High Definition and the future of viewing
Disk and broadcast systems battle it out
Analysis Over the past 20 years, the potential of high definition (HD) has seen development in a number of interlinked fields - broadcasting, consumer electronics and pre-packaged content.
Although definitions vary, the term HD itself generally refers to a television screen offering at least double the resolution of the highest quality standard definition TV screen—that is, a screen resolution of 1920x1080i (interlaced), or 1280x720p (progressive scan), versus the current European PAL standard of 720x576 at 50 Hz picture refresh rate (or NTSC standard at the lower picture quality of 648 X 486 at 60 Hz picture rate).
There is also a ‘true HD’ resolution, referred to as 1920x1080p, where each image is refreshed one at a time progressively in maximum resolution, rather than refreshed in two stages as happens with the interlaced system. By definition, the latter provides the best available visual quality that current technology restrictions allow - although today its primary role is as a picture acquisition (ie, production) format.
In any event, the crystal sharp image of HD means films can be viewed as the directors and cinematographers had intended them to be, with the visual quality matching (if not surpassing, on the right home entertainment system) that offered by a theatrical screening.
The implementation of HD takes place at several stages. In the first instance, there is the production stage, where content is shot and/or mastered in an HD format (either HD video, or simply 35mm film). In the second instance, there is the distribution level. HD content can be broadcast via either digital or analogue TV signals, or sold prepackaged as consumer media on either tapes or optical discs.
Although the D-VHS format, which gained some limited studio support, was an example of consumer HD media, DVD has been unable to fulfil the requirement. With current MPEG2 compression, and the codecs used by consumer hardware, standard DVD cannot store significant amounts of HD data even on a dual layer 9 Gb disc. To provide HD content on an optical disc, there is a need then for a product able to offer a high storage capacity - considerably more than the maximum 9 Gb capacity of today’s DVDs.
However, to reap the visual benefits of HD content, the consumer will need an HD home entertainment system. An HD optical disc device to play the discs, and an HDTV set to view the content at full resolution. In the US digital TV set/display market, there are three categories of product for sale:
- SDTV: standard definition digital TV displays with a resolution below 480p.
- EDTV: enhanced definition digital TV displays with a resolution of at least 480p, but below 720p.
- HDTV: high definition digital TV displays with a resolution of 720p or above.
Why HD packaged media?
It may seem somewhat absurd to discuss what will replace DVD at a time when DVD software and hardware sales are continuing to grow. However, as with all rapid growth, early maturation follows. From a hardware perspective, although the number of DVD households is continuing to rise, the rate of growth has already begun to slow down. In 2003, there were a record 28m new net addition DVD households in Europe. In 2004, this has already dropped to 22m, and the decline in hardware growth rates is expected to follow as the market nears 80 per cent penetration by 2008.
The same argument is borne out worldwide. In the 2003-2006 period, annual hardware growth will decline from 66m to 58m new households a year.
A similar trend is evident in consumer spending on software. In 2003, the European DVD software market grew by almost €5bn. In 2004, this growth has dipped below €3bn and is expected to continue to fall, to somewhere around €500m a year by 2008. According to some studios, DVD software growth has already peaked in terms of the number of hit release titles that can be sold, with the business currently thriving off the back of growth in the deep catalogue and TV/entertainment releases.
Although the end is far from nigh, there is an issue in how to inject new impetus into the packaged media market - a sector that constitutes the major US studios’ single biggest source of revenue. In other words, HD discs, as a new mass-market proposition, could create a natural migration path for packaged media growth, possibly in line with the eventual phasing-out of the VHS as a home entertainment format.
At present, other than a few titles available on the sidelined D-VHS format, the only way consumers can view HD content is via broadcast signals. In the US, almost every major cable and satellite pay TV operator is offering an HD tier in their services. HD movies and sports have been particularly important, with all premium TV and movie services (such as HBO, Showtime, Cinemax and Starz) offering an HD variant on their standard definition packages.
From a content owner perspective, however, there is no additional incremental revenue being generated from these HD services. That is, once the pay TV rights are sold, the pay TV operator is generally free to transmit it in whatever definition/ format they please. As a result, the HD unique selling point is currently only of financial benefit to the pay TV platforms, as the content owner will usually have already been paid once under the blanket window deal. With around 10 per cent of US TV households now capable of viewing HD signals (though not necessarily receiving them) and rising, this is a significant market.
