I was talking with Microsoft about the XBOX 360 earlier this week, and one of the things they said will drive consumers to their console vs. the competition is the integration of multiple features into Live, such as Netflix streaming, gaming, and other content. At Current Analysis our Digital Home service covers game consoles from the perspective of connected services; we treat a PS3, XBOX, or Wii like the fancy set top boxes (that not coincidentally also play games) that they have become. However, I thought we were a bit ahead of the curve – most consumers haven't fully embraced this vision yet. But when FedEx dropped off yet another box here this afternoon, I started thinking: how on Earth am I going to connect this? Is Microsoft right – will consumers buy a game console to access digital services simply because they're out of HDMI inputs on their TV?
Now I know that my situation is not something everyone faces, but how many devices can a consumer reasonably connect to a TV or even a sophisticated A/V receiver? I'm not sure there are enough inputs any more – even on flagship receivers – to connect all the possible devices an early adopter/TV nut might want to. (Some of these offer redundant functionality, but even then there are typically unique functions that could justify their purchase.) Here's a sample list:
TiVo HD (DVR and cable/OTA tuner, Netflix)
Cable box (tuner and VOD, may have integrated DVR)
Satellite Box (tuner, VOD, unique sports programming, may have integrated DVR)
SlingBox (to stream content to PCs and mobile devices)
SlingCatcher (to integrate PC content)
XBOX 360 (some unique game titles, Netflix, DVD playback, streaming PC media)
PlayStation 3 (some unique game titles, Blu-ray playback, DVD playback, streaming PC media)
Wii (many unique game titles)
DVD/Blu-ray player (if you don't have PS3)
AppleTV (iTunes integration)
Roku (for Netflix, but even if you have a TiVo HD or XBOX 360 with Live Gold which also offer Netflix, you still might want a Roku for Major League Baseball access)
I'm trying to integrate about eight or nine of those, and I'm not sure that there is a receiver on the planet that can handle more than about half that list.
Look, it's a great format, and I certainly try to rent Blu-ray (from Netflix) and buy Blu-ray discs in the rare cases where I'm buying. I'm even upgrading a few discs from DVD to Blu-ray: Groundhog Day is coming out on Blu-ray on January 27! We watch that one at least annually. When Star Wars comes out on Blu-ray, yeah, I'll buy it yet again even though the DVD is pristine. The thing is, even CNET admits that the only reason a consumer would buy Blu-ray is for picture quality, and, I'm sorry, that's not a good reason for most consumers to upgrade. Upsampled DVD looks very good on nearly any television – even big HDTV sets. Move to a projector/screen combination, and the difference becomes obvious — which is why I'm renting/buying Blu-ray discs myelf — but no matter how inexpensive 1080p projectors get, that's still a niche market because projectors require setup and light control. DVD player penetration is pretty high (80%), and there's just no reason to upgrade even when you add an HDTV to the equation.
Avi, We want to buy a 37" LCD TV. Is there a significant
difference between 720P and 1080P?
Yes, there is a significant difference between 720p and 1080p –
though it depends on what you’re watching on it, and even then you may not be
able to see the difference. The bottom line is that you can almost always
get away with buying a 720p set and saving the money, but nobody seems to
believe this answer, so here’s a slightly more involved one:
First, two quick definitions:
1.the
“p” in 1080P or 720P = progressive, where the signal has information in every
horizontal line, just like a computer monitor.
2.the
“i” in 1080i = interlaced, where the signal alternates horizontal lines
similar to the way an analog TV works – the information alternates fast enough
that you usually can’t tell the difference.
Now you need to answer two questions:
What are you watching? (You want to be able to display all the
information that your signal contains, but how much information is actually in
that signal?)
· If you’re watching a DVD, it’s 480p. So even a 720p TV is
overkill – either the TV or the DVD player will do some magic to “fill in” the
extra pixels it has to make up the picture.* A 1080p set has to fill in even
more pixels with guesswork.
