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January 09, 2008

BT and X–Box Team Up

Convergence moves on:Xbox will host BT's TV service

Introduction

This BBC story about XBox from Microsoft linking up with BT's online services is a significant development and an important link up in a week which has seen a blow to Microsoft's X-Box and its support of the HD-DVD standard with Bluray seemingly taking a lead in this area however if you look at my comment about if they don't hurry up online services will make both DVD based systems a bit  redundant seems to have been a well-placed one. Here we look at the process of technological convergence which often means that large companies are doing specific deals with other ones in order to try and get ahead in the market place. No single company has technological dominance across the board. 

What Consumers are probably being offered:

On-demand films and sports content from the BT Vision service will be available via the Xbox games console from the middle of this year.

Desparately  Seeking Audiences!

As usual media organisations are desparately seeking new audiences and reinvestment or repurposing of existing technologies is always a likely way forward:  

Sales of BT Vision have been somewhat sluggish according to critics, with BT signing up around 100,000 subscribers since launching in November 2006.

X Box entertainment hub

How far is the X-Box developing into a domestic entertainment hub?

Whilst it is likely to make the broadband service gain a higher profile for BT customers must sign up for a 12 month BT Broadband contract. Unlike BT's own V-Box the X-Box is unable to deliver recording facilities because of hard-drive limitations.  However as BT are patently aware of this is seems reasonable to presume that some sort of add-on external video recording hard drive will be made available at a reasonable price. For those household s sporting an X-Box or three then it will presumably be marketed as an attractive service for them. As a core marketing strategy of the X-Box Mind you watch this space if a recession starts to take hold, there are straws in the wind about the Chinese economy !)


Did Sony Pay Warner? If so How Much?

Whilst this week's Economist thought that it was 'game over' for HD-DVD I'm not so convinced. Certainly announcement's were pulled at the hugely important Consumer Electronics Show (CES) by Toshiba / Microsoft but that is hardly surprising given the brilliance of Sony's timing of the announcement. Yes I said Sony's becuase I don't believe for a moment that Warner weren't heavily bribed to make not only this default to Blueray but also to make the timing of the announcement to try and deliver a knockout blow against Toshiba / Microsoft. Toshiba had already pulled off the same trick but their timing wasn't perhaps so good: 

Paramount, which had supported both formats, abandoned Blu-ray last year after Toshiba offered it tens of millions of dollars in marketing incentives. (See Economist link above)

At the root of this game is Microsoft. It's X-Box has a much larger base in the domestic environment than Playstation 3. Whilst the Economist points to twice as many Bluray discs being sold in 2007 this is not very many. They are still very expensive. flooding the market with cheap players and ensuring that HD-DVDs are readily available in rental outlets at a low price could still put Sony in the shade. Sany Vaios with Bluray are still very expensive and the technology was hugely expensive. Toshiba / Microfst still have some cards to play! 


January 05, 2008

Blu–Ray versus HD–DVD: Will Warner make the difference

Blu-ray versus HD-DVD: An eye to the future!

For more recent comment please see X-Box & BT Link

Bluray disc


Introduction 

This format war between two sets of industrial giants one gathered around Sony and the other around Toshiba has been chundering on for over two years. As a result any consumer who remembers as far back as the Betamx - VHS battle which Sony eventually lost,- was a case of better technology being sidestepped by better audience and market development strategies from the VHS people. This was financially very irritating for Betamax buyers myself included. Like lots of other people I've no intention of buying into either Blu-ray or HD-DVD as a single player burner until things are sorted out. The same situation has been rumbling on between SACD and DVD-Audio. As a result people have stuck with CDs.

Perhaps one of the exceptions to this rule of the audience staying away until a universal system is established is the iPod. On the whole the iPod is the 'killer' technology and machine which has gained a firm market dominance. But it can play MP3s which are slightly lower quality than AAC so that's an important issue. The iPod buyer has universal access the Blu-Ray / HD-DVD disc player buyer has not. Apart from the cost nobody wants yet more boxes cluttering up the place. If they leave it any longer faster download speeds will make them both redundant! So let's look at the latest story on this competition. The Financial Times  of the 5th of January thinks that a company the size of Warner Bros which is coming down on the side of Blu-ray might make the difference. 

