Economist Looks at the Digital Home

spisska writes "There is an excellent article this week in The Economist looking at the "digital home" and at what cable, telecom, internet, and hardware companies are doing to create the new entertainment nerve centers of the future. The article touches on what exists today (CDs, DVDs, etc), what is in production or preparation from various companies (MS MCE, IPTV, music downloads, etc), DRM, interoperability, and competing standards, among other topics. Although there is no mention of MythTV or Linux, it is a pretty solid analysis of the market as it is now and concludes that vendors are trying to hype a market into existence where there is no great consumer demand. A choice quote: "'If consumers even know there's a DRM, what it is, and how it works, we've already failed,' says Peter Lee, an executive at Disney". The article concludes: "As John Barrett, research director at Parks Associates, says, 'it seems that we've concocted a new variant of the 'paperless' office.' This, you recall, was the consensus a decade or so ago among technophiles (but almost nobody else), that computer technology would save our forests by freeing us from having to read and write on paper. Today's variant, says Mr Barrett, is 'no more tapes, CDs, DVDs, discs.' In other words, expect them to be around for a very long time to come.""

Comments

We need truly portable solutions.

[CyricZ]

For this non-paper media to truly catch on, we need digital devices that offer all of the benefits of paper: flexibility, portability, and inexpensiveness. While such devices exist, they are currently not widespread enough.

These all-digital office will truly catch on once people have a piece of digital "paper" that they can use to send emails from, read specifications with, and even watch a movie with on the way home. Laptops are just too bulky for such tasks.

Failure

[overshoot]

If consumers even know there's a DRM, what it is, and how it works, we've already failed,

In other words, the whole plan depends on defrauding the customer into buying something other than what they were told they were getting.

Re:Failure

[Stevyn]

There is nothing inherently wrong with DRM. I think this guy is saying that DRM should always work in that if I pay for something, I should be able to play that file without having to worry about DRM. The problem, however, is that currently DRM doesn't work this well.

I have no intentions on purchasing any DRM music any time soon. I want to be able to play music files on Linux, xbox and my ipod. Currently, MP3s do the job well and I have no intentions on using anything else.

It's not going to be the technology

[Stevyn]

It's going to be how little people have to work to use it. Nobody wants another gadget that they can't figure out how to use. That said, nobody wants DRM that won't work properly. Everybody (including geeks) wants things to work out of the box and that's where these companies should focus on.

They should make lots of mockups. They should get people to let them install this crap in their homes and see how they like or dislike it. The company that rushes some central media player that can only do what my modded xbox can do now isn't going to do well. It's going to take a lot of testing to get the final product done right.

My guess is Apple might come out with some interesting products and I'm going to be watching out for what they do.

Knowledge of DRM

[kfg]

"'If consumers even know there's a DRM. . . we've already failed,'"

Well Sparky, you kinda let that cat out of the bag when you forced people to watch ten minutes of ads every time they just wanted to watch a DVD, didn'ch'a?

KFG

WIndows XP Media Center: inflated sales alert

[dpbsmith]

A friend of mine recently saw a really good deal on a Dell PC. He bought one for his uncle and is thinking about buying another for himself.

The funny thing was that although they were priced about $300 lower than other roughly equivalent home PC's, these were bundled with WIndows XP Media Center instead of Windows XP Home.

They had no video-relevant hardware other than a DVD-burner.

It took my friend an extra half-hour to make his purchasing decision because he was going crazy on the Dell and Microsoft websites trying to find out exactly what Windows XP Media Center was and to convince himself that it was not ''missing'' anything in Windows XP Home Edition.

Oh, yes, the bundle included a 15" flat-screen monitor. So, the bundle contents were put together by someone who does not expect the PC to be connected to an existing TV. And with a 15" monitor, I don't think they expect it to be used in place of an ordinary television receiver, either.

These PCs are definitely not going into living rooms.

Keep this in mind the next time Microsoft starts trumpeting the great sales results it is having with WIndows XP Media Center.

What's the magic of paper?

