And You Thought The Next Generation Video Standards Battle Was Over?

from the we've-got-a-new-one-coming-on dept

Thu, Jul 17th 2008 9:55am — Mike Masnick

If you thought the questions about what technology standard we'd be using to watch movies was settled when Blu-ray won the next generation DVD standards battle, then you're in for a bit of a surprise. In taking nearly half a decade to decide which standard would make it, the DVD camps left open plenty of opportunity for online competitors to start making their moves. The technology for delivering movies online has been rapidly improving. But, of course, what we didn't count on was that it would just create a huge new mess.

Earlier this week, there was all sorts of talk about Netflix streaming movies to the Xbox as part of Netflix's effort to get consumer electronics companies to build in support for Netflix streaming. As we warned when that announcement was made, it's a bad idea for Netflix to focus on a proprietary streaming solution, as it's only going to set up another standards battle. And, indeed, Blockbuster is working on its own such solution. Then, of course, everyone knows that Apple's in the market with the AppleTV. And don't forget Sony, which is selling a special (extra expensive) TV for downloading movies. And, of course, there are countless startups in the market as well.

Oh, and how could we forget Amazon? The company is now announcing its own proprietary online store for streaming movies and TV. This one piggybacks a bit on Sony's awful plan (meaning if you buy that super expensive internet-connected TV, you'll also be able to stream movies from Amazon).

But the end result is a total mess for the entire market, and that doesn't help anyone. All of the players should take a look at how badly the multi-year DVD standards battle hurt the industry. It makes people unwilling to buy certain hardware, as they don't want to be stuck with the "loser" a year from now. What's wrong with coming up with a single standard for streaming movies from any particular service to various TV-connected devices and computers? Then let the different providers compete on actual services provided? That would increase adoption, and let these companies do what they do best, rather than fighting a can't-win battle against too many other competitors.

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Filed Under: movies, next generation, online video, standards, streaming, television, video
Companies: amazon, apple, blockbuster, microsoft, netflix, sony

26 Comments

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Anonymous Coward, 17 Jul 2008 @ 10:18am

It appears that there are...
four incompatible standards (that we know of) being pushed thru the tubes. It's no wonder telcos fighting for net neutrality and metered internet usage.

In the end, I forsee customers getting mad and lost because of incompatible standards based on exclusive content arrangements between parties. It's a solution in search of a problem.
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Sehlat (profile), 17 Jul 2008 @ 10:51am

The Motto of Modern Business
The first rule of business, since long before the time of Sargon the First until recently, has been: "Caveat Emptor": Let the buyer beware.

However, under a legal system which gives the various players in the Corptocracy almost godlike power over the consumer, the new "first rule" has become "Carpe Emptor": Seize the buyer.

In other words, try to lock your customers into YOUR stuff and to hell with the viability of the market as a whole. It hasn't worked yet, but that doesn't stop idiot market-droids from trying.
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Anonymous Coward, 17 Jul 2008 @ 10:52am

Pfft, why make proprietary systems? You're so near-sighted, Mike. If we get them now then out competition can't dislodge us. If you buy a Sony TV, you aren't going to be courted by Netflix because you can't be! If we made a standard that *anyone* could use, then in two years someone might come along and actually do a better job than us and take all our customers. As long as we control the means of distribution, we can practically print money.
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Craig, 17 Jul 2008 @ 10:58am

All valid points but
...you may as well be asking for world peace. I would guess that companies view their particular standards to be the most innovative and best way to distribute content, but they don't want to invest all that money into R&D just to give it away to competitors.

I have not bought ANY new DVD hardware, and I don't plan on doing it. I'm waiting for the solid-state drives to go mainstream and make the current "new" hardware obsolete.

It pisses me off to have to choose a movie based on what hardware I have at home. I just want to watch a MOVIE, not a blu-ray or hd-dvd. The consumer whores who worship at the Altar of Apple have dibs on locking themselves into proprietary purgatory. Me? I'll pass.
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Michael C. Neel, 17 Jul 2008 @ 11:00am

Standards or DRM?
It's my understanding that most, if not all of these use H.264 as a video format. I think your confusing the standard with the DRM and or hardware player required - which at this point is just a vendor lock in; Netflix can stream to an Apple TV technically just fine - but I don't see Apple allowing that in the face of their iTunes.
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James, 17 Jul 2008 @ 11:01am

Re: The Motto of Modern Business
You might have a point if consumers would just remember one thing.... THEY ARE IN CONTROL.

Its easy enough to vote this crap down w/your $$... no money... no half-baked solution. Personally I do my best not to send any $$ to any of these companies (do you hear me Apple and your iPod?) that insist on these closed-end solutions... unless I just really need or want what they offer.

