DVDGuy’s Blog @ Digital Digest

Welcome to another edition of the WNR. For those that are new to this, this is where I usually write my introduction, or in the rare cases, I get to mention the one piece of work that I actually managed to do the whole week. This is one of those rare cases. The work in question is the monthly NPD US video game sales analysis for February 2011, which I posted yesterday. No big surprises, and the five week reporting period for this February made the figures look better than what it was a year ago, when it was only a four week reporting period, but once again, the Xbox 360 was the real winner with year-on-year growth even when you take into account the reporting differences. Kinect is a big part of why the Xbox 360 is doing well, but you do wonder how long people are willing to wait for some new games, because people I think are already bored with the launch titles.

Also, just a reminder that the draw for the Digital Digest Facebook/Twitter competition took place this week, and you can see if you’ve won here. I’ve tried contacting the winners via Facebook/Twitter, but not everyone has gotten back to me, so hopefully you’ll read this message and collect your $20 Amazon gift card.

Lots to go through, so let’s get started.

In copyright news, LimeWire is in the news again, this time for settling one of the two lawsuits it is facing. No details have emerged regarding the settlement agreement, other than both sides will pay for their own legal costs.

But the way music copyright works, LimeWire is still facing about a billion dollar worth of damages from the other lawsuit. With music copyright, copyright is split between copyright owners of the song in question, and the publisher, which owns particular recordings of songs. The settlement this week is with the publishers, but some of the very same companies as part of the settlement are still suing LimeWire as copyright owners. LimeWire is still fighting that other lawsuit though, and they’ve even gone as far as subpoenaing mega-corps such as Apple and Google to see how distribution deals are normally set up. And the conclusion they’ve drawn from the internal emails they’ve looked at is that piracy possibly even helps sales, and that the closure of LimeWire actually had a huge negative effect on legal music sales. And this will all have an effect on the possible amount of damages that LimeWire needs to pay.

Other than this piece of news, it was actually pretty quiet on the copyright front this week. Just before I started writing this edition of the WNR, I came across this editorial in The Observer, on the websites of the British newspaper. The premise of the article is very simple – that movie studios have only themselves to blame for not embracing the Internet, and allowing online piracy to fill the gap left between the traditional, outdated business model, and the consumer’s demand for something new. The entertainment industry spent the last decade basically trying to use the courts and lobby governments to intervene on their behalf, instead of actually working with the technology. And when they did work with technology, it was to invent DRM whose only function was to annoy legitimate consumers, and actually create a legitimate excuse, at least for some, to obtain content illegally. When people can obtain the same or higher quality content for free, and more easily than legal purchases, this creates the illusion that what they’re doing is perfectly justified, even when they know that it’s illegal. What the industry needs to do is to not give people any excuses, at least not good ones, to not buy legal content. And this starts with making content easier to access, to grant users access to more content, faster, and all at a price point that is reasonable. The Observer article hints at the fact that it may already be too late to act, that a whole generation has grown up disrespecting any type of legal purchase, making fun of those that do the right thing. However, I’m more optimistic, because the success of iTunes and Apps suggest that, people in this new under-25 generation do still spend money, even if their expectations are very much raised in terms of value and ease of use. It’s now up to the industry to rise up and meet those expectations, or the doomed scenario that The Observer article predicts, one where a perfect storm of “excessive budgets, dwindling finance and diminishing returns” will catch up to the industry.

If you want an example of the industry not embracing the Internet, then Apple’s iTunes is a good example. While the music industry was pre-occupied on cramming as much DRM into music as possible, even putting root-kits on CDs, Apple was quietly building a new business model to suit the Internet age. Sure, Apple also did experiment with DRM, with no success as predicted, but they also made sure that even if you had to deal with Apple’s draconian DRM scheme, you would at least get something back, which would be cheaper music (cheaper than buying a whole album just for a song anyway), ease of use, and hardware devices that made it all work. And Apple, a computer company, now profits from a music, where the music industry could have perfectly easily retained this revenue for themselves, if they just had the foresight to embrace the Internet, instead of fearing it. And this week, another example of the industry’s fear was on show, as news broke of Apple trying to re-negotiate re-download rights for iTunes music with the major labels. That’s right, once you buy a song on iTunes, you cannot re-download the song without paying for it again. This is not Apple’s doing, this is a roadblock put up by the industry, who greedily wants to be paid on a per download basis, as opposed to a per purchase basis. While this is a simple inconvenience to iTunes users, it just goes to show the mentality of the industry who sees the Internet as the worst thing ever (as one Sony executive put it), trying to make it harder for Apple to sell music *legally*.

