Digital doesn't break disc- DVD, BD hold up despite onslaught of negative press

[crazzeto]

Originally Posted by neone

If you do have FiOS, then you should run the speedtest measurement at a few times of the day, for example, after dinner, early in the morning, midnight, weekends to get a feel for how fast your actual throughput is.

Some of the bottleneck limitations are at the backbone, not just the last mile into the home, with the last mile to the home, you could conceivably mirror the video content thousands of times to service each neighborhood of 100-250 providers and you can avoid the backbone problems, but you cannot centralize the video and hope to build a business out of that --- unless you're talking extremely low resolution and low bitrate video.

Yes well, the problem is we have more than one FiOS on this board talking about starting apple/x-box downloads after a minute of "buffering" (downloadin) with reliable playback after that, not too shabby for a 5GB movie one little bit... Today's internet is very appropriate for the DD options we have available to us right now... As speeds increase, we'll get better and better encodes... It's as simple as that, and yes.. the internet back bone is in fact, getting faster.

[neone]

Originally Posted by crazzeto

Yes well, the problem is we have more than one FiOS on this board talking about starting apple/x-box downloads after a minute of "buffering" (downloadin) with reliable playback after that, not too shabby for a 5GB movie one little bit... Today's internet is very appropriate for the DD options we have available to us right now... As speeds increase, we'll get better and better encodes... It's as simple as that, and yes.. the internet back bone is in fact, getting faster.

4Mbps is not HD.

[crazzeto]

Originally Posted by neone

4Mbps is not HD.

All bow down to the bitrates

Edit
BTW... You're wrong about the bitrates anyhow

[Grubert]

Video Business:

Disc spending positively flat at midyear - Blu-ray sales top $200 million

Consumer home entertainment spending at the halfway mark in 2008 is almost perfectly pacing 2007, providing good news for industry executives who have been braced for worse in these hard economic times.

Through the first six months of the year, sell-through slightly dipped 0.5% to $6.17 billion. But rental offset that drop, rising 0.5% to $3.97 billion. Consumers generated $10.1 billion in DVD and Blu-ray Disc sales combined, unchanged from the comparable 2007 frame.

[…]

“I think it’s extraordinary that the business is holding up this well, given how much of consumers’ dollars are being sucked up by increases in gas and food,” said Craig Kornblau, Universal Studios Home Entertainment president. “It’s a bit reminiscent of the last recession during the ’90s, when consumers were also not going out as much and wanted a home entertainment experience.”

After assessing the first and second quarters, Warner Home Video president Ron Sanders has increased his end of the year projections. He also believes that consumers are gunning more and more for inexpensive catalog titles, further propping up unit sales. Catalog DVD spending is up 4.5% through the half-year mark, according to estimates by Warner and others.

“We’ve seen that the marketplace is holding up better than we thought, roughly flat, and we think it will end the year at about that level,” said Sanders. “That is driven principally by catalog, where the value is ringing true in these recessionary times.”

[…]

Although Blu-ray titles are sold at a hefty premium to standard DVD, consumers believe BD is a relative deal compared to other leisure options, say studios. That is reflected in BD spending north of $200 million year-to-date through June, up about 300% from the same 2007 frame.

“I think people are becoming pickier on what they spend their money on, but home entertainment always represents a good value,” said Lori MacPherson, general manager for Walt Disney Studios Home Entertainment, North America. “Thirty dollars for a Blu-ray movie that you can watch over and over again is still a great value.”

20th Century Fox Home Entertainment president Mike Dunn cited data that Blu-ray is gaining ground at retail. According to studio research, "We are trending 8% Blu-ray sales [per title], and at the end of the year, we will be between 10% and 12%,” said Dunn.

[…]

[Grubert]

Related article by Marcy Magiera, Editor in chief, Video Business:

Flat is fat in 2008

In home entertainment, halfway through 2008, the world is flat. And that is a very good performance for a non-essential (believe it or not, movies are not necessary to maintain life) product category when the price of essentials like food, housing and gasoline are skyrocketing.

VB’s midyear research report shows consumer spending on sales and rentals of all home entertainment formats holding steady just above $10 billion. That’s a big improvement over the midyear mark in 2007, when home entertainment spending was down 5%.