The market will prevail ... if consumers are willing to just wait them out.
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Craig, 17 Jul 2008 @ 11:03am

Re: The Motto of Modern Business
It hasn't worked yet, but that doesn't stop idiot market-droids from trying.

Sehlat - have you never heard of Apple? iTunes? iPhone? iPod?

P.T. Barnum said it best - "there's a customer born every minute." and Steve Jobs knows that better than most.
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TankerKevo, 17 Jul 2008 @ 11:14am

What about the PS3?
You mention that Sony has its own store, but you fail to mention the PS3 as a client that can access the store, so if you have a PS3 you don't need to buy the "special" TV. You also fail to comment that this also gives PSP users the ability to rent movies. Not only that, but last time I checked NetFlix didn't have HD yet, the Sony Video store already does.

The latest BluRay players can access the internet. Gee, I wonder what technology that will be used for. Come on, don't tell me you didn't see this coming when the BluRay 2.0 players were introduced...

Sony used PS3 to push Bluray. Now it's using BluRay to push DLC.
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Nick Stamoulis, 17 Jul 2008 @ 11:15am

We agree with all these competitors pushing devices down our throats.... wish there was one standard tool that could get us what we need...we DO control the market - speak up consumers!
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Dave, 17 Jul 2008 @ 11:22am

Have you seen prices on BluRay movies? THAT is the problem. There needs to be competition or we will be paying $30 a movie.
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Bubba Gump Shrimp Co, 17 Jul 2008 @ 11:30am

Same problems, just 50 years later
I remember reading somewhere that someone like GE made a TV that would only pick up NBC channels, and even though it was 1/2 the price of a normal TV, it didn't sell at all!
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Killer_Tofu (profile), 17 Jul 2008 @ 11:35am

Ah HA!
I believe that services such as these, streaming whole movies, are the reason why the cable companies want to rush to charging more for increased bandwidth usage now.
Once these services start full swing, as if YouTube and its ilk are not enough as is, it would be completely impossible for them to switch over as the public outcry would be 10 fold what it will be now.
Then again, when there is practically no competition ...
I know I am halfway off topic, but I feel the topics are closely related.
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chris (profile), 17 Jul 2008 @ 11:47am

the digital video format war is over, vlc won
you can have a standards war with physical formats, but to have one with digital formats is pointless.

someone will come up with a service/player that is open source and plays most of the popular formats (like vlc media player) and the world will settle on a semi-open format like divx/xvid.

see, big companies get a say on physical formats because you need money to buy a vote in the race. the internet plays by different rules.

streaming video will probably be the same thing... all this hustle and flow about formats, just to have most folks settle on their own semi-open standard.
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Joe, 17 Jul 2008 @ 11:56am

Netflix streaming on the xbox
Did I miss something here? I thought the streaming of netflix movies on the xbox was free if you currently subscribed to Netflix. Also I thought they were unable to stream high def movies. I don't see how Netflix making this offering hurts anyone, all it does is give current subscribers a perk if they own an xbox 360 to watch their movies on a larger screen (not their PCs). Also it allows a point of differentiation between them and blockbuster.

The whole reason they launched the streaming was because of 3 major factors:
1) cost of shipping a DVD
2) Consumer expediacy...blockbuster offered in store exchange
3)Point of competitive differentiation
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Anonymous Coward, 17 Jul 2008 @ 11:58am

It's called free market, and it is what each companies thinks is best, plain and simple. Best for who is completely debatable, mostly for themselves and the stockholders they report to.
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Consumaster, 17 Jul 2008 @ 12:13pm

Re: Re: The Motto of Modern Business
"...if consumers are willing to just wait them out."

How long were the lines for the new iPhone which helps to perpetuate iTunes and the proprietary formats it pushes? You may be willing to wait, but the ignorant masses are believing the marketing hype. As a technologically aware (you're on this site, I'm not psychic), it should be your duty to help guide your friends/family away from these products.
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PaulT (profile), 17 Jul 2008 @ 12:14pm

Re:
...except that's the point. If there was a free market - i.e. a single standard and everyone was using a version of that standard - everyone would win. The hardware manufacturers would compete on features, and the service providers would compete on quality and range. Customers would be able to pick and choose, safe in the knowledge that whichever model they buy isn't going to be useless in 12 months.

At the moment, nobody wins. Many early adopters simply aren't buying the necessary hardware because they don't want to be stuck with another Betamax. Service providers cannot compete directly with each other based on their service because of the hardware required - e.g. an XBox owner can't opt for Sony's service without significant expense.