I can sort of see why the entertainment industry is reluctant to offer re-download rights, and to also put out reasonable prices. They way they see it, if someone is spending $50 on 30 music tracks at $1 each and one DVD movie at $20 every month, then by lowering the price of tracks to 10 cents, and movies to $5, then they will see their income drop from $50 to $8. But the way I see it, if you do truly build a great and easy to use system, people will still spend $50, they’ll just buy more things. In fact, I can see people even spending more than $50, if every buying decision becomes a non-decision and the perceived greater value in their purchases will probably mean more purchases over time. And there will also be more people paying for content than before, because nobody but the really hardcore downloaders will find it necessary to go through the trouble of pirating a 10 cent track. Then there’s the indirect result of “teaching” a generation about copyright, not by trying to punish those that don’t do the right thing, but by creating reasons for them to do the right thing.

In HD and 3D news, nothing much again this week. The only thing remotely related to HD was the news that you will soon be able to rent movies on Facebook, using Facebook credits.

I guess after my rant above about the entertainment industry not embracing the Internet, this is one example of the opposite. I still don’t know if this will be a success, but at least they’re trying. The problem is that it costs 30 Facebook credits, or around $3, to rent a movie that you can only really watch online, via a Flash based movie player not too dissimilar to YouTube. That sounds a bit steep for $3 to me. And the same argument I made above rings true here as well, as instead of trying to sell/rent a few overpriced movies to a small minority of Facebook users, wouldn’t it be better to sell/rent a lot of reasonably priced movies to more Facebook users – the long tail approach, where the money is made on a huge number of small transactions, as opposed to a few large ones.

And in gaming news, some better news for Sony this week as their European PS3 import ban has been lifted, and LG, which initiated the ban in court, might even be fined for perhaps taking things a bit too far.

It’s all just as I suspected, a petty patent dispute (one which, to be fair, was started by Sony), with no real consequences once both sides settle down and settle the matter, in or outside of court. But even Sony admit this one could have been costly, since supply was definitely starting to get constrained had the ban not been lifted in time.

And a new firmware is available for the PS3 as well, with 3.60 released this week to give PlayStation Plus subscribers access to 150MB of online storage to store their save games in the cloud. The firmware also addressed security issues, as I suspect every firmware release from this point will, and hackers have reported that it is somewhat effective, for now at least.

While the update is good for PlayStation Plus subscribers, it’s not so good for those that had their consoles bricked due to the botched 3.56 firmware. What happened was that 3.56’s security fix to fight hackers, fought against those that had legally upgraded their PS3’s HDDs (something Sony encourages people to do, even providing instructions in the manual on how to do it). The update rendered the system unusable, and even the later 3.56 Hotfix didn’t fix the problem, although it did allow those that still had the original unmodified HDD to get the system up and running again (and once that happened, users could then upgrade their HDD again without problems – in other words, users needed install the 3.56 Hotfix by using their original unmodified PS3 HDD, and then afterwards upgrade their HDD). Everybody thought that 3.60 would then fix this major bug, and allow borked systems to work again, but unfortunately, this was not the case. Apart from paying for an expensive repair by Sony tech support, there’s no other way to restore functionality, but some have had success begging Sony to fix their PS3s for free, if they were only out of the warranty period by a few months. I urge people to talk to their local consumer rights group, to inform themselves of their statutory warranty rights, and demand Sony repair their PS3s for free, for a problem that Sony and Sony alone were responsible for in the first place.

Microsoft, on the other hand, are basking in the rays of good news, with Kinect officially entering the Guinness Book of Records as the “fastest-selling consumer electronics device”, with 8 million units sold/shipped in the first 60 days according to Guinness’ own independent research. So far, 10 million units have been shipped to retailers as of the end of February, that’s almost one for every five Xbox 360’s. Still, as I mentioned earlier, Kinect will succeed or fail based on the software offerings, and so far, what’s on offer has been pretty average.

And so that’s another WNR done and dusted. Before I go, I would just like to say that my condolences goes out to the people of Japan. Google has set up a page with resources on the crisis in Japan, for those seeking information or ways to help.

This entry was posted on Sunday, March 13th, 2011 at 6:46 pm and is filed under Computing, Copyright, Movies, News Roundup, PS3, PS4, Xbox 360, Xbox One. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.