DVDGuy’s Blog @ Digital Digest

Welcome to another WNR. It’s been a very quiet week, and I expect a few of them going into the holiday break. But as long as there’s a single story to talk about, we’ll be here, even if the WNR, like this one, might be a very short one indeed.

Disney going after Redbox for re-selling digital copy codes

It’s not often that I agree with the premise behind a Hollywood studio’s lawsuit. These types of lawsuits usually tend to exaggerate the scale of the problem, frequently ignore the principles of fair use, and mostly just used by studios for propaganda purposes, with no real effect on piracy.

But Disney’s lawsuit against Redbox, from a common sense point of view, does seem to have merit. Redbox has been buying Disney movies at retail and putting them in their Redbox kiosks. This part I have no problems with, and while I’m sure Disney would prefer a more formalised deal, this isn’t what the lawsuit is about. What it is about is Redbox taking the Digital Copy inserts from these Blu-ray or DVD movies and then selling them to their customers, despite it being made very clear that these Digital Copy codes are not for sale or transfer.

I’m sure individuals have done this before – to sell the Digital Copy codes on at a discount compared to what the movie would normally cost on iTunes. But for a company to do this, on such a scale commercially, they’re just asking for trouble. The fact of the matter is that Disney and other studios offers a “discount” on these digital copies as part of a Blu-ray or DVD combo in order to promote their disc sales, even though they know this will eat in to their digital only business. Redbox actions removes any incentive Disney has for going down this road, and at the same time, takes a chunk out of Disney’s digital sales.

Redbox’s argument seems to be that it’s good for the consumer, and so they should be allowed to do it. They have a point in that, by offering these digital downloads at a discount, it’s doing us consumers a favour. But we all know that if this is Redbox’s only argument, then it will not hold up in court, because there are plenty of “pro-consumer” products and activities that are, at the end of the day, outright illegal.

Redbox’s actions are not really a threat to Disney’s disc and digital sales, as the studio is doing roaring business thanks to its major franchises, all of which seem to do well on Blu-ray. But with that said, discs sales are definitely down all around. With Black Friday just out of the way, I’ve managed to have a look and write up the sales results from the week, and things aren’t looking up.

Disc sales are down this Black Friday

In fact, almost everything is down. Both Blu-ray sales and DVD sales are down, but because DVD is falling faster than Blu-ray, weekly Blu-ray market share managed to rise compared to the last Black Friday. That’s little consolation considering overall sales were down $36 million, or roughly 13%.

The only bright spot appears to be Ultra HD Blu-ray sales, which now accounts for nearly 10% of all disc sales for many of the top sellers. That’s not bad considering the number of 4K TVs in people’s homes, and the lack of real discounting on BF.

The arrival of subscription streaming, and to a lesser extent, digital sales, have all had an impact on the popularity of discs.

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That’s all we have for you this week it seems. Told you it wasn’t much. Hoping there’s more next week, so until then …

Welcome to the last months of 2017. It has really flown by, hasn’t it? I’ve found a way to judge how busy I’ve been in a year, simply by the amount of binge worthy TV that I’ve managed to miss. So if you’ve still got Black Mirror Season 3, Stranger Things Season 2 and other similar shows in your watch queue, it must mean you’ve had a super busy year.

Was it a super busy week in terms of news? Kinda. Let’s go through it and see what happens.

Netflix’s effect on piracy may take time to measure

New research shows that Netflix may not be the cure-all for the piracy problem after all. The study compared households with a known piracy track record, and tried to see if there was a change when half of the households were given a free subscription to an unnamed VOD service. The results weren’t that promising, with only a small change in the downloading habits of those given free subscriptions.

The main problem? Most of the shows and movies people wanted to watch simply weren’t on the SVOD platform they had access to. Anyone who uses Netflix will know this is not a lie.

When asked given what’s available on Netflix, how much these households were willing to pay, most said an amount that was nowhere near what Netflix needs to cover its costs – only $3.25 USD. And even then, these households were still going to continue pirating.

So while it seems that SVOD alone isn’t the answer to the piracy problem, when combined with digital sell-through and fairer pricing for all content, the piracy problem may not be as difficult to solve as this research suggest. Plus, there is one major phenomenon that the study may have failed to account for – and that is how SVOD *changes* one’s viewing habits over time.

Speaking from personal experience, having access to Netflix, Australia’s own Stan and Hulu has dramatically changed how I consume content. It used to be that I would buy lots of DVDs and Blu-rays (but usually when they’re on sale – rarely would I buy a new release). Now, if I can wait for a movie to get onto one of the SVOD platforms, I would. For the movies that I really want to see right away, I would go see it at the cinemas, or when all else fails, buy it on Blu-ray.

