Technologizer

I think Sony’s finally gotten the picture: either drop your prices, or forget about Blu-ray ever catching on. Data from NPD is showing that player sales in 2009 stand to increase 54 percent over last year, thanks in part to an effort to bring player costs down to near the $100 price point ($79 at Walmart Black Friday) for the holiday shopping season. Consumers now can reliably find a player for under $200, something that was somewhat difficult this time last year.

Player costs have dropped at about the same rate as DVDs did, falling from a high of $800 at launch in 2006 to an average cost of $221 on Black Friday according to research firm Envisioneering Group. Chief among the reasons for the drop appear to be a marked drop in component costs, allowing prices to fall.

However, the deep discounts on Black Friday seem to be significantly more than what happened with DVDs, and probably has a lot to do with a realization that time is running out for Blu-ray.

Let’s face it: the format probably has one more Christmas season — two at most — before streaming media becomes a serious competitor in delivering high-definition to the home. Already, companies are moving along with their plans (take Apple’s rumored television service for example), and I feel I can say with some confidence that by Christmas 2011 there is going to be quite a solid fooprint for ultra-fast broadband, i.e. fiber optic to the home and the like.

Streaming HD is the next logical big thing — the overhead costs are far lower than producing discs and the players that play them: all that is missing is the capable broadband connection. It’s coming, however, and should be here sooner than we think. The window is closing for Blu-ray and its closing fast. It may have won the battle against HD DVD, but in all likelihood its going to lose the war.

One positive that may keep Blu-ray around longer? Internet integration. Most of the players coming out these days offer more and more net-enabled functionality, such as the ability to use Netflix and so forth. This is essential as the shift to streaming media continues. But it may already be too late, and the format’s fate sealed. Whether or not this was Sony’s fault is something that will certainly be debated in the years to come.

It’s not quite clear why it is happening, but Sony disclosed Monday that its Optiarc division in the US is under investigation by the Justice Department for possible antitrust violations. Sony Optiarc is one of the larger manufacturers of optical drives, including DVD and Blu-ray.

The DOJ is not the only government agency worldwide looking into Sony’s practices: other countries are apparently also requesting information as part of a wider investigation into the industry. It is unknown whether any other companies may have received requests for information.

An educated guess would lead to the investigation centering around price-fixing. While it’s not known, Blu-ray prices have remained high even though the technology has now been commercially available for over three years, and its competitor HD DVD has been gone for nearly two-thirds of that time.

Then again, it could have nothing to do with Blu-ray. Fact is we just don’t know much at this point. More on this as we get it…

(Hat tip: IDG)

Is Microsoft planning a standalone Blu-ray player to go with the Xbox 360? It would appear that way from a quote Gizmodo dug out from its interview with Microsoft chief executive Steve Ballmer.

Asked whether Microsoft will add a Blu-ray player to the Xbox 360, Ballmer said “Well I don’t know if we need to put Blu-ray in there—you’ll be able to get Blu-ray drives as accessories.”

On follow-up with Microsoft PR, Gizmodo got the same line that we’ve already heard from Microsoft, that its current plan is to support streaming video and on-demand movies from the Zune Marketplace. “As far as our future plans are concerned, we’re not ready to comment,” the handlers said.

A couple things to consider: First, if you watch the interview, Ballmer’s remarks aren’t as clear as they appear in quotes. It seems as if he’s throwing out the Blu-ray comment off-hand, not announcing a new product, and Ballmer is pretty guarded in the rest of the interview. Second, Ballmer has slipped up before. In June, he spoke of a new Xbox 360 model in 2010, leading to speculation that the Project Natal motion sensor would launch with a redesigned Xbox 360, and forcing a flurry of carefully-worded denials from Microsoft that any new console was on the way.

I would guess that Ballmer was merely talking about owning any old Blu-ray player on the side, but the wording of Microsoft PR is intriguing, because it’s not a firm denial. Maybe the company’s keeping its options open.

That said, I don’t think the Xbox 360 needs a Blu-ray player, especially an external one. Sure, it could allow you to launch movies from the console dashboard and sign into Xbox Live while watching a film, but those benefits seem negligible to me. Besides, Microsoft already bet on HD-DVD with an external player (pictured above), and it failed. If the Xbox 360 is supposed to live until 2015, as executives assert, Microsoft should stick with online video instead of saddling consumers with another technology that will ultimately be overshadowed.