· If you’re watching HDTV, it’s either 720p or 1080i. Some channels
use one resolution (for example, NBC uses 1080i) and some use the other (for
example, Fox uses 720p) – this happens behind the scenes when you change
channels; you don’t have to do anything. 720p and 1080i both have about the
same amount of picture information (720p tends to look better for fast motion
like sports, while 1080i tends to look better for scenes without much motion,
like dramas), both count as real HDTV, and both look spectacular when displayed
properly on an HDTV.
o When you watch a 720p channel on a 720p TV, you’re seeing
everything that’s there.
o When you watch a 1080i channel on a 720p TV, first it fills in
the interlacing by guessing what the missing line ought to be, and then drops a
bit of the resolution.
o When you watch a 720p channel on a 1080p TV, it does some magic
to “fill in” the extra pixels.
o When you watch a 1080i channel on a 1080p TV, it fills in the
interlacing by guessing what the missing line ought to be.
· If you’re watching a Blu-ray disc, congratulations, you’re
watching the only consumer format capable of displaying full 1080p.
o A 720p set throws out some of that resolution; it usually still
looks better than a DVD.
o A 1080p set displays all the information on there without any
changes.
Now, let’s assume you are going to watch Blu-ray discs 100% of
the time. Question two: can you actually see the difference between 720p and
1080p?
This will depend on several factors:
· How good is your eyesight? Seriously.
· How big is the TV, and how far away are you sitting? In smaller screen
sizes it usually doesn’t matter if you’re cramming one or two million pixels
into the set; unless you’re sitting two feet away you won’t be able to see the
difference. Higher resolution allows you to sit closer to the set and does
nothing for you if you’re farther back. For example, if you’re sitting ten to
twelve feet back from a 50” TV you literally cannot see the difference between
720p and 1080p. Some people want to get the higher resolution anyway. I am not
one of those people. My couch is about 12 feet away from my displays, and my
50” plasma is a 720p model. My projector, on the other hand, projects onto an
8’ screen that comes down in front of the plasma; the projector is a 1080p
model because when the images are projected that large, the difference between
720p and 1080p is quite obvious.
Conclusion: unless you plan to sit awfully close to that 37” set
and watch a lot of Blu-ray discs, there’s no reason to spend more on a 1080p
version. If you insist on spending money for something you can’t see, I won’t
stop you. But you’ll be much happier if you put the extra money into a good
surround sound system.
Does the upcoming change in broadcasting frequency have any
impact on the reception?
It depends. If you’re getting your TV shows from cable or
satellite, the analog/digital switchover will make no difference whatsoever.
None. You do not need to do anything at all.
If you’re getting your TV shows from an antenna, then you’ll
need either a new HDTV with a digital tuner built in, or a new tuner/converter
box. Your reception will either get much better or much worse, and it will vary
by channel, how far away you are from the station, and (in some cases) your
physical location (i.e., if you’re at the bottom of a hill or sandwiched
between big buildings). Digital channels do not degrade gradually. A rough rule
of thumb is that if you get a reasonably clear channel today, you’ll probably
get an even better looking version of it on digital. On the other hand, if you
have a snowy channel that’s just sort of watchable today, once it goes digital
you probably won’t get it at all.
Hope this helps,
-avi
*720×480 progressive, or about 350,000 pixels of actual
information per frame. This is a gross oversimplification, but it provides a good
basis for comparison. 1280 x 720 = around 900,000 pixels. Incidentally, this is
why watching analog TV channels or VHS video on an HDTV usually looks much,
much worse than it did on your old analog TV; the new TV is trying to take very
little information (VHS is roughly 240i, or 480×240 every other frame, or the
equivalent of about 60,000 pixels) and displaying it on something expecting
more than ten times that information to create the picture. Without much to go
on, the TV fudges, which, instead of looking soft and fuzzy like an analog set,
looks blocky and horrible.
Well, I’m back from Las Vegas, but my body is still on the wrong time zone. There were three main stories at this year’s CES:
The death of HD-DVD. With Warner’s announcement that it will no longer sell HD-DVD movies, the high definition disc format war is effectively over with Blu-ray as the victor. Toshiba (one of HD-DVD’s primary backers) offered a weak reaction, saying that it is stunned and upset, but that HD-DVD has been declared dead before. That’s true, but formats are only as valuable as the content that they are tied to. With Warner gone, only Paramount and New Line are left in the HD-DVD camp, and even they will probably switch to Blu-ray before the end of the year, once the rumored exclusivity period of their arrangement with HD-DVD is up.
