The "Seamless" sourcing of video content from multiple aggregation services

10 years ago, life was simple in your living room.  You really had 3 libraries of content to worry about:

1. the 500 channels of content you were receiving from your Cable, Telco, or Satellite provider, 
2. the collection of DVD's on your shelf, and
3. the available plethora of DVDs to rent at your local Blockbuster.  

But even simpler then was the fact that there were only a few rights windows, and as a consumer, you understood them pretty well:

• Movies came out at the theater first, and then a few months later were available to rent (eg Blockbuster) or purchase (many locations) on the same day.
• A few months after this, they started appearing in your premium TV networks (eg HBO, Showtime).
• A few months after this, they came out on the standard, non-premium broadcast networks.

Converting your physical disc library to a digital locker

There has been a significant amount of press this week around the Wal*Mart announcement to provide consumers the ability to get UltraViolet digital copies of their existing Blu-rays and DVDs starting on April 16th.  The concept for the consumer is that your bring your collection (minus Disney movies) into the store and they do some magic and create digital copies in your digital locker to be accessed through your Vudu account online.  They perform this service for you for a mere $2 per DVD (presumably then generating a non-HD digital copy) and $5 per Blu-ray disc (presumably for the HD digital copy).

Does this sound like a deal to anyone or does it sound like the consumers are getting the short end of the stick?

A few things to think about first:

• Apple does not support Ultraviolet, so you will not be able to view your converted library on your iPad or AppleTV.
• There will be content gaps.  Disney does not currently support Ultraviolet, and there will be many other smaller studios that don't yet support them either (the other 5 majors do).  I am curious to see how this will be handled on April 16th at your local Wal*Mart store.
• If my memory is correct, the average consumer in the US currently has a library of about 70 DVD and Blu-rays (I will try to dig up this data to confirm).  That mix in 2012 is probably 80% DVD and 20% Blu-ray (I am making an educated guess about penetration over time).  So the cost to convert the average person's library (assuming all titles were supported by Ultraviolet) would be roughly $182.  Ouch!  I have over 400 DVDs and about 40 Blu-rays, so I need to get a 2nd mortgage to convert my library.
• $2 vs. $5 presumably for better quality video.  Let's think through this.  Your typical DVD puts out an average bit-rate of about 10 mbps in video rate (this is a measure of how much data is transferring from the disc/player to your tv screen).  I say average because intense scenes (big explosion, etc) push more data and slow moving scenes push less.  The average bit-rate of a Blu-ray is roughly twice that (about 20 mbps).  The typical "SD" or standard definition download or stream from iTunes, Amazon, Netflix, Vudu, Hulu, etc, is around 2 mbps.  What is typically called "HD" for high definition is pushing 4-6 mbps (720p vs 1080p matters here because there is more data to push).  Vudu's "HDX" is supposedly in the 10 mbps range.  Now I am sure all of the videophiles out there (and the experts behind download services compression algorithms) will jump in here to say that they are compressing the data "in a smater way" than is typically done for DVD and Blu-ray and therefore get a better picture as a result.  I would dispute that for a wide range of fact-based reasons, but even if we gave them a 20% improvement based on this urban legend, what do we have:  We are paying $2 for a video to be transferred to my digital locker that is only 20-30% as good as my physical SD version and $5 for a video that is 25-30% the quality of my Blu-ray HD version.  Seems like a pretty poor deal.
• What are my options?  Well, legally, none.  Despite the urban legend that I can rip DVDs and Blu-rays for "personal use", it is still illegal according to the digital millennium act.  But what if I were a 19 college student who perhaps cared less about these kinds of laws?  I could use a number of paid-for and free software programs available on the internet to "rip" a copy of the DVD or Blu-ray into an .mp4 file.  Let's pretend I pay $30 for "good software" (making this up).  Let's pretend that I have to spend 12-15 minutes each time I want to make a copy for my personal consumption (typing in the title, the destination, importing into my program for viewing, etc, though the actual transcoding might take an hour while I am doing something else).  Let's pretend that I get paid $10 an hour as a college student.  My 70 title library would now "cost" me $170-205 (12-15 minutes) to put together.  The cost for this library moves and and down based on the consumer's perception of the value of their own time.
• What about quality trades?  The great thing about getting an officially sanctioned copy of the title in your digital locker is that it has all of the searchable metadata (title, summary, cast, etc) already done for you.  The pro for using locally available software is that you can have a high-quality encode (depending on the source and your tool) every time (ie better than the $5 version).

