We decompose an article in Home in
Home Media Magazine entitled Katzenberg:
HD is a Niche. We try to get to the real meaning behind Jeffrey Katzenberg's statements. We also talk about the Digital Living Network Alliance, or DLNA and what their view of the future is.
HD is a Niche?
Last
month Jeffrey Katzenberg, CEO of DreamWorks Animation Inc. was quoted
as saying the the next generation DVD formats will be nothing more than
a niche business. His premise for this statement is that only
videophiles will be interested in spending the money in order to see
their content in HD. At $1,000 a player and $40 a disc he might be
right. But we are already seeing prices on these devices plummet and as
we said last week Wal*Mart may have an HD DVD player on the market for
$199. Content has dropped as well. We are seeing next generation DVDs
for as low as $15. Given the choice of HD and standard DVD with a price
differential of only $75 most will take the HD version.
He
continues that the difference in quality is not great enough to compel
consumers to invest in the new technology. We agree that the difference
in quality between VHS and DVD was greater than DVD to HD DVD,
especially on high quality DVD transfers but there is a difference. We
are both on record as saying we don't think the difference in quality
is worth investing $1000 of a player and $40 for content. But things
have changed. Ara owns a HD DVD add on to his Xbox 360 that only cost
him $200 and he rents his movies from Blockbuster online so there is no
differential cost for watching content. The first DVD players that came
on the market in the 90's had a large differential in price compared to
their VHS players and yet people still bought them. The increase in
picture quality was worth it to spend a two, three, or four hundred
dollar premiuim over a VHS player. Very soon the price differential
between a basic DVD player and next generation player will be less than
a hundred dollars. At that price the incremental increase in picture
quality will be well worth it. Plus, it will upconvert your standard
DVDs so you'll see an improvement there as well.
On digital
downloads, Mr Katzenberg feels that in 2007 less than 1% of sales will
come through this route. He's all for it but feels that in needs to
come to market in an orderly fashion and in a way that studios can get
value from it. That probably means that the studios are looking for a
way to handcuff consumers so that the content won't be easily
transportable. Where he thinks things are going is 3-D. Dreamworks is
looking at re-releasing the top 45 movies from the last three years in
3D to generate "significant" incremental revenue. He feels that this is
the first thing to come along that creates a premium experience for the
consumer. Give us a break, has he not seen a 35Mbps 1080p movie on a
110 inch screen? Now that is an experience! High bitrate HD content
almost looks 3D anyway. Its a matter of the studios providing us high
quality transfers and using better video codecs like VC-1. But he said
something else that makes us think there is another reason he wants to
bypass next gen discs. He feels that 3D movies are impossible to
pirate. And that's what it comes down to. Its no longer about providing
consumers with a high quality experience. Its about protecting their
content because we are all thieves in the MPAA's eyes. If only they
would spend their resources in creating better movies they may actually
make more money.
The DLNA
The
Digital Living Network Alliance, or DLNA, has a "vision of a wired and
wireless interoperable network of Personal
Computers (PC), Consumer Electronics (CE) and mobile devices in the
home and on the road, enabling a seamless environment for sharing new
digital media and content services." Huh? What does that mean? Well
we've talked about HANA, or the High Definition Audio-Video Network
Alliance. They're all about networking your home theater gear. We've
also talked about MoCA, the Multimedia over Coax Alliance. They're a
similar notion, but over the existing Coax cables in your home. So
what's different about the DLNA.
The
DLNA wants to go beyond home theater electronics into the world of
personal computers and portable devices. They realize that setting up
a data network is complicated, as is setting up a home theater. Forget
about trying to network your home theater devices, that requires some
serious IT skills. They've decided to push for a way to get all of
them to talk nice, without all the setup and configuration nightmares.
Imagine if all the major consumer electronics devices in your home,
from your computer to your TV, from your amplifier to your PDA, all
spoke the same language. Then give them the ability to find each other
so they can automatically initiate a conversation, and you're looking
at DLNA.
The group was formed in 2003 and published its first
draft of Interoperability Guidelines in 2004. Today more than 220
companies are in the alliance, including some pretty big players like
Panasonic, Philips, Microsoft, Pioneer, Samsung, Motorola, Sharp, Sony,
IBM, Intel, LG, Toshiba, Dolby and HP. You'd think that with all that
muscle behind them, surely we'd be somewhere three years after the
guidelines were published. Not only that, but they selected some very
well known standards to base interoperability on, such as IPv4, UPnP
and MPEG2. So where are all these new, next generation devices? The
ones that can communicate with anything and can automatically install
and configure themselves.
As it turns out, there are two classes
of DLNA CERTIFIED devices: Digital Media Servers (DMS) and Digital
Media Players (DMP). The players are able to find and play content
stored on the servers. Sounds simple enough. But the implementation
is very flexible. Some servers allow you to control other devices in
the network, or even act as players themselves. For example, your
computer can be a server and store media content; it can also be a
player and display its content or the content on a different server.
Then it can also act as a controller for other devices on the network.
A NAS drive, however, is purely a server and a TV is most likely purely
a player.
On the DLNA website there are almost 400 PC
devices, made by companies like Intel, NEC and Sony, but only 21 TVs
from Pioneer, Sony and Toshiba. There are a handful of DVR, DMA and
NAS devices, but not enough to send you reeling. Right now, evidently,
the market for networked CE devices is just too crowded. It's like
nobody will fully commit until something solid emerges, which of course
won't happen until someone commits. And we have the chicken and the
egg conundrum. Hopefully one of them will catch on, and soon. This is
getting old already.