Moreover, these are HD consumer households that if served solely by the broadcast market for any significant period of time, may come to most closely associate the HD format with the pay TV window. Given that there is a huge financial interest for content owners to maintain the primacy of packaged media, simply in terms of the revenue generated and the rate of return, it makes sense that if a desirable HD packaged media format is to come to market, it needs to arrive sooner rather than later. In this respect, at stake is who gets to generate incremental revenues from HD content - the pay TV broadcasters or the content owners.
This becomes even more imperative when considering that in the US, the Federal Communications Commission (FCC) has mandated that all over-the-air broadcasts be fully digital by 2007 - a definition which largely encompasses HD since many US broadcasters have decided to transmit a considerable portion of their digital TV content in a high definition format.
There is also a requirement that all TV sets over 13 inches in screen size sold in the US market post 2007 have an integral digital tuner - although this does not necessarily mean that they be HDTV tuners. (Some digital TV sets on the US market are simply either standard definition (typically 480i) or enhanced definition (typically 480p).)
Of course, if HD is successful, it can also raise the bar of consumer expectation from the home entertainment experience, with a particular focus on the visual quality of content. Although maybe not a completely convincing argument on its own, an HD format may work to differentiate the packaged media business from online downloads, digital TV and other ‘inferior’ modes of distribution.
At present, for example, internet HD services are focused on delivering content in a 720p or 1080i format due to bandwidth limitations. Downloading a 5 Gb-10 Gb video file on even a 10 Mbps consumer broadband connection can take more than two hours to complete. Increasing content resolution to 1080p will also cause the file size to increase, and hence becomes even more problematic for an online service.
With the two main formats both aiming for large-scale hardware shipments in 2005, the stage is set for a potential format war. As with DVD, it is anticipated that the packaged media industry will determine the eventual winner, whether in the consumer marketplace or prior to launch. As such, both the BD and HD DVD camps are actively attempting to woo the Hollywood studios to release content on their respective HD formats.
Where Hollywood stands
Rumours have abounded as to likely support for the formats, especially from the HD DVD camp that has so far leaked information on alleged content support from Warner Bros, Universal and Paramount. But with the exception of Sony’s Columbia-TriStar - firmly behind BD (as is expected will be MGM once the takeover is complete) - the general US studio stance seems to be undecided.
One possibility is that the US studios will hedge their bets and back both formats. However, every studio is clear that a format battle played out in the market would be a disastrous scenario. Some studios are waking up to the fact that it will ultimately be they, the customers of the formats, who will have to exert their leverage in order to avoid a format war.
Consequently, we believe that some studios may attempt to seize the initiative and force the issue - ahead of a commercial launch - by strongly supporting only one of the format rivals. This would appear pretty much the only way to drive the battling consortia to the negotiating table to work out some compromise single format.
However, even apart from the biggest issue of agreeing a single format, there are still a number of issues that need to be resolved before the major content owners concede to release packaged HD discs at all. These issues include concerns of resolution (visual quality), copy protection, manufacturing costs, storage capacity and interactivity enabling new business models.
Screen resolution: is it true HD? Does it matter?
The general line from several studios is that an HD disc format will be mainly competing with the delivery of HD movies by pay-TV operators and broadcasters, who are by and large delivering HD programming in 1920x1080i (or its progressive scan equivalent 1280x720p). Therefore, HD packaged media can, and should, deliver as good a visual experience if not better (just as DVD offered a better quality experience than standard definition digital TV). This is the unifying ‘true HD’ resolution referred to as 1920x1080p.
Technically, this is not an issue as far as the individual formats are concerned as both are capable of storing HD movies at full resolution. Admittedly, BD has a theoretical advantage in that its dual layer 50 Gb disc - once proven - can also provide a great deal of extras in HD. However, the real concern is that none of the HDTV displays currently in people’s homes in the territories that have HD broadcasting, such as the US and Japan, are able to show this true high-end HD.
According to Screen Digest’s analysis of data compiled by the US Consumer Electronics Association (CEA), there were nearly 9m US digital TV (DTV) households in 2003. Screen Digest predicts that this will rise to 48m by 2008. Of these, most can be categorised as HD-enabled - that is, homes with an HD-display able to resolve 720p/1080i or better. In 2003, there were around 8m such homes, predicted to rise to 45m by 2008.
