CES 2008: HD DVD Dead; Downloads Are Alive!

My first overall impression from CES: The clear death knell for HD-DVD.

The buzz at CES was all Blu-Ray. There was little traffic in the HD DVD booth when I was there and when I walked by. The Blu-Ray booth on the other hand was crowded. Furthermore, speaking to some insiders at the show, it is clear to me that Universal and Paramount will be pulling their support in the next 3 or 4 weeks. The format war is over.

While the war is over, I was disappointed with a few things that I noticed on the BD side. The first is that the BD studios clearly seem to think they can hold their current BD movie prices. If they really are serious about ramping up sales of software, they really should drop the prices. $30 to $40 titles just won’t cut it as mass market items, especially if there is a recession on the horizon. Drop the prices, boys.

I would also suggest that they drop the BS which was unbelievably high at the Blu-Ray press conference I attended Monday night. All BS and little if any news, almost as bad as a political press briefing. Almost. Warner Brother keep insisting that they went to BD because the consumer decided. No they didn’t, the studios did. Drop the pretense, please.

Finally, it is clear from the new BD players on display and even the dual players that the manufactures have dropped all support for multichannel analog outputs. If you want the advanced audio codecs, you will either have to purchase an older model or purchase a new receiver or processor with HDMI 1.3 support. Imagine, using a new technology to drive customers to purchase even more equipment they didn’t think they would need! Not exactly a novel concept.

2. The future is right at our doorstep. I was very impressed with (Comcast's) Brian Roberts' keynote address and in particular their rollout of DOCSIS 3.0 this year which will give cable consumers (not just Comcast’s BTW) access to what was described as wideband internet. Scheduled to be rolled out in the 3Q 2008, DOCSIS 3.0 as implemented by Comcast will provide internet speeds of 100 mbps. They have done this by “bonding” 4 analog channels together. As more analog channels are dropped, they can bond those together as well. Therefore speeds of up to 500 and 600 are expected within the next 3 or 4 years.

This is a major development in internet speed and will enable HD downloads that I have predicted to be the future (not optical media) to become mainstream sooner than expected. In fact, this system enabled a download of Batman Begins along with the trailer for The Dark Night in full HD and multichannel sound, to be downloaded in 4 minutes. ( I find it interesting that a WB title was used given their Blu-Ray announcement at the show) The picture and audio quality shown was every bit as good as HDM and was shown on a theater sized screen. With the anticipated rollout of even faster speeds, that download will be possible in under a minute in about 2 years.

I know there are many of you out there who don’t believe in the future of HD downloads. Those of you who feel that way have cited the length it takes for downloading HD. Well, that speed will be reduced from hours to 4 minutes this year. Considering the time it takes to go to the store to buy optical media and the time you have to wait to order from an on line store, 4 minutes or less shouldn’t be an impediment. The real impediment seems to me to be the cost of the wideband internet. Unfortunately, no estimates were given at the presentation as to the cost of this service. I am sure it will be steep at first, However, considering that it is being rolled out as part of cable’s efforts to blunt the growth of DBS, there should be an effort to keep the cost down. Only time will tell. At the least, this announcement will remove the technical barrier to HD downloads. With cheap storage available in the form of portable hard drives, storage of the downloads shouldn’t be a problem. I expect more hardware to be developed to facilitate your ability to connect your computer to your TV to fully enjoy your downloads. I would expect to see these very products at CES 2009. The future of video distribution is already here.

3. The Pioneer plasma presentation was very, very impressive. They displayed two prototypes of new technology under development, a 9 mm thick plasma screen as well as what they call an extreme black panel. The 9 mm panel has to been seen to be believed. Incredibly thin. It was displayed in a 50” screen size. The picture was very good although not up to the quality of the new Kuro panels. The extreme black panel, also in a 50” screen size was absolutely stunning. It displayed a pure black and generated the best looking picture I have even seen on a display device totally slaying the 50” Elite Kuro next to it. Both showed the same content in a totally darkened room. The blacks were so good on the prototype that it put out no light at all while on with no signal running into it. It looks the same on as it does off. In fact, you didn’t even see it in the room until the HD signal was inputted. The best news of all is that Pioneer intends to merge to two technologies and introduce an extreme black 9mm Kuro panel. No date was given however, nor any price points. I am sure that the panel will be very expensive as are the Elite Kuro panels, even more do. The extreme black panel was a beautiful sight to behold and has much better blacks that the current Elite models which are the best screens on the market. The future of plasma is bright indeed.

4. The biggest loser at CES was clearly Toshiba. As this has been covered extensively elsewhere, I would like to address another big loser at the show at that was Verizon’s FiOS which had no presence at all. The big news on the TV side was clearly Comcast and their HD offering, new portable DVR, new guide and web interaction and wideband. From Verizon, you heard nothing. You would not even had known that FiOS even existed if you attended this show. That was not a good business decision. Verizon should have been at CES, touting their new HD channels and plans to add more by the end of 2008. They could have countered Comcast’s announcement of their 1000+ HD “offerings” by noting that Verizon will be offering real HD channels not just HD VOD which most of Comcast’s HD offerings will be. They could have announced their plans for HD VOD in addition to 80 to 150 HD channels by the end of the year as well as increased internet speeds. Way to drop the ball, again, Verizon.

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