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SD Cards Load Up

14 Jan, 2009 By: Chris Tribbey

Anthony Bay, co-founder and vice chairman of MOD Systems, is familiar with the creed “content is king.”

That’s why he didn’t downplay the fact Paramount and Warner Bros. have agreed to be distributed on MOD Systems’ new digital delivery system, which will offer consumers content via Secure Digital (SD) card downloads at retail kiosks.

“These are the first major studio digital distribution agreements for a portable storage format that’s not bound to any one device,” Bay said. “In reality, for this to work, you need to reach a critical mass with the studios. Getting two on board is a great start.”

MOD and Toshiba — which along with NCR Corp. invested $35 million into the venture in September — demonstrated their system at the Consumer Electronics Show this month, showing how a full-length, standard-definition film could be transferred to an SD card in less than three minutes, and then played on almost any device with an SD card slot. DRM is still involved, of course, encrypting content to the SD card to prevent illegal copying.

“[The system] opens up new avenues,” said Toshihide Fujii, corporate SVP and CEO of Toshiba Corp.’s Digital Media Network division. “… Downloading to an SD card allows consumers to customize their selections and choose titles from a vast, virtual inventory that’s never out of stock.”

Alex Carloss, EVP of digital distribution for Paramount Digital Entertainment, called the MOD system “quick, convenient and compatible across a wide range of devices.” Before Paramount and Warner Bros. signed on, Anchor Bay Entertainment, First Look Studios, and Image Entertainment had signed up with MOD.

Russ Crupnick, entertainment industry analyst for NPD Group, said the MOD kiosks — dubbed the MOD Retail Enterprise System — shows a lot of promise, based on current consumer attitudes.

“[It’s a] no-brainer that we're getting accustomed to kiosks, as witnessed by Redbox’s success and Blockbuster’s plans to roll out kiosks,” he said. “Another advantage is in the potential to distribute catalog — even a video retailer could offer an alternative for physical delivery for catalog.”

While the cards’ benefits seem obvious (no physical media orders or returns, no shelf-space concerns and the possibility of unlimited inventory), Bay admits that offering major studio content is just one barrier for SD card downloads: retailer and consumer acceptance are next. Bay said there is “a lot of retail interest,” and consumers are already comfortable using SD cards for storage in mobile phones and digital cameras.

“The industry is already headed toward digital in so many different ways … it’s got a long way to go, but you can see it happening,” he said.

The last major hurdle for content on SD cards may be the most difficult one: how to get the content from the card to TVs.

“Most consumers don't want to pay for, and have the headache of hooking up, another box,” Crupnick said. “Slots will be coming in TVs ... but it'll take some time to go mainstream.”

MOD, Toshiba and NCR are working on a sub-$100 docking station for TVs, and a $20 device that would bridge SD card content to PCs and laptops. Other companies may present a third-party solution, and more and more HDTVs are coming to market with an SD card slot built in.

Even with the TV concern, Bay pointed to the new SD card specs for 2009 as another reason why the MOD system has a future. The SD Association announced during CES that its next-generation card specification provides for up to two terabytes of storage capacity and a read/write speed of as much as 104 megabytes per second.

“How quickly will people latch on to it is one thing, and retailers need to see the value proposition,” Bay said. “But SD adoption is obvious.”

MOD hopes to have the kiosks at retail by this summer.


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