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The Real Format War: HD Media vs VOD vs etc

post #1 of 18
Thread Starter 
I read this article on EngadgetHD (Link) regarding the decline in sales of SD DVD players. While this is no great shock to anyone, it does underscore why this battle between HDM and potential others is of great importance to the studios. While the early results are not spectacular, they are growing and people are getting the message that there is something better out there than DVD. The HDM format war has certainly hurt the adoption of the new standard and left the door open for Video On-Demand or another download service to take a big chunk of that pie. As broadband adoption rates and speeds increase, and they will with fiber adoption, then HDM has a strong opponent in VOD. VOD, in theory, can be cheaper, save trips to the store, avoids issues in finding a movie, and provide excellent image/audio quality relative to SD DVD. Studios may prefer it as DRM may be easier to implement on a VOD system as it's online nature would allow studios to constantly check the device for hacks. Xbox 360s Video Marketplace has yet to be cracked even though both HDM formats have in a shorter amount of time on market. The advent of Comcast's excellent On Demand service, Tivo, and other DVR services have taught people how to use VOD systems. The only thing holding it back are bandwidth issue and high prices for content. If VOD could add a Netflix type model ($17-$25/month for unlimited movies and TV shows, HD or SD) then I would scrap HDM in a second and switch strictly to on demand. A set top box for a VOD service could become VERY cheap. As hard drive sizes increase and processor prices go down, a powerful VOD box could be very affordable for all consumers right at launch.

HDM still has a lot of advantages over VOD, mainly that people like the physical disk and enjoy collecting. That built - in tendency of humans to collect things would disappear as VOD wouldn't provide us with a physical item to collect. The bandwidth issues are also big right now as it is almost impossible to beat the bandwidth available in the back of a Walmart truck. the large disk capacity also provides tons of space for Higher Quality video, Audio, and special features that would have to be trimmed for a VOD version of the movie. Prices on current HDM is very high but if they can be reduced to SD DVD levels, then VOD will have a VERY hard time taking this market.

The third wild card is future technologies. We have no idea what the heck is coming down the line that can replace what we have. In 10 years we could find it ridiculous to purchase optical disc media or download over the internet. Personally, I'm rooting for a Holodeck. Don't laugh, while the visualization techology is still in sci-fi land, the concept is certainly a stage in the progression of our media. Video Games are a necessary step toward that technology as they force writers to write a story built for interactivity instead of just viewing. If I live to be 100, I may see a basic holodeck in my life.

Don't get me wrong, DVD will be with us for a long, long time as I doubt many people will replace their back catalog with HDM discs, but I think there is a strong possibility that one day, far down the road, a day and date new release will sell more copies on a HDM format than an SD DVD format.
post #2 of 18
They cater to different markets.
People who don't have time to go buy a DVD will find VOD more appealing, but they wouldn't have bought DVDs anyway even if they hadn't found VOD.
post #3 of 18
VOD has a LONG way to go IMO..not enough people have the local connection or equipment to get into mega sized downloads etc...plus many folks live in areas that my not see true high speed stuff for a long time. VOS IMO isn't competition to HDM...

SD however will always be the #1 competition to HDM and it is still kicking HDM's rear every day it seems....does HDM have "years" to build up it's fan base? WHo knows...time will tell.
post #4 of 18
Thread Starter 
VOD does have a long way to go but so does HDM. SD DVD WILL be supplanted by a new "format" just as the CD has been supplanted by the MP3. That doesn't mean CDs still aren't sold, but it does mean that the studios have an another revenue stream to pickup from the falling CD sales as a large market who won't pay $15 for a single CD but will pay $1 for a single song jump into the market. Granted those studios had to be dragged in kicking and screaming, but eventually we got there.
post #5 of 18
I'm still waiting for 45mbs broadband.

The U.S. is falling way behind the curve.
post #6 of 18
VOD is for girley-men.

Real men author their own media disc atop a great mountain with nothing but manly concentration. We then burn the silkscreen atop the disc with the hottest rays from god's sun. Then only do we return home to insert them into our hand built HDM/D-VHS/LD players. Which are made from the bone of the great grizzly bear and teeth of the silver backed gorilla. Circuitry woven together by the highly conductive hair of the mongoose.
post #7 of 18
Quote:
Originally Posted by venk View Post

VOD does have a long way to go but so does HDM. SD DVD WILL be supplanted by a new "format" just as the CD has been supplanted by the MP3. That doesn't mean CDs still aren't sold, but it does mean that the studios have an another revenue stream to pickup from the falling CD sales as a large market who won't pay $15 for a single CD but will pay $1 for a single song jump into the market. Granted those studios had to be dragged in kicking and screaming, but eventually we got there.

Good post. Some additional info:

1. VOD will do about $1 billion this year. It is forecasted to do about $4 billion by 2011.

2. 2007 will be the 7th year in a row that CD sales have declined.

