DVDGuy’s Blog @ Digital Digest

Welcome to the last ever Weekly News Roundup.

For 2008, that is. And predictably, there was hardly any news this week. There was the story of the RIAA changing tactics in their fight against piracy. The Pirate Party in Sweden is gaining support, now surpassing the Green Party in membership. And that’s pretty much it for copyright news.

Hardly any Blu-ray news either, as people are still recovering from TDK fever. The only thing slightly related was the cost of making PS3s dropping, but still higher than the retail price. Sony are still losing money on each PS3 sold, so no wonder they’re not offering any price cuts. And video streaming is coming to the Wii, which means all current generation consoles now have video streaming capabilities, which suggest online based video delivery is here to stay.

And that was the week in news, oh well. So instead of looking at the week’s news, I thought it would be appropriate to do a quick yearly roundup. A proper annual review would takes 20 pages, so I’ll just quickly do the news items that I can still remember, which is not much.

2008 was a year in which lawsuits were filled left and right, by the RIAA, MPAA and their legion of evildoers across the globe. TorrentSpy was shut down, many others followed, but piracy rates still increased. 

Consumers finally said no to DRM in 2008

2008 is also the year that DRM died. Unfortunately, it was limited to the music arena, but it’s still a good sign for the future. DRM still reigns supreme in video and gaming, but on the PC gaming front, the voices of discontent are now being heard, all thanks to EA’s mangling of Spore’s DRM. No PC game gets released these days without a debate on DRM, and I think that’s a healthy development and hopefully, 2009 will be the year DRM died in gaming as well.

At the end, the RIAA decided to change tactics and go after ISPs. It happened in Australia as well, with AFACT suing ISP giant iiNet. iiNet has promised to fight the charges, and we might see what happens in 2009. 

In politics, the George W. Bush White House, firmly on the side of the RIAA/MPAA, established a new Copyright Czar position which will make the government do the dirty work of the copyright industry. Barack Obama was elected President, and he promises a different approach to fighting piracy, but we will have to wait and see if he delivers on the promise. 

In High Definition, a lot happened in 2008. The year started with a bang, with Warner Bros. ditching HD DVD and going Blu-ray exclusive. Wal-Mart followed, and a string of other companies too, and in February, Toshiba folded and abandoned HD DVD.

RIP, HD DVD

What followed was a series of fire sales, some of which are still going on, in which yours truly increased his high definition movie collection 15 fold for less money than a Blu-ray player (current pricing). Blu-ray was expected to completely overwhelmed the market, but nothing materialised, at least not what studios were expecting. Blu-ray’s 6% share in March (when HD DVDs were still being released) did not grow at all for the next 6 months. Then came Iron Man, and price cuts to hardware, and Blu-ray was gaining momentum again. The Dark Knight made sure 2008 was a good, but not brilliant, year for Blu-ray, with market share closer to 10%.

Blu-ray standalone prices tumbled towards the end of the year, coming close to HD DVD levels just before it folded, with some deals making them even cheaper than HD DVD players after HD DVD folded. The “players are too expensive” excuse can’t really be used anymore, but people are still not buying players in droves, and with slower PS3 sales, there’s still not nearly enough players in people’s homes. 2009 will be the year of Blu-ray, as the execs now say – we’ll have to wait and see.  

But time may be running out because online video distribution made huge strides in 2008. All three current generation consoles, the Wii, Xbox 360 and PS3, now support some form of online video rental/streaming. There are more than 33 million of these consoles in the US alone.  Netflix, Blockbusters, Microsoft, Sony, Nintendo, Apple, Amazon … are all now doing online video streaming, most of them with their own hardware players as well. If you ask anyone in the industry, they’ll tell you that online video is the next big thing in home video, but until bandwidth increases and its prices drop, we might still have a while to wait before HD video streaming becomes a reality. H.264 has firmly established itself as the video format of choice, and with the H.264 based DivX 7 coming next month, H.264 is truly becoming a mainstream video format and HD streaming using the highly efficient H.264 codec will make bandwidth requirements slightly less demanding. 

And finally in gaming, 2008 was a great year for the gaming industry. There were so many hit titles, and my NPD yearly roundup to be published next month will have more details. GTA IV, Gears of War 2, Madden NFL 09, Super Smash Bros. Brawl – all titles that sold more than 1 million copies in the first month of release. The good news for Microsoft was that 3 of these 4 titles were Xbox 360 ones (the other one being for the Wii). The expected PS3 hits like LittleBigPlanet and MGS4 did not really do much for the console, while any old game on the Xbox 360 sold better. The Wii’s usual suspects, Wii Play, Mario Kart, and Wii Fit all helping it to stay number 2 in software sales. 

