Discussion: HD downloads are not a threat to Blu-ray

[Carmien]

Do not believe the hype about HD downloads rendering the HD format war obselete. The sad reality is that the PR machines of those behind HD downloads are in full flow, taking advantage of a lack of champion. Critical realities are being ignored amidst ignorance and agenda, compounded by the illusion for many that what you read must be true.

Reality #1: The Quality

Picture quality simply will NOT be 1080p (comparable to Blu-Ray). The reality, hope for 720p (If XBOX Live is anything to go by) and very aggressive compression of downloaded files. If you think those weird little coloured boxes in your cable movie look dodgy, just wait til you download these HD Movies! That said, if you currently compare upscaled DVDs on HDTV with Blu-Ray then it's conceded that this reality won't apply to you - you're one of those customers ignorant of the quality differences that the HD downloading business is hoping will be the majority! In otherwords, they're banking on you paying more for less.

And if you think streaming (getting little pieces of the HD movie as you watch it) are going to fly just wait until the consumer realizes that their craving for instant gratification is not met through HD downloads. There will be a whole new meaning to the 6pm gridlock in your neighbourhood as everyone and their dog accesses the same 32 seats on that node.

And then there is the quality of audio. If you're lucky you'll see Dolby Digital 5.1 for the entry level surround sound experience. In 2-3 years time that'll be grossly super ceded by the audio quality that many home theatres will offer. However, audio quality is moot next to the obvious impact of inferior picture quality, and fewer people will care.

In short, HD Downloads will have serious quality issues. The reality - you'll likely experience something akin to a upscaled DVD to 1080p. It may impress those who've only experienced SDTV until that point but when HD Downloads are of lower quality than HD cable films even the most ignorant of consumers might start questioning what's going on. But just wait until the next 2 realities sink in and combine with #1...

Reality #2: The Pipe (or speed of your Internet)

Trying to compare HD movie downloads to Apple's iTune's business model is like comparing an apple to an orange. Yes, they're both tasty fruit crying out to be picked but the differences start there. HD movie films (even with the dubious quality for Reality number 1 above) will still be huge files when compared to the music file size currently being downloaded. Combine that with those people living close to you accessing your part of the Internet. Do you honestly believe things won't start to crawl?

Did you hear the recent news of a major US telco considering a pay-for-use Internet model? Flat fees will be a thing of the past. Business is realizing that film downloads have already begun. Just as Napster evolved into iTunes, so will the current bittorrent and other download vectors morph into the winning HD Download channel. But this time the rules are changing. The size of files will result in big network usage. And in turn those carrying the data to your box will charge you for it. The net result - you could end up paying for the movie AND the cost of downloading it.

But it gets worse. Even with 4G (wireless - WiMax or whatever format wins) and fibre-to-the-home (wireline) technology you'll see a potential of 3+ years before the carriers can roll out the network and a few more years before adoption hits. Until then, fibre to the home is only an option for major metropolis centres. And even then, the higher bandwidth users will still be paying a premium, since the fibre from the local node to the data centre, and consumption of backbone will still take network resources. In short, if you want to take up pipe you'll pay for it. And that's assuming you're in an area that a telco has chosen to lay Fibre to the Home down for.

If not, you're in an area with older cable technology (at cat5 or coax) from the node to the house. And from a phone line perspective, the Telco still needs to make a significant investment to go from ADSL 2+ upward. I suspect Telcos running an ADSL type roadmap will be contemplating fibre to the home as the next big jump. That'll cap at 100-600Mbps but will be something that evolves on a region by region basis, assuming you're in a market that shows promise. Oh, cross your fingers and hope you're in one of the early areas. This type of investment happens carefully, and some of you will be waiting years for access to it.

Does that sound like an ingredient for mass-demand to you? It doesn't to me, and I work in the Telco (TeleCommunications) industry.

