You may remember that I wrote a similar feature around the same time last year. It might be interesting to read that again to find out just how right, or wrong, I’ve been before deciding whether to take this update more seriously, or not.

As mentioned above, I’ve been posting and analyzing the weekly Blu-ray sales stats since May 2008. These weekly stats are provided by Nielsen and published in the free digital edition of Home Media Magazine.

One of the stats provided is the percentage of Blu-ray sales as a total of Blu-ray and DVD sales based on the dollar volume for all titles. To put it simply, you add up the revenue from all Blu-ray and DVD sales and find out how much of it belonged to Blu-ray, and this is the figure which the graphs and analysis below are based on.

Basing an analysis on this figure is not without problems, the major one being that since Blu-ray is more expensive than DVD, its revenue will be higher per title than that of DVD and the revenue percentage figure is affected by this. And as Blu-ray prices drop, its revenue drops, even if the number of titles sold remains the same. The same may apply to DVDs, but it’s at a lesser extent as DVD is a more established format with less price fluctuations (Blu-ray being new is more likely to have price drops, and larger ones at the beginning).

Here’s an exaggerated example to illustrate this point. Let say the DVD version of a movie costs $1 each and it sold 900,000 copies, and if the Blu-ray version of the same movie was $10 each and it only sold 10,000 copies, then Blu-ray would have a revenue percentage of 10%, despite the number of Blu-ray sales being only 1.1% of DVD sales. And then a year later, with the DVD version still selling 900,000 copies at $1 each, but the Blu-ray version is now only $5 and selling 20,000 copies, then the revenue percentage is still only 10%, despite the Blu-ray version now selling twice as many copies. In real life, the difference in pricing is not that dramatic, and both Blu-ray and DVD prices will decrease, but perhaps with Blu-ray decreasing a bit more than DVD.

The best set of figures to base any analysis on would be the percentage of titles sold, rather than a percentage of revenue, but I do not have access to this information for all titles, only for the top 20. So please take all of this into account when looking at the figures.

First of all, let’s take a look at a graph showing the weekly Blu-ray sales percentage from when I first started collecting the data (4th May 2008), to the most recent set (27th September 2009) – click on the image below to see a larger version:

Blu-ray Sales Percentage - 4 May 2008 to 27 September 2009 - Click to see larger version

The immediate conclusion to make is that Blu-ray has made revenue increases over the last year and a bit, and since Blu-ray prices have dropped and hence meaning less revenue per disc, you can bet that the number of titles sold has increased even further than what the above graph indicates.

On the graph, I’ve noted several key milestones for the format, basically the weeks in which major titles were released. Some of the earlier milestones, like the release of I Am Legend, aren’t shown on the graph since it was released earlier than when I had access to the stats. Iron Man was a major release for the format, as you can see from the graph, it was unbeaten as a first week release until just recently, by Watchmen. To talk about important titles for the format, then The Dark Knight cannot be ignored, but as you can see from the above graph, it was relatively disappointing for Blu-ray for a first week release. This was because that it was such a hit title, that even the DVD version sold in huge quantities, thus diluting the Blu-ray percentage. This is why Iron Man was able to beat The Dark Knight, despite the latter being much more popular (or perhaps I should say, “because the latter was much more popular, even amongst DVD owners”).

And it’s not just new releases that can give Blu-ray a weekly boost – catalogue titles, including ones that had already been released and practically given away towards the end on HD DVD like Transformers or King Kong, can still command huge sales (King Kong actually beat The Dark Knight in terms of the Blu-ray sales percentage). And even when there are no releases, Blu-ray can perform, an example is point 5 on the graph, which was occurred during the New Years break. The reason is that when there are fewer shoppers, those that are out there buying are often the more “fanatical” kind, early adopters, home theater enthusiasts and such, and they prefer Blu-ray over DVD. And every new release on Blu-ray, whether it’s a new movie or a classic, is “new” to Blu-ray owners, and such almost everything can be considered a new release and the sales figures roughly reflect this.

In terms of growth, the revenue growth as shown on the graph doesn’t look quite that spectacular. There is good reason for this, and that’s largely down the missing data – we’re not yet at the peak sales period, which is right now until the end of the year. However, the 2008 data does include this period, and most of the peaks occurred during this period as well. Only when the 2009 peak period has passed, can we accurately compare “peak to peak” to see the real signs of growth. And as mentioned earlier, the lower Blu-ray prices resulted in a revenue drop on a per title basis, which is most likely larger than any similar revenue/title drops for DVD, and the graph above cannot accurately reflect this either.