However, of the 500+ digital TV sets listed by the CEA as being on the market in Winter 2004, only two can display the true 1080p HD resolution, retailing at $8,999 and $20,999 respectively, with another 16 offering ‘virtual 1080p’.
Therefore, not only are around 10 per cent of US digital TV households not HD-enabled at all, but those sets that are HD capable actually provide a native display resolution fractionally better than required by HDTV broadcasting.
But does this matter when selling a new packaged media format?
Some studios have suggested that it does. The argument runs that, if the consumer is not able to appreciate the visual difference between an HD disc and a current DVD version on their new display, then he or she will become disillusioned with the format, and such a scenario could be a disaster. If anything, the drastically improved resolution is one of the major selling points for an HD optical disc. If the consumer cannot view that difference, then it could generate not only bad press, but result in poor sales (with consumers choosing to stick to the current DVD format).
Such a line of argument might logically support the delaying of the full-scale launch of HD packaged media on any format until sometime post 2007, when hardware prices have come down and true HDTV sets become more widely available (at lower prices).
Another aspect of this argument is that one of the reasons why DVD has been so successful in the US market is that it represented such a quantum leap in picture quality over the NTSC broadcast pictures they were used to viewing. (It is widely recognised that NTSC is significantly inferior to the signals that viewers in Europe are used to with the PAL and SECAM transmissions systems.) Indeed, many Americans have upgraded their TV sets just to appreciate the quality of current generation DVD.
Moreover, we calculate that 63 per cent of US households that have purchased an HDTV display do not currently have a source of HDTV programming. In other words, they do not own either a set with anintegrated HDTV tuner, or a separate HDTV tuner or a cable or satellite HDTV set-top box. This amounts to in excess of 8m households whom one assumes have so far justified their purchases to get the maximum enjoyment out of their existing DVDs.
This is a figure predicted to rise beyond 9m by 2008. Indeed, the lacklustre performance of pay HDTV services in the US to date reflects this. By end 2003, despite a pay TV market of 96m subscribers, there were fewer than 1m homes subscribed to specific HDTV packages from the pay TV operators. The reality is that on most of these HDTV displays purchased to date, it will be tough to discern a significant improvement in picture quality with a high definition DVD over current DVDs.
Others, however, have taken a different view. The argument goes that, from a marketing approach, it doesn’t really matter whether the HD displays on the market or in consumers’ homes are able to do full justice to the next generation DVDs. In the US then, 12m consumer households are currently equipped with HD displays, and as such have already bought into the technology at enormous expense.
According to this line of thinking, if the consumer has already paid upwards of $1,500 for an HD entertainment system, they are going to want HD content that goes with it, rather than just a conventional DVD. This is predicated on the belief that these consumers will have already ‘bought into’ the concept of HDTV and will therefore demand an ‘HD’ label on their DVD entertainment.
In support of this position, it should be noted that, for example, none of the US pay TV services in operation by end 2004 were offering anything more than 720p or 1080i, the minimum resolution required to be called HD. So arguably, the consumer is already being given something less than ‘true’ HD, but is still buying into it. However, it is again worth pointing out that picture quality gap between these services and legacy NTSC broadcasts is greater than it will be over PAL broadcasts.
Most of the major studios have the capabilities to master the HD content as required, with many already having mastered their last 10 years’ libraries in HD. With the majority of the major studios now considering 1920x1080p (true HD) as the de facto resolution for HD video disc content, it is fairly evident that the more true HDTVs there are in the market, the more likely the consumer is to recognise the superiority of HD packaged content over other modes of HD content delivery (such as pay TV and the internet).
Both of the main format groups claim to offer backwards compatibility with current DVD technology in the sense that Blu-ray Disc and HD DVD hardware will play back legacy DVD discs. However, there is another dimension to the backwards compatibility issue that it appears neither group can address. And that is the provision of high definition discs that include a version of the same content that is readable in legacy DVD players. This would involve the inclusion of a red laser DVD layer on the new disc along with the high definition blue laser layer. However, this appears to be technically too difficult to achieve for both groups, although it is not clear that either group had focused on addressing the issue.
