Blu-ray: Licensed to be killed

Back in 2008, explaining the lack of Blu-ray Disc drives on Apple’s newest line of notebooks, CEO Steve Jobs famously described the licensing process around the format as “a bag of hurt.” After this week’s announcement by the newly formed BD4C Licensing Group, he’s going to need some more bags.

Photo: ArsTechnica

The members of the new group, Toshiba, Warner Bros., Thomson and Mitsubishi, claim to own, collectively, a portfolio of patents “that are essential for BD Products.” Though none of the four are known to have contributed much original IP to the Blu-ray spec, they do own a number of patents essential to DVD products. Insofar as the Blu-ray spec requires that BD devices be backwardly compatible with the older format, device makers are stuck (or stuck up, depending on which end of the deal you’re on), to the tune of $4.50 per Blu-ray player, $7.00 per Blu-ray recorder and $4.00 per Blu-ray drive.

Blu-ray media manufacturers and replicators are also on the hook, the group claims, for 4 cents per disc and 8 cents per BD/DVD flipper disc. Read More »

The TV Everywhere MacGuffin

psychoI wrote a long-ish post for GigaOm Pro the other day on TV Everywhere headlined, Split Decision on Paying For TV Everywhere. Most of the post is behind a pay-wall but nothing in the analysis it provides would be unfamiliar to readers of The Media Wonk. The post drew an interesting response from GigaOm subscriber MichaelMcNabb. In it, McNabb offers four predictions:

 1) TV Everywhere is available as an add-on to your basic cable subscription and free for premium subscribers;

2) Hulu goes behind a paid wall;

3) Cable programmers significantly restrict availability of free content in return for an increase in affiliate fees;

4) Free to air Networks agree not to increase re-transmission fees in order to participate on new On Demand networks – including network DVR’s.

 Net result – continued shift from linear to On Demand model leaving linear channels as “barker” channels for on-demand platforms.

I have no idea who McNabb is (his subscriber profile is a blank slate). But I wouldn’t argue with any of his prognostications. Much of what we’re seeing in the debate over TV Everywhere is a business negotiation among incumbent service providers and programmers over how to divide the revenue pie as its ingredients shift. As is usually the case when incumbents are driving “innovation,” the object is the preservation and enhancement of the incumbents’ leverage, rather than actual innovation, with its potential to disrupt established business models.

“TV Everywhere,” as first articulated by Time Warner and now taken up with gusto by Comcast, is not so much an example of geniune innovation as what Alfred Hitchcock called a MacGuffin: a plot element that drives the story forward but is ultimately irrelevent to the drama. Think: the stolen cash in Psycho. It’s the reason Janet Leigh ends up at the motel. But it’s not the reason for the shower scene.

An uneasy alliance on TV Everywhere

I have a guest post up this weekend over at GigaOm where I discuss some of the potential technical and anti-trust problems with Time Warner  CEO Jeff Bewkes’ concept for TV Everywhere, particularly the amount of cooperation and information sharing among nominally competing service providers necessary to make the system work.

But there are other potential problems that could also scuttle the industry’s best-laid plans. Like the imperfectly aligned interests of programmers and service providers.

It’s striking, although perhaps not surprising, that much of the impetus for the plan is coming from programmers. The idea was first articulated by Time Warner CEO Jeff Bewkes, who coined the term TV Everywhere (at the time Time Warner still owned Time Warner Cable but was in the process of spinning it off). But other programmers have been quick to jump on board. Read More »