Reality #3: The Collection

Data storage for a half-decent collection will be heinous in the short term. In the long term someone is going to have to innovate a media centre solution that's as simple as turning on your TV and has extremely fast restore capability for when the storage media fails. And don't think it won't - all HDD (Hard Disk Drive) media comes rated with Mean Time Between Failure. Some media centres will fail sooner, and those with their HD library will either be fumbling for backup media (a complication) or looking to download content again (which they're paying for - see reality #2), or worse, dealing with technical support in some our-sourcing country's technical support team to get the system working again (which most people likely won't have access to - unless they've paid even more for it).

There is no doubt that storage is getting cheaper, but it's not simple and stable enough to meet mass demand. Ironically, the safer choice would be to move from Hard Disk Drives to an optical storage medium (like Blu-Ray perhaps?). But that introduces multiple optical disks, which is just more complication. And personally, the less simple something gets the lower the demand will be. The masses really do like simplicity, cool and instant graitification when you think about it.

Unless the media centre is a truly stand-alone, elegant, easy to use system that picks itself up with minimal struggle you'll lose the masses. Even the PS3 (Sony's flagship foundation piece for the Home Entertainment system caps at 80GB. How many HD movies do you think that beast will hold today? Be prepared to be underwhelmed by the size of your library on this current/next-gen technology. Oh, adding on a larger Hard Drive is an additional complication that will NOT suit the preference for simplicity of the mass-demand market - unless you make it blindingly obvious and simple!

On the plus side, iTunes proved that the mass market will tolerate an intangible collection of music files on their player and computer.

Bringing the Realities Together

Consider the following recipe for disaster from the HD Download perspective that's being conveniently ignored:
- A product that's of clearly inferior quality in a post-digital switch world, where SDTV is a thing of the past
- Telco's still struggling to upgrade the most densely populated areas to Internet delivery of greater than 20Mbps to your door (that covers Internet, TV and phone)
- Rural and lower density areas PERHAPS seeing Internet delivery able to bring them an HD download in a reasonable time in less than 5-10 years
- The simple media centre still has NOT been designed because the entire delivery chain is so fragmented, and the underlying technology so complex that one standard will be impossible (and don't forget the competing HD download channels/standards)

I can't help look at those ingredients and see that the reality of HD downloads at a pace/demand that matches physical media is vapourware for at least 5 years. I also think the noise around HD downloads is a really white right now.

It's a new channel and the buzz-masters would love to drive news about it. Little of the press I've seen is considering the realities. But that's hardly surprising. The majority of consumers are not really aware of many of the realities, which I believe will result in the majority of consumers settling for HD downloads inferior in quality because they unfortunately don't know any better.

What I think is happening - potential HD download channels (such as Apple) would love to continue the distraction of a perceived format war. With Blu positioning for the win much sooner than expected the HD download camp has to move sooner than they would have liked. Funny how the timing of the upgrade to apple TV came a week after the Warner jump. MacWorld was slated but the cynic in me is not convinced that item HAD to be on the agenda before the shift in momentum for Blu. If I were a cynic - I'd say they've accelerated their roadmap and are trying to continue confusion in the market.

The thing is, this move is TOO aggressive. You won't get any realistic results for a minimum of 3-5 years. Studios may buy into it because they've got nothing to lose. They produce the file for the physical media and now have new channels such as AppleTV to acquire additional revenue (a new channel that can only get profit from that's unlikely to cannibalize their existing media channels). But this is not the same model as downloading a music track. The scales are hugely different.

I put this down to spin-masters trying to force a position. Ignore the hype. There's plenty of time for the HD format war to be decided before HD Downloads can really make a difference. Sure, it won't be as profound as DVD was. But then, I think that HD Downloads won't be as profound as itunes was either. The masses want instant gratification. I just can't see millions of people waiting hours to potentially pay more for an inferior quality product that is inferior to what they see in the shops to stick any time soon.

[181]

I don't believe the hype. The Music Download industry is still a small part of the entire Music industry...and it's been almost 10 years...

[haushausman]

Great post! I agree with everything 100%. Very well done!

Blu-ray knocked off HD-DVD no problem, but expect the PR forces behind HD downloads to be even more aggressive.

