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DVD Industry Insider Report - The Consumer Pot of Gold

by The DVD Insider October 03, 2004

Writing to keep you abreast of the DVD industry is tricky especially when we had to project what you will be seeing in the marketplace now. And we had to decipher all of the smoke/mirrors, claims/counterclaims.

First of all the industry knows precisely who you are - compared to the public at large - so they are better able to deliver products you really want. The industry association spent a lot of time and money to look at your attitudes, purchase considerations, decision influences, purchase channels, current ownership and future buying intentions. As a result they pinpointed five key segments - women, African-Americans, Hispanics, teens and seniors.

Now consider the market dynamics they are working on. Intel and their PC customers - Dell, HP, Gateway, IBM, etc - have done a very good job of selling systems into your office. But the numbers are peanuts compared to the consumer households in the US. What do we mean?

  • Fortune 1000 firms - only 1000
  • mid-size businesses - 93,000
  • small businesses - 7.9 million
  • home offices - 32.7 million
  • consumer households - 73.9 million

Suddenly you can see how important your abode really is to PC/camera/camcorder/burner manufacturers. It's no wonder they are working so hard to bring together your audio, video, gaming, imaging, communications and productivity requirements in flexible, powerful and economic solutions.

The area that exemplifies this most is in the DVD area (thought you'd forget why we were here didn't you?). Hollywood has screamed that with DVD burners we are all going to go out and download billions of dollars worth of movies from the web and they will never get their money. They claim we are costing them billions by making illegal copies of "their" movies. Or that we're going to download all of that "free" music and make really big CDs (actually up to 16 hours plus) of music.

The truth is - and IDC agrees - most people buy DVD burners simply to have the latest technology and - as readers know - to save and share their video memories. For you it is all about the personal and professional video content…your family/friends home movies, your TV programs.

The Home Entertainment Center

As we said the home computer landscape is changing and none too fast. Last year your options were a dozen different boxes (and controls) from the likes of Pioneer, Samsung, Panasonic, Philips, Apex and others. Or you could be a trendsetter and buy a media center PC from Gateway, HP, Dell, IBM and others. Great solution! Trouble was you either had to buy a brand new system or purchase home entertainment software like InterVideo's Home Theater. The shortcoming is that both are based on Microsoft Windows which takes some time to boot up.

It's not a bad thing because it beats five different boxes on or around your HD ready TV set and the dizzying array of remote controls that were required. And when you start networking your home you can deliver content - TV, movies, family videos, photo albums, audio - everywhere in the house. Microsoft says that boot-up really isn't a problem because consumers won't turn off their media center PCs so they will always be immediately ready to go.

It's a good "work around" but we still turn our TV, stereo, DVD player and other appliances off at night…just funny that way.

There's a new breed of solution coming out right now thanks to the leadership of Intel and some of their creative software partners. CE manufacturers have always used derivations of Linux - the open platform software - because it was clean, powerful, easily modified and cheap. Intel proposed to the world a home theater/entertainment solution built on some of their new low power, high-speed processors (naturally) using Linux based software solutions.

One that is just entering the market inside a number of different PCs from firms like Sharp, Fujitsu, Sony, Levono, Mitac, NEC and yes the big names is a home entertainment solution called InstantON. The mini-BIOS, OS, power management, and noise control sits in RAM so it can come on instantly (ok 10 seconds) similar to your TV just with a remote control. All of the systems also include flavors of Windows so you can get office or schoolwork done but obviously Windows takes a little time to boot-up.

It was developed by the people who probably produced the DVD player software you probably use - WinDVD by InterVideo. Seeing one of the first notebooks with the technology installed it looked exactly like a standard media center. We watched DVDs and home VCDs with outstanding clarity, we browsed through photo albums, listened to music with rich surround sound and watched TV with time-shifting capabilities. There was lots more and this next Christmas we know what we're asking Santa for…just don't know which brand name it will be yet.

The technical shortcoming is that we're going to have to buy a whole new entertainment center solution because it has to come pre-installed in the system. Maybe in a year or two it will be software you can buy. But industry analysts project that by the end of the year every PC manufacturer will be offering entertainment systems that will include video production and PVR capabilities.


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