So to better compare, let’s have a look at the 2008 to 2009 comparison based on the same time period. Or in other words, May to September 2008 sales as a comparison to May to September 2009 sales. Here’s the graph:

Blu-ray Sales Percentage: 2008 versus 2009 Comparison (May to September)

I would have preferred more data, but this is the best I can do with the data I have. I will do one at the end of the year which should be more informative. But even with the lack of data, we can still see the growth trend on a year to year basis. Every month of 2009 so far has outsold the same month in 2008, that’s to be expected. The average growth for each week’s dataset is 51.07%, in other words, on average, a week in 2009 meant a 51% increase compared to the same week in 2008. But “percentage increases” are not that indicative of real growth, because if only one Blu-ray movie was sold last week, and two was sold this week, then that’s a 100% increase in a week, which sounds like a lot, but is really isn’t. The actual increase in market share for Blu-ray is about 3.27% on average for the above time period, meaning that on average, Blu-ray market share for a week in 2009 is likely to be around 3% higher than the same week in 2008 (so if Blu-ray had 5% market share in week 30 of 2008, then week 30 of 2009 should have roughly 8% market share). This is not an insignificant increase, and as I will mention again, due to the drop in revenue per title that should be greater on Blu-ray than on DVD, this increase may actually be larger that what you see in the graph.

For the above period (May to September), the 2008’s average was 6.69%, while the 2009 average was 9.96%. This perhaps is biased towards the 2009 figures, as there were no major releases in this period in 2008, compared to a single major release in 2009 (Watchmen). But even if you take out the Watchmen effect for 2009, the average was still 9.42% for the same period. That’s a healthy growth, but nothing like the 100+ % you’ll hear from some outlets.

From observation, Blu-ray growth seems to be driven by individual titles. For example, the release of The Dark Knight might have helped to sell more Blu-ray players, or to make more people aware of Blu-ray, and as such, this lifts the sale of all other titles. With many “Blu-ray friendly” hits coming this holiday season (Star Trek, Terminator Salvation, Transformers 2, Harry Potter), the overall Blu-ray sales percentage should increase beyond the temporary rise offered by these titles. How much remains to be seen, and I’ll update this feature when it becomes clearer.

The very first version of Digital Digest, note the Asus V3400 reference

It is worth noting again that Digital Digest is really a collection of many different websites that I have developed over the last 10 years. The very first of these websites was a Geocities (and Tripod) hosted website called DVDigest. It was still relatively early days for the Internet, and the boom was underway. Free web hosting was all the rage, and Geocities and Tripod were amongst the leaders. You get something like 15 MB of space and some unspecified bandwidth limit, for hosting static HTML pages and images, which was plentiful back then. And when you do go over the bandwidth limit, you can always open another free account – to solve the problem of ever changing URLs, you used redirect services like cjb.net (so you would have something like dvdigest.cjb.net, which would direct to whichever free account that was still active back then). Now, this was a time of venture capitalists going crazy and IPOs popping up all over the place, so in comparison, DVDigest was pretty amateur. Even for the amateurs.

But it was noob time for most people back then, before the word “noob” was even invented. My interests back then, being the nerd that I am, was to go to newsgroups and help people with their DVD playback problems. I was one of the few that jumped on to the doomed VCD bandwagon (having purchased a hardware MPEG-1 decoder card at great cost), and my interests naturally flowed onto this new format called DVD. Playing DVDs on your PC back then is  like trying to play games at 2560×1600 resolution today. With 8xAA and 16x AF. In other words, stutter city was the name of the game. That is unless you had some sort of graphics card that could accelerate DVD playback (or a dedicated hardware MPEG-2 decoder card). The graphics card I had back then was the  Asus V3400, part of Nvidia’s Riva TNT family. Despite the marketing, it did not have DVD acceleration and playback was, well, awful. Software based DVD decoders were still in their early days back then, and it took a great deal of tweaking before you could get acceptable framerates on an Intel Celeron 333a. The experience I gained from helping people play DVDs is what led me to write up a few webpages and open a site called DVDigest, which quickly became DVD Digest because people were a bit confused at the name (and they still are – “Digest” reads as in Reader’s Digest, and not as in “digest food”, BTW).

