Wow... rough week. What's the future hold?

[josh]

Wow, so let's see if I have this summary of the past 2 weeks correct...

• Kaleidescape's Blu-Ray player delayed by 6-12 months. As BR really moves mainstream, our wonderful expensive systems start to look older and more out-of-date with each passing day that we can't show hi-def content.
• Even when it does come out, the Kaleidescape experience we've come to expect will probably not be permitted on (some? all?) Blu-Ray discs.
  • MC itself will first (likely) involve a charge when you choose to copy it to your server. (not new news) OK, many of us had resigned ourselves to that even if we weren't happy about the "buy it twice" solution.
  • BUT now we're learning that even if you do go through this inconvenient process, bonus material (from some studios? all studios?) will not copy over, you need to put the disc in for that.
• And on top of all that, the existing Kaleidescape experience, even for our lowly 480i DVDs may well be proven illegal, bringing into question even keeping the current Kaleidescape experience for our current DVD libraries?

Does that sum up the news of the past few weeks?

If Kaleidescape were a publicly traded stock, it would have tanked this week... clearly the future of the amazing, award-winning user experience, if not that of the entire company, must be questioned.

Well, congrats studios... good job. As others more eloquent than I have said, you've taken a very small but passionate group of your very best customers that want to enjoy your product legally in an elegant way, after paying for your content, and you've angered them to the point that many will replicate that existing convenient solution with homebrew and truly illegal systems that will be FAR more damaging to your studios' future home video revenue streams.

Convenient, technically superior solutions will ALWAYS win in this industry. If you take away the 'good guys' who offered it best, and who always wanted to work with you, you leave only the 'bad guys' who don't care a bit about REALLY breaking your copy protection that will enable mass downloads and duplication. Providers of those quasi-legal and outright illegal products just gained a very lucrative market of disillusioned wealthy movie lovers to support their businesses. Smart.

I realize I'm jumping to many conclusions here, but more and more data points are coming in and the trendline is emerging. Those conclusion-jumps don't seem really that far anymore, do they?

Might Kaleidescape find a way to keep doing what we all love and offering wonderfully convenient ways to enjoy our movies? possibly... it's a great group of smart people. But the odds just got a LOT longer.

--josh

*** 9/21/09 UPDATE: Please see my updated post here that contains important new information. After more research, I need to correct some innacuracies in the info above, and I now do feel more optimistic than I was when I wrote this original post. ***

 

[Mr.Poindexter]

Josh,

I think you may be taking your feelings and projecting them onto others.

I do not look at Kaleidescape as something less viable today than yesterday. The DVD CCA is going to fight until they are dead. It is kind of like the movie Amistad, where the queen kept writing to US President after President demanding reparations for losing her slaves. Some people just can't let go or admit that maybe they are on the wrong side of basic rights.

Also, the issue with BR's MC licensing is not something K has control over and it will apply to all the future media servers coming out except the illegal homebrew systems.

As for having to wait another 6-12 months for BR, that kind of sucks but I don't expect the best system out to also always be the first one to introduce a product. How many new technologies have you seen where the first G1 unit is better than all G2 and G3 units that come out later from competitors? I certainly would rather wait a little longer and get the system I expect than to get a hobbled version today.

Just my $10. It's all about the Hamiltons, baby!

 

[josh]

Not sure on whom I projected my feelings, i wrote my own thoughts, didn't say WE feel this way or YOU should. Just that I did.

And the fact that MC licensing isn't something K has control of it is true, but doesn't diminish the fact that the user experience is very likely about to change for the worse and therefore, in my opinion, it will weaken the Kaleidescape value proposition.

But to be fair, we have yet to see exactly how it will all work out. I just bet that if I, one of their biggest supporters, am starting to question further investment in the equipment for fear of the company's viability, then others probably are too.

 

[Mr.Poindexter]

Maybe I am in the minority then but I don't rip the extras discs when I import movies and generally would go with just the movie loading for all but a few of my films. With the increase in size of the extras included on a disc - most of which I don't find to be worthy of repeat viewing, I wouldn't mind not having them on the server. The only thing I would like for each film is the trailer for scripting.

The extra wait kind of sucks but I am going to stick it out. I only have a handful of Bluray discs since I don't want to have to buy them again for managed copy and it was apparent a while ago that was going to be an issue.

The biggest issue I have is that the content owners are control freaks and everytime we as a collective group of customers try to find new ways to give them our money, they are afraid they will lose control and try to fight the advance of technology into uncharted territory. Radio was a threat, TV was a threat, Home Video was a threat, Internet downloads are a threat, Media servers are a threat. I think they are paranoid and people who are wealthy, powerful and paranoid can be very dangerous.

