[opendtv] Re: Intel, MS back HD DVD
- From: Tom Barry <trbarry@xxxxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Thu, 29 Sep 2005 07:05:47 -0400
Jeroen Stessen wrote:
> Huh ? Is this a true declaration of (format) war ? Ease of copying
> is probably the last thing that the content providers want.
> And what good is copying when there is no content ?
Intel & MS claim to have technologies to safely manage copies on PC's=20
and home networks so it is no surprise they will support a format that=20
might allow this, assuming blu-ray will not.
But also see=20
<http://www.avsforum.com/avs-vb/attachment.php?attachmentid=3D43243> by=20
Rick Marquadt (a pdf but text copied below). It sounds like blu ray=20
will be a much more expensive start up cost for the manufactures.
Personally I'm still betting both formats will first delay, then fail,=20
and we will eventually be using a standard based upon the new higher=20
density holo technology.
- Tom
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
1-1/2.05 1
The media manufacturing industry is on the verge of another milestone in =
its history. The introduction of the next-generation format of the=20
optical disc is imminent, and I take a tremendous amount of satisfaction =
in having participated in the entertainment industry=92s participation in=
=20
this format, from the introduction of the CD in 1982 and a decade later=20
with DVD, as Senior Vice President and General Manager of Warner=20
Advanced Media Operations (WAMO), where I led WAMO management and=20
engineering as it developed and marketed the DVD format worldwide. I was =
later the CEO of Ritek Global Media and President of Deluxe Global Media =
Services.
That=92s why I feel that I have to speak out at this point. In order for =
people and companies to invest enormous amounts of money, effort and=20
intellectual capital developing new products and formats that will move=20
the industry forward, they need accurate information and data to make an =
informed, objective assessment. And as someone intimately familiar with=20
the economics of physical media manufacturing, I can tell you that the=20
numbers I=92m seeing =96 or more importantly, not seeing -- don=92t add u=
p for=20
a proven manufacturing process
The rate of DVD sales is beginning to flatten. That=92s inevitable, as it=
=20
is with any format over time, and the average price of DVD discs=20
continues to decline, as it would with any commodity product. At the=20
same time, major film studios continue to reap increasingly larger=20
percentages of their profits from DVD home video sales. Why, at this=20
critical time of transition, would an entire industry want to radically=20
alter its manufacturing infrastructure, incurring massive new tooling=20
capital costs and a huge new learning curve in the process?
The Blu-ray Disc Association (BDA) has long asserted that its Blu-ray=20
(BD) format is superior to the rival HD DVD format, and BD=92s=20
=93revolutionary=94 buzz has understandably caught the fancy of certain=20
technologists. But it should scare CEOs,
1-1/2.05 2
because what the BDA does not sufficiently address is what lies behind=20
those assertions. The numbers are stark: manufacturing BD discs will=20
require an estimated $1.7 million cost per manufacturing line. Per line! =
Then, each major manufacturing facility would require the implementation =
of a minimum of two mastering systems, at a minimum cost of $2 million=20
per system. DVD, at the height of its success, resulted in an estimated=20
600 manufacturing lines globally. Even allowing for a decline in systems =
costs over time as the manufacturing base expanded, the tab for=20
radically overhauling the media manufacturing industry would approach a=20
billion dollars worldwide or more. Already-beleaguered CFOs will be=20
challenged to raise =96and risk =96 this significant amount of capital.
Compare this to the estimated cost of retooling for the HD DVD format=20
compared to BD ROM. HD DVD is able to utilize virtually the entire=20
existing manufacturing infrastructure. The cost of upgrading an existing =
DVD line is about $150,000 =96 less than a tenth the cost of a BD line. A=
=20
DVD mastering system can be upgraded for $145,000. Basically, HD DVD is=20
a DVD-9 =96 a version of DVD we have enormous manufacturing experience=20
with already =96 with a denser pit structure.
The manufacturing process of the BD format is not fully evolved. For=20
instance, there remains a significant debate regarding the best way to=20
create the 0.1-mm layer that forms the top layer of the disc. Both BD=20
and HD DVD offer content owners and consumers dramatically larger=20
amounts of digital real estate, which will be necessary to match the=20
high-definition programming that is the future of entertainment media.=20
But the BD format will require an already strained manufacturing base to =
invest massive amounts of capital in new manufacturing technology even=20
as disagreements about just what that technology is rages around them.=20
If consumer demand for HD is what projections predict, the simple fact is=
1-1/2.05 3
that BD will not allow the manufacturing base to retool fast enough to=20
keep up with the demand curve.
Furthermore, there is little in the way of statistical verification of=20
any actual production data for BD. Major disc manufacturers are still=20
far from collecting statistically-significant samples with BD production =
lines that prove that BD ROM can be mass produced in a typical 6-sigma=20
capable process, and there is virtually no previous experience upon=20
which to base manufacturing. High production demand on an unstable=20
manufacturing process significantly increases the risk of consumer=20
failures. On top of that, those same replicators will still have to=20
continue to operate their existing DVD lines as the market makes its=20
transition from standard-definition formats to high-definition ones,=20
even as that same market continues to mature and experience ever-tighter =
profit margins. You don=92t need a degree in engineering or economics to =
realize that this is a recipe for disaster.
On the other hand, there is a wealth of manufacturing data available on=20
DVD, virtually all of which is applicable to HD DVD manufacturing. DVD=20
and HD DVD can be manufactured on the same line with only minor=20
adjustments. This enables replicators to maximize the productivity of=20
their equipment, altering it to the ebb and flow of demand for either=20
format.