The real world scenario where this issue would come into play is where a consumer buys one copy of a new title - and chooses to buy the high definition version. That is fine when playback of this new purchase is confined to the primary HD display and HD player, but if the user then wants to view the disc on a legacy DVD player in the bedroom or kid’s den, they will not be able to.
The only solution for the consumer in this circumstance is to buy two copies of the disc in question - a solution that might appeal to studios interested in selling double the volumes of their title, but a scenario that could be perceived rather negatively by the average consumer.
The broadband home
By end 2003, there were close to 25m broadband enabled homes in Europe and Screen Digest expects this to more than treble into 2008, passing 85m households. In some territories, customers are currently connected at speeds of over 10 Mbps, comfortably enough to download a feature film in less than an hour.
This has triggered telcos and ISPs, such as Deutsche Telekom, BT and Wanadoo in Europe, to explore content delivery business models bringing together the hard disk functionality of a PVR with an online distribution platform. These are not isolated instances. In the US, PVR pioneer TiVo, which now has over 2m customers, is working on such services in conjunction with online DVD rental firm Netflix.
Microsoft has allied with Internet video-on-demand (VoD) firm CinemaNow on a similar platform. This is all without even mentioning the studiobacked Internet VoD service Movielink, and the US studio game plan. With the first generation of hard disk portable digital entertainment devices now on the market, such as Thomson’s Lyra and the Archos pocket video recorder, issues of access to content andmobility will become as important in some quarters as picture quality and interactivity.
Therefore, as entertainment business models continue to follow a course of convergence between content provision and broadband as a delivery medium, the question to ponder then is not, as the experience of DVD recorders vs. PVRs has potentially highlighted, what DVD format will win out in a format war, but does packaged media have any future in a converged multimedia environment?
Our research suggests that the resounding message from the US studios in the mid term seems to be yes - packaged media do have a future. First, packaged media can raise the bar of expectation by offering a far superior audio-visual experience. HD movies are extremely large files, and as such cannot be effectively delivered via broadband at today’s speeds (or perhaps even speeds as they will be by 2010). Second, a next generation disc, as explained already, can bolster the better resolution it offers with a combined interactive experience that takes advantage of a broadband connection in the player hardware.
It should be kept in mind, however, that compression technology is catching up fast - and as such, so will the pirates. For example, a variant of MPEG-4 AVC called ‘3ivX’ is already available, able to compress efficiently an HD file. Moreover, the first DivX Certified High Definition DVD Player was announced in October 2004 by tech company I-O Data. The AVeL Linkplayer2 was launched worldwide in November 2004. It can play back content encoded in the new DivX HD compression technology - a format that in the standard definition market has been used by hackers to spawn popular illegal spin-offs for compressing illegally obtained movie files.
The studios are very much aware of the negative experience of the music industry. In particular, they are conscious of the all the efforts that went into developing a successor to the CD as a ‘high resolution’ music carrier and the consequent format battle that erupted between backers of the DVD Audio format on the one side, and Philips and Sony on the other with their Super Audio CD (SACD) format on the other. They are especially mindful of the fact that this format war was very much a side issue, while the key developments were the take-up of MP3 and peer-to-peer distribution networks on the one hand and efforts to create and deploy legitimate digital music services on the other.
The issue then is not necessarily packaged media versus digital distribution, but more how the next generation video media formats are going to interrelate and combined with the connected broadband world.
Further background: The HD contenders
Consumer electronic manufacturers are currently touting two main HD optical disc formats. The first is Blu-ray Disc, now more commonly known as BD. The other is HD DVD (short for High Density DVD), an extension of the DVD format, also sometimes known as its previous name Advanced Optical Disk (AOD).
However, several other formats are seeking to stake a claim in the market, most notably the Chinesemade Enhanced Versatile Disc (EVD) format.
Blu-ray Disc (BD)
Announced in February 2002, BD undoubtedly has the biggest number of supporters in the consumer electronics and PC manufacturing fields. Its founding members were Sony, Matsushita (Panasonic), Philips, Pioneer, Samsung, Thomson, Sharp, Hitachi and LG. The format has since attracted the committed support of Dell, HP, TDK and JVC.
