One size fits all, says Warner Bros. – New THD disc is both HD-DVD and Blu-ray Disc

January 8th, 2007 at 11:45 am (AST) by Jake Richter

(This article first appeared in the January 8, 2007 issue of Jon Peddie’s TechWatch)

At CES this week, Warner Home Video unveiled its new Total Hi Def (THD) disk format, a medium that features HD-DVD content on one side, and Blu-ray disk content on the other, in a play to help increase consumer confidence in high-definition content and, thus, sales of high-definition movies.

Barry Meyer, chairman and CEO of Warner Bros. Entertainment, explained that “the market has experienced confusion and hesitation” due to the competing standards of HD-DVD and Blu-ray disk and that “this is a problem desperately in need of a solution.” He went on to say that he hoped industry colleagues and consumers alike would embrace THD technology.

One for all and all for one - Warner Bros. THD is both an HD-DVD and a Blu-ray Disc
One for all and all for one – Warner Bros. THD is both an HD-DVD and a Blu-ray Disc

Kevin Tsujihara, president of Warner Bros. Home Entertainment, and Ron Sanders, president of Warner Home Video, presented a number of statistics about the high-definition disk market, including a statement that a total of 775,000 high definition playback devices, including game consoles, shipped in 2006 – this includes HD-DVD and Blu-ray. However, these numbers are at odds with Sony’s statement this week that they shipped one million PS3s in 2006, never mind the CEA report of 250,000 stand-alone high-definition players sold in 2006, plus some number of HD-DVD add-on drives for Xbox 360s. It would appear the total number of players sold through the end of 2006 may well actually be between 750,000 and 1.5 million – a rather broad spread, and as every-one is putting a spin on things, it’s not clear if an accurate first-year number will really every be obtainable.

The photo above shows Kevin Tsujihara, Steve Nickerson, and Ron Sanders with mock-ups of Superman Returns on THD media (note the combination blue and red box). Steve holds the demonstration THD disk, which he used to play a clip from the movie on both an HD-DVD player and on a Blu-ray player.

Tsujihara and Sanders further predicted that another 8.7 million players would be sold in 2007, including game consoles, with 2.5 million of those units being HD-DVD and 6.2 millions being Blu-ray (the balance of these presumably being Sony PS3s).

Interestingly, Tsujihara and Sanders also stated their research predicts that there will be $600 million in HD-DVD “software” (a euphemism for titles) sold in 2007, and $400 million of Blu-ray titles, making the high-definition content market a billion-dollar market in 2007. Not a number to sneeze at, but it is noteworthy that they expect more HD-DVD titles to sell than Blu-ray, implying that the PS3 has less of an impact on Blu-ray title sales than Sony might hope.

In customer surveys Warner conducted, they found that among users who had high-definition players, there was 98% user satisfaction with their hardware and high-definition content, with 85% of those surveyed feeling that high-definition content was a great value, and 90% very satisfied with the picture quality. Those are encouraging numbers, and it’s not surprising that this provided Warner with an incentive to get more people to move to high-definition media.

Warner believes that their new THD format can overcome the concerns consumers have about obsolescence, and they have surveys to back this position up as well. Forty-nine percent of the people they surveyed said they would be more likely to buy high-definition players of some sort if content on THD disks became readily available, and 62% felt that that the THD disk format would remove confusion about high-definition choices. Interestingly, 46% of the people Warner surveyed also indicated that THD would allow them to potentially choose different players for their household, for example, an HD-DVD player for the living room and a Blu-ray player for the bedroom.

Under the mottos of “All of the content, none of the risk” and “One world, one disc,” Warner’s Nickerson demonstrated a prototype of the THD disk in both an HD-DVD player and a Blu-ray player, followed by playing the disk in LG’s new BH100 Super Multi Blue Player (see related article below). The clips he played from Superman Returns performed flawlessly. It was probably no coincidence that Superman Returns was chosen, as it is the industry’s top-selling high-definition title in both Blu-ray and HD-DVD formats, and because Superman is wearing both blue and red (the respective packing colors for each of the formats), making Superman an icon of sorts for the unification of Blu-ray and HD-DVD in a single embodiment.