This went on, and more content was added. There were a few new things coming out back then that were quite exciting (for a nerd like me). Talks of doing the impossible and somehow copying the copy protected DVD to your hard-drive, that is if you had a hard-drive big enough. The very first “ripper”, if I can remember, was all about using PowerDVD’s screen capture facility and capturing everything frame by frame. People might as well have pointed a video camera at their TV for all the good that it did (no sound until further processing!) , but at least the process path was all digital. There as also this thing called DivX ; -) – which allowed you to make high quality videos (even better than VCD!) at maybe only a tenth of the space. It was an exciting time.

DeCSS: Who knew such a small program could cause so much trouble ...

It was still late 1999 when I was approached by a company, which shall remain nameless (and actually I can’t remember their name anyway), that offered to help me host my fledgling website, which had already grown too p0pular to be hosted on a 15 MB free webspace deal (shocking, I know). I was to get a part of the advertising money, and they would do all the hosting. They even kindly purchased the domain name dvd-digest.com (don’t bother hurrying over to whois the name, it’s owned by different people now, I think), which was perhaps not as kind as I had believed, naive as I was. All went pretty smoothly until the said company received legal documents which suggested that the rippers I was hosting was not entirely legal. The infamous DVD CCA vs DeCSS case had started. It doesn’t really matter now that the court eventually ruled in favour of the defendants, but I’m sure it was scary for the company that hosted DVD Digest (and owned the domain name to boot). And they took what was in their eyes not only the right action, but the only action, which was to “Shut It Down!”. I was on vacation and away from the Internet at that time (hard to believe that being away from the Internet is actually possible these days, I know) and I did not find out until a week or two after the fact. It wasn’t good news for DVD Digest.

So I had to start from scratch again in the fake new millennium (2000), this time with the domain name digital-digest.com, even though the site was still called DVD Digest back then. And start again I did. The year 2000 was a great one for DVD Digest, despite the soon bursting of the Internet bubble. It was then that I turned what was really a hobby into a business of sorts, and of course, the DVD industry made huge strides in those few years which was helpful for a website that relied on more and more people wondering why they’re only getting 15 FPS from the DVDs on their PCs.

The DVD Digest name continued to be used for many years, with Digital Digest eventually taking over as the official name of the website, but by then there were other sites part of the Digital Digest network called DivX Digest and DVD±R Digest, but that’s a story for part 2 and 3 of The History of Digital Digest.

To be continued in part 2 …

Let’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?

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). 

Onto 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

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

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 

And 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.

Opening up the package, the first thing I noticed that it wasn’t packed very tightly, as the PS3 could move around inside the box slightly. Not a good sign. The second thing I noticed was that the PS3 case wasn’t snapped in properly at one end (front, right hand side was popped up). This is easily fixed of course, just apply pressure to pop it back in, but again it’s not a good sign.

Starting the PS3, doing all the usual set up stuff, the freezing problem (right after the Sony Computer Entertainment fanfare music plays) is still present – it must be something to do with certain settings or something, but I did a quick system restore (not the full one), and it seems to have fixed the problem. The PS3 came with firmware version 2.42, so I’m a little bit afraid. I’m also afraid to update to 2.50, due to the various problems that have been reported so far. I think I shall skip using the PS3 much until 2.51 comes out and people have volunteered to be guinea pigs for it.

I did notice that, unlike my last refurbished PS3, the fan noise is more smooth. The last one had a creaky fan which I did not talk about, it sounded like it needed some oiling. The problem with refurbished PS3s is that you don’t know how it has been used by the previous owner, and while the faulty parts were replaced, the parts that aren’t faulty (but have been used near to death) are still in there. I much prefer Microsoft’s repair policy, where they try to repair your own console before giving you a refurbished one.

So wait I shall for 2.51, which means there will be at least one more post in this series of blog posts. Hopefully, that one will be the last one, because my warranty runs out next month and even if it didn’t, I don’t know if I want to go through everything again.

Update: Bad news. The wireless remote/controller drop-out problem has happened again, and what’s worse, plugging in the controller doesn’t work anymore. I had to do a soft reset, but the PS3 refused to reboot (the green light keeps on blinking), and so a hard reset was the only other choice. Not surprisingly, everything worked again after the restart. I’m now updating the firmware to 2.50, since I have nothing to lose anymore (and Sony tech support will probably ask me to do it anyway). I think I might have to send in my PS3 again. Damn.

So the whole story (in the right order, of course) is that I sent in my PS3 on the 10th, Sony acknowledged that they received it a exactly week later. 2 days after that, on the 19th, I received an email from Sony that my PS3 was being sent out. And the PS3 arrived at my home on the 22nd, which is today. So overall, a 12 day turnaround, or basically 7 business days including today. Not bad. Again just to stress this has only been my experience, and at best, only applies to people in Australia. Some will receive their PS3 even quicker, while others will have to wait a lot longer.

