Refuting arguments against digital distribution of media

Posted by Creeva
April 3, 2008

This was a post on a discussion for a forum I frequent.   Thought it was applicable to bring it here.   This is a response to a blog article entitled 5 Reasons Why Microsoft is Betting On the Wrong Horse Again.

The article does make good points though he wrote it poorly and pulled out data out of thin air.  I don’t argue with some of what he is saying but let’s break it down by his bullet points.

1. Broadband Speed - his assumption that you would buy it anywhere online - in the immediate future as this scales there are two options other then the most obvious update the broadband infrastructure in this country.  The first being it is more likely that major media distributors will have a distribution within your ISP (as long as you use a major one) - since it would be within it’s own network and there would be no connection fees associated with routing traffic over another ISP - all of that ISP’s user would be able to get full speed other then crossing and routing across a partners internet link (which is the real reason ISP throttle you down) - The second is IP multicast which if implemented woudl take most the strain of the ISP - it would take the same amount of bandwidth for hte ISP to send the data to all users on a given subnet/ IP range as it would to a single user - a combination of the two is where this is going.   He also seems to avoid the fact that whenever you watch an “on demand” movie on your cable that it is digital distribution - just on pipes you can’t normally route traffic through.   That works fine for most americans.

He also add that it can take an hour to download a movie - Most movies are 2 hours in length - which means under his assumption that I can watch it streamed no problem - the movie doesn’t have to finish downloading to start watching it (author of the article MUST be using bit torrent instead of a good streaming mechanism so we’ll forgive him).

2. Tiered Download Capacity - addressed this by having distribution points within your home ISP - having this would cost the ISP nothing to give you traffic that stays within their network - it’s when you cross the router that exits their network which costs them fees.  Most logical is that you will see “features” offered from your ISP which state you can do all this within the walled garden (aol style) and the tiered pricing kicks in when you leave the garden.

3.  Media Cost - it’s all dependent on if you want to own something - here is the crux - if you “rent movies” but can get them anytime or anywhere for 3.00 -5.00 dollars a viewing this means you need to watch and pay for it 4-7 times before it actually costs you more then owning it.   He pointed out that it would take 12k to replace his movie collection in blu-ray and stated he could do a trade in - well the trade in would give him 2-3.00 per DVD he traded in - so this would give me at the most 1800.00 - I’m sorry that’s not a large enough dent.   If you do “buy” a digital movie which you can, it does cost about the same as a physical copy - but yet less then current Blu Ray titles - so this really is where you need to decide if you would spend 12k on replacing all your DVDs to Blu Ray.  He also added the full albums cost more if you buy them online versus the store - well radiohead and NIN are both turning that theory on it’s head.   But also how often is it that you want every single song on an album.

4.  Storage Costs - he qouted a number of 8.4 TB that would take to store of all of his data - having ripped enough DVD’s myself I’ll say that 99% of the 200+ dvds I own are single layer - so they max out at 4.3 GB and most don’t even take up all the space on the disk - so 2.5 TB would store all of his DVDs nicely - Ironically I have about 2 TBs at home and it didn’t cost me the 1800.00 he qouted.   I have drives that have lasted for years and yes the storage space is spread out all over the home network - but my server does have over 1 TB.

5. Adoption - a couple things he missed here is that the XBOX 360 and PS3 as well as computers all support streaming media - most blu-ray players are rumored to be able to support it in the next specification lock - so that is something to take note of before he qoutes the 1k media computer.   Actually since home servers are coming to be more common the computer hooked up to your TV can be add for under 300.00.

He is right about how the distribution is going to happen and hte problems it faces.   The recession if anything is going to help spur this.  One friend because of my arguement is getting netflix and dropping his cable - his cable costs 800.00 a year on top of his internet.  Streaming will replace cable before it will replace straight purchased movies - but once the public becomes comfortabel with one the other will follow.

Also don’t forget one thing - Sony is betting on both Blu-Ray and streaming.   They realize that it’s a good thing to hedge their bets.

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Viewing 2 Comments

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    Well I talked to Creeva over chat he seems pretty nice. I'll just dive right in....

    I did not pull anything from thin air. Anyone of those points can be googled to be verified. We're all internet savy I shouldn't have to hold anyones hand.

    1. I didn't include streaming HD content because it is not like owning an actual copy of the Movie/Game/Etc. On -Demand and pay-per-view are timed. You are not able to watch whatever you would like to watch when ever you want to watch it. As I said in the chat movies like Dark City, Powder, Alien Apocalypse (shudder) will most likely never make it to that model. Now it can be argued that this might change as more people adopt a technology for use more options open up. This goes against trend. As corporations obtain more control we get less options as consumers. You only have to look at the music industry in the mid '90s. It really wasn't until web 2.0 that indie musicians were able to come into their own...somewhat. Yes NIN and Radiohead bucked the trend, but that was two cds in a multi-billion dollar a year industry. Even Trent said the results were mixxed.

    2. Broadband speeds in this country were grossly over estimated. The government only required ISPs to provide broadband statistics per zip code. This has recently changed (go gooogle it) and now the ISPs must provide broadband statistics per address. So the governments numbers , which were already low, are about to become lower. Once more the government considered 200kps as broadband. This was also revised, but I can't remember to what, again you can google it if you don't believe me. We can talk about what the ISPs are capable of. Sure they could open up all kinds of doors and windows and let the access free, but that's not what they are doing. Many are looking into tiered service and this isn't going to open a pathway to anything but your wallet when it comes to downloading HD content. Ask the Canadians or Australians about it.

    3. This partly opinion and ties in with number 1. Yeah you can rent it. If it's available to rent. I think it's a poor assumption to think the ISP will have all content available at any time. This is the key thing that makes owning more attractive than buying. His trade in price is a little low. When I switched from VHS to DVD I was able to get a $5 average. DVD should hold thier value since they will be playable for far longer than VHS tapes were thanks to upscaling.

    4. Storage costs, he just misunderstood me there. The storage needs were for storing my newly obtained HD content not my DVDs. Blurays range from between 12-20gig. In chat we talked about future compression, but that's hersay. Has MP3 been replaced yet? With something that has significantly more compression? Without new hardware?

    5. Yes just about everything out supports streaming video, but even if they were to overcome the above issues we still have the same problem. A large population of baby boomers that can't work thier new fangled DVD players. You also have to consider costs. In 5 years Blu-ray players will be $20. At best a set top box that has significant storage will still be $200+ or free with 2 year contract.

    Like I've said before I will not argue that digital distribution will play an increasingly large role. I have no doubt that digital distribution is the future. What I'm saying is that it's not in the 12-18 months that Microsoft is claiming. I'm saying it's a good ten years off before it becomes mainstream.

    Thanks for access to your board Creeva
 

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