The FT Story

Warner, one of Hollywood's largest studios and its leading player in home video, had been publishing its new high-definition DVDs in the Blu-ray format and in the rival HD DVD one pioneered by Toshiba.

Blu-Ray.Com (Obviously an entirely unbisaed company) is crowing:  

Warner has announced that they will be switching to support Blu-ray exclusively. Warner has been supporting both formats since they were launched, but recent talk from top executives suggested that Warner couldn't continue down that road much longer, and that the all important holiday sales would help them make a decision. With Blu-ray winning every week in high definition sales this year, Warner has decided that The Future is Blu.

"The window of opportunity for high-definition DVD could be missed if format confusion continues to linger. We believe that exclusively distributing in Blu-ray will further the potential for mass market success and ultimately benefit retailers, producers, and most importantly, consumers," Warner Bros Chairman and Chief Executive Barry Meyer said in a statement.

Bluray player

A Blue-ray player. They do hold a lot more date than HD-DVD so there is a distinct technological advantage here.

The New York Times has also made a more objective account of the situation:

Behind the studio’s decision are industrywide fears about the sagging home entertainment market, which has bruised the movie industry in recent years as piracy, competition from video games and the Internet, and soaring costs have cut into profitability. Analysts predict that domestic DVD sales fell by nearly 3 percent in 2007, partly because of confusion in the market-place over various formats.

They go to point to the Betamax / VHS analogy I drew attention to (well I was a Betamax owner!). This is a core point for any media student studying audiences and institutions within the media at whatever level. Audiences are not stupid. Thay want equipment that is going to be universal. Previously both Sony and Toshiba had big names behind them and both have a good lap-top market. As the NYT points out Toshiba still have support but the pendulum is definitely swinging Sony's way! People want to be able to lend and borrow each others records CDs DVD etc. or buy a new machine without having mountains of the software becoming outdated. With Warner on board, Blu-ray now has about 70 percent of the market locked up; Walt Disney, 20th Century Fox, MGM, Lionsgate and, of course, Sony have all been backing Blu-ray. The Warner announcement comes after a marketing war in the USA in the run up to Xmas:

Consumers were inundated with marketing from both sides during the recent holiday season. Wal-Mart, as part of a temporary promotion, offered Toshiba players for under $100. Sony and its retailing partners, including Best Buy, responded by dropping prices on Blu-ray players, although not to the same level. Blu-ray players can now be purchased for under $300.

Well Toshiba could chuck them into its cheaper laptops to be used as HD-DVD burners that would tempt a lot of buyers and keep them in the game perhaps? Their official response was that they were 'quite surprised' by Warner's decision. Well very disapointed anyway! 

Toshiba HD-DVD

With rumours flying about of large sums being offered to Hollywood studios this sounds as though it has been a pretty dirty game. I'm wondering who has got the Chinese and Indian markets tied up though. Increasingly the game is being played ona global basis, both have large cinema audiences and film fans. somehow I don't think the fat lady is going to sing yet.

Mind you I'm biased we've got 2 Toshiba laptops in the house then the Telly is Sony that's consumerism for you.  I don't suppose any of the films I like will come out in either of these formats at an afordable price anyway. Perhaps the real story of the moment regarding technology which is really going to move the world on or not in this case is the fact that Intel seems to be messing up the One Laptop Per Child Campaign! Occasionally its good to keep things in perspective. With most people in the world not having a telephone let alone a computer what is Intel up to? Will there be a FairTrade computer chips campaign from AMD? 

Let's defeat the digital divide: after all "we have the technology" !! 

Webliography

Globe and Mail Article 05/01/08

New York Times 05/01/08  



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