The actual THD media consists of two .6mm disks bonded together – one side is a Blu-ray disk, and the other an HD-DVD disk, and therefore it has the same capacity on each side as a solo disk of the format involved, meaning that the Blu-ray side can hold up to 50 GBytes using dual-layer recording, and the HD-DVD side can hold 30 GBytes. The actual cost of the new hybrid media was not disclosed, but Sanders indicated that the final packaged movie pricing would not be materially more than existing high-definition titles. In terms of production, as long as a production house already has both HD-DVD and Blu-ray manufacturing equipment, they will be able to produce THD media.

Movies on THD disks will start shipping during the second half of 2007, and once THD is in full swing, Warner will ship its titles on THD exclusively – and therefore no longer producing two SKUs for every title.

I asked Sanders and Nickerson about licensing fees Warner might charge to let other studios use the THD format, and they indicated that THD was covered by existing licenses for the individual formats, and that in any event, they wanted to see broad adoption of THD as it could only help retailers and consumers, in turn helping the movie industry. Warner produced statements from Best Buy and Trans World Entertainment to support their position on the potential benefit of THD to the industry at large.

In response to a final question from the audience about the future of the individual formats, Sanders said he expected HD-DVD and Blu-ray to coexist into the future, much as the Xbox 360 and PS3 will continue to co-exist. Not a great analogy, but certainly his company’s efforts with THD will ensure that both formats will continue to be well supported for a long time to come.


LG’s New BH100 Super Multi Blue Player for HD-DVD and Blu-ray

January 8th, 2007 at 11:29 am (AST) by Jake Richter

(This article first appeared in the January 8, 2007 issue of Jon Peddie’s TechWatch)

This morning, here in Las Vegas at the start of the Consumer Electronics Show, LG Electronics announced that they will be shipping the first multi-format DVD player during the first week of February 2007 via retail channels including Best Buy and Circuit City.

LG's BH100 multi-format HD-DVD and Blu-ray Disc player
LG’s BH100 multi-format HD-DVD and Blu-ray Disc player

The new LG BD100 player, which goes by the decidedly cryptic name of “Super Multi Blue Player,” will retail for $1,199 and offer playback for HD-DVD, Blu-ray, and standard DVD media using a single tray. Full 1080p output, HDMI-out, and support for a variety of codecs (VL-1/H.264, DDH, DTS HD, and True HD) are also included.

The new player uses a sophisticated beam mirror system to direct the different color laser beams required by the various formats.

LG’s Chief Technology Officer, Dr. H. G. Lee, said that it has been widely perceived that there has been much slower adoption of high-definition DVD players, and that LG believes unification between the competing HD-DVD and Blu-ray standards is possible. LG believes their new BH100 player is a first step toward that unification, and should help consumers overcome the hesitation in committing to high-definition DVD playback, because now they don’t have to choose (although they will need to pay a small premium, of course).

LG's multi-format HD-DVD and Blu-ray Disc player technology
LG’s multi-format HD-DVD and Blu-ray Disc player technology

LG also announced the GGW-H10N Super Multi Blue Drive, an external drive for use with PCs which features support for reading and writing Blu-ray media, DVD, and CD, and can also play HD-DVD. This unit will be available for $1,199 as well, sometime later in Q1 2007.

While the price of the BH100 is not insignificant, it is still cheaper than buying two separate stand-alone players (and about the same price as buying both a PS3, which features Blu-ray, and an Xbox 360 with HD-DVD drive separately), and no doubt the price will come down as volumes increase and as other vendors release multi-format players.

I only wish LG had chosen a better and more descriptive name, like “Universal High Definition Disc Player.”

There were already a number of hints last week that LG would be announcing a multi-format player at CES. Companies and people who had opted to support one of the two HD formats exclusively had guarded comments, but in some cases expressed concern that LG’s product would further delay the eventual success of their chosen standard, and the demise of the competing standard. The same concerns rang even louder when Warner Bros. last week also announced a dual-media disk – the Total High-Definition Disc (or THD), which will play in both HD-DVD and Blu-ray players.


Bill Gates’ Digital Lifestyle Vision – Putting the Pieces Together

January 8th, 2007 at 11:07 am (AST) by Jake Richter

(This article first appeared in the January 8, 2007 issue of Jon Peddie’s TechWatch)

The folks lined up in the halls waiting to see the man. Not so much for what he’d say, most of the people pretty much knew, but just to be near royalty.

Once inside there was an air of excitement – this was an event, we/they were sure of it, and even if it wasn’t, we were going to make it one.

Bill Gates is about to speak: in the hall waiting for the doors to open before Gates' keynote'
Bill Gates is about to speak: in the hall waiting for the doors to open before Gates’ keynote

For the tenth year in a row, Bill Gates gave the keynote at CES. Gates kicked off his talk by answering the question, How long are you going to keep on doing this? He loves it, he says, and will be back if they invite him, but after next year he’s not sure they’ll want to invite him, because he said he might talk a lot more about infectious diseases than great software. “So if they want me, fine, but they’ve been warned what they would hear about.”

Bill Gates - 'I will be back...'
I’ll be back says Bill Gates

Gates said it’s amazing to see the progress over the course of the year, and the Digital Decade is truly happening. He said we see it everywhere we look. We see it in photography: over 2 billion digital photos were taken this last year;

65% of homes are using digital cameras. We see it in the Internet adoption, higher and higher penetration on a worldwide basis, and more and more activity there; whether it’s buying and selling, or whether it’s planning, or being creative, the Internet connected up to the Windows PC and other devices is taking over things that would have been done without it before. Over 40% of U.S. homes now have multiple personal computers.

And if you look at young people, the new generation, they actually spend more time on their Windows PC than they spend watching TV. Now that’s a pretty dramatic change.

It’s (mostly) about Vista

Gates used that backdrop as a lead-in to Vista. For Microsoft, Gates said, “this year it’s a big, big milestone, because the products we’ve been working on for many years that are foundational products are now moving into the marketplace. First, of course,” he said, “that’s Windows Vista. It’s been many years of hard work with millions of people giving us great feedback on that. This is by far the most important release of Windows ever. It’s also the highest quality release that we’ve ever done, whether it’s security, or testing, or usability, all of these things we have learned a lot, driven by the feedback that those hundreds of millions of users are able to provide to us.”

Gates’s speech comes three weeks before Microsoft is due to release Vista to the general public. The much-delayed product is Microsoft’s bid to retain PC market share against incursions from competition by Google, Yahoo, and Apple, as well as that annoying Linux crowd – it’s not easy being king.

Search me

Vista will fight back against the web crowd with a new search engine that can scan both a PC’s hard drive and the Web, and the company for the first time showed the ability for a search query typed into Vista’s Start menu to crawl through the contents of any PC on a home network as well.

“This is by far the most important release of Windows,” said Gates. “Vista and the PC continue to be very, very important.”

Bill Gates - Vista will reach to the heavens and find your data'
Vista will reach to the heavens and find your data

Media, media everywhere

One of the key components of Vista that Gates and his fellow Microsoft colleagues

kept returning to time and time again during his keynote was the media-centricity of Vista. Media Center plays a core role in how PCs become the center of the connected experience, and new features in Vista will include the Sports Lounge, where the latest game scores, clips, channel lineups, and even fantasy teams can be managed by the family sports fanatic.

In addition, Microsoft announced at the keynote that they have signed three new content partners for Media Center and downloadable/viewable content: Showtime, Nickelodeon, and Vongo. And more media partners are apparently on the way.

And, to ensure Vista doesn’t become obsolete, there’s Vista Ultimate, an upgrade from Vista Premium, which will provide users with so-called Ultimate Extras. Such Extras will be downloaded automatically to users’ systems as Microsoft develops new features. Two examples given of such Ultimate Extras were Group Shot – a very cool tool to combine parts of two similar photos (e.g., a family picture in which one person has his eyes closed in one shot, and different person has hers closed in the other – Group Shot would let you select the good parts of both images and combine them so all subjects had their eyes open) – and DreamScene, a new full-motion desktop that allows one to have full-motion video as the desktop background instead of the static pictures we are all used to today.

64-bits to the Office

Vista will usher in the era of 64-bit computing on the desktop, along with Microsoft’s new Office 2007 productivity suite. This will be the first time a new version of Office has arrived with an upgrade to the OS, and Microsoft says both products greatly expand the software’s ability to take advantage of computer memory (which of course continues to get cheaper). The new Office suite also includes a new graphical UI that pretty much gets rid of drop-down menus; Gates said Microsoft’s user studies have shown that the new design works, but acknowledged the danger of confusing customers. Said Gates, “The new user interface was actually a risk, a leap that needed to be taken at some point.”

