Blu-ray vs. HD DVD (2008) - Page 60

Pioneer, the Japanese drive manufacturer, has developed the first laboratory prototype of a Blu-ray Disc that can store 400 gigabytes on one side. Each of its 16 storage layers holds 25 gigabytes. The previous record holder, TDK, only managed to squeeze 200 gigabytes on to 6 to 8 storage layers.


Pioneer says the greatest difficulty it had to overcome was extracting a useful optical signal from the sandwiched layers. Its new lens technology however does a very good job of compensating for spherical aberration in the optical path and minimizing crosstalk and transmission losses, so the optical sensor is able to get a good signal even from the lowest layer.

The success of the prototype will probably be exploited mainly for publicity purposes. It is doubtful, given the current state of the art, that such a 16-layer Blu-ray Disc would ever go into production. Present-day Blu-ray Discs can store 50 gigabytes on two layers. The return from the production effort falls dramatically with each additional storage layer, so economically justifiable mass production still seems far off.

For a practical drive, higher transfer rates would be desirable. If a 400-gigabyte disc were written to at the normal Blu-ray transfer rate – 4.5 megabytes per second – it would take 25 hours for the burner to fill it. Because of speed restrictions, it's expected that the Blu-ray Disc will in the future be limited to being read or written at a maximum of 12X. This makes it more likely that the technology developed by Pioneer will be used in coming generations of new optical storage media, rather than in a Blu-ray device.

Consumers have spent $194 million on Blu-ray high-def discs in the first six months of 2008 -- a 350 percent over sales of both Blu-ray and HD DVD titles in the first six months of last year.

That's according to an article by The Hollywood Reporter.

The publication adds that Bluj-ray sales revenue alone should triple the amount of digital downloading revenue in 2008. One analyst says the high-def disc's advantage is evidence that Wall Street doesn't understand the tech industry.

Many Wall Street analysts have said digital downloads -- downloading movies over the Net directly to your home TV -- will soon replace both Blu-ray and the standard-def DVD.

"Most analysts are techno-geeks with plenty of money and not much time, while most Americans are not technically savvy, and they have plenty of time but not much money," said Tom Adams, president of Adams Media Research. "The fact is, despite what many on Wall Street seem to think, there is very little digital downloading going on. We're talking about $118 million in 2007 spending, and about $254 million this year -- so against a $24 billion packaged media market (Blu-ray and standard-def DVD) it's really not making much of a dent at this point."

The Hollywood Reporter writes that unit sales of Blu-ray discs were up 340 percent in the first half of 2008, with the number of discs sold around 7.4 million.

I Am Legend is the leading high-def disc seller with 305,000 unit sales, followed by National Treasure 2: Book of Secrets with 145,000.


Commentary:
Tom Adams could not be more right. From DVRs to the Apple TV to Interactive TV to now Blu-ray, Wall Street analysts have been dead wrong on predicting the future of nearly every new TV technology.

They have said millions of people would buy products from their TV screens using Interactive TV remote controls; they have said people would stop watching ads because of the DVR (they also said TiVo would conquer the world); they have said the Apple TV would become a cultural phenomenon; and now they are saying that digital downloads will take over the living room.

Wrong! Wrong! Wrong!

Financial analysts, many of which are based in New York and have incomes that far exceed the average person, do not understand the average home viewer; they see the industry through their eyes only, and therefore, too often hype new tech products as the next big thing.

Why? Because they think the products are "cool."

But digital downloads is their latest mistake with the analysts saying millions of home viewers will soon connect their TVs to Net-capable devices.

However, the analysts forget two things: most Americans are not tech-savvy and are confused by Internet TV devices. And two, it takes too damn long to download a high-def movie over the Net.

It will still be a few years before Blu-ray becomes a mass audience product. But it will be years and years and years before digital downloads are ready for primetime.

All I can say is that any investor who listens to a Wall Street analyst on TV technology issues should have his head examined because you're guaranteed to lose your money.