DVDGuy’s Blog @ Digital Digest

Two months ago, I posted an analysis of some polls that I ran on the website, which told us a little bit about the state of Blu-ray before and after the end of the format war. The conclusion I sort of came up with was that Blu-ray’s success was being hindered by high prices.

I promised that I would follow it up with two more completed polls that would concentrate on both Blu-ray hardware and movie prices, and what people thought about it. The results are finally in, and they paint a very clear picture: Blu-ray is too expensive.

Here are the results:

Seldom have I seen such one sided polls. Hardware prices are obviously too high, with only 6% of the people polled believing the “price is right”. It was a little bit getter for movie prices, which have come down quite a bit recently (both in the US and UK, Australia should soon follow) - 12% polled felt pricing was quite good already.

I need to stress again that these polls are hardly scientific, so the margin of error is quite large. But even with that, the picture is clear … Blu-ray needs price cuts before people are interested. The good news is that Blu-ray movie discounts are quite common now, not only in the US, but UK stores such as The Hut and dvd.co.uk are offering discount deals such as “2 for £18″, and this will surely drive sales upwards.

But I was thinking just today why people still buy music CDs, when downloads and higher quality audio disc formats are available. Would Blu-ray suffer from the same phenomenon, in that people won’t upgrade from DVDs even though there is something clearly better? Obviously the average person is less likely to be able to appreciate the difference between CD and higher quality audio, or even if they can hear the difference, they may not care about it. Video is different, in that the differences could be quite noticeable, so perhaps Blu-ray will do better than CDs. But to displace DVDs as the preferred video distribution method is going to take something quite amazing.

There was a recent, somewhat optimistic prediction, that Blu-ray sales will overtake DVD sales by 2012. Even if this were to come to fruition, it still means that at that time, nearly half of movie sales will still be DVD based. That’s four years from now, and still Blu-ray will not established itself as the totally dominant video format. And this not even taking into account the effect downloads will have on optical disc sales. Toshiba, the major backer of DVD, is now planning to launch “DVD 2.0“, which will include downloads as part of the DVD specifications, as well as including many of the technical advances used in the defunct HD DVD format. So the next four years will be quite unpredictable, I think, and it’s hard to say who will come out on top.

But competition will be good for consumers, and having so many choices when it comes to watching and purchasing movies is a good thing too.

P.S: Totally forgot that today was Digital Digest’s 9th birthday. Can’t believe I’ve been working on this website for 9 years already. You know how they say time flies when you’re having fun, the last 9 years seemed only like 7 years, 8 at most!

Welcome back to another edition of WNR. Not a hugely busy week in terms of news, but still some interesting bits and pieces to chew on. Let’s not waste any time and get to it.

Starting with copyright news, in the war against torrents, torrent site The Pirate Bay are upping security measures by introducing encryption. This is mainly due to new laws in Sweden which came into effect last week that allows the government to spy on private communications, including Internet traffic. It was always a matter of time before technology makes torrent downloading impossible to track and stop. The whole idea of torrents itself was to de-centralize file sharing so it cannot be stopped, and encrypted communications channels and privacy filters is just the next natural step. But the war goes on for now and in the courts, the MPAA has scored another victory, this time against torrent site EliteTorrents.

DRM is still refusing to die, but progress is being made to make it a bit fairer. Microsoft is the latest to come out with a new piece of software for Xbox 360 owners that allows DRM’d content to be moved to another 360 box, which was previously not possible before.

Onto HD news now, here in Australia, Blu-ray is in a good position as the PS3 is the leading console here, not the Xbox 360 as in Europe or the US/Canada. Of course, Blu-ray prices are still high, for both hardware and software, and not just high compared to DVDs, but high compared to Blu-ray pricing elsewhere in the world. A local newspaper here has written a piece that urges users to wait before investing in a new Blu-ray player, as better and cheaper stuff will be coming soon. It does make sense, because Profile 2.0 players will soon become the norm, which will drive down prices of Profile 1.1. players, and it’s only a matter of time before Chinese manufacturers get in on the act. In the meantime, it might be worth studying just what else you will need to upgrade to Blu-ray. You can of course read my Blu-ray (and HD DVD) Buyer’s Guide, but Dolby has released their own guide which, obviously, concentrates on their new high bitrate audio formats designed for Blu-ray. The audio aspect of Blu-ray is something that will confuse quite a few people, with nearly a dozen new audio formats and output combinations to contend with. The short answer is to get an AV receiver that supports HDMI audio input, and that will almost always give you support for all the new audio formats, in combination with a proper Blu-ray player that can decode everything to PCM first.