Strong home video titles require the ability to manufacture huge=20
quantities of discs in a very tight time window. Failure to meet that=20
demand because the industry is struggling to learn and refine=20
manufacturing on a radically new format can not only jeopardize the=20
sales of that title =96 it can strangle an entire industry that depends o=
n=20
hit titles. Inability to meet demand could ultimately sink the format=20
and vastly diminish consumer confidence in any new format. As we=92ve=20
learned, new formats drive this industry in the long term.
1-1/2.05 4
With HD DVD, we understand all the critical variables in manufacturing=20
discs already. That verifiable productivity means that the cost of=20
manufacturing the format is estimated to be only 15 to 20 percent higher =
than that of standard DVD.
Given all this information, why risk the fortunes of an entire industry=20
on a potentially disruptive, incompletely tested format when a highly=20
reliable evolutionary format, one already familiar to tens of millions=20
of consumers, is readily available? The amount of time, money and effort =
to so dramatically alter the manufacturing infrastructure has been=20
substantially underestimated for BD. In fact, it=92s responsible for=20
delaying the roll-out of a much-needed upgrade for the home video=20
industry, and has in effect held a portion of the industry resources=20
hostage as a result. Thus, it=92s disingenuous to suggest, as some in the=
=20
BD camp have, that the competition is over. Once people realize the=20
hidden costs of the Blu-ray format, they will also realize the extent to =
which it actually endangers their very industry.
Blu-ray is the Emperor=92s New Clothes =96 it advances the agendas of a f=
ew=20
select companies instead of the market=92s and that of the consumer. No=20
one =96 the studios, the disc manufacturers, the consumer electronics=20
manufacturers =96 can afford a format war today. Consumers want a format =
that=92s familiar and reliable. Shareholders want to see unhindered growt=
h=20
in packaged media, which remains a multi-billion-dollar-a-year industry. =
Game developers are targeting home video demographics. Cable and=20
satellite delivery is betting big on high definition. HD DVD offers=20
predictable, reliable manufacturing; high capacity; predictable,=20
manageable costs; verifiable quality, enormous familiarity worldwide,=20
and billions of dollars that the consumer will not have to pay that will =
instead be converted into profits for the entire home video=20
entertainment industry. Even the name of the format is highly=20
consumer-friendly -- any brand marketer will tell you that it would
1-1/2.05 5
take millions of ad dollars and years of promotion for Blu-ray to build=20
the caliber of brand equity enjoyed by a familiar sounding HD DVD brand.
We got DVD right and it gave the entertainment media industry a=20
windfall. Right now, the process of introducing the next generation of=20
entertainment media is spinning dangerously out of control and we are=20
running out of time. Consumers are fickle. We better make sure we get HD =
right.
end of pdf article
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D
> Hello,=20
>=20
> Found at: http://www.channelregister.co.uk/2005/09/27/intel_ms_hddvd/
>=20
>=20
> Intel, MS back HD DVD
> Better than Blu-ray because... er... it is, say firms
>=20
> Intel and Microsoft have formally allied themselves with Toshiba's=20
> HD DVD next-generation optical disc format. Both will become members=20
> of the HD DVD Promotion Group, the pair said yesterday.
>=20
> Both firms' support for the format centres on its greater suitability=20
> for PCs than HD DVD's rival, the Sony-backed Blu-ray Disc (BD) represen=
ts.
>=20
> (...)=20
>=20
> Intel also said it likes the way HD DVD incorporates the ability to=20
> allow consumers to copy discs for personal use, ie. to a Media Center's=
=20
> hard drive, and then to beamed around the house via wireless networks=20
> to Media Center Extenders. "HD DVD discs also will allow copies of the =
> movie to be played on portable devices," said Intel. Assuming, of=20
> course, content providers set the appropriate flag.
>=20
> (...)=20
>=20
>=20
> Huh ? Is this a true declaration of (format) war ? Ease of copying=20
> is probably the last thing that the content providers want.=20
> And what good is copying when there is no content ?=20
>=20
> Regards,=20
> -- Jeroen
>=20
> +-------------------------------+--------------------------------------=
----+
> | From: Jeroen H. Stessen | E-mail: Jeroen.Stessen@xxxxxxxxxxx |=
> | Building: SFJ-5.22 Eindhoven | Deptmt.: Philips Applied Technologies=
|
> | Phone: ++31.40.2732739 | Visiting & mail address: Glaslaan 2 |=
> | Mobile: ++31.6.44680021 | NL 5616 LW Eindhoven, the Netherlands=
|
> | Pager: ++31.6.65133818 | Website: http://www.apptech.philips.c=
om/=20
> |
> +-------------------------------+--------------------------------------=
----+
>=20
> =20
> =20
> ----------------------------------------------------------------------
> You can UNSUBSCRIBE from the OpenDTV list in two ways:
>=20
> - Using the UNSUBSCRIBE command in your user configuration settings at =
FreeLists.org=20
>=20
> - By sending a message to: opendtv-request@xxxxxxxxxxxxx with the word =
unsubscribe in the subject line.
>=20
>=20
----------------------------------------------------------------------
You can UNSUBSCRIBE from the OpenDTV list in two ways:
- Using the UNSUBSCRIBE command in your user configuration settings at
FreeLists.org
- By sending a message to: opendtv-request@xxxxxxxxxxxxx with the word
unsubscribe in the subject line.
Other related posts:
