Home Media Magazine - January 20-26, 2008 - (Page 32) NEWS Apple’s Rental Service Gets Mixed Reviews Continued from page 1 www.homemediamagazine.com from Apple don’t foretell the end of packaged media. “Download models are close to the video-on-demand and near-video-ondemand models that have been available for a long time from cable and satellite providers,” Parsons said. “I think both distribution models can both coexist for a long time because they appeal to us in different ways.” Then there’s the space issue for Apple TV hard drives. HD video will take up more space than standard definition, movies, said Adam Gregorich, administrator with Home Theater Forum. they have the power to keep digital downloads from developing while maintaining DVD sales or developing cable VOD. With Blockbuster still having a 30-day lead over Apple in their releases, Pachter said Apple won’t threaten Blockbuster any more than it is threatened by VOD. “It is not collusion; DVDs are always going to be more profitable because they allow for an impulse purchase,” Pachter said. “There is no such thing as an impulse purchase of a download.” Still, even Apple’s competition is finding more positive than negative with the new service. “We view the Apple announcement as positive news,” said Randy Hargrove, spokesman for Blockbuster Inc., which acquired the digital movie company Movielink in August. “Apple’s move should accelerate consumer awareness and usage of movies via digital downloading, and we believe Blockbuster is well positioned to take advantage of this potential increased demand by way of our Movielink service.” Netflix’s Steve Swasey said Apple joining the digital movie rental game doesn’t threaten his company. Netflix just recently announced that its customers on unlimited rental plans will also have unlimited streaming access at Netflix.com. “It’s a big market and a big prize getting from the computer to the TV, and that’s what Netflix has been working toward,” Swasey said. “When you get a great company like Netflix and a great company like Apple making these big announcements, it raises the public awareness of the entire industry.” mail,” said Apple CEO Steve Jobs. In addition to being available on Apple’s portable devices, the rental service is available through Apple TV, the digital media receiver box launched last year that moves content from the Web to the TV and can store or stream content from a Mac or PC running iTunes. Through Apple TV, viewers also can rent more than 100 high-def films, $3.99 each for catalog titles and $4.99 for new releases. A new version of Apple TV is set for release later this month for $229, and new software for current Apple TVs removes the requirement that a Mac or PC be connected to stream or load video, allowing users to download content from the iTunes Store directly from their TV. Two versions of the Apple TV are available, a 40GB and a 160GB model. “No more driving to the video store or waiting for DVDs to arrive in the Pros and cons A test of the download gives an option to start streaming the movie minutes after a rental is purchased, depending on the Internet connection. The average size of a movie is only about 1.5GB. The movie, with the same rental time restrictions, can be moved among portable Apple devices and PCs. There are a lot of things Apple’s done right, analysts say. “It is tremendous what they’ve done,” said Richard Doherty of The Envisioneering Group. “We weren’t expecting anything more than 75% of the Blu-ray camp backing this.” Doherty speculates the service will grow much the same way iTunes did for music. “A lot of independents are going to show up in the coming months,” he PorchLight Gives Playdates “Entertainment Tonight’s” weekend host, Kevin Frazier (center), is flanked by The Little Playdates Company’s JoAnne Pettry and Trent Pettry, at the Golden Globes’ Boom Boom Room at the Hyatt Century Plaza Hotel in Century City, Calif., where celebrities stopped by to snag a copy of “The Little Playdates” DVDs, distributed by PorchLight Entertainment. said, adding Apple’s scalability of its service deserves praise. “They’re going to race to this, much like independent artists raced to iTunes music.” “I think this is one of many steps toward a revolution that is due,” said Richard Bullwinkle, chief evangelist for Macrovision. He said faster Internet speeds and Apple’s reputation means good things for the online movie industry overall. “After watching the music industry falter, and watching their revenue slip, studios are looking for creative and secure ways to distribute their content and meet the use-cases consumers are demanding,” he said. “It is time for electronic distribution to go mainstream, but consumers will also want their media to play on more platforms than just Apple’s.” That’s one major problem critics have pointed out: The iTunes service can’t be viewed on every portable media device. Another major issue involves the Apple TV device. HD movies are available only via Apple TV, and not on computers. By