google has been building fiber towns all over the US in anticipation. Even in Australia, our government is committed to connecting 93% of homes to fiber, with speeds up to 1Gbp. Even at 100 Mbps, it is still more than enough to stream two full Blu-rays. So you’d think, given the trend towards Internet based video streaming, Big Content should be rejoicing at the advancements in network speeds that will allow for the continued evolution of web based streaming. But once again, the piracy issue turns out to be the one that movie studios are most concerned about.

NBN Fibre Rollout

Here in Australia, the government is rolling out high speed fibre broadband to 93% of households, something that has Hollywood scared (photo credits: NBN Blog)

The MPAA supported AFACT group here in Australia have already issued dire warnings in regards to the country’s fiber project, about what pirates could be doing on super fast networks. And so instead of focusing on the opportunities (the same opportunities that the likes of Google, Apple and Amazon will probably exploit to their, and the consumer’s, advantage), the focus has been on new legislation to curb piracy on the still unfinished network. This week, Google’s fiber town projects have also attracted the same kind of fear and uncertainty from Hollywood’s major studios.

Now, being afraid that a pirate might be able to download an entire Blu-ray disc every 4 minutes over a 1Gbps connection is a perfectly reasonable response. But the thing is that, however scared Hollywood is at this prospect, high speed Internet is coming to people’s homes with or without their support, and no amount of fear-mongering is going to stop it. So instead of trying to DRM the whole Internet and legislate it to death, why not take a breath, calm down, and try to see the possibilities – that instead of fretting about a pirated Blu-ray disc being downloaded in 4 minutes,  how about seeing the opportunity to offers consumers the ability to buy, stream and even download and burn their own Blu-ray discs in a nice and easy to use service that’s at a reasonable price, and beat the pirates at their own game.

But that would be too easy, wouldn’t it, so expect more pressure on the legislature to help “protect” the entertainment industry from progress, as the fiber (and next-gen 4G) rollout continues.

Well, that was the week that was. Hope you enjoyed this edition of the WNR. See you in 7.