DVDGuy’s Blog @ Digital Digest

Welcome to another edition of the WNR. This part is the introduction, where I will usually comment on some of the activities I’ve been up to during the week, either in the production/maintenance of this website, but mostly not work related because I rarely do any work (although I haven’t played Fallout 3 in ages). This week, I did do some work, although nobody seems to have noticed it. I’ve added archived downloads to Digital Digest’s software section, for software updates from now on. An example of this is for ffdshow, which gets updated more often than I brush my teeth. Not really all that useful, but all the other sites have it and I thought, what better way to waste a whole week. I’m starting a new mini project for Digital Digest next week, which will be much more useful I think.

I also managed to write up the January 2009 NPD analysis. Same story as the last few month, Nintendo wins, Microsoft holds on, Sony struggles.  

Let’s start with copyright news for the week. The FTC asked for comment regarding DRM, and not surprisingly, most of them were negative, and most came from gamers. It looks like the next battle over DRM will be in the gaming arena, and I hope gamers are ready for the fight because I think this is another that can be won, just like the music DRM battle.

Steam sales stats show the cheaper games are, the more money they make

A couple of weeks ago it was reported that Valve founder Gabe Newell ripped DRM a new one by calling it stupid and counter-production (Newell: “there is evidence anecdotally that DRM is increasing piracy rather than decreasing piracy”). Valve owns the Steam platform for digitally distributing games, and they have run a little experiment of sorts to see if there’s another way to combat piracy and also make users happy, and I think they’ve found it. They discounted games through Steam, some by as much as 75%, and found that sales increased beyond the amount discounted – in other words, the cheaper games are, the more money they make from them. This is not really rocket science, but nobody really knew what game pirates would do if faced with the choice of cheap games or free downloads, and it seems many choose to pay the cheap price, rather than take a moral/legal hit and feel the guilt of their actions. My post goes further and puts some real numbers into the sale stats, and it turns out if game companies sold games at 25% of the current pricing, they would be making more than 3 times in revenue thanks to pirates converting into customers. And they won’t even need DRM anymore. Everyone wins in this scenario, except it will never happen because of (irrational) greed.

Lawsuits are still the industry’s preferred way to deal with piracy, and the test case against The Pirate Bay has started in Sweden. After they sue the sites that offer torrents, they will then go after the ISPs to try to attack the problem from two sides. One way to help them in this second quest is to force ISPs to keep meticulous records of *your* Internet usage. With help from the US government, they have forced Wi Fi access point providers to keep records on user usage for two whole years. On the surface, they say this is to help law enforcement agencies, but this would also benefit parties like the RIAA who may now have up to two years worth of people’s download records. Scary stuff.

Then we have DRM, and if something can’t be squeezed in, then the solution would be to deny users the service. The latest case is Blu-ray recorders, or the lack of them in the US. These things have been widely available in Japan for nearly 3 years, but will not show up in the US because the powers that be are afraid people will turn these into “piracy boxes” to record TV programs and other things. Even if they block the digital recording path, there is always the analogue way, and we’ve already seen the MPAA try (and fail) to close this so called “analog hole”. If the industry are willing to ruin a format (Blu-ray) that they created for themselves, just because they’re afraid a some people might save a few bucks off a movie purchase here and there (which probably won’t even happen, because they won’t have intended to buy the movie anyway), then they really are intent on shooting themselves in the foot, aren’t they?

In HD news, you won’t hear the Sony PR people tell you this, but Blu-ray sales have been very flat since the start of 2009. The last week of data was another one where Blu-ray did relatively poorly compared to recent efforts. The stats were pretty much the same as September 2008, before the Iron Man and The Dark Knight led booms, which seems to have died down despite TDK still being the week’s number 2 title (where would Blu-ray be without TDK?).  

Of course, a large part of this is due to lack of decent releases, but you could say the same for DVDs, but sales have been up for the last few weeks. Of course, DVD has the advantage of having a bigger install base, more titles and cheaper ones, so even in a poor release week, there’s always about a million sales going on and plenty of titles people will buy simply because it’s so cheap, they won’t care about wasting money. This is what Blu-ray doesn’t have at the moment, and something it can only get when it moves away from an enthusiast/early adopter format, to a truly mainstream format with 30%+ market share. I believe this will happen, but I have no idea when – I think it won’t happen in 2009 though.

