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Battle of the Boxes

21 Mar, 2008 By: Chris Tribbey

Talk to some people, and you'd think Blu-ray Disc's time has already come and gone.

Tech-savvy movie fans, bloggers, and even some industry experts believe the format war was a moot issue anyway: Digital downloading is where the future is.But it's not here yet, and this idea's been around for a while. After all, cable and video on demand didn't do away with DVD.

“People are collectors,” said Adam Gregorich with the Home Theater Forum. “They want to own the disc, not the bits on a hard drive, and not just for 24 hours.”

Bandwidth issues in American homes, licensing issues between content owners and content deliverers, ownership issues with consumers, and the quality of a download are all getting in the way of digital downloading.

“The movie industry wasn't set up with downloads in mind,” said Rob Enderle, media analyst with The Enderle Group in San Jose, Calif.

At any discussion at industry seminars regarding movie downloads, the No. 1 problem with movie downloads is getting those pictures to the TV. While cable and satellite have been around for a while, and companies like Verizon are taking the direct route with their FiOS system, four companies have offered dedicated set-top boxes, which cater to the movie downloading experience.

Whether or not any of them will replace physical media remains to be seen.

“Not a consumer interviewed wants to buy another set-top box,” said Richard Doherty, research director for market research firm The Envisioneering Group.

Richard Bullwinkle, chief evangelist for Macrovision, said: “If I had to make a prediction, I think we're going to see a layering effect. The best experience on a large TV is Blu-ray. None of the download boxes gives you the same experience.” Macrovision owns all four of the systems discussed here: TiVo, Xbox 360, Vudu and Apple TV.


What originally was just a tool for digital video recording has become a player in movie downloading, thanks to TiVo's deal with Amazon Unbox, which brings Amazon movie content directly to the TiVo box. TiVo also announced this month that, like Apple TV, users can access YouTube content on their TV.

Movies are cheap, running for $3 in many cases, and nearly 5,000 movies are available. But download times are long, nothing is available in high-def, and the rental period of 24 hours once the movie has started can be problematic. “What if I need to put the kid to bed after we started his movie?” Doherty said.

TiVo does have an advantage over its competitors: It already has a subscriber base of about 9 million. As it adds more content and works out kinks in its delivery system, it could be a digital movie delivery monster down the line.

“Slow and steady wins the race for them,” Doherty said.

However, Bullwinkle said TiVo offers the worst quality of any of the movie downloading options he's tried.

“I think their numbers are small,” Bullwinkle said of the number of TiVo owners who download movies.

Xbox 360

Downloading movies from the gaming system has its problems, analysts agree. Movie downloads weren't a service owners had in mind when they bought one.

“The Xbox 360 and even the PlayStation 3 are trying to join the game,” Enderle said. “But those are gaming systems first, and don't appeal to everyone.”

Fewer than 500 movies are available for download. Users have to buy the movies through a point system, and can't just enter their credit card. And even though many movies are available in high-def, the quality isn't so hot.

“The audio is over-compressed, the bandwidth isn't there, the video comes with all sorts of digital artifacts,” Gregorich said. “I want to look at the best picture possible, and hear the best sound possible. With all these download boxes, it isn't there yet.”

Blair Westlake, corporate VP of Microsoft's Media & Entertainment Group, admitted recently, “America loves its optical disc.” And while Xbox 360 is offering high-def downloads, it can take four to six hours to download one, depending on how fast the connection is.

“It's Friday night, midnight. I guess I'll watch it in the morning,” Doherty joked.

But apparently Xbox 360 owners aren't letting the wait get in the way: 40% of all downloads are high-def, Westlake said.

The movie rental model Xbox 360 uses limits users to 14 days to start their movie, which is its biggest drawback, Doherty said.

“Consumers don't like that. Those restrictions don't work, and it's a very anti-consumer model,” he said. “What's the alternative? Torrent (illegal) downloads. That's the enemy, not the consumer.”


Think back to six months ago and ask yourself this question: Ever heard of Vudu?

The box comes loaded with the openings of about 5,000 movies, and users can start watching immediately after they've ordered one. It can store 500 standard-definition movies, and Bullwinkle said Vudu has the best interface of the four. “It's amazingly intuitive,” he said.

Enderle said, “Vudu has very little marketing behind them. They have a good product, but an ungodly amount of movies you don't want to see.”

Many of the movies are ones you may have never heard of, and movies that were available one day may not be available the next. Movies can be rented for as little as $1 and viewed for a 24-hour period, while movies can also be purchased to own for as little as $5.

“Vudu can certainly crow about its quick success right now,” Doherty said. “But Apple TV will catch up.”

Bullwinkle said that if Vudu can evolve to do everything that Apple TV can do, such as playing media on computers, it won't be an also-ran in the movie downloading business.

Apple TV

Steve Jobs' pet project is the movie box making the most waves.

Now that it can connect directly to the iTunes store with no computer needed, the little set-top box can store downloads directly to its own hard drive.

During the recent Content Delivery and Storage Forum in La Quinta, Calif., Tom Adams, president of Adams Media Research, called the Apple TV system a potential Trojan horse that could one day render optical discs useless. Apple TV can operate wirelessly, standard-def downloads start playing quickly, and the box can work with your computer to act as an entertainment server.

Bullwinkle said Apple TV delivers the best high-def picture of the four, and will probably be the most successful.

Apple TV isn't perfect. Current hard drives are small and can fill up fast, and fewer than 1,000 movies are currently available. Apple is willing to admit its box isn't about to kill Blu-ray, especially since its best high-def picture is almost 720p, Bullwinkle said.

Forrester Research Inc. estimates fewer than 1 million Apple TV devices will be sold by the end of this year, in a February report.

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