DVD Insider #43 - Next Gen - The Public Be Damned!

There have been a number of research reports recently that have come to the conclusion
that we aren't interested in upgrading to the next generation of DVD technology
- burners/media. But then all too often we don't know what we want.

We didn't know we wanted:
stereo instead of mono
CDs instead of LPs or cassettes
Stereo TV or HDTV
DVD instead of VHS
Digital or MP3 Audio
Digital instead of Analog photos, film
We did want:
pictures on radio
color TV to replace B&W
We got:
CD and DVD-Video
Personalized, Customized Audio, Video
CD and DVD Photos
DVD quality TV, time-shifting, archiving, playback

But deep in the back of our mind, we know we don't want someone tell us that
the product we just bought is going to be replaced by something yet to be defined,
that is marginally better than the product we have today and at a significantly
higher cost.

The fact is that the total HD TV set universe is still below 15 million. Only
a small percentage o these sets actually receive over-the-air HD broadcasts.
According to CEA president Gary Shapiro that in 2004 only 1.5 million integrated
TVs and 475,000 set-top DTT receivers were sold to dealers. These include all
forms of HD (cable, satellite and DTT). And unless you're really into sports
and watch ESPN regularly the chances that the stuff you watch on your HDTV is
really HD is pretty slim.

More importantly, what if you have a decent size library of DVD movies that you've
bought or are one of those folks who use the NetFlix "Burn and Return" program?
Even if you go to a blue recorder/reader and HDTV set you are still going to
be watching DVD (MPEG-2) quality. And will Hollywood upgrade their vast DVD
library to High Def or continue to encourage you to buy from the current catalog?

The differences between High Def and DVD aren't as dramatic as they were between
DVD and VHS. So the big question will be how much will people be willing to
pay for that slight improvement or will there be an option.

Perhaps it might be better to have a low-cost burner and/or recorder that wrote
your high def content to your present sub-$1 disc? Say perhaps writing in MPEG-4/H.264?
You know one that could also write your regular MPEG-2 content to the disc you've
just begun using regularly?

We expect to see a few of these hit the market this next year. In fact you may
see them at the January CES show.

Prices? Heck we don't know. But logic says they shouldn't be too much more
expensive than today's DVD burners because the only change is in the combination
codec and the unique selling proposition?

Great but you are probably worried that the discs won't play in anything but
your PC -like today's Mac G5? No guarantee but if we were the manufacturers
we'd offer stand-alone MPEG-2/-4/H.264 players for perhaps $50. Or perhaps a
starter bundle…you know burner and player for say $200 - $250. Both have got
to be less expensive than the blue technology units will be whenever they hit
the stores. In fact they probably won't reach that price point until 2007.
Of course the blue media will have to come down a long ways and that will take
even longer.

This type of combination MPEG-2 and H.264 would make all of the news releases
on "mine is better than yours" a moot point. In the blink of an eye consumers
could take back control of their choice as to what they want to buy. After all,
you've already lived through the DVD+/- war of words and the upgrade path should
be relatively economic, relatively painless.

Of course this doesn't take into consideration the DRM issues that Hollywood
has and which are valid if that's your business. You can be certain they will
turn their attention to the issue once people start buying the high def burners
in quantity. As the Wizard said, "Do not arouse the wrath of the great and powerful
Oz."

But this might -- just might -- be a simple solution that the next generation
royalty owners overlooked.

Imagine if Apple once again showed the way and QuickTime became the player of
choice…Jobs just might be onto something !!!!

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