I think they missed the boat though. They needed to have digital downloads perfected years ago when DVD was THE only format. I can see DVD quality flix being transferred via the Internet without any quality being lost; but they are dreaming if they think they can compete with Blu-ray.

All these movies prepped for downloading will just make Blu-ray look that much better.

[dadkins]

Niche item for a few people - nothing more.

[Bobby Henderson]

I think it's currently crazy for companies like Apple to try to push movie rentals via Internet downloading. Right now the Internet infrastructure simply is not there to support it.

However, movie rentals via the Internet will eventually take over the entire movie rental marketplace. But it just isn't going to happen very soon.

We're still at least a couple of years or more before most people can stream and play 480p quality video in real time. It will be at least another 5 to 10 years before good quality encoded 1080p movies can be downloaded at speeds fast enough to allow real time streaming and playback.

Internet users will need connection speeds between 30Mb/s to 50Mb/s to stream 1080p HD content at good quality levels and do so in real time. Right now the best consumer level Internet connections are topping out around 3Mb/s to 6Mb/s. 10 years ago the vast majority of Americans were all on 56k dialup. It's pretty reasonable to say that in another 10 years the current top end connection speeds will be at least 10 times faster.

Once the average Internet connection is 30Mb/s or better, you'll kiss the neighborhood Blockbuster Video store location goodbye. Even with super fast Internet connections, quite a few people will still want physical retail copies of the movies they buy. I don't think disc based formats are going to go away entirely.

[Luis_A51]

excellent points, especially the Pay-per-use internet model thats on the horizon. Thats a "hidden" cost that will definitely blindside even the most staunch download proponents.

[Carmien]

Originally Posted by Bobby Henderson

<SNIP>

Internet users will need connection speeds between 30Mb/s to 50Mb/s to stream 1080p HD content at good quality levels and do so in real time. Right now the best consumer level Internet connections are topping out around 3Mb/s to 6Mb/s. 10 years ago the vast majority of Americans were all on 56k dialup. It's pretty reasonable to say that in another 10 years the current top end connection speeds will be at least 10 times faster.

Once the average Internet connection is 30Mb/s or better, you'll kiss the neighborhood Blockbuster Video store location goodbye. Even with super fast Internet connections, quite a few people will still want physical retail copies of the movies they buy. I don't think disc based formats are going to go away entirely.

I agree.

Initial pilot cities are getting fibre to the home now (new housing builds and some established highly populated areas). Other areas include towns with a really low competitive presence - the Telco wants to grab market share, there's nothing there by way of serious Internet infrastructure, they go in and grab it, creating a huge barrier in the process. They invest in fibre to each home knowing full well that any subsequent effort has already lost a huge advantage. And of course, this is all done on the back of some very serious market analysis.

After that you're looking at the potential of getting fibre to the home over the next 1-5 years. I think 30 Mbps is about right for decent HD content. And I think that the majority will wait anywhere from 3-5 years to get, and some never will.

Wireless technology actually offers a oft-missed opportunity in the form of 4G (the spec holds a ton of potential for rural communities) but the speeds will take a very long time mature, as will the wireless networks. That said expect a pay-per-byte download model following this investment. Telcos paid a ton of cash to upgrade to 3G. Admittedly 4G converges CDMA and GSM but it'll still be another investment to make the step up.

HOWEVER, the interesting challenge for the content providers (such as Apple) is that they don't own the delivery mechanism. Apple had to partner with a telco to get network support for the iPhone (only small file sizes not providing an impact for iTunes). When it comes to HD Downloads AppleTV is going to have the same issue (as will Microsoft TV, and XBOX does today). However, don't be fooled - the Telcos are recognizing the value in content delivery as well. They are already shifting to match this strategy to avoid becoming the commodity of only providing the pipe. There's a LOT of money in content and they know it.

It's a fair point that the growth in speed will continue at a fast pace. But it's also a reality that there's an uneven playing field with content providers and telcos actually stepping on each others toes (competing, aligning, and ultimately adding confusion to the customer). In addition to that you've got a HD download model that is totally reliant on both the pipe and the collection.