PS3: Losing momentum, losing sales, but not losing the high price tag

On the hardware front, the PS3 started with a bang, outselling the Xbox 360 for the first, and second, times in the first 3 month. Then a couple of months where both consoles were neck and neck, the Xbox 360 came back with a vengeance thanks to some smart price cuts and some hit game releases. But it was all a fight for (a distant) second place as far as Nintendo were concerned, as the Wii took top spot for 12 out of 12 months (we’re still awaiting December figures, but one can assume the Wii won by miles again). More than 2 million Wiis were sold in November alone.

The PS3 ended the year on a sour note (although the December figures might be better), with November of 2008 being a worth month than November of 2007, in terms of raw sales, which is not good news at all for a console that’s not supposed to have peaked yet. The lack of any price cuts, and with only a more expensive model being released for the holiday period, was what caused this. The high cost of making a PS3 is still hurting sales, but with the PS3 costs dropping, 2009 might be the year that the PS3 finally gets some prices cuts. And the good news is that the Xbox 360 can’t make any further drops, so it’s all set for PS3 making 2009 their year. 

So that was the year that was. If you listen to the marketing people, 2009 will be the year of Blu-ray, PS3, online video, H.264, and everything else in between. Nobody really knows what will happen, and I would dare make any predictions, but let’s just hope 2009 is a great year. Have a happy and safe holiday period, a Happy New Year and see you in 2009.

CNN's fake holograms were pointless

Obamania is sweeping the world. I watched the election coverage because I love elections, or anything where you get to find out a result at a set date (sports, exams …). I think I can be considered quite knowledgeable on the US election, at least this one, so once I saw PA go blue, it was pretty much all over for McCain. Ohio, Virginia, Florida all going Obama’s way just meant that, as I had predicted, the election will be called for Obama once the polls close in the west. I’m sure the networks would have preferred it to have lasted a bit longer, but there’s only so much one can take in regards to fake holograms. The most  disappointing thing for me was that I had put some money on Obama winning between 311 and 338 Electoral Votes, but he got (it looks like right now) 365 EVs – it’s all Indiana and North Carolina’s fault (plus Nebraska’s single split EV). I did put money on Obama getting more than 338 to hedge my bets, so I didn’t lose any money, but I didn’t win any either which was a shame.

Better news is that it seems my third replacement PS3 (fourth overall) is problem free at last. Fingers crossed. I did go computer shopping, but I ended up buying a system that’s totally different than the one that I thought I would buy last week. That’s just so typical, isn’t it. And despite all the distractions, there happened to be quite a bit of news this week, so let’s get on with it.

Starting with copyright news. Following up on last week’s news about MPAA winning against the Chinese DVD manufacturer GoWell. Apparently what happened was that GoWell made a DVD player that played back copied CSS protected discs – not ripped discs, just discs that you copy with Windows Explorer or something which is still encrypted. Normal DVD players won’t play these files, but GoWell made one that did, which is why it got into trouble with the MPAA. GoNotSoWell, it seems.

Real Networks want the public's help in their fight against the MPAA

In the other MPAA case, Real Networks is appealing to the public for support. They are promising free licenses to RealDVD for all trial subscribers once they win the case. If a free license isn’t important for you, then making a stand against the MPAA is. They may have had a case against GoWell, but CSS in itself is a ridiculously crap encryption that can be broken just by sneezing on it, and to see so much money being wasted on licensing and defending just seems like such a waste. Also a waste is all the money the MPAA spends on lobbying politicians, and no sooner had Obama accepted McCain’s concession, the MPAA issued a statement to clarify their intent to work with the new administration on matters of copyright. The kind of people who voted for Obama, especially the younger generation, won’t stand for yet another administration that’s far too friendly and accepting of the MPAA’s position, and I hope President-Elect Obama stands firm on the principle of fair use.

BD+ broken?

Copy protection schemes, like Blu-ray’s BD+, are only effective when people aren’t actively trying to find ways to circumvent it. But people are, and they have, which brings the dream of Blu-ray playback on Linux systems one step closer. Remember that CSS was broken as a way to get DVD video working on Linux, so you would think that the BDA had learnt that lesson and officially licensed a Linux based decryption software to prevent people hackers from doing it the hard way.