I’m also now spending much more of my free time viewing original productions on Netflix, Stan and Hulu, to the point where I’m skipping a lot of content that, in the past, I would have bought on Blu-ray (when they were on sale). The content that I’m skipping would usually be the so-so movies with average ratings that, I’m curious about, but definitely not in the must-see category (there’s plenty of content on Netflix that falls into this category, so I’m never really out of stuff to watch). Even some blockbuster movies, ones that did well at the box office, might fall into this category as well.

So if other people can change the way they consume content, to be more patient with new releases, to consume more of the original productions, and to be willing to skip a lot of “not so great” content, then piracy should come down thanks to Netflix and other SVOD platforms. It will take time though for this to happen, something a quick study like this one might not be able to account for.

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A small followup to a story I covered a few weeks ago. It seems the latest version of Denuvo is working again to offer publishers some protection, since it’s been a month and Assassin’s Creed: Origins still remains uncracked, along with some other A-list titles like Star Wars: Battlefront II that uses the same updated version of Denuvo. So the cat and mouse game begins again, even though the cat (or is it the mouse) has the upper hand for now.

Alliance For Open Media’s AOMedia 1 format looks promising

The HEVC hegemony is being challenged by a newcomer – AV1. Officially known as AOMedia Video 1 (with AOMedia standing for Alliance for Open Media), it’s a next-gen codec that promises to be even more efficient than HEVC. And Mozilla, one of the founding members of the Alliance, has just added AV1 support to the latest beta version of Firefox.

Tests so far have confirmed that AV1 is at least as efficient as HEVC, and probably more so. With software giants Microsoft, Internet giants Google, Amazon, Facebook, Netflix and computing icons IBM, Intel all backing the Alliance, it’s easy to see why AV1 might just prove to be the real thing (or at least more real than VP9).

The problem though, is the lack of hardware support for AV1 at the moment. Encoding is a pain in the ass right now, 150 seconds of encoding just for 1 second of AV1 video, and without hardware decoding support, anyone playing AV1 files on their mobile devices will soon run out of battery. But these things take time, and the hardware support will come (especially with Intel on board).

So why the need for AV1? It’s in the name, really – the Alliance for *Open* Media. Nobody wants to get tied to a royalty heavy codec like HEVC, so if there’s an open source, royalty free alternative, it will be warmly embraced, especially by open source developers like Mozilla.

While I’m here, I also wanted to address the strange emphasis on Apple in the CNET article I linked to above. While Apple has embraced HEVC in iOS 11, it’s by no means the first company to embrace HEVC, nor does it have some kind of stake in its success. In fact, one might say it is one of the last to fully embrace the format, what with Netflix, Amazon all using HEVC, and with support for it mandatory for 4K TVs and Ultra HD Blu-ray. And Android has had decoding support for it since Android version 5.0. So it’s not so much as AV1 taking on Apple, as AV1 taking on an established format that, I’m sure if AV1 was successful, the likes of Apple would be more than happy to add support for.

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And we reach the end of another WNR. Hope it was an interesting read for you all. See you next week!

Sorry again for the lack of a WNR last week – I know this is kind of getting ridiculous, but I had a good excuse. I have just moved house and with everything in such a state of mess, I couldn’t even find a proper surface to put my laptop on, let alone do any work (and that’s if I had time, which I didn’t).

You didn’t miss much though, and some of the stuff from then will be covered in this WNR as well. Let’s get going then!

The HBO hacker has been identified as someone who used to work for the Iranian military

I had totally forgotten about it, but apparently the FBI did not, and the identify of the HBO hacker has been revealed. 29 year-old Behzad Mesri is the man the FBI says is responsible for the hack and the leak of confidential information from HBO, which included episode spoilers for ‘Game of Thrones’, as well as actual unaired episodes from other HBO shows.

Mesri had gained access to HBO’s systems, possible through social engineering techniques linked to an executive at the company. He then demanded a ransom payment of $6 million in Bitcoins, but when HBO failed to negotiate, Mesri did what he promised and started leaking content from July through August.

Charges that could carry a maximum of 42 years in prison have been laid, but it’s unlikely Mesri will ever face justice. The reason? Mesri currently live in Iran!

Also noteworthy, but maybe not, was the fact that Mesri used to work for the Iranian military involved in hacking the computer systems of foreign governments and enemies. The HBO hack, then, was probably a stroll in the park for Mesri. There is no suggestion that the Iranian military had any interest in the hack, I mean, why would they unless they too were big fans of ‘Game of Thrones’.

It’s a FU from the MPAA to Australians when it comes to Fair for Australians

Speaking of foreign interference, Hollywood studios are trying to tell us Aussies are not as worthy as Americans when it comes to having fair use protection. The MPAA is lobbying the Australian government to not give us the same rights that citizens of the trade group’s home country, the United States, currently enjoy.

