HDTV Almanac

Last week, another bit of evidence appeared that supports the position that DVDs (and Blu-ray discs) should be put on the endangered list. Movie Gallery filed for Chapter 11 bankruptcy protection as it tries to find a way to deal with its growing debt. The company has more than 2,600 stores in the U.S. in the Movie Gallery, Hollywood Video, and Crazy Games retail chains. The company’s restructuring plan calls for closing 760 of those stores, or a bit more than a quarter of the total. The closures come on top of “closing several hundred underperforming stores across the country” according to the company press release, and that they “closing additional stores during the Chapter 11 process.”

This is the company’s second trip into bankruptcy, with the last one starting in 2007 and ending in 2008. According to an article in TWICE, the company had $1.4 billion in revenues for 2009, which sounds impressive until you stack it up against the $2 billion it collected in 2008.

Certainly it’s difficult to run a brick-and-mortar operation that competes with the NetFlix and RedBox juggernauts, but I also view this as the contraction of a market in general that is coping with alternate delivery systems for movies and other video content. The NetFlix streaming movie service and Hulu’s television episode delivery are sparking rapid growth of video delivery over the Internet. We still have a long way to go before the balance shifts from plastic discs to broadband connections, but the change is accelerating and this only makes the future for storefront operations such as Movie Gallery and Blockbuster that much more uncertain.

Okay. That’s more like it. Walmart is offering the Magnavox NB500MG1F Blu-ray player for $68. Yes, there are lots of features that you don’t get with this basic model, but it does have an HDMI connection and an SD card slot. And it’s not even Black Friday!

This brings Blu-ray into range for the average buyer. The difference in price between this and a DVD player is about the same as dinner for four at McDonald’s, which means that a lot of people will now be able to afford Blu-ray. Unfortunately, I still think it may be too late; Blockbuster is closing stores and Netflix is streaming movies over the Internet by the boatload. The days of distributing movies on plastic discs are numbered. You’ll probably get at least five years out of a Blu-ray player if you get one now, but I expect it will become a minor component in movie delivery to the home before the end of that period.

Brand loyalty remains an important part of many consumer markets in the U.S., but according to a new report by Strategy Analytics, subscription television service is not one of them. A recent survey found that more than 2 out of 3 cable subscribers would change providers if they were offered a 20% discount. For the smaller number of people who subscribe to television from a phone company, such as Verizon or AT&T, that number is cut in half to just 1 in 3.

Perhaps more telling is the fact that fewer than 22% of the subscribers overall felt that they were getting “value for the money”. With “100 channels and nothing on”, consumers are starting to question the return they get for their monthly subscription. The rapid growth of services such as Hulu and Netflix streaming movies is another indication of consumer dissatisfaction with the current choices.

From where I sit, one of the primary problems facing cable companies — and to a lesser degree, satellite services — is that they were established under a different set of rules and market conditions. In return for investing in running cable throughout a community, a cable company was given the right to provide the service to those homes. Now consumers are faced with a number of alternative choices, while cable costs keep rising year after year. One easy way to lower cable bills would be to offer a la carte pricing, but that will no doubt result in a huge drop in revenues because subscribers would opt out of all but a handful of favorite channels. But if cable and satellite services don’t do something soon to address the consumers’ concerns, they will will find their customers voting with their dollars and looking elsewhere for their video programming.

A report last week in Tech-On speculates on the possibility that Toshiba might exit the LCD business. The article quotes a senior executive vice president as saying “”Our LCD display business has been worsening, and we are in very difficult circumstances.” He was referring to the LCD business of Toshiba Mobile Display Co Ltd (TMD). This originally was a joint venture with Matsushita (Panasonic), but Toshiba bought out the other company’s share in early 2009.

If you do a search on this story, you’ll find some Web sites that report that Toshiba is considering pulling out of the LCD TV business. (I won’t cite any specifics here for there’s no need to embarass those sites.) And that’s completely wrong. TMD is the portion of Toshiba that manufacturers LCD panels, not TVs. With some limited exceptions, the company makes displays for mobile products, up to about 10 inches diagonal. It should come as no surprise that this highly competitive market is getting tougher, as Taiwan and mainland China increase their production capacity for small and medium LCD panels.