So is firmware 2.42 to blame? The interesting thing is that the refurbished PS3 returned with firmware 2.41 installed. Why would Sony stop at 2.41, and not install 2.42 into the refurbished PS3, even though 2.42 has been available for nearly 2 month now. Then there’s the comment that a user called “ryan” posted in the blog comments for my original “My PS3 just broke” post, which suggests that Sony has confirmed 2.42 is to blame and that 2.5 will fix the problem. More on that if it’s true, and maybe this isn’t the final part of this story just yet…

Let’s start with the copyright news. Police officers in Chicago are now reporting to the RIAA before their own bosses, in policing copyright infringement for the RIAA. How do you feel about tax payer funded enforcement officers, whom are licensed to use deadly force, now working for the a private industry group to protect their profit margins. Not feeling so good? Well, that’s the sad reality these days.

EA backs down over Spore DRM

Last week was all about Spore’s controversial DRM, and after a lot of public pressure, EA has relented and eased the DRM restrictions. You’re still limited to one account per copy of the game, and the installation limits still exists, but you are also now able to de-authorize computers that the game has been installed on, so you can install the game on as many computers as you need, except there is a limit to the number of computers the game is installed on at any one time. Sounds like a fair compromise, but does this really stop the pirates who just rip the entire DRM scheme out from the game and make it have unlimited installs? Sometimes I think that DRM isn’t aimed at pirates at all, but at legitimate users as a way to control their spending. In the past, you can install the same game as many times as you want. But now they want to change this, and it’s as if publishers now want to make you pay 3 or 4 times for the same thing in the same household. I can only see this helping piracy to thrive, because being cost free is a huge incentive, but even to those who want to pay for games, having a copy that’s less restrictive would be nice. So I can see people buying the game, but still downloading the pirated version just so they can use it the way they want to.

Will Wii Homebrew increase piracy?

Onto gaming piracy of a different kind, the Wii homebrew community has been working on many ways to hack the Wii. One of the very first game on the Wii, Zelda: Twilight Princess, had a buffer overflow exploit in it that allowed custom made applications to run on the Wii, including home made games. And as you would expect from the ongoing development of this hack, there is now a software solution to play backed or downloaded up Wii games, opening up a whole new level of piracy for the most popular console in the world. There was a YouTube video of it in action playing, ironically, a backed up version of Twilight Princess, but it has since been removed. Software solutions are easily fixed though through firmware updates, so I’m sure Nintendo will try to plug this loophole very quickly. But then again, the same principle applies to the hack it self, in that it’s software and so can be easily modified to skip around any attempts to shut it down from Nintendo. Or one can just forgo firmware updates.

Onto HD news now. Last week, Blu-ray sales had their best week in the Nielsen VideoScan charts, accounting for 12% of the top 20 titles by sale volume compared to DVD. In other words, it means that out of the top 20 selling titles by volume, 12% of it was Blu-ray, with 88% belonging to DVDs. That may not sound like much, but the usual percentage for Blu-ray is under 8%. But it turns out that was just a one-off, as sales dropped back down to 8% this week. It seems that the Blu-ray only re-release of Transformers had a huge effect on sales, but it didn’t last long. More meaningful figures will emerge once Iron Man and The Dark Knight hit shelves, then we can see how much of an impact Blu-ray is having on the home video market. Don’t forget to keep a bookmark on this forum thread, where I’ll be posting the sales numbers every week.

NetFlix: Blu-ray not making an impact in 2008

NetFlix says that Blu-ray won’t be having much of an impact in 2008. The sales figures that I’ve been posting does back this up, where the Blu-ray sales percentage compared to DVD has been around 5 to 8% throughout the year, with peaks for Blu-ray whenever a new hit movie is available. The last 6 months, a short while after Toshiba announced the end of HD DVD, hasn’t seen a dramatic rise for Blu-ray sales at all (still averaging around 6-7%, which is better than before HD DVD’s fall). NetFlix also believes that Blu-ray prices will fall soon, which will make it more appealing to consumers. I wish that were true, but I’ve kept a close eye on prices ever since last year (for updating my Blu-ray and HD DVD deals page), and if anything, they’ve gone up after the fall of HD DVD, not down. The retail price is the same ($27.95 at Amazon for “hit” titles), but there has been less sales (2 for the price of 1 deals are one, replaced mainly by 3 for 2 deals where the prices are hiked up for the sale). The number of sales are still good (check out the deals page now, and there are half a dozen sales right now), but the prices are higher. The situation is the same in Australia, where older titles are now available for $25, but new titles are still $40-45, which is ridiculously high (the highest price for DVDs is $30, and most are available 3 months after release for under $20). Price drops will help Blu-ray, but it negates the whole point of having a new (and more expensive to manufacture) disc format if profits can’t be increased through price rises. If the high priced Blu-ray isn’t selling and isn’t providing studios with more profit, then you can say that Blu-ray has been a failed experiment in trying to market a more expensive movie format to replace a cheaper one. If Blu-ray prices drop to DVD levels, then studios won’t have benefited much at all, except to replace a cheaper to manufacture format with a more expensive one, albeit providing consumers with a better product (but with more DRM).

