This Week In Marketnews: Conclusion Of The Image Constraint Token Series

This Week In Marketnews: Custom Corner: Image Constraint Token - Real Threat Or Tempest In A Teapot? Part 3

As someone who previewed my article said to me, "I agree that the studios’ lack of response is very telling." Another person familiar with the matter said anonymously, "This may well be the last nail in Blu-ray's coffin."

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The Words "Giggety Giggety!" Come To Mind

Yahoo!: "Family Guy" creator seals megadeal

After 2 1/2 years of negotiations, "Family Guy" creator Seth MacFarlane has inked a new overall deal with 20th Century Fox TV that would make him the highest-paid writer-producer working in television.

I've got nothing else to add to this, other to say that I think it's fantastic to see someone whose creative property has been so phenominally popular be justly rewarded for it.

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Paramount dumps Blu-ray. Now what?

NYT: Paramount to Drop Blu-Ray HD DVDs *
LOS ANGELES (AP) -- Paramount Pictures and DreamWorks Animation SKG Inc. will offer next-generation DVDs in the HD DVD format and drop support for Blu-ray, further complicating the race between the competing technologies.
Monday's announcement affects the upcoming DVD release of the blockbuster ''Shrek the Third'' and all movies distributed by Paramount Pictures, DreamWorks Pictures, Paramount Vantage, Nickelodeon Movies and MTV Films, as well as movies from DreamWorks Animation, which are distributed exclusively by Paramount Home Entertainment.
Paramount previously released movies in both formats.

I had said earlier that my impression was that the balance was tipping in Blu-ray's favor. And now the teeter totter is tipping the other way...



* How's this for a confusing headline? I first read it that Paramount was kaiboshing both Blu-ray and HD-DVD. Is it any wonder that consumers are confused and apathetic, when even the media can't be bothered to keep them straight?

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DVD resellers make money even at bargain bin prices

I ran across a great article that explains the sudden boom in cut-price DVDs that have suddenly become available in every outlet from the grocery store to the gas station.

Seattle Post Intelligencer: DVD liquidator ensures you see the bigger pictures for less

Ryan Kugler is known as the video industry's scrap collector, but he doesn't mind.
He sees himself as doing studios a favor by buying up the surplus DVDs they would otherwise be stuck with, then reselling them to retailers.
Chances are that when you rummage through old movies in discount bins at Wal-Mart, Best Buy or even a local car wash, Kugler's fingerprints are on them.
"It's like guys who buy foreclosures -- they get the house they want for a lower price," said Kugler, who runs Burbank-based Distribution Video & Audio Inc. with his brother, Brad.
With the growth in DVD sales leveling off, and stores such as Sam Goody and Tower Records closing, Kugler's DVD liquidation business is booming.
Last year, the company grew by 40 percent, generating about $24 million in revenue on the sale of more than 17 million DVDs, CDs, video games and books.

Aside from the obvious lesson that ultimately, there's a market for every product, there's also the realization that when you look at the assortment of DVD movies available for sale in bargain bin locations, overestimating the total pressings of DVDs to produce in the first place has to be a fairly common and egregious error.

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MUTINY at Digg.com!

Avast!

In an incident that resembled a digital version of the the sacking of Maracaibo, Digg.com bit off more than it could chew when its attempt to comply with the demands of the movie studios antagonized its users into open revolt.

NYT: In Web Uproar, Antipiracy Code Spreads Wildly
Sophisticated Internet users have banded together over the last two days to publish and widely distribute a secret code used by the technology and movie industries to prevent piracy of high-definition movies.
The broader distribution of the code may not pose a serious threat to the studios, because it requires some technical expertise and specialized software to use it to defeat the copy protection on Blu-ray and HD DVD discs. But its relentless spread has already become a lesson in mob power on the Internet and the futility of censorship in the digital world.
An online uproar came in response to a series of cease-and-desist letters from lawyers for a group of companies that use the copy protection system, demanding that the code be removed from several Web sites.
Rather than wiping out the code — a string of 32 digits and letters in a specialized counting system — the legal notices sparked its proliferation on Web sites, in chat rooms, inside cleverly doctored digital photographs and on user-submitted news sites like Digg.com.