high-def, Apple means 720p, not 1080p, possibly making it less of a threat against Blu-ray Disc and HD DVD. “The picture quality isn’t as good,” said Kevin Collins, director of HD DVD evangelism for Microsoft. “Also, the audio quality doesn’t match what is being delivered on HD DVD with Dolby True HD/Digital Plus. Simply put: From a video and audio perspective, HD DVD is superior.” Andy Parsons, of Pioneer Electronics and the Blu-ray Disc Association, said download models such as that Industry impact Another issue is that the Apple might find allies hard to come by. “Apple faces a further challenge in that they won’t get support from other [consumer electronics] manufacturers or MSOs [multisystem operators],” Bullwinkle said. “Look at deals like CinemaNow’s relationship with Echostar [Dish Network], or the recent holiday offer of a free Vudu with the purchase of a Sharp LCD TV. “Apple has alienated the MSOs, satellite companies and CE vendors, and they won’t get partnerships like that.” Also, some analysts contend the mode of getting content to the TV is too cumbersome. “Our sense is that only a small number of consumers would be willing to pay the extra cost and add another set-top box to their living rooms,” JP Morgan analyst Barton Crockett said in a research note. Michael Pachter, media analyst with Wedbush Morgan Securities in Los Angeles, said the studios know L ATE FLAS HE S I DVDPLAY: DVD THRIVING Rental kiosk operator DVDPlay said the DVD industry will continue to thrive despite increased competition from cable VOD and the Internet. The company reported its 13 millionth movie rental and completion of an installed base of 1,400 kiosks as well as plans for 1,800 more in 2008, primarily at convenience stores and supermarkets. Citing thirdparty data that claimed 33 million domestic DVD player sales and $16 billion in consumer spending on DVD purchases in 2007, DVDPlay CEO Chuck Berger said DVD remained the dominant format in home entertainment. – Erik Gruenwedel Bloggers Busy on HD Sites Continued from page 1 I REPORT: GOOGLE NO. 1 Online search behemoth Google Inc., through subsidiary YouTube.com, upped its video market share 2% from October to 31.3% in November, according to data from ComScore. The report found that 75% of Web users watched video, including about 9.5 billion streams, averaging 3.25 hours per person per month. Google sites tallied more than 2.9 billion video views in November, which was 700% greater than runner-up Fox Interactive Media with 419 million views (4.4%) — largely through MySpace.com. – Erik Gruenwedel that things will swing their way. “HD DVD fans seem pretty split, with one side being very angry at Warner for giving up on the better format and succumbing to the [Blu-ray Disc Association’s] cartel. Their word, not mine,” said Ben Drawbaugh, an Engadget.com HD reporter. “The other smaller fraction of the HD DVD camp, while disappointed with the news, is hopeful that everyone can finally get behind a single format and move on.” In a Jan. 17 informal survey posted on the Web site, 66% agreed HD DVD should throw in the towel. The poll had more than 6,000 votes within a couple hours of launching. “Some are saying they’ll never buy another Warner product, and they can’t understand why Warner would ignore all the success HD DVD has had,” Drawbaugh said. “Of course they are completely ignoring the fact that Blu-ray has had more success, but that’s what makes them fanboys.” Digital-Digest.com webmaster Xiao Fang said gloating Blu-ray supporters have suddenly come out of the woodwork. “[I’m seeing] Lots of post closures, members leaving, and Blu-ray fans excitedly [posting] the same old stories, [with] rumors all over the place,” Fang said. Those rumors — Paramount and Universal ending it all by going Blu — are still just rumors. But the Warner Blu-ray exclusive announcement was a rumor at one point too. “I think most of them see that the writing is on the wall,” said Bill Hunt, editor of TheDigitalBits.com. “Even a lot of the most enthusiastic HD DVD supporters online seem to have come to that conclusion. I’ve been surprised how quickly the news seems to have been absorbed. “There’s been a little bit of hostility, but again I’ve been surprised at how quickly it’s dissipated … The prospect of finally being able to put the format war, and all the bitterness it’s inspired, in the rear view mirror is cause for no small amount of relief online.” HOME MEDIA MAGAZINE (ISSN 1934-9882) is published weekly 51 times per year (weekly except for one week at the end of December) by Questex Media Group, Inc., 306 West Michigan Street, Suite 200, Duluth, MN 55802. Subscription rates: $49.99 for one year in the United States and Possessions; $79.99 for one year in Canada and Mexico; all other countries $99.99 for one year (by surface mail). Add $75 annually for air-expedited service. Single copies (prepaid only): $6.99 in the United States, $8.99 in Canada and Mexico, $13.99 all other countries. 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