Strategically speaking I think the film studios come out best because they win either way. I think HD Downloads would LOVE a piece of the multi-billion dollar film industry. But most importantly, there are so many variables at play that this is not going to be a slam dunk - and it will most certainly take a minimum of 2 years to even see any kind of critical mass. And to be honest, my call is more in the region of 3-5 years.

Thus I am back to my original point - the format war will be well and truly done by then.

And yes, I'll be happy to have this quoted back to me whenever it happens. If someone actually solves this problem within the next year I'll be applying to work for them. Their strategic and tactical genius would be too irresistible for me!

[Carmien]

Originally Posted by Strannix136

If I buy it, then I wanna touch it, collect it, put it on a shelf. Downloads are far from being a threat.

I'm with you on that. My Collection of DVDs (and now my small but growing stack of Blu) actually inspired my post.

[gvortex7]

Originally Posted by dadkins

Niche item for a few people - nothing more.

I can't believe I'm hearing that from you. Last year you sounded like you were all for downloading movies. What happened since then?

[MACSTER]

I think HD downloads could work fairly well in a rental model, but no way will it take over physical media anytime soon. There are still areas around the midwest that can't get cable or dsl, which itself isn't a good infrastructure for downloading 1080p (if they would offer FullHD). It will be an extremely long time before we have an internet infrastructure capable of what it will take to make this a mainstream option. I have no doubt that Blu-Ray will have made SD DVD officially obsolete by then.

I don't have any interest in downloadable media. Other than I like having the physical media, I just don't trust computers to keep my information. If it CAN be overwritten/erased, it WILL be overwritten/erased. Just because you keep backups, doesn't mean it isn't a pain in the ass to restore. Too many unknowledgeable consumers won't backup, and lose everything they downloaded. So how long would it take to re-download my near-400 movies?

[TheEnd187]

i agree, althogh Verizon does offer good rates on its FiOS service, ts not that expensie

[Slackr89]

pretty soon our home will only be filled with one computer...nothing else if this download cr** keeps going on for everything we do.

[statikcat]

There are a lot of movies I would download at 4-5gb at a cheap price as opposed to 20$+ for Blu-ray. For animation you can get much better quality at lower sizes/compression rates. Overall I think it could have some good uses.. but not take over.

[Canada]

One reason downloading will never take of is the file size I have 28 Blu Ray's at say 50 gigs a piece that would be 1400 gigs of Blu ray quality movies. That would not even include a OS of any kind. I will not settle for anything less than Blu Ray quality movies know.

[Carmien]

Originally Posted by TheEnd187

i agree, althogh Verizon does offer good rates on its FiOS service, ts not that expensie

For now.

If you happen to be in an area with FiOS service you're in great shape. I don't have the penetration numbers to hand, but I am curious.

Now stroll forward 1 year or more. HD Downloads are starting to take up bandwidth. The 32 seats on your FiOS node are now getting sapped. Customers are using FiOS for phone, TV and Internet.

Those 32 seats share approximately 640Mbps. That translates to 20Mbps per seat. That's barely enough to bring 2 HDTV signals into your house. If you're a triple play customer you've got an HDTV channel, phone and maybe 10 Mbps Internet at peak times.

How long do you think that'll continue at a flat fee rate? OR, you can get flat free but watch your connection throttled.

Yes, it's good value now - because Verizon is paying for the priviledge to entice you to upgrade. I'll be super surprised if it's always that way.

Good news - cat out of the bag time
That said, over the next few years the more advanced Telcos have roadmaps looking to deliver 100+Mbps to each seat. If you're willing to pay you'd be able to solve reality #1 above. But I didn't share that earlier. I don't think a premium model will support mass adoption. I'm sharing it for those of you lucky enough to be a service area and have the cash to burn have hope for downloading, period.

[dalejrfanfreak]

Agree 100%. I don't think that digital downloads will change much for quite some time. Not only is storage a problem but so is portability. If your movies are digital, how can you take them with you? Jump drives could be used, but unless you are using an ipod or a large external drive then HD movies can't be transported because of the size. Plus, you're going to have to wait for a bunch of gigs to transfer from your hard drive to jump drive. Secondly, how will these things integrate? I read last week about that one guy who wanted to rent some Netflix movies but if he did that then his legally purchased files from amazon would be wiped out.