Notably, BD most recently obtained support of sorts from US studio Fox, which joined the BD Association. However, Fox has been at pains to make clear that its membership is motivated only by a desire to learn more about the format and influence it from the inside - rather than being an explicit commercial vote of confidence in the format. Indeed, Fox has also been positive about the attributes of the HD DVD format.
From the outset, the founding members felt that the BD format was a technical departure from the existing DVD standards, and therefore did not fall within the ambit of the DVD Forum. The technology is now being pushed by the recently founded BD Association (BDA), formerly known as the Blu-ray Disc Founders (BDF).
Though BD, like HD-DVD, uses a blue-violet laser rather than the conventional red laser found in today’s DVD players, the similarities effectively end there. The information layer itself gets as close to the disc surface as possible, with a 0.1mm cover layer to the disc, in an effort to generate the maximum amount of storage from a 12cm disc. This is in contrast to a cover layer thickness of 0.6mm for standard DVDs. (Nb: for CDs - the first generation optical disc - the information layer is at the back of the disc, so the cover layer is 1.2mm.)
The difference in technology has meant that BD is able to promise large storage capacity - 25 Gb on a single layer disc, 50 Gb on a dual layer. In the long term, the backers envisage the disc will be able to go up to four layers, offering over 100 Gb space per disc.
Translated into content, a 25 Gb disc with the appropriate MPEG2 encoding will be able to store 135 minutes of an HD feature, and two hours of standard definition extra features. A dual-layer 50 Gb disc can store a three-hour HD feature and two hours of bonus material in HD. For TV programmes, the large capacity can also mean that an entire series may be stored and sold on one disc - up to 22 hours of standard definition content on one 50 Gb disc.
A BD-ROM read-only physical disc specification (the format on which eventual pre-recorded content will be released) was finalised on 11 August 2004 and made available to disc manufacturers and other interested parties. In terms of compression and encoding, content can be encoded in MPEG-2, but the format backers have opted to additionally endorse both Microsoft’s VC-1, and the AVC flavour of MPEG-4 as mandatory advanced codecs to be supported in all hardware products, allowing content owners a wider choice to suit their requirements
The BD-ROM application layer has yet to be completely finalised. Although the specifications describing how linear video content should be stored on BD-ROM discs are bedded down, there are still some outstanding elements to the interactive features for the format that are being refined.
Some crucial issues regarding the implementation of an effective copy protection solution have yet to be finally resolved. This is a process that the BD format backers are currently working through with the major US studios. A copy protection system was developed by some companies within the Blu-ray group. More recently it appears that agreement has been reached - in common with the competing HD DVD format - to adopt the Advanced Access Content System (AACS) developed by a consortium of studios, consumer electronics firms (including BD backers Sony and Matsushita) and information technology vendors.
A recent breakthrough for BD was the major improvements made to strengthen the discs. In the early stages, the BD disc integrity was prone to damage and therefore had to be housed in a cartridge. However, TDK’s addition to the BDA brought new hard-coating technology that has meant the discs are tougher even than existing DVDs (uncoated - the coating technology is also applicable to them), and all BD formats are defined without cartridge.
The first BD recorder, Sony’s MPEG-2-based BDZ-S77, was launched into the Japanese market in 2003, costing $3,830. Mid 2004, Panasonic started shipping its BD recorder in Japan and LG started shipping a BD recorder on the Korean market. Most recently, in November 2004, Sharp announced the introduction in Japan of its BD recorder with integrated hard-disk drive and DVD player. Launched on 9 December, the BD-HD 100 model had a price tag of $3,000, with the ability to not only record onto the BD format, but to also store 19 hours of HD broadcasts on its 160 Gb hard drive. The model mimics the red laser hard disk/recordable DVD combination devices that have proved to be rather successful in the Japanese market.
Notably, the addition of a DVD player has meant that content from as many as six DVDs could be archived onto a single BD. However, shipping of BD-ROM consumer products is not expected to begin until late 2005 or early 2006, by when most of the BD backers will be bringing consumer machines and PC hardware to the market.
Importantly, Sony has already committed its next-generation PlayStation 3 games console to incorporating the Blu-ray format, as well as, it is expected, its Vaio PC notebooks. Moreover, the Japanese giant’s studio Columbia-TriStar has already pledged its support to the Blu-ray format, as is expected will the recently acquired MGM.
