Blu-ray, Blue Movie, Blue Just Sounds Sexier

by Robin Harris on Wednesday, 6 September, 2006

The stupid fight between Blu-ray and HD-DVD shows no sign of abating, but there may finally be a player with enough clout to decide the issue after the movie studios, Sony, Apple, Microsoft and HP couldn’t break the log jam. The tie-breaker: pornography. And Playstation 3.

All this according to a Computerworld article Porn industry may decide battle between Blu-ray, HD-DVD. I don’t care which format wins, but it is instructive to students of technology diffusion.

Follow The Money
The porn industry has been a major driver of internet technology since it has always had a product that people are willing to pay big bucks for. Looking at Playboy’s (the only public adult entertainment company I’m aware of) latest 10-K report, for example, we see that their domestic TV revenues are flat, publishing revenue dropped 12%, while domestic internet revenue climbed 22% and their e-commerce site grew almost as fast. As the song at the hit Broadway musical Avenue Q goes “the internet is for porn” [hilarious, but not for the easily offended].

Storage vs Bandwidth
The article’s money quote:

Porn studio Digital Playground Inc., which claims to have produced the largest number of high-definition movies in the industry over the past three years, said it is choosing Blu-ray Disc for all of its “interactive” videos because of its greater capacity. It also selected Blue-ray because Sony chose the format for its PlayStation 3 (PS3) box, due out in November.

As I’ve noted before, storage and bandwidth are largely substitutes for each other. Before broadband, CD-based magazines enjoyed some popularity because they could ship you several hundred megabytes much more easily than you could download it. With Blu-ray, a vendor can ship 50 GB of content for a couple of bucks, while it would take it would 14 hours to download that amount over a one MB/sec link, which few Americans have.

So Digital Playground is betting on four trends: HD movies; interactive video; widespread PS3 adoption; and little improvement in American broadband speed. Other than the PS3 those all seem like pretty safe bets.

Critical Success Factors
Although the VHS/Betamax story is often told as the victory of “open” over a superior proprietary format, I don’t recall most folks in those days really cared about either the quality or the standard. Each produced an acceptable picture that was usually better than what people saw on broadcast TV. Pricing may have been a factor – porn producer Steve Hirsch is quoted in the article noting that VHS tapes were $5 cheaper, which lead his company to push VHS – and certainly Matsushita, the biggest backer of VHS, is usually the consumer electronics industry’s low-cost producer.

Yet the winning factor for VHS was recording time. Betamax had a one hour tape when VHS had a four hour tape. Tapes weren’t cheap and thrifty consumers voted with their dollars for VHS. By the time Sony got its act together the market had shifted decisively to VHS. Score one for better marketing.

Dual-layer Blu-ray holds 50 GB vs HD-DVD’s 30 GB. Assuming dual-layer Blu-ray disks are price competitive, I think that difference will win over consumers who want the HDTV movie and HDTV features. Shooting digital HDTV doesn’t cost much more, so producer’s will likely spring for the whole package and I think customers accustomed to HDTV will respond.

The Real Problem
Is consumer uptake of either format. High-quality upsampling DVD players are pretty good, and I’m certainly not going to be in any rush to replace my 600 DVD collection. To get the full effect of either format requires 1080p screens and those are still costly and rare. Perhaps HD porn will be the killer app that drives volumes to Blu-ray. Yet even without the format war this will be a longer transition than proponents imagine.

Trivia: Hugh Hefner, Playboy’s founder and controlling stockholder, pays about $100,000 a month for rent, meals and services for his private quarters and his guests in the 29 room Playboy Mansion.

So what do you think? Comments always welcome.

{ 4 comments… read them below or add one }

hmurchison Wednesday, 6 September, 2006 at 9:30 am

I don’t think Porn applies now because the access is different today. 20 years ago if you had a need for a porn fix you have to risk being seen by friends or colleagues walking out of a smut theatre. $1000 was a small price to pay for the ability to view the smut within the confines of your own home. VHS and Betamax sold like hotcakes despite little major studio content.

Today you have instant access to porn via the internet. I didn’t even know Digital Playbround existed because I don’t know many people that actually pay for porn anymore.

As for HD DVD vs Blu-Ray as a movie lover I’ll own both but if I had to choose the format that would be better for the next decade I’d choose HD DVD based on the best mix of features for all parties. Lower production cost because current DVD-9 replicators can be upgraded. Better legacy support (single lens assembly supports Blu-Laser and red laser DVD and CD support) and cheaper discs (the DL 30GB disc cost about the same as a SL 256GB Blu-Ray disc)

With the newer codecs like VC-1 and AVC we don’t need 50GB for movies. A 30GB disc will hold about 5hrs of HD content. Microsoft has been able to get the encoding process down to the point where movies are high quality and sitting comfortably on the disc at bitrates of 10-12Mbps

Blu-Ray still hasn’t shipped any 50GB discs so I’m going to assume that the current yields aren’t that good nor will their cost be that affordable. Unfortunately HD DVD will probably lose the war because Sony realized that content was a nice leveredge point and they purchased Columbia. They also have more experience pushing their own homegrown formats so they’ve got most of the big Japanese companies and Korean companies making Blu-Ray hardware and they have Fox, MGM, Columbia and Buena Vista/Disney exclusively as of now on the format.

Consumers may not get to choose the $499 HD DVD drive that currently offers the most movies and the best quality overall because they cannot get the content they need. HD DVD has more mandatory features like ethernet and secondary audio and video decoders yet it is still cheaper than Blu-Ray. Clearly as a consumer my only job is the pay the Japansese and Korean hegemony profits and roylaties rather than let competition reduce pricing.

Robin Harris Wednesday, 6 September, 2006 at 9:30 pm

H,

like you I am clueless about the dynamics of the porn industry, as well as the state of the dual-layer Blu-ray disk. Nor am I impressed with Sony’s marketing of late. Yet somebody is buying or renting all the video porn getting produced – probably by the deeply repressed.

My take is that is doesn’t take much at this point to tip the balance. If folks in Hollywood think porn will tip the balance to Blu-ray, and the porn producers agree, that may be all it takes.

Of course, if all the porn consumers are chekcing bit rate, HD support, luminance and Dmax ratings, perhaps the technically correct decision will be made.

This is why I like living in a free country, where the government wouldn’t dare intrude in your church, doctor’s office, gun dealer, bedroom or home theater. It keeps things fluid.

Oh, do you live in the United States? Never mind.

;-)

hmurchison Thursday, 7 September, 2006 at 1:23 pm

touche Robing ;) Less than two more years for this current regime. TG

With that said I’m certainly looking forward to owning both Blu-Ray and HD DVD. I’m a movie lover and I’m going to have a 1080p 56″ screen or larger next year as a present to myself and I’ll be looking for Netflix to supply me with SD and HD titles.

No porn though LOL

Jim Tuesday, 14 November, 2006 at 10:47 am

Interesting topic… I’m working in this industry myself and I don’t agree about this in 100%, but I added your page to my bookmarks and hope to see more interesting articles in the future

Thanks
Jim
Sony PlayStation 3 Admirer

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