So the market moves much more slowly, costing all these companies not only millions in R&D but many millions more in advertising and trying to create awareness. Since the books are balanced much more towards these costs than they should be, the shareholders don't make so much and the customer never gets a good deal.

The problem is that this isn't a free market. These people are trying to lock customers down so that they can't choose a competitor even if they want to. Many people are responding by not buying any of them.
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Matt, 17 Jul 2008 @ 12:20pm

Re: Netflix streaming on the xbox
Agreed. The Netflix thing is offered IN ADDITION to their normal offering, meaning it is completely free for Xbox Live members and Netflix members (and I have to assume those groups overlap quite a bit, as Live's video rental service is still pay-per-movie, which is lame). I am having a really hard time seeing the downside for consumers in this latest offering, seeing as there is no extra equipment to buy and there are no extra fees.
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Philip Stehlik, 17 Jul 2008 @ 12:59pm

Over and over and over again
The war whoever brings their proprietary solution to enough consumers first, in order to create enough revenue to keep it alive is happening everywhere and over and over again. Not only with digital video formats.

The company who is fastest and can attract the most consumers first will be the winner. From thereon it will be pretty hard to get a foot into the door.

I see it as another cycle of 'evolution'. You can fight it but eventually people have to start learning what is better from experiences they make...

However: I think open standards are the better way to go. Let the provided quality of service decide who is better!
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Freedom, 17 Jul 2008 @ 1:20pm

Open Standards...
In a lot ways, the decision of Netflix to use the XBOX for streaming is a sort of open standard. Instead of building a special box, they made a deal to use an existing box (i.e. XBOX 360) and I'm sure the setup is just Media Player with some DRM. Is it 100% open - no, but it has the chance to be more open especially if this opens up the ability to play via the PC using just Media Player which then opens up any device that has Window's Media Player.

Could it be better and a true universal IEEE type standard, sure. But all in all considered, this is far better then another dedicated special purpose 'Netflix Box' or something insane like that.

For me, I'll take it any day over Sony or Apple as both these companies are all about 100% control. With that said, a nice open solution with even an open DRM solution would be the best - something like VLC on a chip would cool!

Freedom
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KAC, 17 Jul 2008 @ 1:24pm

CABLE
Why do Cable Companies want to start limiting how much you can download?? Is it really just all those illegal file sharers out there?

NO, they know all these other players are wanting to try to start providing much of the same content that they do.
So by limiting the amount that you can download, they can make their "Pay-per-view" and "on-demand" systems look even better.

All they need to do is start allowing their cable boxes to be connected to home networks...

I know everyone wants a piece of the consumer entertainment dollar, but the Cable Companies are really in the best position to get these dollars, and to keep others from them.
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sehlat (profile), 17 Jul 2008 @ 1:32pm

Re: Re: The Motto of Modern Business
I've heard of them. I'm SO not interested in locking my precious body parts into Steve Jobs' DRM trap.
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Rekrul, 17 Jul 2008 @ 2:29pm

This stuff probably would have been really popular before the age of high-speed internet accounts and file sharing.
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Silvermane, 17 Jul 2008 @ 2:45pm

Re: The Motto of Modern Business
Kind of like Apple and it's OS??

What if the car companies said you may ONLY use the fuel THEY sell??
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Illegal Prophet, 17 Jul 2008 @ 3:24pm

Something overlooked
People have already pointed the significance of Xbox 360 and it's partnership with Netflix. One thing that was overlooked though. Xbox Live has an installed base of over 12 million users. According to them they are attracting people at an average rate of 1 every 5 seconds (or maybe that is what it averages out to since its inception, anyhow it is their word saying it). It's not Netflix necessarily trying to get people to buy some new box or TV, it's them boosting their own service on an existing platform. No new gadgets to buy. Microsoft showed off it's new dashboard rolling out with the fall update. Netflix and many other nice features are being added to the 360 all via software. There will be no need to purchase anything additional, nor will it need to be streamed to your PC through Windows Media Center. Other than the lack of HD streaming, it seems to be a win-win situation for both companies. As a 360 owner this just gives me more bang for my buck for free.
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Anonymous Coward, 18 Jul 2008 @ 5:17am

Standards for rentals? Who cares?
I see no reason why there needs to be a video standard for online rentals on a gaming platform. After 24 hours you can't watch it again anyway. Besides, if your goal is to be able to watch it on any gaming platform, how many transfers do you anticipate making before that 24 hour period is over. Rent the movie, watch it on the system you bought it from and be done with it. Sounds like this is just a gripe for people who want to pirate movies.

Movie PURCHASES is a whole other animal though :) You SHOULD be able to play it on any device you choose and as many of them you like.
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