Sales of standard DVD do look to be off 2% to 4%, according to various studio estimates, but rental is up and Blu-ray, with about
$200 million in sales in the first half is offsetting the small standard format loss.

Let this be food thought for the critics who expected packaged home entertainment’s decline to accelerate in 2008 (it ended 2007 down 3%) and declared Blu-ray would never establish itself because consumers became enamored of digital delivery services while the two high-def camps were at war.

Just last week Pali Research analyst Rich Greenfield, who in the past has been rather bearish on home entertainment, in a blog post reversed his earlier opinion that consumer spending on DVDs would decline at an accelerating rate this year after seeing their first decline last year. Greenfield raised his full-year DVD spending estimate to flat, with sell-through down 1% and rental up 1% and admits that might be too conservative give the strong slate of summer films headed to stores in the second half.

Greenfield based his reassessment on slightly overly optimistic midyear data from another source, but his conclusion is spot-on: “The DVD industry is not rapidly declining in favor of digital distribution (whose revenues remain completely insignificant to the Hollywood studios).”

Given the state of the U.S. economy, flat will be a good place for the industry to end this year. But the upcoming release slate and the potential for Blu-ray sales of $800 million to $1 billion do foster hope for more.

[ack_bak]

Originally Posted by Grubert

Video Business:
20th Century Fox Home Entertainment president Mike Dunn cited data that Blu-ray is gaining ground at retail. According to studio research, "We are trending 8% Blu-ray sales [per title], and at the end of the year, we will be between 10% and 12%,” said Dunn.

That seems to mesh with the weekly Nielsen data as well. This is good news for Blu-Ray (capturing 10%+ of the home video market). Q3-Q4 is going to be interesting when you consider all of the titles coming out (plus a ton of sales)..

[neone]

Originally Posted by crazzeto

All bow down to the bitrates

Edit
BTW... You're wrong about the bitrates anyhow

From what I can tell by trying to 'experiment' with the apple tv streams, 1280x720p24 (24fps) is the max supported stream, and itunes carry the contents at a max of 4Mbps.

If default settings are what we go by, 1.5Mbps is the default setting for an avc encode at 720p for pc based 1.5Mbps --- which is about what you get for free if you have no moral scruples about stealing content.

So a lot of video content is really below 4Mbps.

What does 4Mbps mean for high resolution video? The analogy is mp3 or jpeg files. First, for any music content with enough range, a 64kbps mp3 sounds very different from a 256kbps one. The difference is more audible than changing 24bit samples to 16bit samples.

You know that you can take those pictures from your camera and use photoshop to make them smaller, say even 1/4 the size of the original jpeg. When your purpose is to see them on facebook or as thumbnails, this doesn't matter. If you print them on a 8x10, it matters. If you are viewing them via the PS3 slideshow at 1920x1080p60 mode, it also matters.

I'm just saying that for people who can recognize high def video when they see it, in any reasonable scenario involving highdef video (even ignoring that resolution of 1280x720 is halved), the acceptable bar for highdef video (=no obvious artifacts) is still a lot higher than what AppleTV is delivering today.

Their real problem isn't the halved resolution, it's the low bitrate and resulting visual artifacts which are too severe to ignore.

[crazzeto]

Originally Posted by neone

From what I can tell by trying to intercept the apple tv streams, 1280x720p24 (24fps) is the max supported stream, and itunes carry the contents at a max of 4Mbps.

If default settings are what we go by, 1.5Mbps is the default setting for an avc encode at 720p for pc based 1.5Mbps --- which is about what you get for free if you have no moral scruples about stealing content.

So a lot of video content is really below 4Mbps.

What does 4Mbps mean for high resolution video? The analogy is mp3 or jpeg files. First, for any music content with enough range, a 64kbps mp3 sounds very different from a 256kbps one.

You know that you can take those pictures from your camera and use photoshop to make them smaller, say even 1/4 the size of the original. When your purpose is to see them on facebook or as thumbnails, this doesn't matter. If you print them on a 8x10, it matters. If you are viewing them via the PS3 slideshow at 1920x1080p60 mode, it also matters.

I'm just saying that for people who can recognize high def video when they see it, in any reasonable scenario involving highdef video (even ignoring that resolution of 1280x720 is halved), the acceptable bar for highdef video (=no artifacts) is still a lot higher than what AppleTV is delivering today.