Super-thin flat panel displays. Several vendor showed incredibly thin flat panel televisions – as thin as 9mm (a prototype) to 1.7” (likely to become a production model shortly). You might wonder whether there is a market for slightly thinner displays – after all, how much thinner is 1.7” than a 4” plasma or LCD today? The answer is, a lot thinner. The difference is that a 4” display is still a box you’re putting on the wall, while anything under 2” approaches being part of the wall itself. The prototypes on display looked incredibly good, and will be extremely exciting to interior designers. I expect that super thin displays will make up a significant premium segment of the market in just 1 – 2 years time. The phenomenon of super-large flat panel displays, on the other hand, has limited appeal beyond the super-wealthy, even as prices inevitably drop from the “if you have to ask” range, simply because an 11 foot long flat panel literally cannot fit around a typical home’s layout to the installation site.
Waiting for MacWorld. Last year, CES was completely upstaged by the iPhone at MacWorld the same week. This year, MacWorld is back to the week after CES, but the shadow of Cupertino was palpably draped over Las Vegas this year as well. I have no inside information on what Apple will announce next week, but Apple’s head of PR promised me that Apple’s announcements at MacWorld will be better than anything I’d see at CES. I believe him, and I suspect the rest of the industry does, too.
Other CES trends:
Several systems for moving HD content wirelessly were shown, either as part of the television purchase or as a separate accessory. While wired connections will continue to be the bulk of the market for some time, the availability of wireless options is extremely welcome as a solution to specific installation challenges.
Home storage was another big theme, with solutions that ranged from simple connected hard drives up to enterprise-class servers with friendly user interfaces.
The industry continues to introduce boxes that let you watch PC content on TV. Yawn.
GPS was everywhere at the show, particularly from vendors who either are new to the U.S. market or new to the market generally. Prices are already dropping due to the competition (and ready availability of the components needed to become a PND competitor), and it will be extremely difficult for all these vendors to make money, even if they can avoid being cannibalized by GPS on cellphones. These issues and more were discussed during my CES Education session on GPS Monday afternoon. The panel was well attended and the discussion could have easily continued for an additional hour or two beyond the time allotted.
Due to a hyper travel schedule I will not be in SFO for MacWorld next week, however I will be covering announcements made at the show from afar. Should be interesting!
The Leichtman Research Group (an ex-Yankee Group analyst) put out a press release with some interesting stats on consumer HD awareness.
LRG claims that over 75% of HDTV owners believe that they are watching HD programming, but LRG estimates that "about 53% of all HD households are actually watching HD programming from a multi-channel video provider (cable, DBS or a telco), and about 4% are watching HD programming via broadcast-only – leaving about 20% of those with an HDTV erroneously thinking that they are watching HD programming when they are not." That may actually be better than previous studies, which put the number of HD delusionals at 25%.
But it doesn’t stop with TV content. According to LRG, "about 40% of HDTV owners, and over 20% of all adults, believe that their household currently has a high definition DVD player." Actual HD-DVD and Blu-ray player sales penetration — even including every last Sony PS3, whether it is being used for movies or not — equates to single digit household penetration numbers, not 20%. I’ve been saying this for years now: many consumers don’t think there’s a problem that they need an HD format to solve for them. Even once/if the format war is resolved, the HD-DVD and Blu-ray camps will need to do some serious educational outreach / demand creation.
Engadget just posted a nice wrap-up of their CEDIA coverage. (I was not able to attend CEDIA; after Nokia’s big London event last week, I went to RIM and Motorola events this week and even had to follow the Apple announcements from afar due to scheduling). The big news both at CEDIA and in the press last month is around the HD-DVD Blu-ray war; HD-DVD gained a studio just when it appeared Blu-ray was pulling away with software sales, and both Samsung and LG have new dual-format players coming to market demonstrated at the show.
Back in January at CES, I attended the launch of LG’s first dual-format player, and it looked like it might assuage early adopters fears about getting into the market. Certainly, the new players, which support even more features of both formats, are welcome. However, with the software schism, prospects for success for either format have gotten much worse. The only way a HD disc format could succeed is if it brought new experiences to consumers along with overwhelming industry support.
With some content available only on one format and some on another, consumers are understandably gun-shy. So industry support is certainly far from overwhelming. But a more fundamental problem is why anyone beyond videophiles should care about either HD-DVD or Blu-ray.
(For a videophile, higher resolution is reason enough to embrace a new format. I’ve bought and re-bought DVDs several times just to get versions enhanced for 16×9 TVs and better transfers. I am decidely NOT normal. The problem is, there aren’t enough videophiles out there to make a mass market. Normal people need clear reasons to move to something new, and upsampled DVDs look pretty good.)