There are two schools of thought when it comes to fighting piracy. Stick or carrot. The stick approach, like what EA has been  doing lately and getting into trouble with, doesn’t seem to work too well. EA has had to back down time after time, but stories of more snafus won’t help. This time, EA forgot to print one character from the CD key for the game Red Alert 3 and their solution is for customers to guess it by entering all 36 possible options (or send in a picture of their improperly printed CD key for verification). If there was one company that could do without one more DRM related scandal, it was EA. The other approach, carrot, is to not try and prevent people pirating stuff, but work with it for everyone’s benefit. A new technique for online video sharing sites allows ads to be inserted into videos whenever copyrighted work is detected. Not the most ideal solution, but it’s better than having the video removed. One can also fight piracy on the pricing front, and that’s what Warner is doing in China with low-cost online rentals. Why can’t they do low-cost online rentals here? And even the lack of copy protection can be seen as a promotional tool, with DRM-free MP3s now getting a new “MP3 100% Compatible” logo to promote the fact. The anti-DRM movement has helped to fight piracy more effectively than DRMs, it seems.

Let’s move onto Blu-ray. Sony/Universal are coming out with a vending machines that sells Blu-ray movies and PS3 games. It’s funny that Universal is helping Sony out, because if you look at the companies that have contributed most to Blu-ray, it’s Paramount (Iron Man, Transformers), Warner (I Am Legend, The Dark Knight) and now Universal. All three were HD DVD studios, two of them exclusive until the very end. Interesting.

The Dark Knight on Blu-ray is set to break all Blu-ray sales records

The other HD DVD exclusive party was Wal-Mart, and now they’re bigging up Blu-ray too by devoting more shelve space to Blu-ray for the holiday shopping season. The low cost players that have started to arrive will suit Wal-Mart’s pricing strategy, something that wasn’t possible last year this time which forced them to go HD DVD exclusive for standalone HD players. The lower hardware prices, movie sales and in-store promotions are all part of the big holiday promotional push for Blu-ray, which is set to cost up to $25 million dollars. Money well spent, or waste of it during harsh economic times? Regardless, analysts all predict Blu-ray player prices will nosedive in the next month and a bit. HD DVD’s price crash was seen by probably the very same analysts as a sign that it was doomed, but this time without any real competitors around, the outlooks if fairly different. The Dark Knight on Blu-ray, which is predicted to sell by the truck load, and coupled with cheap Blu-ray players, should see uptake increase. If it works, this could be the most significant holiday season for Blu-ray – the one that decides whether it can replace DVDs, or merely supplement it as a niche format.

And as I normally like to do at the end of the HD section, there’s a bit of news about H.264. DivX 7 is nearly ready for release, with the first beta player being released with H.264 support.

And in gaming, PS3 sales bottomed out last week, but bounced back during the week thanks to GTA IV I think. Just goes to prove that games sell consoles, more than the other way around. Unfortunately for the PS3, it has the lowest attach rate (the average number of games people buy for the console) out of the big 3, with the Xbox 360 way in front followed by the Wii. The Xbox 360 being released earlier helps it, plus the lower prices of the console. The Wii and it’s fun (and hype) factor is helping it too. The PS3’s excellent Blu-ray and media hub functions, is making things worse when it comes to games attach rates. Console manufacturers make money off games more than consoles (that’s if they’re not losing huge amounts of it by selling them below cost, like Sony does with the PS3), so attach rate is everything (especially if your consoles has sold in greater numbers, like the Xbox 360).

In other PS3 news, firmware 2.52 has been released to fix problems with 2.51 which was released to fix problems with 2.50 (which was released to fix problems with …). Sony really need to do better release testing when it comes to their firmware, and there are more reports that 2.52 is borking PS3s by making the not reading disc problem appear after updates. It’s only a matter of time before someone launches a lawsuit, if Sony’s not careful. Sony is also patenting a Wiimote like controller for the PS3.

Will we ever see a slim, sexier Xbox 360?

The NPD October figures should be released next week, and it is widely expected that the Xbox 360 will do extremely well thanks to recent price cuts. But Microsoft is hinting that the last round of cuts will be the last round, period. It was always a matter of time before price cuts are so large that they no longer make any financial sense. The next logical step, at least in my mind, would be for them to make a more reliable and “sexier” version of the 360 – doing that, even for higher prices, will drive sales.

One company not looking to drive up more sales is Nintendo, who thinks they will have enough Wii stock for this holiday season, but you never know. If you want one for Christmas, for yourself or as a gift, please take my advice and buy one today, just to be safe.

And that’s all the news we have for this relatively busy week. Obamania will subside I think, as reality of the current situation sink in (two wars, global economic crisis, terrorism, disease, environmental disasters, and of course the big one, movie piracy). Those of us that have wasted countless hours following the election will now have to find something better to do, so the question is then can we fill our empty lives with something else to worry about? Yes We Can!

Update: The real picture of the Xbox 360 Slim, now that it's available

Update: Seems a lot of people are finding this page on Google or somewhere when searching for pics of the Xbox 360 Slim, so instead of providing just the pic for the prototype one, here’s the real one to the right.