Their real problem isn't the halved resolution, it's the low bitrate and resulting visual artifacts which are too severe to ignore.

Well I can't speak for apple since I don't use their service for video as I can't pump QT encoded video to my home theater... Though from what I undrestand not only does apple get the same bitrate "break" x-box does by using 720P encodes and way better than mpeg2 codecs, but they also cut out DD 5.1 in favor of some sort of pro-logic type solution... Someone please correct if that's wrong, but if I'm correct about that then I imagin it would give them even more of a bitrate break over XBL which uses either PCM 2.0 or DD 5.1.

As far as XBL it has a bitrate celing of between 7 and 8 Mbps (I forget the exact figure, I'm sure someone will post it)... With VC-1 video codec's and 720p encodes you get very acceptable picture quality.

[neone]

Originally Posted by Grubert

Related article by Marcy Magiera, Editor in chief, Video Business:

Flat is fat in 2008

As a technologist, my assessment of wall street's enchantment over digital delivery is that it is premature by many years, because bandwidth today is not free --- and there is no known codec technology yet that is more than 200%-400% as efficient as AVC under 'lab conditions' --- at least not silicon-productionable ones, if your horizon is 10 years, giving VC money to a start up next year is almost a reasonable move with the 7 year cash-out plan, but the technology is still a few years away, and the economics is still not there.

This is similar to the internet-craze that sucked up all that vc money pre-1999 and monetized shareholder ignorance into fabulous lifestyles for the innovators who laid out grand visions of dark fibre or home shopping for books or PEZ-shopping network.

After 10 years, we see now that they are right, but that's only after enduring almost a decade of being almost right.

Will digital delivery be a 5 yr or 10 yr target? At some point this will work, and if there was no BD or HD DVD (may it rest in peace), Digital Delivery might have a better chance of pushing 1Mbps video and taking on DVD, ignoring the equipment cost rampup (which follows its own rules).

My view is that this is too early by years, and anyone hoping to get in on the ground-floor on the digital delivery as the next big thing (for IPOs) are more likely to be saddled with the 360networks/boo.com/webvan than they are of ending up with an amazon/ebay. But hey, what you do with your own money is really nobody's business.

[neone]

Originally Posted by crazzeto

Well I can't speak for apple since I don't use their service for video as I can't pump QT encoded video to my home theater... Though from what I undrestand not only does apple get the same bitrate "break" x-box does by using 720P encodes and way better than mpeg2 codecs, but they also cut out DD 5.1 in favor of some sort of pro-logic type solution... Someone please correct if that's wrong, but if I'm correct about that then I imagin it would give them even more of a bitrate break over XBL which uses either PCM 2.0 or DD 5.1.

As far as XBL it has a bitrate celing of between 7 and 8 Mbps (I forget the exact figure, I'm sure someone will post it)... With VC-1 video codec's and 720p encodes you get very acceptable picture quality.

Streaming is different from download-play. If you stream, it is supposed to be real time and your delivery format is CBR (bitrate is constant every second [or whatever your buffer is]). If you download, you can have peaks that are much higher than your average bitrate (= filesize/time).

But the download-pvr technology model is different from the live-streaming one. The download-pvr makes more sense because you can download overnight.

The prime time for watching tv is mostly after dinner, and that's when the internet crunch for cable modem is most severe. For the US, you don't have the people consuming equal bandwidth throughout the day, you'll have roughly a 6 hour window after 7pm eastern with something like 2 core hours of rather intense use when all 3 time zones are going to be watching TV.

[crazzeto]

Originally Posted by neone

Streaming is different from download-play. If you stream, it is supposed to be real time and your delivery format is CBR (bitrate is constant every second [or whatever your buffer is]). If you download, you can have peaks that are much higher than your average bitrate (= filesize/time).

But the download-pvr technology model is different from the live-streaming one. The download-pvr makes more sense because you can download overnight.

The prime time for watching tv is mostly after dinner, and that's when the internet crunch for cable modem is most severe. For the US, you don't have the people consuming equal bandwidth throughout the day, you'll have roughly a 6 hour window after 7pm eastern with something like 2 core hours of rather intense use when all 3 time zones are going to be watching TV.