Will Apple release Blu-Ray-equipped iMacs for the holidays? Maybe–and it probably makes sense, since it’s been a while since iMacs got meaningful new features other than ongoing refinement of their industrial design. But to abuse a famous Steve Jobs quote, Blu-Ray still feels like a bag of boring to me. It’s one of the few high-profile examples of gadgetry I have no impulse to invest in.

Here’s why:

It’s not truly part of the digital world. These days, I’m less interested in getting better image quality, and more interested in doing stuff with content–sending it via wireless networking to multiple screens in my house, sticking it on my iPhone, storing it in the cloud. Blu-Ray doesn’t help with any of that. In fact, it’s designed specifically to prevent me from doing it.

The content isn’t there. At least not for me. I admit that I’m not representative of the Average American Consumer here, but I’ll never buy any blockbuster movie on Blu-Ray. I like obscure animation and box sets that aren’t going to sell by the million. For now, they come out on DVD, not Blu-Ray. That’ll change. Eventually. Probably. But if I bought a Blu-Ray player today, I’d mostly use it to watch DVDs.

It’s a stopgap. Like the 2.88MB floppy disk, Blu-Ray is ultimately an impressive (and pricey) improvement on a technology that’s going to go away. By 2012, it’s going to look almost as retro as VHS. Okay, it might take a year or two more than that. But no more.

I’m not saying that Blu-Ray will never show up in my living room or inside a computer I own. (Hey, I was a late adopter of DVD, too.) But I’d say the odds are less than fifty percent that I’ll ever get it–at least as a conscious decision which I’m excited about. (The day will presumably come when all computers that sport optical drives have DVD.)

But enough about me:

Starting in November, Sony will revert to its old, closed-system ways by packing a PSP-ready digital copy on its Blu-ray discs.

The reasoning is obvious: If you’re an owner of one device, you’ve got a reason to pick up the other. Why buy an iPod for video when the PSP gives you a chunk of your Blu-ray collection in digital form?

Here’s the problem: Of the two Blu-ray films that Sony Pictures will launch with a PSP-ready copy, only one will include a separate digital copy on DVD, playable on your PC, according to Home Media Magazine. So while Sony is offering the full range of choices for people who buy The Ugly Truth, those who purchase Godzilla won’t get a digital copy unless they have both a Playstation 3 and a PSP.

Sony calls this a “multi-platform” solution, but the only platforms being supported are Sony’s. To me, that seems like a backwards step for the company, which in May was professing its newfound love for open systems. Here’s what Sony chief executive Howard Stringer told Nikkei Electronics Asia in an interview:

“There was a time when it made sense to divide the market with closed technology, and monopolize a divided market, but that’s just not an effective strategy any more. In the Internet universe, there are millions of stars – millions of options that have been created through open technology.”

Indeed, Sony is turning a new leaf in some ways, such as its support for the open ePub format in its e-readers. But the Blu-ray promotion sends a mixed message: We want our hardware to support lots of media, but our media will only work with our hardware.

For perspective, see how Disney’s digital copies are available as a download in either Windows Media or iTunes format, whatever the customer chooses. I’m not sure that Sony could offer those proprietary formats through its competing Playstation Network, but by removing PC-ready digital copies, the company is headed down the wrong path.

Toshiba’s Qosmio is one of those laptops that’s pretty much an all-in-one desktop PC in disguise: With its 18.4-inch screen and beefy specs, it’s more transportable than portable–and with its emphasis on entertainment, it’s like a Windows Media Center you can fold up and move from room to room.

The company announced the newest Qosmio model today, the X500 series, and the most notable new feature is the overdue, inevitable inclusion of a Blu-Ray drive or burner–Toshiba’s first. (The one-time proponent of HD-DVD formally announced it was getting into the Blu-Ray game last month.) The X500 also has Intel’s new mobile version of its Core i7 processor, 6GB of DDR3 RAM, Nvidia GeForce GTS 250 graphics with a gigabyte of DDR5 memory, HDMI, Harmon/Kardon sound, and room for two hard drives (one of which can be a solid-state disk).

How much will all this run you? Toshiba says it’ll announce pricing on October 13th, and that the system will be available on October 22nd–which, uncoincidentally, is Windows 7 launch day.