My only solace is that in the past, when they tried to stop the advance of technology, they failed every time and ended up making a fortune. History has a way of repeating itself and they can't hold back the tide forever. It is just a matter of waiting for the sequel to come and let us have our technology and they make their money.

I also don't really need to invest much more in my Kaleidescape system until BluRay comes about with the exception of an occasional extra drive so I am not really questioning further investment in equipment although I wouldn't mind a mini-system for my mobile theater system or perhaps to install in my car. Something about putting a Kaleidescape in a Honda just sounds kind of ironic though.

 

[cinelife]

I'm with you on the extra content Mike. I never load it, and frankly I'm not interested in what the actor's had to say about their roles, nor am I interested in "how" the special affects were constructed. Watching that content sort of diminishes the movie's impact for me. Historical drama's however, can have some interesting extra content, like interviews with those present at the event, etc...


Jim

 

[Mr.Poindexter]

I agree wholeheartedly on the extras for films based on true stories which often let you know what really happened vs. what was Hollywood.

 

[ambleside]

I have a slightly different view but maybe I'm in the minority. While a single disk player for BR would be nice in the interim, it's just a stop-gap. The hold-up on BR is really the availability of MC. We've all heard March. Check out the AVS discussion on the extra's - the Pioneer rep was misinformed. Will the costs of MC be too high too warrant it's use? How will K reduce storage costs to support BR? These are unknowns. The storage cost issue worries me most. The cost of high-end managed storage hasn't come down as much as I would have thought in the past - a NetApp FAS2050 is still >$4K/TB. Even a small NAS box from Dell costs $650+/TB for add-on storage...

 

[JerryL]

Josh I agree with your frustrations but I have not lost hope. I think K has a lot of connected customers and I don't think they will be shut down. This is just going to take longer than anyone would have liked. Its a shame but its how it is apparently. Btw the managed copy thing is really absurd.

 

[cinelife]

I have a slightly different view but maybe I'm in the minority. While a single disk player for BR would be nice in the interim, it's just a stop-gap. The hold-up on BR is really the availability of MC. We've all heard March. Check out the AVS discussion on the extra's - the Pioneer rep was misinformed. Will the costs of MC be too high too warrant it's use? How will K reduce storage costs to support BR? These are unknowns. The storage cost issue worries me most. The cost of high-end managed storage hasn't come down as much as I would have thought in the past - a NetApp FAS2050 is still >$4K/TB. Even a small NAS box from Dell costs $650+/TB for add-on storage...

I think we will all have to decide how many BR disks we want to store. I'm not anticipating any major reduction on storage costs. I'd be surprised if the eventual larger disks are less than the current cost for 1TB ($1K), and at those numbers I plan to be discriminating with the content I select for import. Mainly action, scifi, etc. movies that take advantage of the BR format. I'm thinking no more than 400 BR, but I'm flexible.


Jim

 

[Mr.Poindexter]

Well, the cost of the system has not dropped much for their big servers but they continue to increase the size they can hold. When 2TB drives emerge, we will be looking at a fully loaded 3U server holding 28TB and probably not costing much different than they do today at 14TB fully loaded.

When I got my first Kaleidescape system, a fully loaded 5U server was 3.3TB.

 

[MrCaseyB]

If I were you dealers and owners I would urge Mr. Malcolm to pursue alternatives such as digital downloads from VUDU. The HDX downloads are Blu-ray quality picture but only have a 640kbps DD 5.1 track (better than DVD, but not lossless like on BR)

Mitsubishi, LG, Vizio have now integrated the VUDU service into their dirt cheap products, surely Kscape could get it implemented in their new Blue Laser player. Heck Kscape and VUDU offices are only a few miles apart.

 

[Steven]

Hi,

Sounds like I'm in the minority, but I never watched 'bonus' material before I had my Kscape system. I guess it was a pain to stick in that other disk or something, but I find myself browsing the content that I put in the system, in addition to the movie itself. And the funny thing is that the more I watch, the more I watch for the new movies. There is really some good stuff there. Yeah, I'm not big on listening to an actor comment about making the movie, but I like deleted scenes, alternate endings, and in some cases, footage that puts sequels together.

Thanks, Steven

 

[JerryL]

Steven, that is exactly my experience also.

 

[josh]

Josh I agree with your frustrations but I have not lost hope. I think K has a lot of connected customers and I don't think they will be shut down. This is just going to take longer than anyone would have liked. Its a shame but its how it is apparently. Btw the managed copy thing is really absurd.