Having fair use rights would enshrine into law the rights that we, as consumers, ought to have when it comes to using content that we’ve already paid for. This would mean things like making a personal copy of a movie ought to be legal, even if it means circumventing copy protection. This would also mean extra protection for educators, and also security researchers when it comes to finding security flaws (as sometimes you need to attempt to break the protection before you can find its weakness). It’s all common sense stuff that kind of falls into a legal grey area at the moment – you’re most likely not going to get sued for it, but even if you do, you’ll most likely win the case in court – fair use exemptions simply make it clearer from a legal point of view what is actually allowed and not allowed.

You would think the creative industry, or everyone really, should embrace injecting this kind of clarity into the copyright laws, but for Hollywood, they are against anything that has the perception of watering down copyright laws, regardless of whether it’s something that’s good for the economy or good for consumers. So I hope the Australian government sees the MPAA’s opinions as exactly what it is – a biased opinion from a group that puts its own self interest above everything, the economy, the rights of its customers, and common sense.

With Australian retailers freaking out at the moment about the introduction of Amazon into our market, one thing is for sure, the increased competition should lead to lower prices for a lot of things, and in particular things like DVDs and Blu-rays. This is because a lot of Australians already have experience buying movies from Amazon US or UK (back when the exchange rate was more favourable), so much so, that Amazon has had a local warehouse here for ages now to deal with the ever increasing sales.

Blu-ray and DVD price drops accelerate due to increasing competition from streaming and digital

It won’t be the only pressure on DVD and Blu-ray pricing though, as the latest data from the UK shows that streaming services such as Netflix and online retailers have had a big effect on when retailers and studios choose to drop prices for the latest films. Retailers are dropping prices sooner and with a great amount than before, according to the latest data, and competition from the likes of Amazon Instant Video and online retailers, as well as supermarkets engaged in loss leading practices, is the main cause.

Adding my own personal anecdotal evidence into the mix, I’ve dramatically cut down on the number of movies I buy on disc since the arrival of Netflix and local streaming options. And so when I buy, it will only be because of a really great price. If other feel the same way as I do, then prices are only going to go down even further. Subscription streaming has definitely, in my opinion, lowered the value of movies to the point where I think it’s ridiculous to pay AUD $30 for one. Buying movies also has other problems that streaming and digital sellthrough does not have – as someone who is in the middle of moving, having endless number of boxes full of Blu-rays and DVDs is a real headache. On the positive side, I’m definitely going to the movies more with the money I’ve saved buying discs (but my overall spending is still way down).

Although with Amazon arriving locally, and if they can give us some great deals on Blu-rays, I might just get back into buying – not as much as before, but more than now. It really is all just about perceived value, isn’t it?

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Well, that’s it for the week. Hope you’ve had a nice Thanksgiving for those in the U.S., a good result from Black Friday (not only in the U.S., it seems to be everywhere now), and hope you grab a bargain on Cyber Monday too. See you next week.

Running a bit late today, so the WNR is being released a bit late too. There are a few things to go through, so let’s not waste any time …

The piracy rates has been steadily dropping in Australia, previously infamously known as one of the piracy capitals of the world (when it comes to Game of Thrones piracy, at least). And in the most up-to-date survey finds that the number of Australians actively engaged in piracy has dropped again, ever since the rate started in drop in 2015.

The introduction of legal streaming sites like Stan in Australia has had a big effect on piracy

The piracy rate has dropped from 29% in 2014, that is 29% of those surveyed said they downloaded pirated movie and TV content, to only 16% now.

There might be all sorts of explanations as to why movie and TV piracy started to decline in 2015 on wards, but the fact that Netflix came to Australia in 2015 and Australia’s own subscription streaming platforms were also launched that year, might point to a possible reason.

But despite the clear relationship between the arrival of affordable, legal options and the decline in piracy (which incidentally has also happened with music piracy, after the arrival of Spotify), the group that commissioned the survey, the Australian Home Entertainment Distributors Association (representing the Australian film and TV home entertainment industry), feels that it’s actually website blocking and personal lawsuits that might have been responsible for the decline.

Never mind the fact that website blocking has only just recently started, despite the piracy decline starting in 2015, and the fact that the talk of personal lawsuits is just that, talk, at the moment. It is kind of worrying that even with such clear data showing what needs to be done in order to reduce piracy, some in the industry still fall back to the tried and failed solutions.

That’s not to say that the copyright crusaders haven’t changed. They have, for sure. They started with suing and blocking download sites. Then they changed to sue and block torrent sites. And then streaming sites. And now, it’s about suing and blocking Kodi.