Yet another example of the futility of trying to clamp down on web users who are damned and determined to do what they are going to do.

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Kaleidescape 1, DVD CCA 0

As you know, Kaleidescape and the DVD CCA squared off in court this week. At issue was the right of end users to copy DVD's that they own onto their video server for their own use.

Fantastic news, as CE Pro reports:

Kaleidescape Prevails in DVD Ripping Case
Manufacturers, dealers, and champions of digital rights everywhere can rejoice: Video server maker Kaleidescape has beaten the DVD Copy Control Association (DVD CCA).
The DVD CCA, which licenses the Content Scramble System (CSS) for protecting DVDs, had claimed that Kaleidescape breached a contract when it created products that enable (indeed encourage) individuals to copy protected DVDs onto hard-drive servers.
Kaleidescape argued, first and foremost, that nothing in the DVD CCA licensing agreement prohibits the development of products that allow users to copy their DVDs. (For the full background, see "Copy Protection Group Sues Kaleidescape.")
Indeed, that's exactly what Judge Leslie C. Nichols ruled today in the non-jury trial at the Downtown Superior Court of Santa Clara in San Jose, Calif.: There was no breach of contract.
As Kaleidescape CEO Michael Malcolm explains, "The DVD CCA went on a fishing expedition for three years, trying to find a breach." In the end, he says, Judge Nichols agreed that "nothing in the agreement prevents you from making copies of DVDs. Nothing requires that a DVD be present during playback."

This is a major victory for the rights of end users to view and listen to the content that they bought and paid for in any way that they wish.

As a Kaleidescape dealer, we are immensely pleased with this outcome!

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Forget Blu-ray, the clock is ticking on hardcopy movies, PERIOD!

Great article on The New York Times about the growth of movie downloads. In much the same way as recording artists have learned that they no longer need record labels, so too have the independant filmakers adopted internet distribution to reach a wider audience. Hollywood, typically, is still trundling along late to the party.

Major studios — fearful of both piracy and cannibalizing the money they make from DVDs, their biggest source of revenue — are entering the Web film market cautiously. The few hit films online are generally put there only after they are widely available elsewhere, and often for the same price as a DVD.
But the major studios may not be able to play possum much longer. The DVD business is flattening. And media forecasters are busy out-predicting one another about how many billions of dollars Internet video will throw off each year.

At the same time that the DVD Copy Control Association is breathing its last gasp trying to stem the tide, the content distribution model is heading away from the marketing of hard copy. It kind of puts the whole Blu-ray vs HD-DVD schmozzle into perspective.

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Kaleidescape and Hollywood square off in court today

CE Pro: Kaleidescape Faces DVD CCA in Court Monday; Fair Use at Stake
Kaleidescape finally will have its day in court Monday, March 19, to face the DVD Copy Control Association (DVD CCA), the "arm of the Hollywood studios," as Kaleidescape calls it.
The DVD CCA, which licenses the Content Scramble System (CSS) for copy-protecting DVDs, sued Kaleidescape in December 2004, claiming the maker of video servers breached a contract by building "a system to do precisely what the license and CSS are designed to prevent ... the wholesale copying of protected DVDs," according to a statement released by the DVD CCA back then.

Since we are a Kaleidescape dealer and installer, I am following this case with great interest. Best tidbit from the article:

What deserves mention, though, is that the DVD CCA is expected to file a motion to close the trial to the public and the press. Apparently the group is concerned about exposing trade secrets concerning its Content Scramble System--you know, the encryption scheme that was broken in 1999 by a 15-year-old, and is now widely available on the Internet.

That is so DVD CCA.

"They're delusional that CSS is a trade secret," says Malcolm. "We're just amazed they're still claiming this fiction."

Really, why should the motion picture industry (or the record companies, for that matter) have any stake the "reality-based community?" They haven't shown much sense so far, why should they start now?