• What are my options moving forward for new titles?  A little research on Amazon tells me that I can buy an "Ultraviolet enabled" version of the title when I buy new movies.  The price difference varies.  It seems that Warner Brothers is including it with the DVD and Blu-ray for nearly the same price as the discs used to be alone, where as Paramount, Sony and others are charge $2-7 more for a bundled product that is the DVD + Blu-ray + Ultraviolet Digital Copy.  My other alternative is of course to buy it from iTunes (typically at the same price as the DVD or Blu-ray), and while I do not get the physical disc nor do I get an UltraViolet compliant digital copy, I get the movie in my "iCloud" service, and can download/stream to any of my apple devices (AppleTV, iPads, etc).  If you have tried registering a purchase in Ultraviolet, you know that the experience is complicated and confusing--unlike a purchase from Apple.  There has been some activity (from Paramount) offering the digital-only UltraViolet copies to consumers, but this is typically not the case (ie buy something in Vudu, it is stuck in Vudu).

First Takes on UltraViolet’s Early Days

Hollywood’s first UltraViolet-enabled movies are receiving positive marks from early reviewers in the business press, even as they note the battles that studios, technology companies, and service providers will have to wage to establish the platform.

Geoffrey Fowler, a contributor to the The Wall Street Journal’s Personal Technology column, emphasizes the simplicity of watching an UltraViolet movie on the go. Reviewing his experience with Warner Bros.’ UltraViolet-enabled “Green Lantern,” Fowler reports that the process of accessing a digital copy of the movie “went smoothly, though it could be streamlined. Entering redemption codes,” Fowler writes, “reminded me of collecting cereal-box tops to win a prize.”

Fowler suggests that for UltraViolet to “really catch on,” the format’s backers “may have to develop a way to add previous DVD purchases to a digital locker, like people do with music by ‘ripping’ old audio CDs.” Setting aside the legal implications of DVD ripping — could content owners now sanction the circumvention of past copy protection measures? — Fowler’s suggestion is analogous to what Apple is promising for cloud-based music storage with its upcoming iTunes Match.

No doubt an iTunes Match-type service for video is technologically feasible. But it will likely involve some compromise between Apple and studios supporting UltraViolet, which can be viewed as a competing platform to Apple’s iCloud.

Such a compromise is necessary if Hollywood has any chance at reestablishing an ownership-oriented consumer base, argues The Economist. In covering UltraViolet’s launch, the British magazine outlines the marketing hurdles that studios face in convincing consumers to build libraries of digital rights, ultimately instead of discs. “The benefits [of UltraViolet] for the consumer — flexibility, a common user interface and experience, and freedom from hassles over digital rights — are difficult to convey in simple terms,” The Economist observes. Consumer marketing and consensus building among industry players are only two challenges to establishing cloud-based entertainment: privacy protection also looms, The Economist notes.

Apple: 20 Million Check Out iCloud, 4 Million Purchase iPhone 4S in First Weekend

Announcing first-weekend sales for its new iPhone 4S, Apple also said that some 20 million customers have signed up to store content via the company’s free iCloud service, which launched last week.

The service encountered hiccups on Friday both in meeting general demand (via All Things Digital) and in recognizing shared accounts across multiple devices (via Ars Technica). But iCloud was fully functioning as of Monday morning, according to an Apple status page.

Apple also announced that it had sold than four million of its iPhone 4S, which the company launched in the U.S., the UK, and five other countries on Oct. 14. The phone will be available in 22 more countries on October 28; Apple is also set to launch a premium version of iCloud for music, iTunes Match, by the end of the month.

Apple Slates Launch of iPhone 4S, iCloud, iTunes Match

Among the new product announcements Apple made today at an event at its Cupertino, Calif. headquarters (via gdgt):

• Apple’s iPhone 4S, available Oct. 14, will mark the first time the company offers 64GB of storage in its smartphone (for $399). The new model features a processor that’s twice as fast at CPU tasks as the chip in the current iPhone 4; other features include 1080p HD video recording capability. The current iPhone 4 will now sell for $99 (featuring 8GB of storage), while an 8GB iPhone 3GS will be a free option for cell phone subscribers—including Sprint customers.