I haven't lost hope either Jerry... I do think that if anyone can navigate this very tough field of challenges, it's the team at Kaleidescape. I'm very much hoping that they continue to amaze and delight us. Despite how it sounded, I remain a huge fan and supporter of course!

 

[josh]

Hi,

Sounds like I'm in the minority, but I never watched 'bonus' material before I had my Kscape system. I guess it was a pain to stick in that other disk or something, but I find myself browsing the content that I put in the system, in addition to the movie itself. And the funny thing is that the more I watch, the more I watch for the new movies. There is really some good stuff there. Yeah, I'm not big on listening to an actor comment about making the movie, but I like deleted scenes, alternate endings, and in some cases, footage that puts sequels together.

Thanks, Steven

Actually, then I'm REALLY in the minority... I really enjoy (most) bonus disc contents. And I actually watch commentary tracks too... at least the ones where it's not just some ditzy actors saying "ooh, remember that day, it was so fun... what was that extra's name, he was really great, wasn't he?" and meaningless drivel like that. I like hearing from the director and cinematographers, or the writers... and I learn a lot. Doesn't take the magic away for me.

 

[Mr.Poindexter]

Good insight is great and a great commentary can really add to one's appreciation of the film. But yeah, drivel is useless - kind of like reading twitter updates that so and so is bored and eating a sandwich.

Generally I prefer comments from the production staff over comments from the actors.

 

[Transepoch]

Guess I shouldn't be surprised at how the minority seating section is the larger part of the room on here. I'll take a table in the no commentary section, but will watch all non-spoiler extras before the movie itself and will enable re-insertion of deleted extras if the option exists.

More to the topic, pity that the blu-player received another push-back, but can understand there are more pressing logistical issues at the moment. Doesn't mean I have to like it though.

 

[josh]

I received several emails from users, dealers, even a (shall remain anonymous) Kaleidescape employee asking me to revisit my original post in this thread after some more research into the various issues I discussed. I agreed, and have spent the last week or so talking to a variety of people in the industry, including a journalist who covers the industry, an IP and Patent attorney, and a person with some inside knowledge of what Kaledeiscape is doing next.

Since I fired off that original post without much thought, but with lots of (alarmist?) conclusions based on my own thoughts, I felt I owed it to the group to come back with a more rational, thoughtful analysis.

First, I may disappoint some by saying that after much more research and thought, I still believe that Kaleidescape is likely to have a tough road ahead. However, my offhand analysis of when, why, and to what degree the company is in real danger was too shallow, and is therefore quite misleading in its conclusions.

Here's some updated thinking...

1) A more informed opinion of the legal situation regarding the DVD-CCA lawsuit

OK... this was tough to work through, but here's my analysis of where the situation stands. As of right now, Kaleidescape has not been found to have violated any contract, nor has it been found to have violated a copyright or the DMCA. It hasn't broken a law, and there certainly is no injunction, therefore there's no change to the business for now.

The original court found that the "General Specifications" (which, depending on whom you talk to, either does or doesn't contain details about how to implement CSS in devices, and may or may not talk about how to handle storage to a hard drive) was not included in Kaleidescape's CSS license agreement.

On appeal, the appeals court has now decided that the GenSpec WAS in fact a part of that agreement. That is all that's been decided so far... NOTHING'S been decided on the merits of whether Kaleidescape is in breach even if GenSpec was in effect.

Kaleidescape is now likely to appeal THAT decision to the Supreme Court. Not sure how long that will take, but it could be a year, maybe longer. In the meantime, the studios are probably unlikely to be able to file a lawsuit that Kaleidescape is in breach of the GenSpec until the full appeal cycle has been exhausted. If the Supreme Court declines to hear the case, or hears it and upholds the appellate court's decision, THEN the studios could file a lawsuit alleging breach. Then THAT case could take 2 years or so to be heard, and regardless of who wins that, it would likely be appealed by the other party and that could take another year or longer. And it still remains a very real possibility that the Supreme Court sides with the original court in saying GenSpec wasn't a part of the agreement.

So in short, we're probably 2, 3, 4, or more years away from that path being resolved.

Could the studios go for an injunction? Maybe, but probably not... they first would probably have to get a court to determine if there's been breach. And if there's been breach, they may have to allege damages. Both of those may be very difficult to prove. BUT, even if they DID eventually get an injunction, after all the court process finished, would the injunction apply to EXISTING systems already sold and operating as legal devices when they were purchased? Up for debate, but it would be unusual to force a company to withdraw or change the operation of a product that was sold legally in good faith at the time of purchase. More likely is that some functionality would be changed for future systems, but again, this is only if breach is eventually determined...