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Dave Long tells it like it is on copy protection, Blu-ray and High Definition

This editorial comes courtesy of Dave Long of Evolution Audio Video, a distributor of high end A/V equipment to the dealers. Dave's a little gonzo (I mean that in a good way), but he makes some very sensible points about how copy protection systems do a disservice to the end-user.

Reprinted with permission from his monthly newsletter:


With the advent of digital cameras and HD camcorders, anyone notice there’s suddenly no mention and certainly no pictures, moving or still, of UFO’s, Bigfoot, crop circles or the Lochness Monster? With computer technology so far advanced that it allows one to easily tell when a picture’s been altered, Photoshopped or buggered with, is it any wonder why no one’s come up with any new footage of pear-headed alien’s at Area 51? Sure, there’s still a ton of buck-toothed google-eyed people named Cletus or Thelma-Lou who still want to believe and sit on the porch nibblin’ on pickled Crawdad lips and deep fried pig nuts... swearing up and down that they experienced first hand, an anal probing from Darth Vader’s minions and dang it, their sister-wife has the pictures to prove it... but where’s their proof now? Who’s gonna buy into their exotic tales?

Technology therefore, has killed the fantastic imagination of the weird-o. Gone are the days of tall tales, fibs and outright lies. Science has removed the fun out of an ordinarily hum-drum life in the trailer park, where Earl could don his best overalls, brush his tooth and be on the 6pm Arkansas news, telling his side of some fantastic story he made up while in the outhouse just hours before. Now, life in the Ozarks has returned to what it once was. Quiet and simple with the odd Sadie Hawkins Day dance and old Marryin’ Sam advertising his three dollar wedding ceremony. No more spaceships… no more gigantic hairy beasts roaming the woods with meat hooks. All is back to normal for Daisy Mae an’ her chillun’.

It’s sad in a way, that our evolving technology has snatched away the reason for living, for so many slobbering boobs and it says something. It says technology, like science always taught us, has no room for fantasy and the more tech-driven we get in our lifetimes, the question is, will we use our imaginations less? Will things become either black or white with no gray area in between?

Nope. Despite the concept, people will still come up with stupid ideas. Case in point—Video piracy. If you own a crappy 20” RCA CRT television and a $60.00 DVD player, you’d rather buy a copy of a movie shot by some sleazebag in the back of the theater with a camcorder because you’re
cheap plain and simple. Those people are what the industry statistics use as part of an estimation for the 30 billion dollar loss over piracy but that’s not true. Those same people will NOT go out and buy a $30.00 disc no matter what. It’s the videophiles who buy legal product. The people who have 1080i/1080p displays with great sound systems. They buy store DVD’s. Not the blurry crap from the local flea market. You have a great system, you want the most you can get out of it and a camcorder version of King Kong aint gonna cut it. A 12” Emerson CRT looks pretty much the same whether running VHS or DVD so these people see spending $5.00 on a blurry current release as a wise investment, in fact by odd coincidence, the very same people trying to figure out how to prove their toilets actually tunnel down to Atlantis. Good luck with that.

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Viacom: do they get it or not?

Great article in the NYT about Viacom's stand-offish approach to YouTube and other new media aggregators.

NYT: The Old Guard Flexes Its Muscles (While It Still Can)

Viacom's resistance to partnering with Google and YouTube is notable in the face of the willingness of other old media companies to realize that if they can't beat them, they should join them.

Personally, I favor the motive laid out by NYT's Richard Siklos: they're playing hard to get.

It is hard not to conclude that the media establishment’s threats to start its own rival to YouTube — as well as Viacom’s yanking of its popular clips from the site — amount to posturing. What it might really be about is securing a lucrative deal from Google that would end hostilities in exchange for guaranteed cash and a healthy split of revenue from any advertising the company derives from their video content.

At this point, it doesn't make much sense to talk about starting your own web page. Sure, there are other video sharing sites, but who can name any that aren't YouTube?

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