Justin Hutchinson, group product manager at Microsoft, further demonstrated the Internet integration into the new Office suite by selecting a term in a document, having that term fed to Live Search, the search component of Microsoft’s Live site, and then pulling up the search results.

The term Hutchinson pulled up was the name of a cafe located at the Bellagio Hotel, and Live Search immediately offered a map, which Hutchinson was able to navigate in 3D in real time using, of all things, an Xbox 360 controller, which he said was natively supported by Vista.

Microsoft's Justin Hutchinson checks out the Bellagio on the PC using an Xbox 360 controller by way of Live Search
Microsoft’s Justin Hutchinson checks out the Bellagio on the PC using an Xbox 360 controller by way of Live Search

Servers at home

Another major new announcement Gates made was that Microsoft was releasing a new server operating system with a very specific target – the home. Intended for homes with multiple networked Vista PCs, Microsoft Windows Home Server is designed to help users of those multiple PCs “easily connect their digital experiences, providing a reliable and familiar way to store, access, share and automatically enhance protection of treasured digital images, music, video and personal documents,” according to Gates.

Among the numerous features of Windows Home Server are an automated cross-network backup service, remote access, and media serving capabilities usable by both PCs and Xbox 360s alike. Because storage capacities and thus backup requirements are growing at a rapid pace, Windows Home Server allows for new drives to be added dynamically and the Home Server operating system will automatically integrate them; Microsoft engineers have tested Windows Home Server with 14 Terabytes of storage, and it reportedly worked flawlessly. Things like network volumes and drive letters will also not be present in order to provide a simpler to use experience for users. The new operating system will be available in the second half of 2007.

Hewlett-Packard announced that it would implement Windows Home Server in a new computer they are calling the HP MediaSmart Server, which the company was also demonstrating on the show floor, integrated with Vista-based Media Entertainment PCs and wireless MediaSmart display panels.

Hewlett-Packard's MediaSmart Server Based on Windows Home Server
Hewlett-Packard’s MediaSmart Server Based on Windows Home Server

It’s also all about the Xbox 360…

Gates brought out superstar Robbie Bach, king of Xbox 360 and Microsoft’s entertainment efforts, for a chat, and during it Bach, president of Microsoft’s Entertainment Devices division, revealed the company’s plans to start using the Xbox 360 console as a set-top box. Bach said they are working with five telecom companies, including AT&T and British Telecom, to deliver television over Internet lines (known as IPTV) through the Xbox 360.

Bach also announced that through the end of 2006, Microsoft had sold 10.4 million Xbox 360 consoles in 37 countries since launch, and that by the end of last year there were 160 high-definition game titles available for the Xbox 360, with over 300 such titles expected by the end of 2007. And while touting numbers, he indicated that approximately half of all Xbox 360 users – 5 million – were paid members of Xbox Live, which he dubbed “the largest social network on TV”. So far, over 3 billion hours of time have been logged on Xbox Live by members.

Microsoft's Robbie Bach raves about the Xbox 360
Microsoft’s Robbie Bach raves about the Xbox 360

As was already disclosed at E3 last year, Microsoft wants to expand Xbox Live and bring it to the PC and the 200 million Windows gamers out in the world. The so-called “Live on Windows” will roll out this summer.

And also about HD…

Bach went on to point out that movies and TV were also a key part of the whole connected experience, and that high definition was the way of the future. He explained that there were now four ways to get HD video in the Microsoft ecosystem.

First is the HD-DVD drive for the Xbox 360 – Bach would not provide any numbers for sales of the drive, but said Microsoft had “been making as many of these as we possibly can, and they continue to sell out. Demand for this product is incredibly high.” He further indicated that HD-DVD was the top-selling format for 2006.

The second way to get HD is via Windows Media Center. He said 80% of all PCs sold during Christmas were Media Center-enabled, and that there are now 30 million systems running Media Center worldwide. Xbox 360 consoles offer a feature called Media Center Extender, and Bach said that was a way for HD content on a PC to be viewed on the Xbox 360 – by distributing the content over a local area network.