Sometimes it takes tech companies an amazingly long time to confront the inevitable. The whole war betwen Blu-Ray and HD-DVD was a rotten idea from the start (both formats were announced in 2002). But all parties involved in both camps insisted on wasting billions developing two competing HD formats. Then it took ages before HD-DVD prime mover Toshiba accepted that it had lost the conflict and discontinued the format. That was in February of last year.

And then it took another eighteen months for Toshiba to announce the inevitable conclusion to the whole saga: It’s joining the Blu-Ray Association and will be selling Blu-Ray players and laptops with Blu-Ray drives. I feel for the the company, I don’t think its stance that HD-DVD was the superior format was utterly irrational, and if and when the day comes that I buy a Blu-Ray player, it’s as likely to come from Toshiba as any other company.

But a panel of relatively well-informed consumers could have figured out the likely outcome years before Toshiba ditched HD-DVD and embraced Blu-Ray. Wouldn’t it have made sense for everyone involved to get here more quickly?

(Note: The Toshiba Blu-Ray Disc logo shown above is my quick mockup–I wonder if Toshiba still winces when it sees its name and “Blu-Ray” in close proximity, or if it’s over it?)

Polling from research firm Harris released on Thursday paints a not so rosy picture for Blu-ray, the winning high definition optical disc format. In fact, more than a year after it “won” over HD DVD, it still trails its now-defunct competitor by several percentage points. That has to have some at Sony a little concerned.

Harris says 7 percent of Americans own a Blu-ray player, up from 4 percent a year ago. Compare this to HD DVD’s performance, which is actually up 5 percent from 2008 to 11 percent. How could a format that doesn’t even exist anymore do better than one that does? Simple answer — price.

Since HD DVDs fall, prices on Blu-ray players have changed little. Similarly, media remains expensive. I chuckle when passing by the Blu-ray section: most films are still retailing for $25-30 in many cases, which seems high given the current state of the economy.

Players are also expensive — generally remaining above $200. There are a few now below that, but most are not. Like many have said, high-def disc just isn’t enough of a change for most to justify the premium.

There’s worse news down the pike. Only 7 percent of respondents say they plan to buy a Blu-ray player in the next year, which is actually down two points from 2008.

I don’t see how Blu-ray ends up winning this battle. With streaming media continuing to become more popular, and the technology behind it improving, the format’s window of opportunity is closing.

Streaming, on-demand media is the future of entertainment. Physical media is not. I wonder how many inside Sony are regretting now not trying to work with HD DVD and avoiding the format war.

Sony may have won against HD DVD, but it seems to be losing with the consumer.

Apple tablet rumors: gettin’ boring!

Analyst thinks Apple tablet coming.

Google, beta: no longer synonymous?

Jetpack: Mozilla’s new add-on framework.

Are your deleted photos deleted?

Is Kumo search already behind?

Twitter: more popular. MySpace, not.

Conficker hasn’t gone away yet.

Got 400 movies on Blu-Ray?

Cablevision to launch remote DVR.

Saw Star Trek, expected Tribbles…

An EeePC that’s a tablet.

Nokia preps giant app store.

How to research: copy Wikipedia!

Blu-Ray sales up 72 percent.

I’ve pointed cameras at TVs.

Big Sony e-reader in works?

Stardates for your Google Calendar.

SugarSync adds a free version.

Hulu tiptoes towards international expansion.

Hey, my HDTV’s a Vizio.

Hey, BlackBerry fans, good news:

Spy shots: Skyfire’s BlackBerry browser.

YouTube gets a chat feature.

New Ubuntu available for download.

Microsoft: still under antitrust watch.

$9000 Leica camera: pretty, white.

MSI readying Android-based netbooks?

OQO’s future doesn’t look bright.

Trade your HD-DVDs for Blu-Ray.

Lost laptops cost $50,000. Supposedly.

Asus releases a 17.3″ notebook.

Amazon deletes bribe-revealing reviews.

Here’s what’s up this morning:

How the CIA uses spyware.

iSuppli tears down the Kindle.

Embedded broadband for new Macs?

Crooks want old Nokia phone.

Firefox fixes twelve security holes.

New OLPC uses Via CPU.

Pleo maker files for bankruptcy.

A Blu-Ray player for cars.

Oprah fans pour onto Twitter.

Second Life’ red-light districts.

I just got finished reading two pieces on Blu-ray: one from David Carnoy from last week on why the format will succeed; and the other from Jeremy Toeman, who countered David’s argument that it actually may be closer to failure.