The last transition brought a lot more than just better looking video. The move from VHS to DVD brought:
noticeably better video on even the least expensive displays – VHS is downright fuzzy
slightly improved sound with even a basic setup, greatly improved sound when combined with an inexpensive 6 speaker Dolby Digital HTIB setup, and excellent sound with better equipment/room setup
longer lasting physical media
smaller physical media and packaging
a complete shift in industry pricing practices from business rental (where VHS movies cost $75 – $150) to consumer purchase (where DVDs started out at $20 – $30 and quickly dropped to $8 – $20)
no rewinding
random track access
extras such as director’s commentaries, deleted scenes, and related video material
multiple language tracks and subtitles
The move from DVD to either HD format is basically the DVD experience, plus:
improved video; this ranges from obvious improvement over upsampled DVD to none at all depending on the content, the display, and the setup/environment.
the potential for a further improved audio experience; right now this potential is limited to high end systems and is further limited by available content, hardware selection, and setup
the potential for interactivity, however, I have yet to see a compelling use of this technology. Keep in mind that DVD offered it’s own promising features that never amounted to much – remember "multi-angle?"
higher priced content
I made these points back when the formats were first announced, but it’s worth repeating now. Neither format offers average consumers enough to get excited about. If the PS3, which includes a good Blu-ray player as part of the package, had been a smash hit AND content providers all lined up to support the format, it might have had a shot at replacing DVD by default. But the PS3 has struggled out of the gate and is getting trounced by Nintendo’s Wii, which cannot play movies at all. Wal~Mart will be offering inexpensive HD-DVD players this Christmas, but if the content question is still in doubt (and titles are more expensive than DVDs), free players would not make much of a difference.
Consumers are moving to random access media. A strong case could be made for a new format that brought HD video resolution to a media server where it could be queued up at will from a visual menu, seamlessly distributed around the house, moved to portable/phone/car -based systems, and sliced and diced for instant access to greatest hits scenes (like a typical spliced-together YouTube video). This would be a significant improvement for consumers who today must load individual discs from racks of DVDs or download movies from iTunes to watch on a single PC or iPod touch. Of course, content owners won’t let this happen — they can’t even get out of their own way with HD DVD/Blu-ray. But if Hollywood doesn’t create and monetize a system like this themselves, consumers will eventually piece something like it together on their own with pirated/downloaded content and/or content ripped from DVDs. Sure, the video quality won’t be as good, but video quality alone isn’t enough to get consumers move to a new format – or keep them from moving to different format, either.
The New York Times (free registration required) has an article up on the difficulties facing independant DVD labels:
DVD sales are stalled
Retail is flooded with titles
Retail space is shrinking (big box stores are cutting back, while independents and record chains are going out of business)
Shelf space that might be dedicated to less mainstream titles is instead allocated to HD-DVD and Blu-ray
The most important point? Overall DVD sales are stalled. I suspect that sales will start to fall next year as collectors have built their libraries and the market is saturated: anyone who doesn’t already own a DVD player simply doesn’t want one (my supermarket sells DVD players for $20, so it certainly isn’t an affordability hurdle).
The Wall Street Journal has a great article (subscription required) quoting a recent survey showing that 50% of consumers who bought an HDTV set don’t actually have HDTV service. What’s more frightening – and yet entirely believable – is that 25% of HDTV owners think that they do have HDTV when they don’t. Well worth a read.
Full disclosure: I created the diagram that Michael uses to illustrate his point back when I was an analyst at what was then called JupiterResearch and he was my Research Director; it was for a report on next generation audio formats.
I attended Samsung’s Blu-ray Disc player launch this evening at the Samsung Experience in New York and came away disappointed. There were several things wrong with the launch, starting with the fact that it was off by ten days (the players won’t actually be available for sale until the 25th):
Samsung’s prepared remarks were overwraught, telling us over and over again how much we would be blown away by Blu-ray, and to prove this they showed a cheesy video and a few movie previews that, quite frankly, weren’t all that impressive on the pair of Samsung DLP TVs at the front of the venue.
Samsung boasted – several times – about how they were the first in the world to launch the product. This may be true (though, technically, the actual launch is still 10 days away). But Blu-ray follows HD-DVD’s launch in the market. There was no discussion of that elephant in the room whatsoever. No comparisons, no predictions, no explanations of why consumers will choose Blu-ray. Nada. It was like HD-DVD not only didn’t beat Blu-ray to market, but that HD-DVD doesn’t exist in the first place.