HD DVD, as its name suggests, has grown out of the existing DVD format supported by the DVD Forum. In August 2002, DVD founder Toshiba and consumer electronics firm NEC formalised a joint proposal to the Forum of a blue laser format based on DVD’s current construction of bonding two 0.6mm thick discs together.
Later joined by Sanyo, the premise of the format has been very much cost-focused. Literally billed as ‘next-generation DVD’, the backers contend that the physical similarity of the HD DVD format with today’s standard definition DVD means that the cost to disc manufacturers and replicators will be as low as permissible (an important point when considering that most manufacturers made their infrastructure investments only a few years ago). However, critics point out that it remains to be seen if older replication equipment can really be used to meet the stricter tolerances required by HD-DVD.
Given the reliance on a 0.6mm disc, the HD DVD format does not offer the same storage capacity as BD. A single layer HD DVD offers 15 Gb of storage, up to 30 Gb on a dual layer. On the 15 Gb disc, using MPEG-2 compression this translates into a 120-minute HD-quality movie with no space for extras. The 30 Gb disc can, however, store a 180- minute movie and just under an hour of standard definition extras. In effect, the dual layer HD DVD format provides a similar storage capacity to the BD single layer.
Like BD, HD DVD is in the process of finalising its various specifications. The DVD Forum approved an HD DVD-ROM spec in June 2004, with hardware support given to both MPEG-4 AVC and Microsoft’s VC-1 compression technologies as options for content providers to use. The advanced compression is arguably more important to HD DVD due to the lower storage capacity of the format. In terms of copy protection, it is likely that the backers of the HD DVD format will - as Blu-ray is expect to do - adopt the new AACS format, of which Toshiba is one of the developing founders.
Although Toshiba and Sanyo have demonstrated prototype devices, there is no HD DVD hardware on the market. Both companies have announced an intention to commercialise the hardware in late 2005, with Toshiba also integrating the HD DVD drives into its branded laptops.
At launch, Toshiba’s consumer HD DVD players are expected to retail for $999 in the US and around ¥10,000 ($925) in Japan. The company is hoping for 1,000 HD DVD-based movie titles in 2006, and as many as 10,000 titles in 2007 (though this is unlikely to be any more than speculation at this point). Though no studios had officially committed by November 2004, it has been rumoured that Warner Bros, Universal and Paramount are poised to pledge content to the format, whilst Fox has also given its support to HD DVD (but stopped short of committing any actual content).
NEC is expected to commercialise HD DVD drives in the PC and PC peripherals market in the same timeframe.
The two major formats are not alone in the market. Some manufacturers have put forward their own variations on the HD optical disc format, largely borne out of a desire by manufacturers in certain territories to reduce DVD royalty payments. None are considered serious contenders for next-generation global packaged markets, although they may take a slice of their domestic regions.
Enhanced Versatile Disc (EVD)
The EVD caused a recent stir. Initially developed by China’s Beijing E-world Technology and the US technology company On2 Technologies, it is supported by leading Chinese consumer electronics manufacturers SVA, Shinco, Amoi, Xiaxin, Yuxing, Skyworth, Nintaus, Malata, Changhong and BBK.
The platform was approved by the Standards Administration of China, and the first EVD devices were unveiled at a special event in Beijing on November 2003. Put simply, it is widely assumed that the concept was devised as a means of eliminating royalty payments made to the DVD Forum by China’s manufacturers in a bid to reduce manufacturing costs. It is reported that Chinese manufacturers need to pay approximately $14 in royalties for every DVD player they make.
Technically, the EVD is based on the existing red laser disc format. However, it uses proprietary compression solutions, developed initially by On2, with chipsets subsequently delivered by LSI Logic, to fit 120 minutes of HD content onto a dual layer 9 Gb DVD. According to the group, the standards body is at present working on a 16 Gb EVD.
The first commercial EVD devices were launched in the Chinese market in January 2004 by manufacturers Shinco, SVA and Amoi. In a bid to push sales and raise the profile of the format, Shinco took the unusual step of announcing negotiations over content for the format from some US studios, including MGM and Fox, and promised 1,600 EVD titles overall in 2004.