To further back up my point about Blu-ray being an experiment in trying to jack up prices of home movies, the BDA says that Blu-ray price drops are not happening anytime soon mainly because Blu-ray isn’t selling in as great numbers as they would like. So Blu-ray will remain expensive and unpopular because it’s unpopular? I think studios need to come to their senses and see that Blu-ray won’t help them increase profits, and so they should accept that and lower prices. I still like Blu-ray because I like HD, and so I would want it to succeed. Proper HD video is better than upscaled DVD for sure, but not worth twice as much money, as the studios seem to think.

And while H.264 is on it’s way to becoming the industry standard for this generation of video, On2’s latest codec claims to be able to save up to 50% on bandwidth compared to H.264. H.264 is already very efficient, and if On2’s codec can be even more so, then that’s good news for online video streaming and downloading.

And finally in gaming, the Xbox 360 is finally having a great time in Japan, as it rose to the top of the sales charts, even going above the Wii. It’s all very “one-off-ish”, of course, as the reasons for the sales surge are many. Low stock from a previously high demand game, a new game that’s attracting users, the price drop and the increased HDD, all helped to make it number one in Japan for the first time ever. It’s not easy for an American console to make it big in Japan, and I think Microsoft has finally understood the reasons why – games matter! And getting the Japanese game producers on-board is more important than anything there.

The Blu-ray drive reading error is not new

Staying in Japan, the PS3 has a new firmware but it’s for Japanese consoles only. You can install it if you live outside of Japan, but it’s not compulsory (and it doesn’t to anything). I’ve still not seen any response in relation to firmware 2.42 and the Blu-ray drive problem - I’m still thinking it’s more than a coincidence, but also more than just a firmware problem. My current theory is that 2.42 was released to “flush out” the consoles with bad Blu-ray drives – the bad Blu-ray laser is a design fault for quite a few PS3s, and the problem existed before 2.42 with similar symptoms. The fact that after 2.42 came out, the report of problems suddenly increased suggests there is some relation there. But I don’t think 2.42 “breaks” perfectly working PS3s, but it might help those problems show up sooner.

That’s all the news for this week. Not much, I know. Hopefully next week will bring more news. See you then.

Those in the UK will be familiar with the recent agreement between the BPI (British Phonographic Institute) and UK ISPs. The deal basically forces ISPs to spy on their users and to report piracy to the BPI for further prosecution (or is that persecution).

On the surface, this sounds fair enough. If you pirate stuff, then you should be prepared to face the consequences. Legal music downloads and movie purchases are cheap enough these days, and casual piracy means that you can always get make less than 100% legal copies of stuff from your friends’ legal copies.

But looking at the big picture, what has just happened exactly? Basically one industry group, a rich and powerful one, has just forced another industry group and all its members to start spying on their customers. The government was not involved for better or worse, so basically two private entities made a deal to invade the privacy of consumers to ensure future profits, with no oversight, on police or rights protection, and possibly not even a charter of what’s allowed and what’s not. When corporations start making deals with each with the effect of eroding our basic liberties, all in the name of profit and done so in such a public way, is this the time to start getting really worried? Not only has government around the world not acted to stop this, they have helped these organizations by creating new laws and legislation, such as the DMCA, to empower and legalise these actions. There is this quote that often comes to mind when I read these type of stories:

Fascism should more appropriately be called corporatism because it is the merger of state and corporate power 

– Benito Mussolini

Now, perhaps I’m overreacting just a bit. I’ve always been a fan of conspiracy theories, and so maybe this is just that side of me looking to be outraged. But the Internet is now possibly the most frequently used communications platform we have today, at least for people in the developed countries. If private companies are now allowed to spy on our most intimate communications, all in the name of protection intellectual property, then where will it stop? Random computer searches? Which is now easier than ever thanks to spyware. Searching laptops at airports for pirated material? Sounds far fetched, but amazingly, it’s already been proposed.