So the statement that our current systems have been found to be "illegal" or in breach, or will be changed, was not correct. We're probably a very long way from that happening, if ever.

In all likelihood, our systems will remain operating just as they do today for many more years to come. They remain legal devices and there is no finding of breach, damages, infringement, or illegality.
​

2) Blu-Ray delays

Yes, the Blu-Ray player is delayed, at least for 4-6 months and it appears this is due to errors in, and delays to, the primary chipset that K needs to do the graphics rendering it desires as well as decoding and video processing.

How significant is this? Depends who you ask. High-end users think this is very important... Kaleidescape dealers fall somewhere in the middle, and Kaleidescape itself believes this isn't a huge problem due to the continued availability of high-quality DVDs and the relative library sizes.
​

3) Managed Copy status

Ugh, this is a mess. The more you ask around, the murkier it becomes. Basically, I'm starting to believe that the incredibly burdensome managed copy system will make it so difficult for manufacturers and consumers that no one will really care to use it. Legacy discs don't have it, future discs may. Consumers will become confused what capabilities apply to which versions of movies, with differences between the studios and distributors, and differences in implementation from different hardware vendors. It will make even CableCard & Tru2Way look like wonderfully understandable and simple specs by comparison.

I think it is more likely that it's viewed as so flawed, so confusing, and so inconsistently deployed across titles that it will hasten (rather than delay) the death of plastic disc-based distribution.

​

So... where does this leave us? Our Kaleidescape systems will keep operating... with all their features intact, for longer than most of us will care to count.

There will be a Blu-Ray Kaleidescape player released sometime... probably middle of '10.

So with all the info above, what is it likely to do? What will the user experience be like? Well, no one will say much, of course. So all I can do now is make some guesses. I'm guessing (no one will confirm or deny) that it will not even load BR discs to the server, given the MC mess. It will be for playback of BR discs in the tray only. again, just my guess. I don't see any other way they'll be able to release it in the next year or so unless this is the path. But I could be wrong...

That's not great - it's not what we've come to expect from Kaleidescape. But even if it does turn out to be as I described, it may also not mean it's useless. I'm sure it will be one of the finest BR players out there, with some great UI, and I'm sure K will apply all their neat-o movie-guide tricks like masking info, automation control, and enhanced metadata. (After all, they do that for us now with their "play from disc" functionality that came out a year ago for DVDs. Physical media that gets as much of the Kaleidescape treatment as is possible.)

But I'm currently not betting that we'll see a K blu-ray loader anytime soon. So we're probably left with using DVD for all our high-availability, multiroom playback-critical titles... they'll be stored to the server. Put in a BR disc for titles where you really care about that extra resolution in video or sound. Again, just my guess.

And meanwhile, while MC grinds itself to death and takes the physical media with it, Kaleidescape will (as many here have implored) pursue a great download solution. My guess is they won't partner for this... they'll do their own version, riding on the trailblazing licensing work that DivX, Vudu, and others have done with the studios.

Will it be streaming or download? No one's saying... (in fact, I can't get anyone to admit that it will even exist, but the lack of outright denial leads me to believe it's being worked on.) My guess is they'll pursue Download-to-own, not streaming or downloaded rental, based on:

1) Kaleidescape seems to have always bet on users that want to own their movies
2) The existing release-window availability mess isn't nearly as bad for DTO as it is for streaming.
3) DTO would better preserve the important marine and aviation markets for Kaleidescape. (Still probably a while before yachts and planes have high-bandwidth always-on streaming capabilities.)
​

OK, so that's now my more-informed, and more optimistic predictions for "what the future holds" for us...

I'll repeat that Kaleidescape has incredibly smart people, and if anyone can get through this mess and deliver a compelling, simple, high-quality experience, they will.

--josh

 

[JerryL]

Good thoughts Josh.

Anyone who wants a world class BR machine right now- check out the Oppo- its fantastic.

I hope K does a download setup and I hope they will pursue true 1080P for 2.35 movies via anamorphic stretch.

 

[cinelife]

Thanks for taking the time to clarify those points Josh. Well reasoned and makes complete sense. I also happen to agree with your comments.

I would not be surprised at K getting involved in downloading content. IIRC, that was the original business model so it makes sense that they eventually head in that direction (no personal knowledge about this, just a comment).


Jim