Kaleidescape Strategy
Like many others on this list and no doubt off it, I am holding back on buying any HD movies until my Kaleidescape can store them (I no longer have a conventional player and I don't want to buy and install one).
My HD movie collection comes from setting my SKY+ to store movies that are broadcast in HD and watch them. Only room for 5 movies on the SKY+ disk though ... Most of my DVD viewing is in standard definition which is "OK".
On the other hand, I too have decided to avoid adding to my K-Scape system (i.e. no more rooms, avoid buying hard discs) until its clear that K-Scape will handle HD. The option is as others have said to simply copy HD DVD's to a PC based system and watch them on a PC connected to an HD projector or screen. Clunky but it works surprisingly well, although I don't like doing illegal stuff.
Obviously K need to do whatever is right on the legal side, but perhaps they will have considered two other strategies:
(1) Use European Community Competition law.
http://ec.europa.eu/comm/competition/index_en.html
EU law is far more supportive of competition than US law. Specifically Collusion (Art.81) and Abuse of a Dominant Position (Art.82) are targetted right at the sort of behaviour that K-scape is trying to stop. Moreover, the EU commissioners seem keen to support actions that target "bullies".
At a previous company I worked for, Microsoft was trying to enforce a contract make us pay a royalty for software we did not use (they backed down and paid us damages when threatened with EU court action and they also threatened action when we reverse-engineered some of their proprietary technology (RDP+security) to open us access to NT servers. They had to back down when we reminded them of EU law on "abusing a dominant position". Might be an angle here.
(2) Go with [encourage] the flow.
Surely K-scape will(must) soon respond to customer demand to allow the upload of digital video material encoded using H.264 (AVC, MP4), VC-1 (SMPTE 421) etc. We can then transfer our movies (from AVCHD) or media we have bought to our servers.
The "back door" is then open for movies to be copied using PC tools or simply downloaded from wherever onto our K-scapes. Since K-scape makes money by selling hardware and software maintenence fees, the more content the better. Its like Apple and the i-Pod - only about 1-2% of i-Pod content is ever bought for an i-Pod, most of it is simply copied from a CD (as Steve Jobs himself recommends!) you bought some time ago.
Kaleidescape seems to be quite a "secretive" company - avoiding talking about the future and shying away from publicity. Perhaps it will soon be bought by Apple, who knows. It will certainly be aware of the threats to its existence from big consumer brands and from small "movements" and above all from the PC, gaming and internet giants. So the company needs to be prepared to step forward a little more and be prepared to "surf" some trends rather than taking a more navel gazing "follower" attitude if it is to keep its customers happy.