The division that makes and sells LCD HDTVs – including the new CELL TVs announced at CES last month — in the U.S. is Toshiba America Consumer Products (TACP) which is a completely different company, and one that relies on other LCD manufacturers for the panels used in their sets.

So it’s quite possible that Toshiba may throw in the towel for the small and medium LCD panel business, but don’t expect them to exit the LCD HDTV market any time soon.

Last fall, I wrote about the Samsung Instinct HD cell phone that could capture HD video. Now comes news that SonyEricsson is following suit. The new Vivaz is a 3G touchscreen phone that can record 720p video using the 8.1-megapixel camera. (The phone originally was known as the “Kurara”.) Apparently, the press release announcing the product may have be posted prematurely, as it appears that it has since been taken down, but not until after the information got posted to a host of Web sites. According to various reports, the phone is expected to ship in the first quarter of 2010, but the company has not announced any specific plans to market it in the U.S.

The cell phone continues to become the kitchen sink of mobile devices, able to do just about anything you might want to do while on the go. As I’ve stated before, this is probably motivated more by the need to differentiate products from the competition than it is by the user demand for more features. But clearly this trend shows no signs of slowing down, so expect cell phones to continue to evolve into the Swiss Army knives of the consumer electronics market.

I have reported previously on the “Commercial Advertisement Loudness Mitigation Act”, or CALM, which has been passed by the House of Representatives and now is in the hands of the Senate Committee on Commerce, Science, and Transportation. However, we don’t have to wait for federal legislation to do something about the large variations in sound levels between television programming and the commercials that are inserted throughout them.

Last month, SRS Labs reported that their “TruVolume” technology is now at work in 30 million individual consumer electronic devices. More than 3,500 products use TruVolume, including HDTV televisions, set-top boxes, and soundbars. It is also found in automotive and mobile products. Samsung and Vizio are two of the companies that use SRS technology in many of their flat screen televisions. SRS also has offers a Analog Volume Leveling Adaptor, an accessory that sells for less than $50 and can add automatic volume control to televisions that don’t have the feature. (There is also an HDMI version that sells for less than $100.)

I believe that technology is the correct way to solve the problem, as opposed to invoking a new federal law or additional regulations. It puts the viewers in control of just how much — or how little – variation in volume levels is acceptable, rather than have some branch of government make that determination for them.

Okay, I was determined to maintain the HDTV Almanac as an iPad-Free Zone, but Steve Jobs has forced me to break my resolution. There are many amazing points to pick out of Wednesday’s announcement, but I’m just going to focus on the video part. First, consider these quotes from the iPad promotional video on the Apple Web site:

“The iPad is the best… movie-watching experience ever.”
Phill Schiller, Senior VP, Worldwide Product Marketing

“This is an unbelievable device for watching video. The quality of this video is amazing.”
Scott Forstall, Senior VP, iPhone Software

And finally, from the text on the iPad Web site: “The best way to experience the web, email, photos, and video. Hands down.”

Well, in my opinion it’s “thumbs down” on these typically hyperbolic claims by Apple. Even a momentary consideration of the specifications makes these claims dubious at best.

First, Apple gets all excited about the LED backlight and the IPS LCD panel. Hmmm… just about every notebook on the market these days has an LED backlight. There’s nothing amazing there. And IPS stands for “In-Plane Switching”, which is LG’s technology for wider viewing angles on LCD panels. It’s a good technology that has been around for a long time, but it’s hardly cutting edge.

A more stunning fact is that the iPad does not have a widescreen display. It is the same 4:3 aspect ratio as your grandmother’s Zenith picture tube TV had. Just about every netbook computer on the market has a 16:9 aspect ratio screen, but not the iPad. To make matters worse, however, the panel only has XGA resolution, which is 1024 by 768 pixels. Guess what? That’s not enough to even show 720p high definition images without scaling them down. And because the panel is not a widescreen, the result will be letterboxed. The best it can do is 1024 by 576, which is barely better than a widescreen standard definition format. And when letterboxed, the image size shrinks from 10 inches diagonal (actually, it’s just 9.7 inches) to a mere 8.9 inches.