3. The CBL industry is looking very hard at Switched Digital to solve both the internet speed issue, and how to offer more HD channels using the existing infrstructuure.
post #8 of 18
Why does everyone keep talking about bandwidth. VOD is not just over the internet. VOD is also available by cable company and now by Verizon via FIOS (fiber to the home). Even plain jane coax used by the cable companies have a ton of bandwidth. Right now 80%+ is wasted broadcasting analog channels (1 SD analog channel ~= 2 HD digital channels). As OTA moves digital slowly the cable companies will move 100% digital.

VOD will be a serious threat as buying habits change (more renting less buying) high prices of HD, format war, etc. Toshiba and Sony may ensure that Comcast and Cox communications are the "winners" of the format war.
post #9 of 18
vod netflix-like model will absolutely (further) erode (and eventually doom) disc sales. it's just a matter of negotiating with studios. bandwidth isn't even an issue today. until then the "i won't repurchase my DVDs in HD" mentality will no doubt prevail making this format war debate probably the biggest waste of bandwidth to date

Quote:
Originally Posted by venk View Post

I read this article on EngadgetHD (Link) regarding the decline in sales of SD DVD players. While this is no great shock to anyone, it does underscore why this battle between HDM and potential others is of great importance to the studios. While the early results are not spectacular, they are growing and people are getting the message that there is something better out there than DVD. The HDM format war has certainly hurt the adoption of the new standard and left the door open for Video On-Demand or another download service to take a big chunk of that pie. As broadband adoption rates and speeds increase, and they will with fiber adoption, then HDM has a strong opponent in VOD. VOD, in theory, can be cheaper, save trips to the store, avoids issues in finding a movie, and provide excellent image/audio quality relative to SD DVD. Studios may prefer it as DRM may be easier to implement on a VOD system as it's online nature would allow studios to constantly check the device for hacks. Xbox 360s Video Marketplace has yet to be cracked even though both HDM formats have in a shorter amount of time on market. The advent of Comcast's excellent On Demand service, Tivo, and other DVR services have taught people how to use VOD systems. The only thing holding it back are bandwidth issue and high prices for content. If VOD could add a Netflix type model ($17-$25/month for unlimited movies and TV shows, HD or SD) then I would scrap HDM in a second and switch strictly to on demand. A set top box for a VOD service could become VERY cheap. As hard drive sizes increase and processor prices go down, a powerful VOD box could be very affordable for all consumers right at launch.

HDM still has a lot of advantages over VOD, mainly that people like the physical disk and enjoy collecting. That built - in tendency of humans to collect things would disappear as VOD wouldn't provide us with a physical item to collect. The bandwidth issues are also big right now as it is almost impossible to beat the bandwidth available in the back of a Walmart truck. the large disk capacity also provides tons of space for Higher Quality video, Audio, and special features that would have to be trimmed for a VOD version of the movie. Prices on current HDM is very high but if they can be reduced to SD DVD levels, then VOD will have a VERY hard time taking this market.

The third wild card is future technologies. We have no idea what the heck is coming down the line that can replace what we have. In 10 years we could find it ridiculous to purchase optical disc media or download over the internet. Personally, I'm rooting for a Holodeck. Don't laugh, while the visualization techology is still in sci-fi land, the concept is certainly a stage in the progression of our media. Video Games are a necessary step toward that technology as they force writers to write a story built for interactivity instead of just viewing. If I live to be 100, I may see a basic holodeck in my life.

Don't get me wrong, DVD will be with us for a long, long time as I doubt many people will replace their back catalog with HDM discs, but I think there is a strong possibility that one day, far down the road, a day and date new release will sell more copies on a HDM format than an SD DVD format.
post #10 of 18
Quote:
Originally Posted by namechamps View Post

Why does everyone keep talking about bandwidth. VOD is not just over the internet. VOD is also available by cable company and now by Verizon via FIOS (fiber to the home). Even plain jane coax used by the cable companies have a ton of bandwidth. Right now 80%+ is wasted broadcasting analog channels (1 SD analog channel ~= 2 HD digital channels). As OTA moves digital slowly the cable companies will move 100% digital.

VOD will be a serious threat as buying habits change (more renting less buying) high prices of HD, format war, etc. Toshiba and Sony may ensure that Comcast and Cox communications are the "winners" of the format war.

It's understood that VoD isn't just internet, however, where I am located, I have two major cable companies here that cannot even provide enough HD content from broadcast channels, how on earth are they going to start offering HD VoD? Is it possible? Surely it is, but I think we are a lot further away from that being the norm than some here would lead us to believe.

The cable infrastructure in the US is shoddy @ best, and FIOS, while rolling out, is still a decade @ least from becoming any sort of commonplace occurance. It's going to take a quantum leap in available bandwidth and compression schemes to make it really and truly viable. I think we do have at least one to two cycles of optical media left... just on the technology side, not to mention changing buying habits, ie no actual ownership of media, etc.