There’s a bit more movement on the PC front too, which to be honest, hasn’t seen the mass acceptance that DVDs received at this stage, despite prices being lower. PowerDVD is now certified for BD-Live (Profile 2.0) and AVCREC (HD on DVD, using MPEG-4 AVC).

But Blu-ray has to hurry before other distribution methods start eating into its market share. There’s a whole bunch of news about new download services, even including one from Sony, so there’s an obvious trend towards that kind of distribution. Sony has struck a deal with DivX to provide movie downloads for Sony products (PS3, PSP, most likely). It will be DRM’d, but the DRM is user based, not device based, so movie files can be moved from place to place without problem. The PS3 will get the movie download service soon in the US, and then later on in Europe and Japan. So if even Sony is investing heavily into downloads, you can see why other analysts might question the future viability of Blu-ray. Netflix recently launched their own download service, requiring a hardware box from Roku. But Xbox 360 owners can now get around this hardware requirement through a Media Center plugin, and get access to Netflix’s services. Official support for Netflix services might be on the way too.

And in gaming news, Sony has revealed figures showing that the PS3 has cost them $3.32 Billion so far. That figure is still growing though, as every PS3 sold still loses money for Sony. Even Microsoft, who launched the 360 a full year before the PS3, has only just started making a profit, despite having superior software sales which is the real money earner in the industry. The PS3 will get a new graphics chip soon, which might help reduce costs a bit. And there is news of the upcoming 2.40 firmware, which promises to be a big one that finally adds in game XMB and a bunch of other features that Xbox 360 users have taken for granted.

The Xbox 360 might get a price drop soon, to take it below $USD 300. That should help recent flagging sales. On the other end of the scale, you can now buy a custom made Xbox 360, that also plays Wii games and acts like an iPod, for as little as $25,000. Hope this one doesn’t RRoD after 3 month!

I think that’s all for this week. I’ll be back next week with more WNR, unless posting news is outlawed by the MPAA before then. See you then.

Got quite a few things lined up today, so won’t spend the usual 30 minutes sitting in front of the computer thinking up of a good introduction (yes, it takes me *that* long!). The best I could come up with when time is that critical is: Hello World

(programmers will know what “Hello World” means, but don’t worry, it’s not supposed to be meaningful or funny)

Let’s start with copyright news. Did I mention I was short of time today? Virgin Media, an ISP in the UK, will now spy on its users to detect potential piracy and protect music industry profits. What else will they spy on, you have to wonder. Across the channel, France is also threatening to crackdown on Internet Piracy, and plans to set up a new agency to also spy on user’s downloading habits. Big Brother in action here, but I’m sure someone is already spying on your Internet habits for the fight against terrorism or other viable excuses. But maybe none of this is needed, as the MPAA claims that no evidence should ever be required to sue someone for piracy. Because the MPAA is always right, you see, and they never ever make any mistakes, you see, and people who downloaded a movie should get a $150,000 fine without the MPAA having to proof anything, you see.

Rarely do I put good news in this section, but there are in fact two pieces of good news this week. First is Microsoft’s reversal of a decision which say their MSN music store bought DRM’d files become unplayable because validation servers were shut down. Microsoft will now keep these servers up until 2011, which should give people plenty of time to find a way to crack the DRM. Good news for PC fans, as the PC version of BioShock will have its controversial and troublesome DRM removed. Sales stats show that games with lots of copy protection does not necessarily sell better than games without copy protection. Just like with music. This is mainly because most forms of copy protection can be easily broken, and also games without copy protection garners greater community support for buying the game (”Sins of a Solar Empire”, is one example). Both types of games will get pirated anyway.

But is piracy really a bad thing? Not according to piracy-evangelists, Sony, who finally admits that piracy has helped them sell lots of PSPs. I think most companies know that piracy helps just as much as it hinders, and without it, products often fail. Think PCs, DVDs, PlayStations, Nintendo DS and how easy it is to get pirated content on these platforms, and think of the competitors that failed and how hard it was to get pirated content on those platforms, and you begin to see a pattern. Also coming out of Japan and related to Sony, as well as the next section of this news update, Japan plans to put a piracy tax on Blu-ray disc recorders and blank discs. Yes, I’m sure doing this will greatly help reduce the high cost of Blu-ray recording, and I’m sure it will help Blu-ray catch up and replace DVD’s lead in this area.