Ok, now I'm confused because I was under the impression that appletv operates using the download model used by everyone else... Purchase through iTunes, download then play... With the option to start playing before the video stops downloading much like x-box.

[ack_bak]

Originally Posted by neone

The prime time for watching tv is mostly after dinner, and that's when the internet crunch for cable modem is most severe. For the US, you don't have the people consuming equal bandwidth throughout the day, you'll have roughly a 6 hour window after 7pm eastern with something like 2 core hours of rather intense use when all 3 time zones are going to be watching TV.

When I was a Comcast user just outside of DC (Arlington, Va) I noticed very limited bandwidth between the hours of 5pm and 10pm. After midnight my bandwidth seemed to double. I actually tried to avoid downloading during peak hours due to such restricted bandwidth.

I agree with your sentiments that downloads are just not there yet. The bandwidth (for most people) is going to be a very limiting factor with regards to decent quality HD for years to come.

[neone]

Originally Posted by crazzeto

Ok, now I'm confused because I was under the impression that appletv operates using the download model used by everyone else... Purchase through iTunes, download then play... With the option to start playing before the video stops downloading much like x-box.

Our who sub thread was based on the premise of your assertion that highdef video can be watched in streaming mode and your example was AppleTV over Fiber with 1 minute of buffer allowed streaming mode... My main point is that true highdef video cannot be streamed at anywhere near real time unless the video size/bitrate is reduced by a large fraction or you are allowed to download it before watching.

I have no issue with the technology of downloading highdef video for time-shifted playback. The economics and usability on the other hand, is a negative --- which is why digital downloads (outside of cableTV pay-per-view) total revenue is its current size after many years of attempts --- compared to BD revenue which has grown much faster. How much Apple TV investment continues is going to be a bellwhether here whether the horizon is 5 years or 8-10 years --- since that's right now the poster child of the download-tv era. (like that pets.com icon for the .com era).

At least for the next 4-5years, digital downloads is not going to mount any significant threat to packaged media, and while DVD revenue will decline rapidly, BD revenue will grow, and each day, it looks more and more likely that total packaged media (BD+DVD) is still going to grow, even if the DVD component contributes a lot less in the next few years.

[The BJD]

Originally Posted by neone

As a technologist, my assessment of wall street's enchantment over digital delivery is that it is premature by many years, because bandwidth today is not free --- and there is no known codec technology yet that is more than 200%-400% as efficient as AVC under 'lab conditions' --- at least not silicon-productionable ones, if your horizon is 10 years, giving VC money to a start up next year is almost a reasonable move with the 7 year cash-out plan, but the technology is still a few years away, and the economics is still not there.

This is similar to the internet-craze that sucked up all that vc money pre-1999 and monetized shareholder ignorance into fabulous lifestyles for the innovators who laid out grand visions of dark fibre or home shopping for books or PEZ-shopping network.

After 10 years, we see now that they are right, but that's only after enduring almost a decade of being almost right.

Will digital delivery be a 5 yr or 10 yr target? At some point this will work, and if there was no BD or HD DVD (may it rest in peace), Digital Delivery might have a better chance of pushing 1Mbps video and taking on DVD, ignoring the equipment cost rampup (which follows its own rules).

My view is that this is too early by years, and anyone hoping to get in on the ground-floor on the digital delivery as the next big thing (for IPOs) are more likely to be saddled with the 360networks/boo.com/webvan than they are of ending up with an amazon/ebay. But hey, what you do with your own money is really nobody's business.

What is a technologist?

[neone]

Originally Posted by The BJD

What is a technologist?

As a hobby it means someone who follows technology and can't resist finding out what makes things tick. As a job description, presumably it might mean a job title that has Technology in it somewhere.

My last post on the Digital Download scene is --- other than the .com craze as an example, (and in spite of attempts to whip up frenzy, let's face it, there's no IPTV craze, and the interest level nowhere matched the pets.com's of that bygone era --- so there's just no chance of the same level of free pools money for iptv innovators this time, they're going to have to do real work to earn their lamborghinis this time).

I've heard a lot of hype of digital download's future, some of them might be true, but few seem to stick, and some analysts have come back with various adjectives on the DigitalDownload revenue, "miniscule" and "insignificant" are words that some analysts have used when describing digitaldownload revenue. If you take away the pay-per-view-cable revenue from the total, "miniscule" might be too generous.