The battle of words against Kodi has started in earnest (and the legal battle having started a few weeks ago), and this week, the MPAA claims that almost 70% of Kodi users are pirates. Of course, nobody actually knows where they got this information from, since not even the makers of Kodi are aware any such data exists about how their users use the software (and this was done intentionally, in order to protect the privacy of users). So just where and how the MPAA obtained their stats is a bit of a mystery, or as the Kodi people would say, it’s either completely accurate or something they’ve just made up.

Assassin’s Creed Origin’s choice of DRM under attack

Speaking of something that may be completely made up (and something I forgot to cover last week), Ubisoft’s Assassin’s Creed Origin has been in the spotlight for the wrong reason due to its use of Denuvo, and more specifically, using VMProtect on top of Denuvo to make it harder to crack. There were claims that the game’s unusually high CPU usage was down to this controversial setup, wasting resources that otherwise could have been used by the game. Ubisoft then came out and flatly denied that their DRM implementation was at fault, saying the DRM had “no perceptible effect” on the game’s performance.

We won’t know who is telling the truth until the game’s DRM is cracked and a comparison can be made. As for when the game will be cracked, based on recent evidence, it might not take long at all.

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Well, that didn’t take long. I think I may have rushed things a bit because I’m so out of time. I’m sure the qaulity of the artical hasn”t been affected at all! See you next week.

Again, sorry for the hiatus last week. I know this is becoming far more common than I would like, but I did have a genuine excuse last week. Apparently, you’re never too young to have your first bout of vertigo. First, and I really hope last for a while if not forever, because having the whole room spin every time you move your head, is not a pleasant experience.

So this week’s Weekly News Roundup is more like a Fortnightly Roundup, or Bi-Weekly if you prefer that terminology instead. I promise not to make a habit of it!

(One positive from my confined bed rest was how I managed to catch up on my Netflix a bit. Also good timing that Stranger Things 2 just came out! Tubular! I’m currently working my way through Mindhunter.)

Here at Digital Digest, we’ve always been waiting for the day that common sense prevails when it comes to DRM. In that, we look forward to the day that everyone sees just how worthless and counter-productive the whole thing is and either it stops being used, or if needed, legislation is put into place to prevent its use. What’s happening in Portugal falls short of this, but it’s at least in the right direction, with the European country deciding to inject a bit of common sense into digital copyright laws.

No longer will fair use have to play second fiddle to laws protecting DRM, and so if you need to rip something for research or personal use, there are no legal repercussions for doing so. And the use of DRM is now completely banned in Portugal when it comes to protecting content that shouldn’t be protected, such as works in the public domain.

The only things Portugal doesn’t do the right thing on is in relation to obtaining the tools to rip and remove DRM. Distributing these tools will still be considered unlawful, despite their use being legal in many cases. How this will work, I don’t know (probably a “turn a blind eye” kind of deal), but it just goes to show that, despite progress being made, there’s still a long way to go before “the folly of DRM” is consigned to the history books.

HEVC wins an Emmy!

One things I found out last week was that it is actually possible for a video codec to win an Emmy. Or rather, the super smart people behind the HEVC codec won an Primetime Engineering Emmy, and I think well deserved too. Without HEVC, the 4K revolution really wouldn’t have been possible (imagine if Netflix 4K required a minimum bandwidth of 50+ Mbps, instead of the current 25 Mbps requirement).

Now, you could enter the argument that without the existence of HEVC, some other codec, maybe even an open source one, could have taken over. But one that is as efficient as HEVC, and also at the same time totally free of royalty encumbrances, might be nothing more than just wishful thinking – paying for something some times gives you a peace of mind that not paying for something and then getting sued later on for it does not.

The Nintendo Switch is selling like hot cakes. Better, even!

Things get better and better for Nintendo. The Switch is dominating the PS4 and Xbox One in the NPD results, and this has translated to a upgraded profit results for Nintendo. And if you ever needed a comparison to how well the Switch is doing and how poor the Wii U was, all you need to know that in just a year, the Switch will most likely have sold as many units as the Wii U managed to do in its entire lifespan of five years. In other words, the Switch will outsell the Wii U by next March!

I don’t know if this says more about how popular the Switch is, or how poor the Wii U was, but probably a bit of both.

The next couple of months will be very interesting. Not only do we have the usual holiday sales peak, there’s also a new console out from Microsoft. The Xbox One X somehow manages to be the most powerful console ever made, and heaps smaller than the original Xbox One (and even smaller than the Xbox One S). Its price tag, however, is not that small, and that’s its main weakness.

Going back to the Switch, it will be interesting to see if sales hold up during the holidays, whether it’s the “must have game console” for the holidays, and if so, whether Nintendo can ensure there’s plenty of stock for everyone.

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Alright, that’s it for the week. Time to finish off Mindhunter and then move on to the next binge target. See you next week.