But plans were scaled back to 300 titles, with the first titles only appearing in July 2004, and only 50 titles having appeared by the start of September. The studio titles are not expected to be in HD at the moment. Unsurprisingly, this has affected sales, as has the high cost of discs (an EVD movie disc costs twice that of DVD) and players (an EVD player costs twice that of a DVD player). Alhough a target of 200,000 EVD player sales in 2004 was set in January, the average sales figure has been around 1,000 players a week.
Ironically, due to the low take-up, EVD manufacturers have had to make their players compatible with the DVD standard in the interim period, therefore obliging them to pay the $14 DVD royalty on top of $2 per player they already pay for the EVD standard.
Forward Versatile Disc (FVD)
FVD was developed by the Advanced Optical Storage Research Alliance, a consortium of 28 Taiwanese optical storage firms, and Taiwan’s Industrial Technology Research Institute (ITRI). The platform uses Microsoft’s Windows Media 9 (WM9) advanced video encoding technology to store content on a standard red laser disc. It was officially released in April 2004, and has a 6 Gb capacity on a single-layer disc and 11 Gb on a dual-layer. This means that a single disc can store 135 minutes of content at 720p (not true HD). Like EVD, it is a localised effort to reduce the cost of royalty payments paid by DVD hardware manufacturers.
The disc physics have been specifically developed by CMC Magnetics, RITEK, U-Tech Media and Prodisc Tech, whilst hardware manufacturers Lire-On Technology, Mustek, Quanta Storage, ALi and BenQ are making the player hardware drives. Limited supplies of FVD hardware was in Taiwanese shops by end 2004, with the first main shipments expected - probably in the Chinese mainland - about now .
Digital Multi-layer Disc (DMD)
The DMD HD format is the brainchild of Russian company D Data. The format uses a standard red laser to read data from specially coated disc layers. The discs can store up to 30 Gb of data using a twosided disc with six layers on each side, according to D Data. The standard single-sided disc, however, will be 15 Gb, four layers, offering 130 minutes playing time. The maximum resolution, however, will not be true HD - actually only 1920x1080i (interlaced, not progressive scan).
The company has opened an office in New York and is pitching its technology to hardware makers and content owners. It says that DMD players could be built using existing manufacturing capacity and would retail for around $300.
It is planning to build a disc manufacturing plant in Germany with government backing - reportedly. The plant could produce DMD discs that would cost content owners only slightly more than conventional DVDs. To date there has been talk of some limited content support, purportedly from Time Warner’s Turner Pictures.
According to D Data, it aims to have DMD hardware and software on the market by the first quarter of 2005 although possibly not in US. This appears a major oversight given the company’s desire to target the HD broadcast home recording market. A number of Taiwanese hardware manufacturers are looking at the standard with the prospect of developing players for the format.
High Definition Video (HDV)
Another Chinese format, HDV was developed by Beijing’s Kaicheng High Definition Electronic Technologies, which owns core technologies for the format, as a rival to EVD. Though Kaicheng contends that its red laser standard can provide discs with the capacity to store five times more than a standard DVD (using MPEG-4), the format’s ability to provide actual HD has been brought into question by engineers working for the Chinese government (as well as issues of backward compatibility, amongst others).
Notwithstanding the criticism, Kaicheng has pressed on, with an aggressive focus on South East Asia. It has teamed up with several domestic Chinese manufacturers to produce HDV players, including Shenzhen Utek and Wanlida. Kaicheng provides these partners with HDV chips, and the first batch of 30,000 Utek-produced HDV players has already been completed.
It is currently negotiating with large national Chinese retailers to promote their products. To support the format, Kaicheng currently offers more than 400 titles in the HDV format, though unsurprisingly nothing from the mainstream US studios.
Internationally, the company reportedly shipped 6,000 units to France and in October 2004, Kaicheng announced a deal with an unnamed European distributor to ship 1m HDV players to Europe.
Though not a specific format in its own right, the Warner Bros backed HD DVD-9 proposal is worth a mention. The idea is that by using advanced compression, such as AVC or VC-1, a 120-minute HD movie can be stored on a standard red laser DVD-9. It’s a proposal that has many similarities with EVD and FVD, but stays firmly within the ambit of the technical DVD specs laid down by the DVD Forum.