Music is one thing, HD VoD is something completely different.
post #11 of 18
Quote:
Originally Posted by chinch View Post

vod netflix-like model will absolutely (further) erode (and eventually doom) disc sales. it's just a matter of negotiating with studios. bandwidth isn't even an issue today. until then the "i won't repurchase my DVDs in HD" mentality will no doubt prevail making this format war debate probably the biggest waste of bandwidth to date

Bandwidth is an issue today, it's the largest issue. The infrastructure in the US has taken decades to get where it is now, and it's got a long way to go to get to HD VoD type delivery.
post #12 of 18
VoD has been in place for several years and it competition for rentals not purchases. This isn't music (when does on rent music?). It is in the interest of the studios, to get to providers first (which they have done) and in the interest of MS and Apple to provide them with software and tools to create the content. None of this has had anything to do with DVD declines and has nothing to do with HDM.
post #13 of 18
Quote:
Originally Posted by eskimo2176 View Post

Bandwidth is an issue today, it's the largest issue. The infrastructure in the US has taken decades to get where it is now, and it's got a long way to go to get to HD VoD type delivery.

Are we confusing VOD with DNL's?

I have HD VOD both in the form of PPV and On Demand. It is like any other HD program - it plays in real time. A 2 hour movie takes 2 hours to play.
post #14 of 18
Quote:
Originally Posted by Slim GoodBooty View Post

VoD has been in place for several years and it competition for rentals not purchases. This isn't music (when does on rent music?). It is in the interest of the studios, to get to providers first (which they have done) and in the interest of MS and Apple to provide them with software and tools to create the content. None of this has had anything to do with DVD declines and has nothing to do with HDM.

Amen.

There would be so much that would need to occur to have VoD take the place of HDM.

First, you need the bandwidth, of which, there isn't enough to deal with the daily internet use.

Second, you'd have to get retailers on board somehow, because as we all know, while DVD might be in decline, it still accounts for a good draw into their stores.

Three, you'd have to get consumers buying habits to change, and make them willing to really substitute rent for buy and own, which is a tall order in and of itself.

VoD will punish the rental B&M locations, but it has little to do with HDM and movie ownership.
post #15 of 18
Quote:
Originally Posted by Lee Stewart View Post

Are we confusing VOD with DNL's?

I have HD VOD both in the form of PPV and On Demand. It is like any other HD program - it plays in real time. A 2 hour movie takes 2 hours to play.

Full back catalog? I didn't think so.

Again, going after the rental market is one thing, the ownership market is quite something different. There's isn't the bandwidth nor space to accommodate the catalogs.
post #16 of 18
I don't really see discs and VOD as in competion for the long term, anymore than software on disc is a profoundly different market than software via a download. As we convere on a consistant set of interactive and playback technologies, there's no reason the same bits can't be sold on both spinnng polycarbonate and as bits from the cloud, with the consumer choosing the way they want to get the bits.

The story of IP video since the mid-90's is about the converging curves of decreasing bits needed for a particular quality experience and increasing consumer bandwidth. Bear in mind a decade ago we were still targeting 19.2 Kbps modems using primative implementations of H.263. Today, we've got commercial 720p downloads at about half HD DVD bandwidths that offer a great consumer experience. Imagine where we're going to be a decade hence.
post #17 of 18
Quote:
Originally Posted by eskimo2176 View Post

Full back catalog? I didn't think so.

You didn't think so what? That they don't offer 50,000 movies for me to choose from?

Quote:


Again, going after the rental market is one thing, the ownership market is quite something different. There's isn't the bandwidth nor space to accommodate the catalogs.

Both VOD and DNL's remove all of the middlemen between the studio and the consumer. The only addition is the delivery company be it SAT, CBL or TELCO. The only other addition is a substitute from the Studio to a Rental/Retailer Co. that owns the system like BBI's MovieLink.

VOD is not affected by bandwidth. It is affected by the server farm - how big is it?

DNL's are affected by bandwidth - the speed at which they occur.

Do a Google on "Switched Digial Video" and you will learn how CBL is attacking 2 problems at once.
post #18 of 18
To me VOD is an advanced pay-per-view model. PPV has been around for a long time and has done nothing to slow DVD sales. It has only managed to compete with the rental market and has not fared well.

I would argue that DVRs are a bigger threat. DVRs presents the opportunity for all TV to compete with movies at any time. Viewers watch more prime time TV, just spread out over other periods of time. I LOVE my HD DVD and it is recording HD programming throughout roughly half of primetime hours. I find myself watching less HDM because I have a backlog of HD recordings to view.

I consider DNLs to be a non starter until the infrastructure of the US high speed network is completely overhauled. The US is WAY behind the curve in this.
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