Disney's Pinocchio's Blu-ray version will also include the DVD version

One way to counter this effect, particularly with titles that don’t usually appeal to the normal Blu-ray crowd, is to do something that Toshiba in their infinite wisdom thought to do with HD DVD – combos! Not in the same way HD DVD does by having everything on one disc, but by packing both the DVD and Blu-ray versions, on separate discs, in the same package. Sure, prices will go up, but it gives those with DVD players and thinking about Blu-ray a reason to make the step up, but not necessarily immediately. They can build their Blu-ray library right now without even having a player. The only problem is pricing, and if this package is going to be more expensive than even the Blu-ray only version, then you can forget about it. Sony laughed at Toshiba for doing this, but it looks like they had the right idea about how to win the format war against DVDs, even if they were a bit clueless about winning the format war that actually mattered at the time.

Wireless HD is something you’ll hear about a lot in 2009, I suspect. Unfortunately, the spectre of a format war is looming on the horizon, but hopefully common sense will prevail and it won’t be as tedious as other format wars since this is only about cabling, or the lack of them. The best way to think about Wireless HD and other formats is basically to think of it as wireless HDMI/USB/DisplayPort. I’ve blogged about this before, but I’m still excited because I hate wires, and I manage them badly as it is. The application is not only limited to the home theatre, but also to your computer, imagine having no cables other than the power cable, and that’s nearly possible now with wireless USB, HDMI/DVI, KB/Mouse, speakers, networking … what else is there left that needs wires?  

Onto gaming now, Microsoft says the worst of the Xbox 360 Red Rings of Death problem is behind us. But the problem was so bad, it really doesn’t mean anything. If 50% of consoles died due to RRoD before, and now only 25% of them die, then Microsoft aren’t lying when they saw the worst if behind us, but it’s still not good enough.

Custom made fully silent (and unbreakable) Xbox 360

I just don’t understand that with modern technology available, why can’t Microsoft make a console that won’t break, and is also much quieter for the bargain. Even if they have to make the console a bit bigger, then I don’t mind. Except they won’t do it, but it doesn’t mean someone else won’t, and custom made Xbox 360’s are now available with these design features to finally make one that won’t break and is deadly quiet as well.

PS3 gamers are the oldest, while Wii gamers are the youngest. I don’t know why that matters, but it might interest someone out there. This would suggest Xbox 360 owners, like myself, are right in the middle. Except I also own a Wii and a PS3. PS3 firmware 2.7 will be released soon, and some details have already leaked out. Doesn’t look like Sony will be addressing the “firmware breaks PS3” problem that hundreds of thousands of people have experienced so far. Shame.

And I’ve already mentioned the NPD stats for January and it’s not pretty reading for Sony. I think I would put money on a PS3 price drop sooner rather than later, because this can’t go on for much longer unless Sony wants to kill the PlayStation brand.  

Okey dokey, that’s all for this week.

I hope you had a nice Valentine’s Day. I spent mine alone, in a windowless room, eating day old pizza and watching re-runs of Friends. So it was a good day for me too.

Didn’t get to write any blog entries this week because I’ve been cleaning up the innards of the Digital Digest website, adding new functionalities and fixing some problems, but all on the web admin site of things, not the front-end so you won’t notice anything different yet. But it’s all for a purpose, and the sooner I can get these boring things done, the sooner I can start adding some new content and functions to the site. 

As you know, last week I reported on the bushfires here in Victoria, Australia. The full extent of the damage and loss of life wasn’t really known to me at the time I posted the blog, but it has now been revealed as much worse than first feared. Donations are very much needed as many people have lost homes, and those are the lucky ones. The response so far has been fantastic, despite economic harsh times, people are giving more than they can afford and it’s great to see something good come out of a very bad situation.