HD movie downloads just sound like a headache to me, the only time I would possibly use it would be to buy something I can't get anywhere else.

[dadkins]

Originally Posted by gvortex7

I can't believe I'm hearing that from you. Last year you sounded like you were all for downloading movies. What happened since then?

Huh?
I download the occasional DVD... HD? Not bloody likely!
No where (to the best of my recollection) have I ever thought HD downloads were "in".
I don't have the bandwidth for timely consumption, Have no like for restrictions, and Comcast would not be pleased if I were to download 200+GB per month.

[TheEnd187]

Originally Posted by Carmien

For now.

If you happen to be in an area with FiOS service you're in great shape. I don't have the penetration numbers to hand, but I am curious.

Now stroll forward 1 year or more. HD Downloads are starting to take up bandwidth. The 32 seats on your FiOS node are now getting sapped. Customers are using FiOS for phone, TV and Internet.

Those 32 seats share approximately 640Mbps. That translates to 20Mbps per seat. That's barely enough to bring 2 HDTV signals into your house. If you're a triple play customer you've got an HDTV channel, phone and maybe 10 Mbps Internet at peak times.

How long do you think that'll continue at a flat fee rate? OR, you can get flat free but watch your connection throttled.

Yes, it's good value now - because Verizon is paying for the priviledge to entice you to upgrade. I'll be super surprised if it's always that way.

Good news - cat out of the bag time
That said, over the next few years the more advanced Telcos have roadmaps looking to deliver 100+Mbps to each seat. If you're willing to pay you'd be able to solve reality #1 above. But I didn't share that earlier. I don't think a premium model will support mass adoption. I'm sharing it for those of you lucky enough to be a service area and have the cash to burn have hope for downloading, period.

i thought only cable did it that way? I thought twas diff with FiOS, since they ran the fiber to my hous and they have a conjunction box lik 30 secs away from my house

[Carmien]

Originally Posted by TheEnd187

i thought only cable did it that way? I thought twas diff with FiOS, since they ran the fiber to my hous and they have a conjunction box lik 30 secs away from my house

You're partly right.

Telco's still need to do a few things:
- They need to upgrade their network to get the bandwidth from the backbone to the local node
- They need to lay the fibre from the node to your house (which can potentially be a construction cost - only easy for newer housing developments)
- Not all the network in a given area may be ready and investments/upgrades need to happen.

Some telcos have done some fancy work to make upgrades based on compression and software. Others have roadmaps to introduce significant hardware upgrades to beef up the pipe from the backbone to each region. But the key issue is that each box from your house has a connection to the local data centre.

From what I can tell FiOS is actually an upgrade from ASDL 2+. I'm not intimate with the details but I suspect Verizon have made investments in a number of areas to make that happen.

I will confess I'm not a network engineer so can't explain the details but I know that millions of dollars are required for an upgrade from one generation to the next. The company I work for spent nearly 2 billion dollars on R&D/upgrades last year alone.

Someone's got to pay for those upgrades. And I can't see flat fees + gradual penetration taking care of it.

I know my local cable company offers tiered pricing for net access. Those getting the super-dooper 20Mbps pay twice as much as those getting the 5Mbps service, and four times the 1Mbps service.

[gvortex7]

Originally Posted by dadkins

Huh?
I download the occasional DVD... HD? Not bloody likely!
No where (to the best of my recollection) have I ever thought HD downloads were "in".
I don't have the bandwidth for timely consumption, Have no like for restrictions, and Comcast would not be pleased if I were to download 200+GB per month.

Damn you have a short memory. It's alright though....


You may seem confused about my statement just now, but I remember quite clearly that you and I went at it regarding the future of HD downloads about 6 months ago. Then you were certain that the infrastructure would be in place soon for the masses to start downloading larger and larger sized movie files. I guess not.