Thursday, October 06, 2005

A few odds-n-ends from the DWEEB-o-sphere



Next-gen DVD duel is format for trouble
The Hollywood giants taking sides in the heated next-generation DVD format wars, touting the virtues of the rival Blu-ray and HD-DVD technologies, are dismissing critical truths that could thwart both their plans and adversely effect industry economics.

The most important and most obvious is that consumers no longer are the passive, unsophisticated recipients they were during the costly VHS-Beta format wars of the 1970s, in which value was lost for all involved. EDITOR'S NOTE: OH I DON'T KNOW.... I SEE AN AWFUL LOT OF SHEEP-LIKE BEHAVIOR OUT IN CONSUMER-LAND, DON'T YOU?

Today's savvy consumers have been empowered by digital-broadband interactivity that allows them to decide the when, where and how of what it is they want. EDITOR'S NOTE: YES, THIS IS MORE TRUE THAN IT USED TO BE. AND YES, THERE IS A VOCAL MINORITY OUT THERE EDUCATING THEMSELVES AND DEMANDING SPECIFIC TECH FROM THE PROVIDERS. BUT THESE FOLKS ARE STILL A MINORITY. THEY MAKE A LOT OF NOISE, BUT THAT COVERS THE SILENT BULK (AND I DO MEAN BULK) OF CATTLE OUT THERE WITHOUT A CLUE WHAT'S WHAT IN TECH-WORLD. They care less about technology particulars and more about the content and services at the other end.

A format war will only keep them from getting what they want at an affordable and value-oriented price.

Paramount Pictures provided the latest salvo in the HD-DVD vs. Blu-ray battle Sunday by announcing it would support the Sony-developed Blu-ray format, along with Sony Pictures Entertainment, the Walt Disney Co. and News Corp., in addition to the Toshiba-backed HD-DVD format, which has NBC Universal and Time Warner in its corner.

While marketplace forces normally check such conflicts over time, there clearly is a lot more than usual at stake in this battle.

The next-generation DVD -- whatever form it takes -- will help transform living-room television into a hybrid PC console to access, download, store, manipulate, play and manage boundless content and services in bold high definition. EDITOR'S NOTE: DESPITE THE FACT THAT I CAN'T AFFORD TO UPGRADE ANY TIME SOON, I AM STILL DROOLING IN ANTICIPATION. (I AM AN HD ADDICT).

As in the past, the rate at which consumers adopt new technologies -- which are faster and more lucrative than ever -- will lift all related businesses.

It took only seven years for mainstream adoption of DVD technology introduced in 1997 compared with a 19-year penetration process for color television after its commercial launch in 1954.

You needn't look any further than the lightning-fast adoption of Apple Computer's iPod music device, which landed in stores in late 2001. Although its supporting iTunes service followed nearly two years after the iPod launch, Apple clearly got the hardware right with its MP3 player.

The first seven years of a next-generation DVD format could generate $40 billion in U.S. sales, compared with $15 billion in slowing domestic sales from the existing DVD format, according to Bernstein Research.

However, making some kind of format choice now is better than postponing a selection.

Bernstein estimates that the media and entertainment industry could lose $16 billion in revenue trying to work out the format wars for another two years, which seems to be the path they are on given that both sides expect to launch their respective next-generation DVD players by early next year.

A format stall or split will only play havoc with an already disrupted content pipeline and hinder consumer conversion of their content collections. It most certainly will retard the already slow growth of HD television sets, which penetrate only 10% of U.S. TV homes, and perpetuate the Catch-22 content and hardware adoption cycle threatening digital growth.

Should the warring formats continue down separate paths, limited proprietary content would only further fracture Hollywood's food chain.

Industry economics are so competitive and diffused that short-term gains can quickly be dashed by long-term losses.

The proponents of Blu-ray and HD-DVD understandably have the proceeds from endless patent and license fees in mind as they argue the benefits of their different formats and continue to reject compromise. But, there's also the downside.

Toshiba's next-generation DVD players set for release in the U.S. don't record discs, like the model that is sold in Asia. Blu-ray discs cost many times more to produce than the rival HD-DVD discs and might initially be limited to record-only. Both formats will have better HD picture quality and more interactivity with some copyright protection.

But no matter which side wins, industry players stand to lose an important new revenue stream and potential windfall profits if they all don't unite behind a dominant format that will allow new venues of content to flourish.

Merrill Lynch estimates that within five years, digital-based earnings could contribute as much as 9% to overall earnings for Viacom, News Corp. and the Walt Disney Co. and up to 20% of overall earnings for Time Warner. This revenue is an important offset to declining or shifting traditional media revenue.

For some of the biggest industry players, it is more of a make-it-or-break-it proposition. As a major software and hardware provider, Sony could emerge the big winner in the Blu-ray bonanza. Its recently announced restructuring, involving $1.8 billion in cost reductions and 10,000 lost jobs, is aimed at creating a seamless transition among its devices and untethered content. Its PlayStation 3 device could emerge as the first pocket-size, anywhere multimedia interactive device as it migrates from a game console to a more general entertainment player, driven by its core young male demographic.

Paramount's pivotal decision, which will cost it twice as much on content formatting, also is an acknowledgment that though it has been a backer of HD-DVD, it can't ignore the competitive edge Sony has by integrating Blu-ray technology in its new PlayStation 3 video game console set for release in the spring.