Onto HD news now, and I must really stress on the fact that I have to leave very soon. Lots of positive news for Blu-ray, or is that positive spin, I don’t really know anymore. Studio presidents are claiming, or hoping, that Blu-ray sales will reach $1 Billion dollars in 2008. DVDs sell this much every two months, by the way. Blu-ray take-up is faster than DVD’s at the same time in the development phase, but only European figures are available or quoted, which makes me suspicious. Plus, this is only significant if Blu-ray follows the same pattern of growth as DVD, which I highly doubt since DVD saw an explosion of mass consumer uptake (after a rather quiet start), and I doubt Blu-ray will see something similar, since it’s not a revolutionary format, merely an evolution one. And it appears I’m not the only one that thinks that, as a research study comes up with pretty much the same prediction: that Blu-ray’s win over HD DVD may be hollow. The study makes several very valid points, including a lot based on similar formats in the past and their performances, plus future distribution methods for movies which will slowly destroy the optical disc as the most preferred method. Video-On-Demand and truly interactive TV, is something that I think will take on both the notion of the traditional TV broadcast, as well as the necessity to buy and keep lots of movies for “on demand” viewing. When I read the next article’s headline, I thought that they were trying to say the same thing too, but I was wrong. The article with headline Interactive TV: Blu-ray’s Worst Enemy was actually about the Profile 2.0 features for Blu-ray (Internet connectivity), and how this is causing problems for studios when creating discs that need to be compatible with players that do not support Profile 2.0. A problem that could have easily been avoided though, simply by having one mandatory profile that supports everything, much like DVDs.

And finally in gaming, sorry, but I really have to go now as people are waiting for me. But before I go, I will tell you about how the PS3 will beat the PS2 in hardware sold, as least according to Sony (a lot of “according to Sony” in this edition). It’s going to take a while, or something unexpected to occur, before it happens though (127 million versus 13 million, is the current score). But an in-game XMB (finally!) and “Trophies” (Xbox 360’s Achievements copied) will certainly help the PS3 sell more units, when these additions arrive in the next major firmware update. Wii Fit, following the fine example set by Wii Sports early on, is causing millions of dollars of collateral damage when people play. The Wii really does help the economy in more than one way, doesn’t it? How many windows, doors, coffee tables, LCD screens, desk lamps and other such things has the Wii caused to be replaced, and hence, improve the economy? Wii-insurance might be the next big thing, you know.

Ok, I really have to do now. I’m sorry I’m in such a hurry today, but you know how things are. Oh wait, Star Trek: TNG is on TV now … it’s a season 3 episode I haven’t seen in a long time … might just sit down and watch for a bit, I’ll call and tell people that I’m going to be a bit late. Checks TV guide. Voyager, DS9 and Enterprise on next? A Star Trek marathon? Awesome! Maybe I will have to cancel my plans, since how often does a Star Trek marathon happen anyway (twice a month, at most!).

I’m such a geek …

June 15th sounds like it should be exactly the middle of the year, but it’s not due to February being an idiot and not having enough days, and July and August conspiring together to win the “two consecutive months of the year with the most number of days” award. The news is a bit thin this week, so please bear or bare with me depending on your mood.

In copyright news, the MPAA recently said they plan to release on HD movies for public/paid broadcast before they are available to purchase on discs, but as part of this arrangement, they also want the ability to prevent recordings of these types of content. One senses that releasing movies early is almost just an excuse for the MPAA to ensure they can get this type of copy control rammed past the FCC regulators, who currently prohibits the use of such technology. Of course, even with the most sophisticated copy protection technology, as long as one can physically view the content, one will find a way to record it, even if through “lowly” analogue means. The FCC, like most people, are a bit wary of the MPAA’s intentions and have opened the petition to the public for comments. I suggest that if you have a couple of minutes to spare, you read the MPAA proposal and then complete the form to add your comments here. We must send a message to the MPAA that we can no longer tolerate their attack on our personal freedoms. The line must be drawn here! This far and no farther!