How does watching a less-than-high definition 8.9 inch diagonal video image rate as “the best movie-watching experience ever“? Somehow, I would have picked a 1080p projector with a 100-inch screen and a 7.1 surround sound system in a home theater installation, or at least a 50-inch LCD or plasma flat screen HDTV. I don’t think a device like the iPad would ever occur to me.

Am I all wrong on this? Will you be trading your HDTV for an iPad as soon as you can? Let me know at alfred@hdtvprofessor.com.

Raymond Soneira is the creator of DisplayMate, which is an excellent program that can quickly tell you volumes about your display, whether it’s an HDTV, a computer monitor, a notebook, or even a cell phone. I used DisplayMate extensively for many years when I developed and used the display tests for PC Magazine, and they still use the program today in the product testing. While I don’t entirely agree with every conclusion Ray makes, I hold his work in the highest regard and trust his test results above all others.

Ray makes a wealth of information available for free on his Web site. Check out his mobile LCD display shoot out and his HDTV shoot out results in particular. And now he’s making his expertise and analysis even more readily available. He has started a DisplayMate Twitter account that you can follow through Twitter, or by going to the page on the Twitter Web site, or through an RSS feed. He explains why glossy screens for notebooks and mobile devices are a bad idea, and what’s wrong with local dimming on LED backlight LCD HDTVs. He explains why “dynamic contrast” is a meaningless specification. Many of his tweets include links to his Web site where you can find additional information on the subject that doesn’t fit within Twitter’s 140 character limit.

If you’re interested in displays and what really matters for image quality, you’ll want to follow the DisplayMate tweets.

If there’s a way to make money with YouTube, Google is sure to find it. The company is certainly trying enough different ways to generate revenue. Last week, YouTube announced that they will start renting movies. According to a company blog entry, an agreement with the Sundance Film Festival will make five films available for rent for $3.99 each through the end of January. You can find the films featured on the YouTube home page. Apparently, YouTube is focusing on independent film makers for the start, though the blog mentions “a small group of partners across other industries” that will be invited to participate in the program.

The size of the catalog is underwhelming, to say the least, and it’s hardly a bombshell commitment. On the other hand, it represents a new direction for YouTube, and it will be interesting to see if viewers are willing to pay for long form content from a site that is associated with free short videos. I suspect that without a much larger collection that appeals to a broader audience, YouTube is not going to become the go-to site for movies for most people.

But Google isn’t depending just on movie rentals to expand YouTube’s revenues. The company recently announced a deal to provide live worldwide coverage of a sporting event. Starting on March 12, it will stream all 60 matches of the Indian Premier League tournament. (That’s cricket, if you’re not familiar with the IPL.) The programming will be shown free, supported by advertising. The content will be shown on a dedicated YouTube channel. Sadly, this coverage will not be available in the U.S.; you have to go to fee-based Willow.tv for the IPL coverage in this country.

Keep throwing the spaghetti, Google. Something’s bound to stick.

China News Daily reported last week that more than 2,000 workers demonstrated at a touch panel plant owned by a Taiwanese company to protest pay disputes and unsafe working conditions. According to the protesters, at least four workers have died from over-exposure to hexane, a toxic solvent used to clean the panels. Some other reports indicated that workers may have also been upset about rumors that year-end bonuses were to be cancelled.

According to the article, Chinese government officials denied that any workers had died from exposure to hazardous materials at the plant.

This is just one report of many that indicate that production costs for Chinese technology factories may start to rise. As workers protest pay and working conditions, the government is likely to start enacting — and enforcing — laws that provide more protection for workers. As one economist has stated, China has been exporting deflation to this point, but the pendulum is swinging and the country will start exporting inflation as their citizens demand a higher standard of living. The per capita income for China is just $3,200 a year, with many workers earning as little as $100 a month.

This could certainly cause the cost of our imported goods to rise, but another possibility is that the production will continue to migrate to areas of lower costs. Vietnam, India, and Brazil are all cited as countries that could take the place of China for high-tech product manufacturing.