On with the copyright news, Sweden is well known for being the home of The Pirate Bay and The Pirate Party. But Sweden is no home for pirates, it seems, as piracy rates in Sweden are lower than that of many other countries with much harsher views towards copyright.

While politicians in Washington are trying to get the right economic stimulus package through, there’s always someone trying to squeeze a bit of pro-MPAA agenda into the bill, this time it was Senator Dianne Feinstein. Under the guise of preventing child pornography, the language used by the amendment to the bill was, as experts testify, clearing MPAA produced and with the child pornography bit thrown in for dramatic effect. I don’t know what is worse, that the MPAA compares people who download movies to child abusers, or that they think child pornography is only as serious as movie piracy. And all this beneath the table stuff while Congress is debating serious issues such as how to prevent people from losing their homes and jobs just shows how tasteless the MPAA is, and how politicians are being led by the nose by those with money in Washington.

Apple trying to prevent iPhone jailbreaking with DRM

It’s not often that you find Apple, and the RIAA/MPAA on the same side of anything, but when it comes to DRM for the iPhone, those three are the best of buddies. Apple argues that DRM protects their business model, while the RIAA/MPAA argues that DRM is the best thing since Sliced Bread 2.0 added SecuROM protection that required users to dance a jig before use. Jailbreak on iPhone allows you to install custom apps without going through Apple, and that’s why Apple don’t like people breaking their DRM. It’s not even about piracy in this case, as it’s all about closing down competition and making sure Apple makes money from everything you intend to use the iPhone for. It’s something you expect Microsoft to do, not Apple.

And the EU has just extended copyright protection from 50 years to 95 years, at the behest of the RIAA. Royalty free music helps it to  survive longer culturally because anyone can (and will) use it  – from TV commercials to independent films to even YouTube clips – but extend copyright protection to 95 years, and I can see some music disappearing from society’s consciousness for good, all because money. The RIAA, who represent the studios, argues this is to protect artists, who they rip off quite brutally without remorse. This will just ensures the rip off lasts longer, that’s all.

In HD news, the news is that Blu-ray prices have now dropped to DVD levels. This is from looking at Amazon though, so it may not be indicative of the overall market, as Amazon always has lots of Blu-ray deals.

Blu-ray prices have dropped, but do the studios really want that?

Looking at the situation here in Australia, I buy DVDs at under $10 mostly ($US 6.50), and special offers take that down even further most times. Obviously I’m not buying the new releases, but wait a couple of months and they’re almost always $15, and then $10 another couple of months later. Blu-ray has dropped in pricing here, but it’s still $25 for old releases, and $35 to $40 for new titles. So for Blu-ray prices to actually drop to DVD levels, then it still has a long way to go and I’m not sure what the point of that would be for the studios. I mean, Blu-ray was invented to make up for losses in DVD due to falling prices, so dropping Blu-ray prices will hurt the studios more than it helps them. In fact, looking at the latest Nielsen VideoScan figures show that, if this supposed drop in price has occurred, than Blu-ray is now doing worse despite there being no barriers left for its total domination. Blu-ray sales have dropped back to pre-Iron Man levels, although that’s largely due to lack of decent releases that titillates the core demographic of the young, male, techno-savvy crowd. I think the movie studios were a bit naive in thinking that consumers would be willing to pay more for something they’ve been paying less and less for ages, despite the upgrade in quality. The sooner the studios realise this, and stop trying to make Blu-ray into the saviour of home video, the sooner we’ll see more reasonable prices and Blu-ray finally replacing DVDs on all levels, not just as a premium alternative. But maybe that’s not what the studios want?