• Apple’s free iCloud service will launch in the U.S. on Oct. 12. Meanwhile, iTunes Match, Apple’s premium cloud music service, will debut at the end of the month. In reviewing iTunes Match, Apple’s Eddy Cue said that the service would “stream” songs to users’ mobile devices; but the consensus remains that iTunes Match will not offer a streaming component like Amazon’s Cloud Music Player.

Impact of iCloud on Streaming Music Prospects?

In contrast to the cloud music services of Amazon.com and Google, Apple’s “iTunes in the Cloud” lacks a streaming component. That surprises some music industry observers: Wired, for example, had expected Apple would introduce new streaming-based features to iTunes such as online song sharing or collaborative playlist building capabilities. On its face, Apple’s forthcoming iTunes Match seems to be about increasing access to music, but as All Things Digital reports, the service remains rooted in the concept of ownership, with Apple continuing to emphasize the primacy of downloading content to individual devices.

Younger digital music startups contend that none of the new cloud-based services go far enough in developing new models for record labels and publishers. “We can’t enrich the music industry,” says Beyond Oblivion CEO Adam Kidron, by “going to the same five percent [of consumers] who already pay for music.” Kidron’s company advocates integrating the cost of an unlimited music license into the price of new entertainment devices or services.

Apple Positions ‘iTunes Match’ as Premium Cloud Music Service

The “iTunes Match” service — part of a slate of new iCloud products that Apple unveiled at its Worldwide Developers Conference on Monday — will offer music fans a simple way to sync their digital music collections across multiple devices, while providing record labels and music publishers with another potential revenue source.

For a $24.99 annual fee, Apple will provide iTunes users with cloud-based storage of up to 20,000 songs, automatically “matching” music that wasn’t purchased in iTunes to high-quality, DRM-free equivalents from the iTunes retail catalog.

During his conference keynote, Apple’s Steve Jobs pitched the value of iTunes Match as saving users time. Compared to rival cloud music storage services from Amazon and Google, which require users to upload their libraries to online accounts, Apple’s hard-disk scanning capability means that music library transfers are complete in “minutes, not weeks” (via The Wall Street Journal).

Apple made no mention of licenses by record labels or music publishers for iTunes Match, but the industry’s major players are reported to have agreed to new licensing terms with the company, which remains the leading digital music retailer in the U.S. The new service, if successful, would seem to provide record labels and publishers with some compensation for downloads that music consumers continue to acquire illegally.

While iTunes Match is set for a fall launch, Apple made available on Monday a free beta version of “iTunes in the Cloud,” offering syncs of users’ previous iTunes music purchases across as many as 10 Apple devices.

Separately, Apple announced at the conference that it would market its Lion upgrade to the OS X operating system exclusively via the digital Mac App Store. The $29, 4GB release will be the first operating system upgrade that is unavailable on optical disc.

More iCloud and iOS news at Ars Technica.

Apple Said To Secure Record Labels, Music Publishers for iCloud

More reported facets of Apple’s streaming music plans with labels, ahead of the company’s iCloud announcement June 6:

• Universal Music Group will join the three other major record companies in supporting the service, reports CNET.

• The iCloud music service will initially be free to iTunes customers; ultimately, Apple eyes charging a $25 subscription for cloud-based music storage and streaming, reports the Los Angeles Times. The music service also will support advertisements. Labels will take a 70% cut of revenue, with music publishers claiming 12% and Apple reserving the remaining 18%, according to the website’s sources.

• Apple is paying labels between $100 million and $150 million in advance fees to launch the service, according to the New York Post.

Apple To Unveil Cloud Services Next Week; Is Music In the Mix?

In a preview of its June 6 Worldwide Developers Conference, Apple says that it plans to unveil an “iCloud” service next week, along with new generations of its computer and mobile device operating systems. There is word yet on iCloud will include at its launch date, which also remains TBA. The trade press has reported that the company has closed deals with three of the world’s four major record companies to offer a consumer service for cloud-based music streaming and storage.

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