Why I think M$ is Barking up the wrong tree.....

[Shadowself]

1. Microsoft plays for the long term. They don't worry about version 1.0 of anything (hardware, software, 'net, etc.) failing badly. Their goal is to get a passable version out by 2.0 and a winner by 3.0. There could be 5+ years between versions.

2. Microsoft is in it to stay for digital media downloads. They know they have a lot of making up to do on the audio side and don't want to get as far behind with the video side (note their management shake ups over the past six months on their video side).

3. Microsoft is not throwing money away on HD DVD. Virtually all software is re-usable in the download arena. Implement a significant fraction of HDi in a browser (IE?) and you have a new interface for downloads over the 'net. VC-1 can be used directly.

4. The average home's bandwidth won't even realistically support 720p for the next 3+ years. I'm talking *average* home bandwidths -- this excludes those of us who have 10+ Mbps links today! Home bandwidths are getting faster, but they are not there yet. And remember, you can rarely get long downloads at even half your theoretical peak rate.

5. The only way to push video downloads in less than 5 years is to get people to accept 720p or worse as "good enough" to buy.

6. If either HD DVD or BD truly takes hold, for the next 10 years the average consumer will focus their purchases on physical media rather than downloads.

7. If either HD DVD or BD (and especially if BD) takes hold then consumers will get used to 1080p imagery and lossless sound. Consumers won't want to deal with 720p as it just won't be thought of as "good enough" anymore.

8. If 1080p and lossless audio become the recognized standard for quality then average home bandwidths won't be able to support this for possibly 10+ years from now -- delaying any direct download market.

Thus if Microsoft wants to push the edge and do an early take over of video downloads they need to
A. keep either HD DVD or BD from being adopted
B. push 720p as the best available download in the near term ( < 5 years from now) and that this is "good enough" and *eventually* 1080p with lossless audio will get there
C. convince people that having Microsoft based codecs for everything from 320x240 imagery up through 1080p and beyond is the best way to go

Apple was "lucky" with their iTunes store. The largest fraction of the initial customer base got used to poorer quality MP3 rips. When Apple did a slightly higher quality version people were OK buying it (even though it was poorer than what is on a standard CD and much poorer than on other media available). Microsoft has no choice but to try to keep people from getting used to 1080p and lossless audio as the minimum standard.

Note that the trend to consider 720p as unacceptable has already begun. Apple limited the iTV product to 720p. It is not selling anywhere near as well as Apple (or Steve) had hoped. Microsoft cannot afford to let 1080p and lossless become the minimum acceptable standard.