The business case for this has been that packaged HD movies could be offered on existing DVD-9 discs, thus avoiding the cost of utilising new replication equipment. In this respect, some studios feel it is important to have the option of using HD DVD-9 as a cost-saving measure on certain highdefinition releases.
To date, backers of the HD DVD format have confirmed that HD DVD-9 will be offered as an option within their specification. By contrast, the Bluray group has yet to confirm the inclusion of this option within their specifications.
DivX is a proprietary video compression technology developed by DivX Networks, which has in recent years used its format to make some headway in both the online sector and the DVD hardware market. DivX enables the compression of DVD-quality video to 10 per cent of that of MPEG-2. Recently, the company announced that its technology will have been incorporated in over 20m DVD players shipped by end 2004.
Notably, all of these devices will be able to play back DivX encoded titles downloaded from content partner websites. At present, DivX has 75 content partners, offering around 18,000 titles for download. However, most of these are lower tier movies with no blockbuster content to speak of (although there is an impressive mix of well-known television content).
The current content business model sees some titles being available for download so that they can be subsequently burnt onto a CD or DVD, to be played back on a DivX-certified DVD player. Unique to DivX’s plans is true interoperability between an online environment and DVD - enabling the consumer to transfer secure content freely between the PC and the TV.
The next stage in the DivX DVD strategy seems to be a shift towards DivX-HD - advanced compression that, according to the company, can compress HD files to approximately 25 per cent of existing broadcast HD files. The aim is not only to enable quick Internet distribution but to fit a feature-length HD movie, a standard definition encode, multiple audio tracks and bonus features onto a single red laser DVD. This, however, sees the picture quality pushed down to 720p, with a bit-rate as low as 4 Mbps.
The company is currently offering movie trailer downloads in HD, and is planning to work with manufacturers to launch DivX-HD DVD players in 2005.
Further background: What is HDTV?
There is no universal agreement what constitutes high definition and a lot of dispute about which image format is ‘true HD’ as opposed to just tolerated. Broadcasters in the US are evenly split between 720p (720 horizontal lines progressive scan) and 1080i (1,080 horizontal lines interlaced scan) distribution formats. While 1080p is increasingly accepted as a near-universal HD production format, here too there is dispute about whether capture should be at 24, 25, 30, 50 or 60 frames per second or even some subset of it (such as 59.57Hz). Moreover, there are today only a handful of displays capable of showing 1080p at any frame rate. The situation for televisions is further complicated by the fact that most flat-panel displays are based on PC and graphic monitor resolution, such as VGA, rather than on established television format resolutions, such as PAL or NTSC.
In September 2004, the EBU (European Broadcasting Union) came out in favour of 1,920x720p at 50 Hz as a broadcasting format in an announcement from EBU’s BTQE committee of public broadcasters. The statement was later withdrawn, or rather qualified, that it was a ‘work in progress’ and that the EBU had not endorsed the recommendation. While EBU thus leans towards progressive as a ‘natural preference’, there are still many in Europe that gravitate towards 1080i as the ‘Common Image Format’ as supported by the ITU (International Telecommunications Union). Europe is thus no more in agreement on HDTV broadcast formats than the US or the rest of the world.
In a forthcoming Screen Digest report on the prospects for HDTV in Europe we consider a television or display to be an HDTV set if it has a minimum resolution of 720 horizontal lines capable of being displayed progressively (ie, 720p) or XGA resolution, which is its nearest computer graphics equivalent. Sets that have a native resolution of, for example, W-VGA or are capable of 480p display are not HDTV sets1.
We have also included two other provisions. The first is that HDTV sets ought to have suitable connectivity—ie, digital DVI or HDMI sockets, to be able to connect to digital devices (set-top boxes, next generation DVD players, etc). We do not consider component input practical for HDTV viewing and there are no sets in Europe with integrated tuners for HDTV signal reception.
Secondly, the sets must be a minimum of 20-inch as sets below this are rarely the primary viewing sets in any television households. This eliminates dual-use PC monitors in work or study areas that would otherwise have to be counted as HDTV sets on account of their native resolution.
1An exception is made for plasma screens with a resolution of 1,024x1,024, which fall into the grey zone as half field refreshment means that they have an effective resolution of 1,024x514. These are still included, though it is worth noting that they are being phased out as a plasma television source material.
Copyright © 2004, Screen Digest 
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