Video Business, Connected Style


The video rental industry has survived despite numerous historical predictions of its demise. The typical cause (cited years ago) was video on demand. Many decades long after promised, we might finally be in an age where the video rental industry has to finally succumb to both the Internet and cable companies (and other carriers).

Blockbuster has been reporting declining video rental sales quarter after quarter throughout 2004 and before. (Revenue has been somewhat balanced out throughout the industry by a dramatic increase in video "sales"it is nearly as cheap to buy a movie as it is to rent once with a two-day late fee.) Rental customers are angered by late fees and the hassles related to returning videos. A number of alternatives have entered the scene. For one, video on demand is now real, and most cable subscribers can watch a wide selection of movies any time they want (including pausing and rewatching) and for a lower rental fee than a video store. Second, services such as Netflix offer mail-based rentals with no late fees and value priced. (They claim that typically the movies arrive the next day....The post office has evidently become faster with all of us sending e-mails instead of post.) Last, online computer downloads are getting some steam from companies such as www.movielink.com or www.internetmovies.com. Tivo is even rumored to be in discussions with some DVD mail-rental firms to allow streaming and buffering of movies electronically.

Video-Quality Challenges

We all welcomed DVDs when they entered our lives, partly because of the smaller form factor but mostly because of the vastly improved picture quality (and no degradation from usage, aside from those nasty scratches). The quality of a DVD is good enough to hold up to home-theater projection (using theater-like computer projectors that can illuminate an image to six feet wide or more).

Sadly, the image quality of digital television is closer to VHS or worse. In an effort to cram thousands of streams onto a limited pipe, bit rate has to be compromised (and thus quality). The quality issue is different than with VHS, however. The problem is what is known as macro blocks. Video images are compressed in a "lossy" manner, meaning some data is lost. An image is divided into thousands of squares, and each square gets compressed. In an effort to better use the limited pipe, successive scenes are often sent as "deltas" from a base image. If the scene does not change much, the bandwidth can be used to sharpen the picture. This can be annoying to watch, and the macro blocks are often visible (as well as the subsequent sharpening that occurs). This is even the case with HD (high definition). Downloaded movies (from movielink for example) suffer from the same problem because they too have to deal with limited-capacity pipes today. Fortunately, time has shown us that data rates go up and prices come down in the communications industry. In the meantime, video quality is a barrier to wider acceptance of Internet-style downloads.


Let's not overlook the wireless industry (cellular). The wireless players are huge industry players and always looking for a way to increase their monthly fee. Might we see a day soon where the speed of wireless would be sufficient for video? In 2003, in South Korea, SK (the area's leading mobile operator) launched a video download service using its new 3G network. (3G is the third generation of mobile technology and many times faster than predecessors.) Customers were able to download movies to their cell phone or similar devices. The service was so well received it was overloaded in no time.[5] SK is more recently using some satellite technology with special satellite-enabled distribution mechanism.

[5] http://www.economist.com/business/displayStory.cfm?story_id=3150731.

The point is this: The video rental and nontheater movie business is dramatically changing and seems to be moving to a fully connected (and perhaps wireless) and real-time experience. Once again, we desire to be in control of our entertainment experience and want it on demand. And, we are starting to expect movies and videos to be available no matter where we are and no matter what device we might be in front of at the timecomputer, TV, cell phone. Inescapable Data!



    Inescapable Data. Harnessing the Power of Convergence
    Inescapable Data: Harnessing the Power of Convergence (paperback)
    ISBN: 0137026730
    EAN: 2147483647
    Year: 2005
    Pages: 159

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