Finally, we were shuffled off to a side area that was intended to look like a living room. Nothing was done to acoustically isolate the "room" – actually just curtains – so the sound bled in from both the Terminator 2 demo in the other "living room" and the loud music in the main area. Thus, audio quality was impossible to evaluate. This was a shame, because the super-exciting video clip we saw earlier had promised AMAZING sound!!! demonstrated in the video by little helicopter outlines flying out of the speakers and INTO THE GUY’S EARS!!! AMAZING!!!
The "living room" was equipped with another 50" (or perhaps 60") Samsung DLP. On the one hand, this is the sort of setup a consumer might have in their home. On the other hand, if you’re really trying to create an immersive experience to show off the player’s capabilities, wouldn’t you want to go with a larger, more immersive image from a front projector?
Finally, the demo… The demo group I was in was shown a segment from 50 First Dates. I like the movie, so I had high hopes, especially since this is not standard T2/Fifth Element/Anything-By-Pixar demo material – it’s a romantic comedy. If 50 First Dates is better in HD, then anything is.
It started off well – Adam Sandler by himself on a boat with beautiful Hawaiin scenery in the background, all in clearly higher resolution than DVD and more saturated colors than is typical for DVD. Then, the sound mysteriously went out (the Samsung rep blamed the glitch on a Samsung A/V receiver). By the time sound was just as mysteriously restored, the cinematography had moved to a close up of Sandler’s face, then flashbacks, then a soft-focus shot of Drew Barrymore. None of this was enhanced by HD. Then a longer sequence leading to Mr. Sandler asking Drew whether she recognized him at all. This sequence, too, did not appear to be much improved from a DVD. While the background scenery really popped in one scene, based on this experience, I’d have a tough time recommending the Blu-ray "experience" at all.
Now, it’s certainly possible that the sound glitch was just a glitch. And that in a controlled environment, there would be audible benefits to the enhanced bit rate version of Dolby Digital used on Blu-ray. And that, over the course of an entire movie – we saw just a few minutes – the higher resolution video would have altered the experience. It’s even possible that while romantic comedies such as 50 First Dates do not benefit from Blu-ray, an epic film, animation, or sci-fi really would. I have been on the record saying that most consumers will not be excited by a new disc format – you need several real enhancements to sell a new format, and the only thing Blu-ray offers is higher video resolution for videophiles. Nonetheless, I always assumed that videophiles – and I am one – would be excited by Blu-ray.
But I got none of that from the launch. Samsung’s clearly artificial excitement bled away any possibility of the real thing. This was the official launch of a product I’ve been following and looking forward to for several years – there should have been no way for me to have felt like heckling during the presentation. I have been to product launches where Steve Jobs made me excited about a sneaker/iPod combo for hard core runners, and I have not run anywhere since I was in fifth grade. I’ve been to product launches for televisions – Samsung televisions, in fact – that made me want to pull out my credit card. I have been to product launches for high definition audio formats that I knew were dead on arrival, but at least they made you believe, for a little while, that they might succeed.
The actual Blu-ray experience may be a lot better than Samsung’s launch of the first Blu-ray player. I certainly hope it is.
I’m back from Las Vegas, but my body is still on the wrong time zone. There were three main stories at this year’s CES: 
I attended Samsung’s Blu-ray Disc player launch this evening at the Samsung Experience in New York and came away disappointed. There were several things wrong with the launch, starting with the fact that it was off by ten days (the players won’t actually be available for sale until the 25th):
It started off well – Adam Sandler by himself on a boat with beautiful Hawaiin scenery in the background, all in clearly higher resolution than DVD and more saturated colors than is typical for DVD. Then, the sound mysteriously went out (the Samsung rep blamed the glitch on a Samsung A/V receiver). By the time sound was just as mysteriously restored, the cinematography had moved to a close up of Sandler’s face, then flashbacks, then a soft-focus shot of Drew Barrymore. None of this was enhanced by HD. Then a longer sequence leading to Mr. Sandler asking Drew whether she recognized him at all. This sequence, too, did not appear to be much improved from a DVD. While the background scenery really popped in one scene, based on this experience, I’d have a tough time recommending the Blu-ray "experience" at all.