And Xbox Live’s Video Marketplace is the third way to get HD content. Over a thousand hours of video content, including high-definition content, are presently available on Xbox Live and more are being added, including content from Lion’s Gate, which Bach announced had just agreed to release their content via Video Marketplace.

The final HD delivery mechanism is the aforementioned use of the Xbox 360 as an IPTV set-top box. While this has been something of an obvious move, Microsoft does not always do the obvious thing, but in this case the announcement was warmly greeted by the audience. Even more interesting was the ability to use native Xbox 360 features, such as headset voice chat, during TV viewing so that watching television over IPTV on an Xbox 360 becomes a social experience.

Gates returned to say that Microsoft’s ‘ambition is to give you connected experiences 24 hours a day. We admit that when you’re sleeping we haven’t quite figured out what we’re going to do for you there, but the rest of the time, the minute you get in the kitchen and look at that refrigerator, pick up your phone, hear the alarm clock tell you about the traffic; whatever it is, we want you to have the information that you’re interested in.” Talk about information dominance.

With that Gates brought out Mark Fields, president of the Americas for Ford Motor Company. Fields disclosed news from the annual Auto Show going on in Detroit that Ford was going to use Microsoft Auto software in a system called “Synch”.

Mark Fields of Ford Motor Company raves about Synching with Zune
Mark Fields of Ford Motor Company raves about Synching with Zune

Synch integrates all of the electronic devices – like cell phones, Zunes, and iPods – right into the vehicle, seamlessly, providing voice-command access to phones, automatic address book synchronization, text to speech for text messages, and a variety of other futuristic capabilities. And Synch will not be limited to luxury cars, but will be an affordable option for non-luxury vehicles as well.

Home of the Future

Gates closed his keynote with a demonstration of the Microsoft Home of the Future, in which he showed an intelligent kitchen where a computer helps you prepare food with instructions and guidance, and an intelligent bedroom with display-based walls that could be changed to suit various moods and applications, explaining that connected experiences could go far beyond what exists today. He ended by stressing that users need to provide feedback, however, to help guide Microsoft’s research and efforts in developing tools and experiences for the future.

Gates’s keynote was certainly not earth shattering. In fact it was predictable, in the sense that Microsoft’s vision to be part of every facet of information gathering and viewing was furthered by the new technologies and efforts Gates and his colleagues disclosed. Just about all of these new efforts have a real place in the world, fulfilling various needs and desires (some of those being Microsoft’s and others being those of users). For example, the staff here at JPR doesn’t know of anyone who could not benefit from automated backups of their systems, as the Home Server promises to do. And making driving safer by making today’s technology work in a hands-free, yet highly interactive manner can only be a good thing, right? Likewise, getting people to interact socially at a time when more and more of us are becoming solitary and sedentary couch potatoes is also beneficial.

The so-called connected experience has the potential to usher in a whole new era, but at the same time, there is the danger of becoming too dependent on technology and connecting to people and information remotely.

That’s something Microsoft and Bill Gates don’t talk about, however.


Forecasts for 2007

December 11th, 2006 at 11:25 pm (AST) by Jake Richter

(This commentary first appeared in the December 11, 2006 issue of Jon Peddie’s TechWatch as part of a collection of commentaries by Jon Peddie Research analysts, including myself)

The Intro (by Jon Peddie): “The coming years are going to be even more surprising… Believing as we do that technology is growing at an exponential rate (and not just at Moore’s law rate), some of our colleagues have ventured a guess as to what’s coming in the next few years.”

Jake Richter’s Forecast

HDMI switches – Sales of HMDI switches will grow from virtually none to many thousands as consumers discover they have more devices with HDMI output than their TVs will support.

No cross-platform yet – Portable, cross-platform, online gaming will still not take off, even with Xbox Live being launched across multiple platforms. Device capabilities will still be too divergent to support proper playability.

Video downloads – Downloaded video to consumer electronics devices will continue to grow at a very rapid rate as mobile and living room devices add video storage, playback capability.

More spam please – Spam emails and messages, already at over 90% of all email traffic, will get even worse, forcing people to take draconian efforts to get only the mail they want, without spam.

Wii wins – Nintendo’s Wii sales will surpass Xbox 360 and Sony PS3 sales by early 2008 as more women discover that it is family- and woman-friendly, relatively inexpensive, and provides a good workout.