Media conglomerates declaring themselves platform-agnostic have acknowledged this shift with their recent scramble for a foothold in emerging media, as seen in News Corp.'s $2 billion Internet spending spree and Time Warner's rigorous reinvention of America Online as a springboard into the Internet space AOL helped found -- despite the lack of a digital-rights management safety net.

The advent of a new uniform DVD format would normally give content producers, providers and distributors more pricing power and leverage, were it not for having to make the costly choice between two DVD formats, or adopting both.

Meanwhile, the scary prospect of Hollywood's major film and TV players being "Napstered," or suffering the same blows as the music industry amid the onset of the digital distribution revolution, is pushing major content producers and providers closer to cable operators' free video-on-demand and subscription on-demand platforms as well as streaming online options.

Because the lesson of Napster is that consumers will gravitate to whatever platform they can find that pleases them, which this time around will be all manner of digital broadband cable, telephone and Internet-connected devices.

With consumers accounting for 57% of the $405 billion in U.S. media and entertainment spending every year, this latest format war sadly demonstrates the industry's stubborn lack of respect for or understanding of newly empowered consumers and the new business models they should adopt to win them over.

"The issue for the media companies is that, while the iPod has been a runaway success for Apple ... the conversion from the CD to online music has caused devastation to music companies, which did not force a standard audio format for the new online distribution method," Bernstein Research analysts said. "The unprotected MP3 emerged, and when legal alternatives rose, their adoption rate was hampered as the different camps fought it out," they wrote in a report this year.

Video is evolving along similar lines.

"In a digital world, format wars only push consumers toward an open, unprotected standard, Bernstein analysts said.

Adoption rates will suffer, billions of dollars of potential profits will be lost by media companies, and digital's forward march will be slowed some if Blu-ray and HD-DVD continue to slug it out as if industry players still controlled the marketplace. EDITOR'S NOTE: KIND OF A RE-HASH OF STUFF WE'VE ALREADY SEEN, BUT WORTH THE READ, I THOUGHT. (NOW WE JUST NEED TO GET ALL THE PETTY-TECH COMPANY FOLKS TO READ IT!)

Nothing 'Little' about 3-D deals
After months of haggling and deal brokering, the country's top three theater chains have either signed or are about to sign five-year contracts with digital 3-D provider Real D for 3-D exhibition.

Its system will be in place in time for next month's release of Walt Disney Pictures' "Chicken Little," which proved to be a tipping point for the agreements.

Real D has completed deals with AMC Entertainment and Loews Cineplex and is in final negotiations with Regal Entertainment Group. EDITOR'S NOTE: WE GET CHICKENS IN 3-D!!! (CLUCKING HAPPILY......)

By adopting Real D's technology in advance of the release of Disney's first homegrown CGI-animated film, which bows Nov. 4, the exhibition community is making one of the first tentative steps in the rollout of digital cinema.

Real D said the participation of the top three exhibitors, in addition to several smaller chains, will result in 85 locations where "Little" can be screened in 3-D.

Excluding Regal, 20 chains have signed on. EDITOR'S NOTE: SIGN ON, REGAL. SIGN ON!!! (BWACK!)

Dallas Comic Con & Sci-Fi Expo

Coming this October 15-16, it's the DALLAS COMIC CON 6!

Join us for a weekend filled with exciting comic book creators and special celebrity guests.

Mark Brooks - artist AMAZING FANTASY and NEW X-MEN
Ale Garza - artist of BATGIRL for DC
Cliff Chiang - artist of BATMAN: GOTHAM KNIGHTS
Terry Moore - STRANGERS IN PARADISE creator (Saturday only)

Rich Buckler - creator of DEATHLOK,
comic book legend Michael Lark - artist of DAREDEVIL and GOTHAM CENTRAL
James O'Barr - creator and artist of THE CROW and more!

Jonathan Frakes - Riker on STAR TREK: THE NEXT GENERATION
Genie Francis - Laura (Luke & Laura) from GENERAL HOSPITAL

Carrie Fisher - Princess Leia from the STAR WARS Trilogy EDITOR'S NOTE:!!!!
Kevin Sorbo - star of HERCULES and ANDROMEDA (Saturday only)
Adam Baldwin - Jayne from FIREFLY and SERENITY (Sunday only)
Donnie Dunagan - voice of BAMBI, star of SON OF FRANKENSTEIN
Marc Singer - star of V and the BEASTMASTER films and more at the show!
Kane Hodder - Jason in FRIDAY THE 13th Parts VII - X
Erin Gray - Wilma in BUCK ROGERS, Kate on SILVER SPOONS and more at the show!

The convention will feature comic creator and celebrity Q&A panels all weekend.

Steve Sansweet from Lucasfilm will be giving a special presentation on the future of STAR WARS on Saturday, and hosting a "Star Wars Road Show" charity fundraiser, where you can bring your collectibles to be appraised.

There will also be gaming demos and tournaments for Star Wars Miniatures, Magic, Yu-Gi-Oh, and more. Look for free movie promo items to be given away at the freebie table. This event features something for everyone!

The show will be held at the Plano Centre, located on 2000 E. Spring Creek Parkway, just a half mile East of 75 Central Expressway. Free parking. Hours are Saturday 11am-6pm, and Sunday 12(Noon)-5pm. General Admission is $10 on Saturday and $5 on Sunday, but kids 12 and under get in FREE. Don't forget, there are also Speedpasses available online now. Don't miss this event!!!

For more information check


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