The Canadians are fighting a fight of their own as well, as new proposed copyright legislations, dubbed the “Northern DMCA”, will ensure police powers to fine copyright offenders. Of course, the police are not that happy, as they would prefer to be out there catching real criminals, not so called copyright abusers which even the likes of the MPAA and RIAA would have difficulty proving guilty/innocent in court (find out how the RIAA catches copyright offenders). As expected, the protest online is getting louder and louder, so hopefully the Canadian government will take their lips off the copyright lobby’s ass for a second and listen to the people who elected them to power.

And as if things can’t get any worse. Well, they can. New proposals doing the rounds and written up by the United States proposes draconian measures to stop digital copyright theft, including on the spot searches, seizures and destruction of digital devices suspected of carrying pirated content all without the right to ask for a lawyer or the right of appeal. It looks like the US has been talking to North Korean about more than just nuclear arms, they are getting a few pointers too on how on policing “inappropriate” content.

Onto HD news now, another week, another rumour of an Xbox 360 Blu-ray drive, and yet another rumour being shot down. Read what I posted in the link to see who I think is making up and spreading these rumours, and why. Meanwhile, the previous HD DVD studios move to Blu-ray is gaining momentum, as Paramount launches a Blu-ray support site. Despite what you’ve read in the news, Blu-ray sales are still pretty sluggish, even compared to the quickly declining DVD sales. With a possible US recession coming, the studios are extremely worried about what the future may bring and they are desperate for Blu-ray to succeed (and by success, I mean increase profits). But who knows, perhaps desperation is exactly what the format needs, as this could mean more movies released for less money per movie, with a slight premium over DVDs but nothing that would turn people off.

The other approach is to make the discs more feature packed. Something that Toshiba tried to do from day one with HD DVD, with very limited success. Disney wants to add a chat feature to its Blu-ray releases, made possible by Profile 2.0 hardware (more reasons to get one or wait to get one, as opposed to buying 1.1 players). HD DVDs have had this and similar features for ages, and it didn’t seem to help much, so I don’t know if this is the way to go. But expect more and more “Web 2.0″ type features to be added to Blu-ray discs.

Porn, the great teat from which the DVD format has sucked from to gain strength, is another potential saviour of Blu-ray. But do people really want to see *that* and *those* in high def glory? And does it add, or detract from the experience? Or perhaps people won’t be able to tell much difference at all? With a limited production budget, porn films probably don’t benefit much from the increased resolution as say your typical Michael Bay effort, even if the former usually has a better script.

And finally in gaming, there’s not much going except for the NPD figures released, which I have already blogged on yesterday. The porn article link above says Blu-ray hardware sales are plummeting, which might explains the spate of Blu-ray sales that are going on at the moment. I don’t know if that’s true or not, but certainly, the PS3 hasn’t been selling in the numbers the “best Blu-ray player on the market” and the “most technically sophisticated game console” should expect. Even compared to the dodgy, somewhat ugly and noisy beast that is the Xbox 360, or the Gamecube with a new controller that is the Wii, it isn’t doing too well, not for a console that has never beaten both of its competitors since launch, and has only beaten the half-broken 360 twice or thrice monthly in a year and a half worth of results. But then again, it’s still quite expensive, so a price drop will do wonders for it. Although be on the look out for more and more stories regarding a potential design fault with the PS3 in relation to the Blu-ray drive, which has been known to crap out after about a year’s use. This one could rival the 360 RRoD as a source of headache for gamers and Blu-ray owners alike, with upwards of 10% to 15% of PS3s being affected. This number is a conservative estimate based on forum posts, first hand accounts of retailers and online poll results.

That’s the news for this week. More next week as usual. Hasta la vista.

May 2008’s NPD figures are out. While not entirely surprising, but it is still somewhat of a shock that GTA IV had absolutely no effect on console sales, and April wasn’t just a statistical anomaly. The Wii is on a wiinner and it’s outselling both the PS3 and the Xbox 360 left and right. The PS3, at least, can claim to have beaten the 360, but as you will read on, the signs are not all that great for both of these console heavy hitters, not when the featherweight is running away with it like that. My prediction from last month was not correct at all, as there wasn’t a bump in hardware sales due to GTA IV. The while I was right in that the 360’s lead would narrow, it has narrowed so much that it’s now a negative. But I least I got the bit about GTA IV selling well and the 360 version selling better right, although any idiot with a keyboard could have come up with that. You can read last month’s analysis here. The figures are from NPD, a marketing research firm that releases games console sale data every month.

