Tuesday, February 1, 2005
The Wonderful World of CES
Posted by Jason Dunn in "THOUGHT" @ 10:00 AM
The following article is written by an industry insider, anonymously referred to here as Steve Sanders.
Anyone who struggled to make their way through the three football fields of fantasy we call CES would come away believing high definition TVs, camcorders, recorders/players are going to be snapped up and snapped together by any consumer who knows what is good for him or her. The big problem is it still requires credit cards with a huge spending limit, a lot of patience or assistance and hurdles thrown in the way of the buyer by factions that focus more on patent payments than the consumer.
The big, beautiful screens from Sony, Samsung, LG, Pioneer, Panasonic and the newcomers from Taiwan and Mainland China you never heard of are spectacular. TV that sits on the counter or floor is rapidly giving way to video wall art. Trouble is they cost as much as a fine painting and lack the one thing you want … content worth watching (and that you can save). Television and content providers are rapidly improving the number of HD programs and some you may even want to save with your DVR. No problem right now but what happens mid year when the obligatory broadcast flags go into effect and recorders must identify the flag before it can successfully record your high def program(s)?
Our first hurdle comes up because there are two approaches to the content protection (VCPS that puts money into Philips and HP coffers or CPRM which puts the money in the pockets of the 4C members). Which will be used is being hotly contested but either approach will require a new DVR if you want to save the content in high definition. The decision on who wins is probably two years away which should coincide with when all of the high def components will really be in place.
The second hurdle (and huge noisemaker) at CES was the rivalry of words between the Blu-Ray (BD) and HD DVD camps. Some members of the media say that it is obvious that consumers want the high definition storage and that the rivalry is only hurting demand and sales. Especially since it appears that Hollywood studios are divided equally on the issue and no one wants to blink.
But a few analysts are skeptical of the immediate demand.
Why?
DVD was significantly better than VHS for viewing. HD is better than DVD but is it so much better that people will open their checkbooks immediately? Analysts from IDC, Gartner, Enderle Group and others feel true volumes for HD won't arrive for at least 4-5 years because "good enough" viewing will be sufficient until present systems fail and prices of new products come down dramatically.
IDC and Enderle both note that the majority of the country (and globe) still don't have DVD burners or DVD recorders even though prices have come down to $50 and $200 respectively. Now that DVDR media is well under $1 and DL (8.5GB) media is just now approaching $6 people are still looking for the killer app that makes it imperative that they record an hour of standard def video.
The low-cost burners and media have some people practising what they jokingly call "burn and return," they are the minority. Even more though are beginning to master the recording of TV favorites onto their HD and then have transferred them to DVDR. But most of the DVR users simply struggle with the technology so they can watch shows when they want to watch them and then overwrite older video content when the HD gets full. And with hard drives getting bigger and cheaper that is probably going to continue.
For those who plunk down $3,000-plus for a high def screen they will have to add another $1,000 - $2,000 for a high def DVR and $25-plus per BD or HD disc. But then they only be able to watch them on their set since most manufacturers agree that sales volumes won't become significant until sets are below $1,000, DVRs are below $500, and media gets down to $2-$3.
Put those costs on top of the standards "discussions" and it becomes easy to understand why research firms are looking to 2010 for widespread high def sales. By then, "everyone" will have a good/cheap DVDR/RW based system using single and double layer media so it will take another 3-5 years before high def recorders/burners replace present products.
By then we'll again have the next great solution ready to battle over.
Anyone who struggled to make their way through the three football fields of fantasy we call CES would come away believing high definition TVs, camcorders, recorders/players are going to be snapped up and snapped together by any consumer who knows what is good for him or her. The big problem is it still requires credit cards with a huge spending limit, a lot of patience or assistance and hurdles thrown in the way of the buyer by factions that focus more on patent payments than the consumer.
The big, beautiful screens from Sony, Samsung, LG, Pioneer, Panasonic and the newcomers from Taiwan and Mainland China you never heard of are spectacular. TV that sits on the counter or floor is rapidly giving way to video wall art. Trouble is they cost as much as a fine painting and lack the one thing you want … content worth watching (and that you can save). Television and content providers are rapidly improving the number of HD programs and some you may even want to save with your DVR. No problem right now but what happens mid year when the obligatory broadcast flags go into effect and recorders must identify the flag before it can successfully record your high def program(s)?
Our first hurdle comes up because there are two approaches to the content protection (VCPS that puts money into Philips and HP coffers or CPRM which puts the money in the pockets of the 4C members). Which will be used is being hotly contested but either approach will require a new DVR if you want to save the content in high definition. The decision on who wins is probably two years away which should coincide with when all of the high def components will really be in place.
The second hurdle (and huge noisemaker) at CES was the rivalry of words between the Blu-Ray (BD) and HD DVD camps. Some members of the media say that it is obvious that consumers want the high definition storage and that the rivalry is only hurting demand and sales. Especially since it appears that Hollywood studios are divided equally on the issue and no one wants to blink.
But a few analysts are skeptical of the immediate demand.
Why?
DVD was significantly better than VHS for viewing. HD is better than DVD but is it so much better that people will open their checkbooks immediately? Analysts from IDC, Gartner, Enderle Group and others feel true volumes for HD won't arrive for at least 4-5 years because "good enough" viewing will be sufficient until present systems fail and prices of new products come down dramatically.
IDC and Enderle both note that the majority of the country (and globe) still don't have DVD burners or DVD recorders even though prices have come down to $50 and $200 respectively. Now that DVDR media is well under $1 and DL (8.5GB) media is just now approaching $6 people are still looking for the killer app that makes it imperative that they record an hour of standard def video.
The low-cost burners and media have some people practising what they jokingly call "burn and return," they are the minority. Even more though are beginning to master the recording of TV favorites onto their HD and then have transferred them to DVDR. But most of the DVR users simply struggle with the technology so they can watch shows when they want to watch them and then overwrite older video content when the HD gets full. And with hard drives getting bigger and cheaper that is probably going to continue.
For those who plunk down $3,000-plus for a high def screen they will have to add another $1,000 - $2,000 for a high def DVR and $25-plus per BD or HD disc. But then they only be able to watch them on their set since most manufacturers agree that sales volumes won't become significant until sets are below $1,000, DVRs are below $500, and media gets down to $2-$3.
Put those costs on top of the standards "discussions" and it becomes easy to understand why research firms are looking to 2010 for widespread high def sales. By then, "everyone" will have a good/cheap DVDR/RW based system using single and double layer media so it will take another 3-5 years before high def recorders/burners replace present products.
By then we'll again have the next great solution ready to battle over.