What is clear though is that while the PS3 has been the pick of the Blu-ray players right from the start, it no longer is the most attractive. Lower prices for standalones coupled with Sony’s insistence on not dropping PS3 prices has seen “PS3 as a Blu-ray player” sales drop, which may account for the year-to-year sales drop of 24% in the US for the PS3. Is Sony deliberately sacrificing the PS3 to help standalones? Standalones bring in parts of the demographic the PS3 cannot attract, and I’m sure the CE firms that backed Sony in the HD format war want to see some returns on their investment, as opposed to the PS3 dominating all things Blu-ray. Do I still recommend the PS3 as the Blu-ray player of choice? Yes, but with much more reservations compared to before. If you need more than one of the following: a media hub, game console, good (but not great) quality DVD upscaler, highly responsive Blu-ray player, then the PS3 is a good choice. It may no longer produce the best quality output, nor offer the best price, but it does much more than your usual Blu-ray player, but only if you really need those functionalities. I still like it the most because it’s just so damn fast and responsive – no waiting for button clicks to register, or minute long loading screens, and the Bluetooth remote means I can slouch all the way on the sofa and can control everything without even lifting my arm.  

And in the “well that looks a bit desperate” section for this week, Sony is thinking about releasing hybrid game/movie Blu-ray discs, that feature a Blu-ray movie and the PS3 version of the crappy movie-to-video game conversion all on one disc. I can see Sony releasing this as the sole version for the PS3, meaning if you want to play the PS3 game, you’ll have to also buy the Blu-ray movie in a package that will cost more. This should help inflate the Blu-ray sales figures at the expense of the gaming side of things, which Sony is very good at doing, to gamers frustrations. Is this also Sony’s way of admitting that PS3 games don’t really need the up to 50 GB of space on Blu-ray discs (considering the equally good 360 port only needs 8 GB), and that the only way to fill up the space is by including a movie on it?

Kuro: Still the best on the market, but soon to be discontinued

And in the “I thought they were dead” section, S3 is releasing a new graphics chip designed for media PCs and Blu-ray playback. “S3 are still in business?” was my first reaction too. I should probably write a feature on graphics cards for media PCs, but you know, this is something that S3 may have a chance in. These cards don’t need gaming capability, which is what separates the best GPUs from the rest, so as long as they emphasis on output quality, low heat/noise, and quality driver/software packages, then there will be a market for these type of cards.

Panasonic is betting 3D Blu-ray will take off, I hope they’re right, but I have my doubts. Another thing Panasonic might have to prepare for is to take over Pioneer’s plasma division, because Pioneer are pulling out of the game altogether. HDTV enthusiasts will acknowledge the Pioneer Kuro plasma range as being the best HDTVs on the market, and it’s a shame to not being able to see a new series being released. Panny plasmas are okay, maybe even pretty good (and about to get better with the new 09 models), so hopefully they can absorb the (albeit small) demand for being able to own the best damn TVs on the market. I paid $US 7,000 for my Pioneer plasma a bit more than 4 years ago, which is crazy I know, but I don’t regret it one bit and I would still be willing to pay $US 4,000 for another one right now. If I wasn’t broke, that is. LCDs with LED backlights are promising, as are OLED displays, but nothing beats a Kuro plasma right now and nothing will for a little while I suspect.

Not much gaming news this week. The NPD figures for January are out, I know, and I’ll get the analysis up early next week. The figures was again alarming for Sony, as the PS3 was outsold by the 360 again (and the Wii, of course). I’ve already mentioned that year-to-year sales for the PS3 is down 24%, which is not all that bad considering lack of price drops, cheaper Blu-ray standalones, economic conditions and all that, but when 360 sales rose by 25% and Wii sales by nearly 60%, it makes the figures look even worse by comparison. And it’s happened 3 months in a row, and during the busiest time of the year. Some are saying the PS3 peaked in 2008, and it’s now on a slow decline to oblivion, which I don’t really buy. But if you’re not growing, then you’re shrinking and the PS3 market share is shrinking rapidly each and every month that PS3 prices remains high. Software news is even worse for Sony, as not a single PlayStation (2, 3 or portable) title made it to the top 10, with only a single, lonely PlayStation title in the top 20 as well  (Call of Duty: World At War for the PS3) – 8 Xbox 360 titles and 9 Wii titles were present. Oh dear. 

Okay, enough Sony bashing for this week, there’s plenty of time for that next week. Unless the PS3 gets a surprise price drop and outsells everything, then won’t I look stupid? Or simply proved right? There is indeed a very thin line between being right and being stupid. See you next week.