And when you look at the current political climate around the world, what with terms like ‘enemy combatants’, ‘Gitmo’ and ‘rendition’, plus ‘third degree interrogation’ techniques such as ‘waterboarding’ all becoming accepted parts of democratic society, is this really the direction we want to head in (and that’s not even mentioning those other countries that don’t care about human rights).

Going back on topic slightly, I know a lot of people who hate the movie “Starship Troopers”. In typical Paul Verhoeven style, it was crass, loud, extremely violent and many claimed that it promoted piracy. I thought it was a brilliant movie because of the message that it delivers … that any society can turn into a fascist one, and we probably wouldn’t even notice. Seeing Doogie Howser M.D. in an Nazi SS like uniform, and being one of the “good” guys, says it all really. In fact, all the good guys in the movie promoted fascist ideals, and that’s also why many people were outraged. But were they outraged that this was a movie portraying fascists as the good guys (and gals), or were they more outraged by the fact that it was so easy for themselves and other moviegoers to start cheering for symbols of fascism? And should we start embracing corporate fascism just because we want to do the right thing and respect the rights of artists. If this the cost of anti-piracy, then sign me up for the Swedish Pirate Party.

Starting with copyright related news, Sony is once again in the headlines with Sony’s chief lawyer person saying that copying songs that you have already purchased, such as from the CD to your computer, is considered stealing. This betrays the intention of content owners such as Sony, who want you to buy a copy of the movie for every single device that you want to use it on. So if you have a PS3, a PSP, a Walkman video player and a Sony Vaio laptop, then you’re screwed. And just in case you are wondering what could happen to you if content owners find you guilty of copyright infringement, a woman found guilty of sharing 24 songs has been ordered to pay $US 220,000 to the RIAA. Although I’m still not sure whether it’s a copy protection related problem or not, but Fox’s new Blu-ray movies featuring BD+ copy protection has been found to cause problems in certain players, and requiring firmware updates to fix the problem (and if you’re lucky, the required firmware might just be available). Later reports suggested that it was the BD-J usage in these discs causing the problem, rather than BD+, since a disc without BD+ from Fox also suffers from similar problems. I don’t know what’s worse, playback failure due to BD+ or playback failure due to a basic standard feature like BD-J when all the DRM layers appear to be working. It seem the priority of the Blu-ray engineers might have been to get the DRM working first, and then worry about the other small features like playback.

Onto gaming news. The Halo 3 version of the Xbox 360 hardware appear to be using a new 65 nm CPU, which is probably Microsoft’s solution to the overheating problem the console suffers, which is indicated by red rings showing up on the 360’s power switch indicator. While Microsoft has been generous in extending the warranty from the initial 90 days, to a year and now 3 years, perhaps they can learn something from Nintendo when it comes to dealing with design faults. The Wiimote strap was notorious for breaking and usually smashing into people (if you’re lucky) or expensive electronics (not so lucky). A better strap was introduced, and Nintendo offered to replace all older straps with the new ones without cost, and this seem to solve most problems. Now, Nintendo has gone a step further by giving all existing Wii owners up to four non-slip jackets for Wiimotes free of charge – all you need to do is to give them a call with your details, and they will send them out to you. All new Wiimotes will ship with the jacket from now on. Now this is what I call commitment to service. They admitted the problem, found a solution and offered to fix everything for free even though it will cost them more than 17 million dollars – if only all companies were like this (but I guess the 360’s problem was more serious, and they have already committed a billion dollars to fix the problem). The big PS3 news of the week has been the announcement of a €400 40 GB PS3 for the EU market, set to sell for €400. The catch is that it has no backwards compatibility with PS2 titles at all, limited to only 2 USB ports and no Compact Flash/Memory Stick and SD slots. I think the console will have a matte finish too, as opposed to the glossy finish of the other versions. The bad news is that once the fully featured models sell out, this cut down version will be the only one available in Europe (and I assume, in Australia too). This is the 5th version of the console to have been released as Sony tries to make the package more attractive price wise.

