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BrustBlog Pontifications on Microsoft and the Tech Industry

I like writing about digital home media because I invested in it significantly when I renovated my home.  My family lives in a brownstone in New York City that was built in 1846; nonetheless, we have CAT6 cabling behind the walls and, among other things on our Gigabit Ethernet network, we have connected a Vista Media Center, two XBox 360s (used exclusively for media; we’re not  gamers), Windows Home Server and several Sonos devices.

But I also write about digital home media because Microsoft is making bigger and bigger bets on it and living room PC/AV convergence is one area where they are beating their consumer entertainment competitors, including Apple and Sony.  That doesn’t mean Microsoft is doing everything right though. For example, they backed HD DVD and lost.  And they haven’t exactly embraced Blu Ray.

Today though, Microsoft and Nextflix announced that with a software update this fall, XBox 360 will gain a client for Netflix’s “Watch Instantly” content.  This means that Netflix subscribers who take advantage of this service won’t be forced to use a browser plug-in or a dedicated set top box to get the content.  That’s a good development and a good partnership for Microsoft.  But I wonder how many analysts and reporters who are covering this and praising the deal actually use these services.  Because if they did, I think they’d realize Internet-delivery of video is so limited as to be nearly unusable.  Blu Ray (and Playstation 3), on the other hand, offer great entertainment with uncompromising video and sound quality.

Here’s why, at least for the time being, (non-pirated) streaming and downloadable TV and movie content is mostly fantasy:

  • Studio opposition and paucity of downloadable content: only a very small percentage of new home video releases are available in Internet-delivery format.  Netflix Watch Instantly has over 10,000 movies and TV episodes, but that’s but that’s compared to over 100,000 titles in their DVD library.  For all intents and purposes, blockbuster titles are not available over this network delivery medium.  Cable on-demand can do it, but Internet-based services do not.  That’s not a technology problem at all; it’s a legal one.  But it’s going to be difficult to overcome, and Microsoft is learning (again) that DRM isn’t a good compromise to break the logjam.
  • Lack of HD content: most downloadable programming is Standard Definition (SD) video, with two channel audio.  Blu Ray offers HD video, and a multitude of 5.1, 6.1 and 7.1 encoded and un-encoded audio formats.  Even standard DVDs on an upconverting player offer very nice picture (though certainly not as nice as HD) and almost always offer 5.1 audio as well.
  • Low bandwidth: The download times for feature-length HD films over the typical U.S. broadband connection are unacceptably high.  Streaming delivery mitigates this to some extent but then hampers your ability to select random chapters in a film, or even to perform simple rewinding and fast-forwarding.  Beyond the raw bandwidth provided, many broadband carriers are working actively to limit the amount of rich media traffic that consumers can generate.  This policy is undoubtedly futile in the long-term, and certainly misguided.  But it’s here today, and further reduces the short-term viability of Internet-delivered film and TV content.
  • Lack of portability: streamed content isn’t portable beyond the console it’s being viewed on and even non-DRM downloaded content is, at best, portable to a laptop, with an inconvenient amount of effort.  DVDs, on the other hand, play on inexpensive, rentable, portable players and in-car seat-back systems.  Anyone with children can attest to the fact that losing that capability makes the technology much less attractive.  Arguably, Blu Ray faces the same challenge since its players are far from ubiquitous.  But the assumption is that Blu Ray will replace DVD in much the same way that DVD replaced VHS (for movie playback).  That may or may not come to pass.  But a specific encoded, downloaded content format doesn’t even have a chance.

I’ll agree that physical media is old-fashioned, and that network delivery is, in the abstract, more sensible.  But physical media is a standard, and standards are powerful.   Manufacturers, studios and consumers adopt standards rather universally.  That makes for ubiquity, interoperability and usually ease of use as well.  CinemaNow, Movielink and Akimbo don’t offer that.  Neither do Apple TV and iTunes.  Nor does Netflix Watch Instantly. 

Make a standard that supports consistent HD video and 5.1 audio, convince the studios (including, yes, producers of adult programming) to distribute all their home video content over it, make truly high-bandwidth connections ubiquitous and get the telcos to end their prohibition on unfettered consumer use of the bandwidth they’ve paid for.  Then you might have something.  But that’s a lot of work to do and a lot of negotiation to conduct and conclude.  And until and unless it happens, the only real competition to physical media for major motion pictures is cable pay-per-view and on-demand service.  Microsoft can break this regime, but only if it’s committed to the heavy-lifting required to do it.

Posted on Monday, July 14, 2008 10:15 PM | Back to top


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