DVD Burning Bits.com - DVD Insider #40

Who Cares Which Blue?
Will Compromise Occur?
What Is Unsaid?
What Do You Do?

Who Cares?
Sometimes we are so dense!

We have actually been keeping score on which Hollywood studio and which content
owner "signed up" for the HD- (HD-DVD) and Blu-ray Disc (BD) camps. We actually
wondered which wanted to limit their creativity with 15GB (HD) or expand their
horizons with 25GB (single layer) and 50GB (double layer) capacity for their
fantastic next generation video content and extras.

We thought about all the TV folks planning fantastic entertainment what they
can beam to our digital TV sets with thrilling effects we can time-shift, copy
and enjoy anywhere in the house or on the road.

We studied the HD and BD format approaches and tried to see how Hollywood and
the TV folks could force the two parties to the table and hammer out a compromise.

As we slowly stepped back from our hours of research and stared at the papers
strewn across the floor we had an epiphany!!!!

Those folks not only don't care which blue write-once and rewritable technology
the industry delivers�they don't want either one!

All they want is a high definition ROM. A disc you can buy, rent or borrow that
allows you to view their movie, their TV series, their music audio and not copy.

Does the consumer care? Sure�eventually. But at the present time a next generation
storage device/medium is low on his and her priority list because they need/want
to buy new DTV sets, new camphones, new game systems, new PCs (Fig 1). Then
they need to struggle to interconnect them to share devices/content�even if it
is the use of the printer.

While consumers want all this content movement without wires (Fig 2), the reality
is that today and for the near future the easiest way to accomplish this is with
wire - over coax or through your powerline.

Now that the FCC has mandated that consumers will have DTV sets by 2008 the CE
industry is rushing to meet the demand. Why the rush? Well digital signals
require less bandwidth than analog signals so this means the government can take
back all of that wasted and unused bandwidth and sell it to someone else...trust
us the way the U.S. is amassing its debt they can use all the money they can
get!

As a result, the penetration curve for DTV will almost be as steep as DVD, which
was the most rapidly accepted technologies in our history (Fig 3). How fast
we "accept" the new enhanced TV is up for debate. According to In-Stat's recent
report more than 15.5 million HDTV sets will be sold this year worldwide and
by 2009 that number will increase to 52 million. On the other hand, Informa
Media Group indicates that there were about 144.1 million Digital TV households
worldwide and that by 2010 there will be roughly 369.8 million (Fig 4).

That's enough to make the accountants at Sony, Panasonic, Hitachi, Mitsubishi
and the rest of the plasma, LCD and projection TV suppliers hearts beat a lot
faster. Of course that 2010 number is only roughly equal to the population of
the U.S. so there will still be a lot of people left behind.

What do people really want? According to a recent CEA survey (Fig 5) and folks
want to play DVDs, play video games and record TV programs (among other things).
And they are spending serious dollars to do it! In the U.S. alone consumers
spent more than $330 billion for (in order of priorities) digital CE, content,
wireless, PAY-TV service and similar entertainment.

Behind the scene Hollywood, broadcasters and other content developers are working
deviously to ensure they maintain control of every bit of "their" content. They
have devised a series of "solution" to deliver, manage and control their content.

Compromise?
Ok now that we have taken the content developer/owner and consumer out of the
blue-ray equation, who really cares about a single format? Patent holders!

Do we need a blue-ray disc (Fig 6)? No, Yes, Probably�

Blue-ray technology represents the next performance bump for optical storage
(Fig 7) which despite all of the pro/con discussions delivers the best, most
economic and most versatile archive storage technology we have.

Single-layer CDs, which cost almost nothing, store 700MB of data or about 4,000
photos, 20 minutes of video and filing cabinets of digital data. Because the
technology has been with us more than 20 years you can record and play the disc
almost anywhere on the globe�that's universal!

DVD media is now readily available in dual/double layer formats with 8.5GB of
capacity, which is equivalent to more than 48.5 million photos, two hours of
MPEG-2 video and tons of data. Even the best single-layer media is extremely
economic today and the 8.5GB media prices are coming down as production yields
and volumes increase.

To achieve 50-100 year data life on a disc the industry has to move to some flavor
of blue-ray technology and in an ideal world the two factions would put individual
interests aside and work for a common solution for the consumer. As you sift
through your spam, phishing messages and viruses you can see this isn't a perfect
world.

A single specification won't appear! A compromise specification is virtually
impossible because of the read/write approaches of HD and BD (Fig 8). There
are significant differences as to the placement of the write/read layer of the
disc and this affects every aspect of the separate technologies.

Sony and Panasonic have been shipping BD recorders in Japan for more than a year.
Panasonic has promised a BD drive in early 2010 and since they have been so
successful in the past that announcement sent shockwaves thru the NEC and Toshiba
organizations.

Not to be outdone, Toshiba and NEC announced they would begin shipping HD DVD
recorders and drives the first of the year.

While the HD-DVD crowd's main claim to fame was that media could be produced
on today's DVD production lines (which Verbatim/MKM and Maxell have proven) thus
alluding to the fact that the media would cost the consumer less. The BD team
pointed to higher capacity single and double layer R and RW media and recently
announced that through the efforts of Pioneer and MKM the firms had developed
special dyes and production techniques that would significantly slash the cost
of the media.

That kind of news from both sides is great! But�

None of the firms have mentioned the vulgar word - consumer price. If you use
the prices in Japan as a rough guideline the disc costs are $25 - $40. Reports
are that burners will be "under $1,000." That is a long way from consumer pricing!