In HD news, Acer is to launch what it claims to be the first PC with a combo drive, capable of playing both Blu-ray and HD DVD movies. As a supporter for format neutrality, I hope it turns out to be the first of many. Back to the Fox Blu-ray playback problems mentioned earlier – it turns out that the problem was related to the BD-Java usage of these discs, rather than a BD+ issue, at least with the “Fantastic 4: Rise of the Silver Surfer” disc. This once again highlights how Blu-ray is playing the catch up game when it comes to interactivity, with HD DVD’s equivalent HDi being used from day one to great effect (albeit not without it’s own compatibility problems at the start). When HD DVD are already starting to toy around with interactive online shopping via HD DVD movies, Blu-ray is still struggling with basic interactive content like Picture-in-Picture. And when Blu-ray profile 1.1, 2.0 are rolled out, expect more problems as discs requiring 1.1 or 2.0 players might simply fail on 1.0 players (most of which lack the secondary video/audio decode and persistent storage required to upgrade to 1.1). But the good news for Blu-ray is that the new layer of DRM, BD+, appears to be working. Meanwhile, a Japanese HD DVD presentation appear to show several Spielberg directed or produced films that will be released on HD DVD, at least in Japan. Films like Jaws, E.T, Back to the Future and Jurassic Park were shown. Spielberg has been quoted to be a Blu-ray supporter (I suspect he has been fed some non truths by Blu-ray supporter friends of his, such as how Blu-ray has better quality or how HD DVD is doomed). His movies were left out of Paramount’s HD DVD exclusive deal, for example, so it suggests that at the very least, he doesn’t want HD DVD exclusivity for his movies. The only one of his films scheduled to be released on HD has been Close Encounters on Blu-ray. But with many of his films “belonging” to HD DVD friendly studios, namely Paramount and Universal, it all depends on who has control over the release of his movies. Spielberg has always been slow to get on the next-gen video train, if you can recall how long it took his movies to come out on DVD.

See you next week.

Starting with copyright related news again, some DRM advocates are worried that there might be a consumer backlash towards DRM (you don’t say!). I mean it’s not like there was a DRM related revolt on Digg earlier this year or anything, and I’m sure Apple/EMI and Amazon launching DRM-free music was just a coincidence, and in no way related to a consumer backlash. Torrent site Demonoid has been shut down by the Canadian RIA. Torrent sites usually only link to torrent files, and not the actual copyrighted content, but in the greater scheme of things, providing any assistance to copyright infringement is going to be risky, whether they host the actual file or not. I would like to see some separation between torrent sites and legitimate sites like Google Video, who are under renewed pressure this week over users uploaded pirated content – the main aim of torrent sites is to offer pirated content, whereas Google Video and other video sharing sites have pirated content because they cannot control their numerous users. Then again, there are video sharing sites that advertise free movies and encourage users to upload them, so they again should be treated differently. And then there is “Movie Night” on school campuses. Showing movies in common rooms or public areas is technically “broadcasting” and is against the terms of the copyright agreement, but how much does that really hurt the movie studios, so much so that lawsuits need to be launched? What’s next, not being showing to watch movies with people other than your immediate family?

Onto gaming news. Sony says that it can catch up to the Xbox 360 by March next year. I would say that if they don’t at least achieve this, then the PS3 is in serious trouble. The PS3 is the cheapest Blu-ray player around, and actually represents good value if you want next-gen gaming + HD movie playback, but it still hasn’t been able to beat the Xbox 360 + HD DVD add-on drive in sales since launch. Add to that the Xbox 360’s better range of games and exclusives, it’s not looking great for the PS3 compared to how well the PS2 did at this stage of its release. Can Sony claim a huge market share like it did with the PS2? I don’t think so and not being able to hold on to the market the PS2 created means a defeat for Sony no matter which way you look at it. Sony will hope that’s it’s new slim PSP bundle will at least claim a bigger market share in the handheld gaming market, a market dominated by Nintendo for some time now. But the big news of the week has been the launch of Halo 3. Even the news of scratched discs didn’t slow down sales, with Halo 3 breaking all gaming and even movie box office records on the first day. When video games start making more money than big Hollywood blockbusters like Spider-Man 3, something has changed in the way entertainment is delivered. It’s no wonder then that there has been more and more games to movie conversion, rather than the reverse, lately (Hitman the movie is that one I’m waiting for).

In HD news, it seems site like us are either not doing our jobs, or people are not visiting our sites (the most likely explanation, and I’m sure that the 10 people that read this blog will agree with me here). Consumers just don’t seem to understand HD with only 11% feeling they understand HD completely, and even HDTV owners don’t seem to understand. The situation is not just limited to the US either, with Australian consumers faring even worse. It’s a shame, because HD really is quite wonderful … people who have enjoyed proper HD will never want to go back to standard definition. And if you’ve already jumped on the HD movie bandwagon (in particularly, the HD DVD one), then you can enjoy state of the art interactive features from future titles such as Shrek the Third, in addition to the superb video and audio quality. But speaking of interactive features, Blu-ray is still playing a game of catch-up, and consumers will be the victim once again (no wonder they are confused about HD). As I’ve blogged previously, Blu-ray has really screwed the pooch on the issue of hardware standards, and now Blu-ray owners may need to replace their less than a year old Blu-ray player because it doesn’t have all the required features for future Blu-ray movies. Us HD DVD owners are feeling pretty smug about it all because the HD DVD standard has been finalized from day one and includes all the advanced interactive features that Blu-ray owners might not be seeing until next year. And did I mention that HD DVD is region-free? I know I shouldn’t go on and on about region-free, but it really is wonderful to have it. There’s not a lot of HD DVD movies on sale in Australia (and the ones on sale are too expensive), but because of the region-free status, I can import movies from the US or UK, usually at a lower price and faster release date. Unlike DVDs, with the NTSC/PAL difference, HD DVDs don’t have this difference so the US version is either likely to be identical, or in most cases, superior to the local release. Studios and local distributors may not like it, but it’s partly their fault isn’t it for not releasing identical versions in a timely manner. My US import to my local purchase ratio is at 3:1 at the moment.

And that’s all folks for this week. See you next week.

Starting with some copyright related news, I found some funny anti-piracy video parodies on the net and posted them up – it’s not strictly news, but I thought it needed to be shared. There was news that MediaDefender, a anti-piracy company, set up a fake video sharing websites to lure people in to get their details for legal purposes – it’s ironic that their own emails and details were leaked or stolen, and it’s now available online for all to see. The MPAA is at it again, and they once again have asked ISPs to help them catch video pirates, or to filter out “inappropriate” content, and maybe even charge users extra up front for the movies they will no doubt steal at some point. Macrovision, the company with the slogan “quality protection”, which actually means copy protection that ruins quality, is talking about legal DVD rips, albeit at a premium. It’s not a bad idea, I must admit, and it’s certainly better than introducing more and more layers of (easily bypassed and consumer unfriendly) DRM. And to round off the copyright related news, Germany will ban all kinds of CD and DVD copying, even for personal use, starting in 2008.

Now onto some gaming news, reports say that Sony will sell its PS3 cell chip division or manufacturing plant to Toshiba, Sony’s bitter rivals in the HD war. Are Sony that desperate to free up some cash to subsidize their struggling PS3? Or is this just part of normal business and cooperation between Japanese conglomerates, which happens quite frequently. A Star Wars lightsaber game on the Wii? Yes please (and what took so long). Sony’s long awaited “Home” virtual community for the PS3 is going to be delayed – things are really not going well for the PS3, and comments such as the following from Sony execs aren’t helping:

Going aggressive only on price without being able to back it up with content doesn’t make a whole lot of sense to me

In other words, no discounts for the PS3 because it doesn’t have enough games to make up for the loss in income. Yes, I’m sure the high price and low hardware sales will encourage software publishers to make more games for the PS3, not less. Bioshock on the PS3 anyone?

In HD news, Intel says that it’s next mobile chip platform, Montevina, will support both Blu-ray and HD DVD decoding. Intel is still a major backer of HD DVD, but because Blu-ray uses the same set of video codecs as HD DVD, it’s impossible to support one HD format without supporting the other, unless they do something really sneaky and anti-competitive by deliberately blocking Blu-ray playback or acceleration. Not that Blu-ray will care even if Intel ditches Blu-ray, because you see, they have already won will win. Disney CEO Robert Iger is quote as saying that “victory is a forgone conclusion” during an investment meeting, which stunned other attending studio execs. I went on a nice rant at Iger’s statement, and also this other statement: “The public can tell the difference” statement in regards to Blu-ray being heaps better than HD DVD – yes, there differences Mr. Iger. Blu-ray can’t do the advanced interactive stuff that HD DVD has been doing since day one, like picture-in-picture and Internet connectivity. A lot of Blu-ray titles also used the inferior MPEG-2 video codec, making for a poorer picture quality compared to MPEG-4 AVC or VC-1 encoded discs. But Blu-ray does have more copy protection and region protection (HD DVD is region-free), so I’m sure that’s exactly what consumers want. Just what kind of company would sacrifice essential features and quality, and yet not miss a beat when it comes to unnecessary DRM and region control?

Okay, that’s about it for this week. Stay tuned next week, same time same place, for another roundup (hopefully).