Archive for March, 2009
Let Them Eat Bits: Cheap HD For China But Not For You
It isn’t often that a dead format continues to wage market warfare from the grave, but that’s just what’s happening in the arena for high definition movies on disc.
What’s that you say? Blu-ray trounced HD-DVD? Sure it did – at least as far as you’re concerned. But over on the other side of the world they’re playing a different movie, complete with stock villains that include pirates, mad scientists and monsters that aren’t dead even after you’re sure they’ve been killed.
The fuss is over a new disc technology designed specifically for the Chinese market called – we’re not making this up – China Blue High Definition disc, or CBHD. The last time we heard the name China Blue it belonged to a prostitute, memorably played by Kathleen Turner in Ken Russell’s loopy Crimes of Passion. That irony may be too corny even for Hollywood, but let’s follow the plot anyway.
The original China Blue
As you’d expect, the story begins with a crime. Movie piracy in China is big business; the MPAA estimates that as much as 93% of the movies sold there are bootlegs. A typical price for a pretty good pirated DVD – easily available in almost any Chinese city – is 6-10 RMB, which is more or less a buck in US terms. In other words, cheaper than a cup of coffee over here.
If you can’t beat ‘em join ‘em, or so went the reasoning from Hollywood, already up to its keister fighting illegal downloads, never mind pirated discs. The logic went that if you offered a legit copy that was affordably priced, people would buy the real thing instead of stealing it. Hence the decision to try to sell authentic studio DVDs in China for around $3.00 a pop. It’s a tiny finger in the dike, but a even a few thousand sales (out of a market of many millions) was judged to be better than nothing.
The new China Blue
Cheap and legal has proven to be a reasonably promising strategy in more developed markets; it’s been working for iTunes, to greater or lesser degrees. In emerging markets where consumers are much less affluent but no less eager, it’s wishful thinking to expect similar successes. China’s (and India’s) nascent consumer cultures are already very comfortable with cheap or free bootleg software; just ask Microsoft.
The latest battle moves us from DVD to Blu-ray, which Hollywood hoped would inject new life into the declining market for disc sales, at least on this side of the Pacific. And it has, to some degree. But why not simply sell BD discs in China just like here, even if you have to sell them more cheaply? Because it costs nearly $3 million to tool a disc pressing plant for Blu-ray duplication, as opposed to around $800k for a CBHD plant.
Cheap upgrades to HD for disc pressing plants was the major reason why HD-DVD existed in the first place; that and because Toshiba and Sony couldn’t agree on how to share the new market, thus giving us the last format war. Once Toshiba cried uncle on HD-DVD, its basic technology was “embraced and extended” by Chinese engineers, who now claim the intellectual property rights to CBHD. This assertion no doubt produced some guffaws in the boardrooms of Tokyo and Osaka, but with CBHD moving from possibility to reality, nobody’s laughing anymore.
Any physical similarities between this Shinco CBHD player and a Toshiba HD-DVD player are, er, next question...
This is particularly true of the Hollywood studios, which had already tried fighting fire with oil by offering 60¢ movie downloads in China as an “alternative” to file sharing. Its latest accommodation raises the ante into the HD space, with Warner Brothers announcing that it will support the CBHD format in China, along with Blu-ray everywhere else. The cost for titles like Harry Potter, The Golden Compass and Speed Racer among others translates to roughly $7-10 per high def movie, or about a third of what we pay here for a Blu-ray disc of the same title.
The idea of paying three times more for something than someone else pays for the same thing because they’re more likely to steal it than you are is certainly a novel commercial concept. While we don’t expect to see Wal Mart slashing prices in stores that experience more shoplifting, we do expect that the CBHD decision will quickly come back to bite Hollywood where it hurts most – in the wallet.
Any cursory look through the web will offer dozens of DVD (and now Blu-ray) players for sale with region-free disc capabilities. How long will it be before we see region-free machines that also play CBHD? Prediction – not very. Once that happens, what’s to stop Chinese entrepreneurs (or anyone else) from selling them to places they weren’t meant for, like the USA?
When (not if) that happens, American consumers will rightfully ask why they should pay $20-30 for a movie when they can get the same high-def, 1080p presentation for $7-10. Frankly, we don’t think the trivia games and coming attractions you get (but don’t use) with BD Live offer a particularly compelling answer.
At some point in all this, movie executives will be thinking of their counterparts in the music industry, still gamely asking for an $18.98 list price on a CD, and wonder if law school wasn’t such a bad idea after all. Or international economics.
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1 comment March 11, 2009
Plasma – Fading To Black?
Superiority alone is never a sure bet for winning at any endeavor. If it were, Starbucks would be bigger than Dunkin Donuts, the Yankees would be champions every year and DTS would be the surround sound standard, rather than Dolby Digital. We’re willing to bet that few people reading here even know what DTS stands for, much less use it on any regular basis.
In today’s TV market, there’s a superior technology out there called plasma. It invented its own category so thoroughly that lots of people say plasma for any flat TV, like Kleenex for a tissue. It enjoyed happy years where there was little to no market competition. Everyone loved and continues to love it. Yet plasma already seems well on its way to joining the CD, FM radio and DV cassettes in the inexorable slide toward technology obsolescence.
- Is plasma toast?
Why? Because LCD TVs are cheaper to produce and more profitable to sell than plasma; because the major manufacturers have already made huge investments in LCD plants, and because, well, that’s pretty much it.
Before we go any further, know that we have no intrinsic beef with LCD, the technology that’s pushing plasma out the door. Well, that’s not exactly true, we really do wish big-screen LCD technology was better than it is. We don’t like its finicky viewing angles; sit on one side of the room and the picture looks fine, sit on the other (or stand up) and it’s washed out. We don’t like its inability to keep up with fast action like sports, which is why LCD manufacturers knock themselves silly with fixes like 120 Hz and now, even 240 Hz refresh rates. Most of all, we don’t like that its color and black levels — the meat and potatoes of a good picture — still don’t equal those of plasma, much less CRT (remember those?), another obsolete technology that was, by the end of its life, better than either plasma or LCD for pure picture performance.
Actually, that does sound like a beef, if not a rant. We apologize, but the apology would be more sincere if LCD TVs were simply better performers. Some of the best ones have gotten to be pretty good. The worst ones (no names will be mentioned) make us nostalgic for analog. For most TV manufacturers, that’s not a good enough reason to stick with plasma, although several key makers have announced that they’ll do just that – at least for the present.
Panasonic is one of them, and they’re about to become the plasma kings by default. Their plasma technology has always been very good, thanks to a talented engineering culture, economies of scale and some astute acquisitions early in the game. The company’s latest sets have been very good indeed, and now that Pioneer and its standard-setting Kuro sets are leaving the market, perhaps soon to be followed by Hitachi’s excellent plasma models, Panasonic will likely take the title of “best” TVs out there.
Samsung and LG both claim to be sticking with plasma, although LG was a bit coy before saying so publicly. But one look at the names who’ve already left plasma for good tells you what time it is. Sony, RCA and Toshiba may have been sourcing their plasma sets from other manufacturers, but at least they were in the game. Now they’re not, and neither is Vizio, Fujitsu or JVC. Even Sharp, the all-time LCD champs, once marketed a couple of plasma models. Just don’t mention it to them now.
So is plasma still worth thinking about for a TV purchase? Sure – in fact, it may well be your best purchase, if picture quality is your primary concern.
If it’s not, enjoy your LCD set. At least until OLED and other superior display technologies become market friendly.
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1 comment March 5, 2009
