The Content Delivery War - Revisiting Star Wars
It's hard to believe that it has been nearly thirty years since George Lucas sprung Star Wars on us. Today we are entering a content delivery war and it isn't in a galaxy far, far away.
Tellywood is feeling a disturbance in the Force as if millions of voices suddenly cried out!
Their money model is broken and they struggle to regain control of their ship. It's becoming apparent that it will be impossible. The Sundance Festival proves great video doesn't have to cost tens of millions to produce. With as little as $10,000 and a lot of sweat labor, material can be produced people actually want to see.
Cinematographers and viewers have options. Creators don't have to grovel at Tellywood's doors. They can produce and sell their own DVDs. They can bring their creative work directly to your PC.
The shift in the Force started with music. It helped Steve Jobs increase his percentage of the computer market a whopping 2% (from 2% to 4%). Jobs introduced a cool little Mac Mini that looks like an entertainment appliance instead of a computer. He switched engines for his next generation of attack vessels.
He made Intel's Paul Otellini happy. He irritated a few of Intel's customers (which made AMD's Ruiz happy) and ticked off Bill Gates. Bill already had his sights set on the home entertainment environment. But competition creates chaos and out of chaos comes a better order (we hope).
Tellywood wants to take a scene from Star Wars and shut down the main reactor by keeping people from capturing, storing and sharing content at home for viewing later. Like the dark side they want to control it all with AACS, broadcast flags and analog hole plugs. A few renegade Jedi are going to pump out their content multiple ways - DVDs, TV, web download - to maximize eyeball impact.
If it works the troops will mobilize.
While the RIAA isn't real happy with Jobs' 99 cent-per-song formula, it's hard to ignore the bright spot in music sales. They are hoping that monthly rentals gain traction because they like the idea of the monthly revenue stream formula. But that damn little iPod is big mother ship in disguise. It just keeps spitting out new X-wings/pilots.
As if that wasn't bad enough, Jobs introduced the video iPod and $1.99 TV show downloads. Suddenly there was a new challenge to the $20 ticket, $10 popcorn and million-dollar TV syndication. It is hard to figure out why folks want to watch shows on the small Bono screen but hey $$$$ is $$$$.
Mobile units are cool and 42 million iPods is nothing to sneeze at but remember there are over 300 million folks in the US, 6.5 billion WW, about 200 million US households and billions of households WW. At least one TV set is in every American household and we've just begun selling the 2nd billion PCs. Jobs, Gates, Otellini, Ruiz and all the PC folks know the home is where they must win as we focus on managing all of our entertainment.
Forget about the DVD Format of the future skirmish. We're looking at the collision course of death stars.
The Force can have a strong influence on the weak-minded
Jobs has the Mac Mini. Otellini has the ViiV. Gates has Vista. Ruiz and Dell say 'we'll have what they are having.'
Different platforms. Different approaches. Different views of the future. Tellywood and the RIAA aren't happy with any of them. They are marshalling their Congressional storm troopers and saying not with our content you won't!
Sure some portion of the home entertainment cargo bay will hold "their" video content. But the really big and important cargo is personal and family content - photos and videos. The hard drives are also quickly being filled by download videos from the growing number of web sites.
It is no wonder the Mac Mini's 40 and 80GB HDs fill up so quickly. That's why Apple's companion HD is the second item folks purchase and the reason products like ADS Tech's D-I-Y Mini HD kit sells so well.
Granted Gates view of the home media center started first. Each reinvention looks better. Not great but better. But when Jobs unveiled his MacTel system and iLife solution that was so elegant, so complete and so sexy we could almost hear Obi-Wan urging us to go with the Force. We resisted the call. But it will be a home entertainment platform to watch that could expand the popularity of the 99-cent music and $1.99 video download.
Intel is working both (all) sides of the galaxy. Sure they are MacTel. They are also WinTel. And they are LinTel. They provide the ships (chips), the technical and application assistance and training and your people provide the pilots and fuel.
If ViiV follows the commands of Tellywood dark team and implements their DRM commands it won't be in the best interest of the home user. That's why the EFF (Electronic Frontier Foundation) has encouraged folks to get their digital TV tuner card before Tellywood's Congresspersons reinstate the HD-TV broadcast flag, plug up the "analog hole." They are also working on adding anti-copying flags to digital FM signals and make it impossible for satellite radio subscribers from "stealing" gigabytes of content on your home or portable player.
They are going to come at consumers with light sabers drawn even though you only have a laser pointer! Intel will have to stand up for the lowly consumer and insist that we have content we can capture/store, move around the house and move from one device to another.
So far everyone - Dell, HP, Lenovo and the rest of the computer makers - like the new Intel home platform and focus. First we'll see "regular" PC solutions. Then they will get the message and really make innocent boxes that look as good as the Mac Mini in the living and family room, hopefully in colors other than Steve's virginal white. Despite what they do in Tellywood, the world is not made up of thieves! If they shackle the content too tightly we will go elsewhere for our entertainment.
Help me, Obi-Wan Kenobi; you're my only hope
Microsoft certainly isn't resting on its earlier wins. They understand that "it's all about money and the cost to the PC industry," and the Force's deep pockets can have a strong effect on the weak-minded. Since Intel has retired its Intel Inside program, MS is ramping up its Vista marketplace and partner logoed program. They know how to use the Force.
- over 6.5 million Windows XP MC PCs have been sold WW
- 40% of all retail Windows PCs in the US are MC PCs
- The mother ship has big plans for Windows Vista. They are planning to move over 25 million units in 2009 and have the solution working in more than 50% of the consumer PCs worldwide.
Bill is so intent on the home market he cut off the supply of content support for the Mac. After all, he wants the total mind and soul of the digital media enthusiast by helping bring prices down and raising the home attach rate.
He wants to win by making it easier to implement your home network and oh yes include the Xbox as an integral part of the enriched Media Center experience (so there Sony!). Like Darth breathing in too much oxygen, he sees Vista worldwide with TV tuners attached (knocking out DVRs), robust PCTV channel scanning, TV tuners built-in complete with 5:1 and 7:1 sound and more all flying behind the Windows Vista banner. It's the whole home and personal on-the-go entertainment solution... Obi-Wan you're our only hope!
It's such a grand battle that it is easy to forget that it is all about content, the ease of access to that content, the ease of use and the ease of moving it from device to device.
The more they tighten their grip, the more consumers will slip through their fingertips and find their entertainment content in other parts of the universe. IPTV, video content sites and music download solutions aren't on every corner yet but their numbers are growing... rapidly.
They still aren't easy to use but they are getting better... rapidly. They may have a plan to rescue themselves and find out that once they get in they didn't have a plan for getting out!!!
Interesting chapter in the trilogy.