Pricing like that, even at OEM levels, kept burners out of PCs and notebooks
for more than three years. It is only now that DVD-anything, disposably-priced
burner is a standard component in almost every medium-high performance PC and
notebook.

It also doesn't address the issues of the replacement cost of DVD players, set-top
recorders, cameras/camcorders and software.

The Sleeper Options
While the blue ray factions in Japan work to one-up each other there are also
some less visible options that could surprise us all. Taiwan and Mainland China
have already perfected EVD and FVD technologies using red lasers. These may
gain sales in the two countries but there is little incentive for the technology
and content owners to adopt them.

Holographic technology which shows promise of 100GB, 300GB, 1TB and eventually
3.9TB disc storage appears to be very promising for the business/professional
arenas. Optoware seems to be slightly ahead of InPhase in these developments
(six months) and by 2010 holographic could be the big bit bucket that we'll be
using for niche applications - you know financial, legal, government, healthcare!

What is Unsaid?
While Hollywood, broadcasters and content developers aren't concerned about which
blue technology is implemented, they are deadly serious about not revisiting
the mistakes of today's CD and DVD technology.

It is true they want to deliver content to you in every way, shape and form (Fig
10) at home, in the office, on the road, to your portable device�you name it
they want to be there for you. The hardware and media manufacturers will continue
to play the game of words and ramp up their respective production operations.
In stealth fashion, the content owners are making very certain that when you
finally buy their ROM-based videos or receive their content through the pipe
of your choice, you will either not be able to make a copy or the number of copies
will be extremely limited�1, 2, 3?

High Definition content has provided content owners the opportunity to start
with a fresh slate and get it right this time. They aren't going to miss the
chance to put the horse back in the barn. Next generation content protection
for video and audio content is extremely robust (Fig 11, 12). Digital rights
management for over-the-air signals has the Broadcast Flag embedded that will
dramatically impede recording the High Def and digital TV signals.

The content owners have become excellent quick studies of digital technologies
over the past five years as they've watched DVD and on-line services get stronger,
better, bigger, faster and more ubiquitous. This time around they are going
to make certain they don't leave any money on the table this time

What Do You Do?
Will one of the HD leaders blink and move to a compromise? Will a BD player
extend the branch of friendship? Doubtful on both counts because both sides
will have to give up too much in the compromise. Sony has committed to BD for
the PS3. Panasonic has missed so many technology opportunities they look like
a perpetual bride's maid. Pioneer has strengthened its technology position.
Toshiba amassed a broad base of allies before coming out of the closet. NEC
knows read/write mechanisms perhaps better than anyone today.

The best scenario will come from one of the volume producers - LG, BenQ, LiteOn
- that will follow Sony's playbook from the last DVD game. One will introduce
a HighDef-everything writer that supports both HD and BD as well as leverages
today's multi-DVDs and yesterday's CD. Then they will have to focus on driving
costs out of the hardware which will require at least two - three years.

In the meantime, super-multi DVD burners and recorders are becoming commodity
priced -- $40 and $100 - and give content developers and users the choice of
700MB, 4.7GB or 8.5GB storage. Those discs can be played virtually anywhere.
Homes on a global scale increasingly have at least one DVD player.

At the OEM level even High Def proponents like Dell and HP will be hard pressed
to put expensive blue technology burners in anything but their most expensive
systems. Perhaps this is why industry analysts like IDC estimate that even by
2010 blue laser drives will only account for two percent of the units sold (Fig
13). If history and human nature are any indictors, very few of the red laser
burners will find their way into home DVD recorders or camcorders (Fig 14).
As we move to produce and deliver our second billion notebook and desktop systems
the majority will include disposably priced DVD burners.

Content developers will end up with an even broader array of software tools -
today's multi-purpose DVD, HighDef on DVD, HD-DVD and BD products.

The software folks will certainly write their support for blue�just in case.

But increasingly they are working on new video compression algorithms that allow
people to store more data and content on today's discs. DivX 6, H. 264, MPEG-4
AVC and WMV9/VC1 enhance the capacity of today's 4.7GB and 8.5GB discs without
increasing costs or asking people to replace today's barely used hardware.

Faced with having to make a decision between expensive option A or expensive
option B or cheap status quo, consumers will most likely take the time to learn
how to do more with the technology they own. And because today's burners, recorders
and media are so inexpensive retailers will start featuring them on their endcaps
and relegate the Blue technologies to the geek and adventurer shelves.

Suddenly they will discover a standard writable (or rewritable) 4.7GB DVD will
hold one hour of HighDef material. In addition, an 8.5GB DL disc will hold three
hours of content. That's a lot of low-cost storage that hasn't been fully exploited;
even though "everyone" is taking pictures with their camphone, capturing hours
of memories with their camcorders and time-shifting the best broadcasters have
to offer.

People who wring their hands and claim that the lack of a compromise will confuse
the consumer and slow adoption are right but only partially right. It has taken
nearly five years for today's DVD technology to become close to mainstream.
Blue-ray technologies - regardless of what the sides say - will require new production
processes that will encounter low production yields. The need for initial profits
plus the universe of patent royalties and limited competition will also keep
devices and media expensive and scarce for several years.

While technologies like DivX, WMV and QuickTime don't have universal acceptance;
it is a lot easier - and less expensive -- for manufacturers to offer these HighDef
storage solutions to their hardware to sell stuff now rather than wait for the
BD and HD camps to resolve their issues.

Only a few benefit from the royalties involved. The rest of the industry benefits
from sales!