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.