Blu-ray is in a lot of trouble at this moment. It’s kind of a one-two punch: with the sinking economy, people have less money to spend on expensive gadgets. Blu-ray is still one of them, with most players still well above $200 if not $300.

Add to this the fact that streaming media is really beginning to take flight (yesterday’s Inauguaral hiccups notwithstanding), and it isn’t looking good for Sony’s format.

Yeah, Sony may have finally won a format battle, but the protracted fight may have just taken too much time and ended up wounding Blu-ray just enough that it will never be able to replace DVD.

Like Jeremy says, there just is not a whole lot of value proposition to Blu-ray. People with HDTV’s are indeed finding their upscaling DVD player looks wonderful for a third of the price of the Blu-ray player.

The only way Blu-ray is going to stay afloat here is the PS3. And you all know my opinion on that subject.

Maybe I’m just not very observant, but I never notice old media formats going away until they’re…gone. One moment, the record stores down at my local malls still stocked vinyl. And then they didn’t. Audio cassettes? Same thing. And now the Los Angeles Times is reporting that Distribution Video Audio, the last major distributor of VHS tapes, is calling it quits on videotape. Everybody seems to be taking this is the closest thing we’ll get to an official death warrant for VHS, which seems perfectly reasonable.

I never noticed Blockbuster or Hollywood Video shrinking their tape sections into nothingness to make room for DVD. But even in my home, VHS ain’t what it used to be. I moved in July; so far, I haven’t bothered to set up my VCR at my new house, though it’s in working condition and ready for duty should I need it. Which I probably will, since I have several hundred VHS tapes–including some good stuff that has never been released on DVD. (I keep telling myself I need to dub them all to DVD before they rot away, and I will…but almost everything is still in surprisingly good shape, or was the last time I checked.)

It doesn’t seem like it’s been all that long since I bought my VCR and had to choose between VHS and Beta, and congratulated myself on my wisdom in investing in VHS instead of the increasingly dicey Beta format. But that was…1985, I think.

The end of VHS is a little different than past media-format deaths in that it’s pretty obvious that media is on its way out. DVD is wonderful in many ways, but Hollywood is already trying to get us to buy everything we already bought on VHS and DVD all over again in Blu-Ray. (I’ve resisted the siren call so far.) And given how fast things are moving with delivery of video programming over the Internet, Blu-Ray itself feels like a stopgap. Ten years from now, a Blu-Ray disc will look almost as archaic as a vinyl LP does now–and I’m not so sure that it won’t be more like four or five years. Maybe even less.

In many ways I’ll miss the comforting notion that content I’ve bought resides on platters or cassettes that I have control over…although copy protection has already removed much of that benefit. But I won’t miss it too much. Especially since I have the sneaking suspicion that I’ll have some tapes and discs around the house for as long as it’s possible to find devices that will play them.

As I have pointed out in the past, streaming is probably the single biggest threat to Blu-ray overall. Well, it looks as if Samsung — the company thats already given the format just five years to live — is acknowledging that and trying to stay one step ahead of the curve by adding streaming capabilities to two of its players. This appears to be part of a bigger strategy by Netflix to get its software on more Blu-ray devices.

CEO Reed Hastings does acknowledge that the format’s install base is still extremely small, but expressed confidence in its earnings call earlier in the week that adoption would pick up. Either way, it is definitely a good move for either company.

Netflix gains another partner for its streaming service, which already includes Microsoft and the Xbox 360, LG, and Roku, which markets the Netflix set-top box. Blu-ray gains a partner which adds functionality to its players, making them more attractive to consumers.

Obviously, this does nothing to address the price issue of players, which is the single biggest obstacle for most. However, at the same time, it certainly adds more value to the player. This could help justify the high up-front cost for some.

After Blu-ray finally finished off HD DVD shortly after CES 2008, analysts rightfully asked whether the format could survive the wounds the format war had inflicted on it. While these concerns certainly were warranted, for awhile it had appeared Blu-ray could weather the storm.

That now may not be the case — and this time, it may be no fault of Sony. With the overall economy beginning to sour and technology going with it, Blu-ray’s moment in the sun may be over sooner than we think.

Simply put, all indications are that consumers will close their pocketbooks for the forseeable future. No one has confidence in this economy: consumer indicators are falling, which likely equals to more budget conscious shoppers who will not be as eager to drop large amounts of money for higher ticket items.

Bad news, Blu-ray fans.

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