The figures for US sales in May are below, ranked in order of number of sales:

As mentioned above, GTA IV had almost no effect on console sales. This is a bit odd, but if you think about it, perhaps makes sense. GTA IV is the game that everybody knew was coming, and it is very likely the people who wanted the game will have purchased consoles ahead of time. If GTA IV had been the first good game on either consoles, then perhaps this would lead to bigger hardware sales as people who waited now finally have a reason to go for it. But that’s not the case, since both the 360 and to a lesser degree, the PS3, already have a pretty good range of games to attract even sandbox style game fans like myself (Crackdown, Saints Row are two examples for the 360).

Sony will be the happier of the two companies. The PS3 outselling the 360 might be a fixture for the future, but I can’t help but feel that, at least when compared to the Wii, both consoles are plateauing or decline, with the 360 declining a bit faster than the PS3. The PS3 is also more than just a games console, it is (in my opinion anyway) the best Blu-ray player on the market for now, so even if it isn’t selling as a games console, it will sell as a Blu-ray player. I have a PS3 and I don’t play games on it, but it is probably the most used piece of equipment in my home theatre at the moment.

Both consoles will have to do several things before it can fully take on the Wii. Microsoft may look towards having a Wii style controller, which when added to its very good Xbox Live Arcade system, might mean cheap Wii style games in HD - quite attractive for those that like the Wii’s control system, but not the (sub) SD graphics. Making the “box” more attractive, at least more reliable and less noisy, should also be on the list of “todos” at Microsoft HQ. The PS3 will simply have to drop in price to make it competitive, plus time will give it a better games lineup as compared to the 360. So it’s not over for either consoles, but their current way of thinking does seem a bit outdated compared to what’s happening around them.

I won’t say too much about Nintendo and the Wii , except to say that they’ve been extremely clever in marketing games to non gamers. What was once considered a suicide mission by many in the industry now look like a stroke of genius (as often the case). Even the DS is marketed differently than say the PSP, which is still aimed at the traditional male demographic. When girls barely in primary school are playing DS, you know you’re onto something.

Let’s have a look at the software figures now. Again it highlights the problem for both Microsoft and Sony. While both had a top 10 title, with Microsoft occupying the top position, it is still a disappointing month for both console giants as Nintendo almost dominated every other position. The only good news for Microsoft this month was that GTA IV on the 360 outsold the PS3 again, this time by an even bigger margin to take it into an almost exactly 2:1 lead (66.3% versus 33.7%). The PS3 only had one game in the top 10 at 4th, which was GTA IV.

1. Grand Theft Auto IV (Xbox 360, Rockstar) - 871,000
2. Mario Kart w/ Wheel (Wii, Nintendo) - 784,700
3. Wii Fit w/Board (Wii, Nintendo) - 687,700 
4. Grand Theft Auto IV (PS3, Rockstar) - 442,900
5. Wii Play w/ Remote (Wii, Nintendo) - 294,600
6. Super Smash Bros. Brawl (Wii, Nintendo) - 171,100
7. Iron Man (PS2, Sega) - 130,600
8. Guitar Hero III: Legends of Rock (Wii, Activision) – 116,800
9. Pokemon Mystery Dungeon:  Explorers of Darkness (DS, Nintendo) - 107,000
10. Pokemon Mystery Dungeon:  Explorers of Time (DS, Nintendo) - 102,000

So while Nintendo has dominated hardware sales for a long time now, that hardware dominance is finally translating into software sales. The Wii, out of the top 10 titles, held 55.4% of the market, with the Xbox 360 down to 23.5% and the PS3 at 12%. The only slight problem for Nintendo, and I mentioned it last month too, is that all of it’s top games are first party games, games that are made by Nintendo. It seems other software publishers either don’t want to, or don’t know how to yet make good games for the console, which is a tricky proposition compared to your standard video game (and standard control system). But as long as Nintendo can come out with innovations such as Wii Fit every year or so, the Wii looks set to dominate for a long time.

So onto June next. I don’t think I will make a prediction, but things will probably look similar to this month. Maybe the 360/PS3 positions will be reversed, or the lead narrowed/deepened depending on what games are coming out, but it won’t really make much of a difference to the Wii’s lead anyway. And with GTA IV sales dropping back, total software sales will be down, and it will be interesting to see if Mario Kart and/or Wii Fit can even claim top spot for next month. Until then, have a good one!