[psb777]

My next laptop will not have a CD reader/writer. E.g. To load a new O/S I'll download the bootable image onto a USB key. Or netboot. My music CDs are never taken out of their cases anymore. Same will happen to my DVDs, sometime. So all that off-line media which is only machine-readable will go. The article is wrong.

But paper? I carry a notebook and pen and will do so for a long time to come. No PDA for me. The article is right.

"Seamless" and "transparent" DOES mean "deceptive"

[dpbsmith]

The comments about how he just means "seamless" and "transparent" are nonsense. DRM is always seamy and murky. It becomes seamy and murky at the exact point when you try to lend your friend a recording and it won't play on their machine.

Or when you buy a new computer, copy all your stuff over, sell your old one, and find that you can't play your stuff because your new computer isn't authorized, and you can't authorize your computer because your old computer hasn't been deauthorized, and you can't deauthorize your old computer because you haven't got it.

What "transparent, seamless" DRM does is to conceal the real nature of the bargain from the customer until it is too late for it to affect their buying decision.

From TFA...

[payndz]

There is a third possibility. This is that the wars continue, but consumers continue not to care.

DING! We have a winner! Almost everybody will go right along buying individual components as they always have done, and not caring if they're interoperable or not. How many people even bother to buy a universal remote to replace the four or five you'll find in most homes now? (TV, DVD, VCR, CD, cable...)

'Convergence' of entertainment devices in the home has one very big problem - "What if it breaks?" Since the PC has a reputation of being the most complicated and troublesome gadget in the home already, piling in all the functions from every other box is not going to make people feel safe.

If your DVD player packs up, you buy a new DVD player - these days, you can pick them up from the supermarket with your groceries for little more than the price of an actual DVD. But if the DVD player in your super-duper Media Center PC packs up...

And if the computer itself packs up, then you lose all your entertainment systems in one go, not just one element. And what if, in this fabulous all-digital future, you've bought music, movies, TV shows, etc, that exist as nothing more than data on a hard drive? Are they all lost too?

MS can go on about 'educating' the consumer all they want (and the line from some MS guy along the lines of 'the consumer doesn't know what they want until we show them' really was a perfect example of that company's arrogance), but most people are unwilling to put all their eggs in one basket. Especially with hardware that is associated with the words 'crash' and 'virus'.

Targetting the wrong market

[plusser]

The problem with the consumer electronics market at the moment is that they are now targeting a mature and saturated entertainment market. In addition they are concentrating on extracting more money from "old" content, much of which has been in existence for years, if not decades. There will come a point where the consumer will demand a lot more from the products they are offering, before they upgrade their existing system.

It could be argued that DRM is actually nothing new. If you think about it, subscription based television services, in particular those like Home Box Office and Pay Per view are effectively a form of DRM, in that you have to pay a fee to the broadcaster in order to view the content. In addition much of the content on these systems has been restricted using macrovision to prevent viewers from recording the programmes on their VCR.

The problem arises in a market where companies are trying to increase their profitability margins by placing more restrictions on the product in the hope that the consumer will want to pay out more of their cash to view the same material on a new piece of equipment. The old term "money for old rope" applies here. Unfortunately, unlike in the 1980's when CDs were introduced and music lovers purchased CDs to replaced well loved but worn out vinyl, most of the current new consumer devices offer nothing new with regard to improving the entertainment experience, apart from perhaps making your music a little more portable in the case of MP3 players.

I for one used to subscribe to Satellite television (Sky Digital here in the UK), but stopped subscribing when the quality of the television content nose-dived, while the cost of subscribing went up. Instead, I decided to subscribe to broadband, which I find much more interactive and stimulating. I could go back and subscribe to Sky at some point in the future, but you know what, I think I would prefer to spend the money on going out to the cinema instead. At least if I don't like what is on offer, I don't have to go.

The rise of High Definition Television will possibly be a draw, especially as it has the potential to offer the cinema experience at home. The only problems I can see at the moment is that the equipment is an expensive luxury, is not yet available in the UK (until next year) and that I haven't got a big enough room to get the benefit.

Too be serious though, rather than produce devices that provide me with more entertainment, I would be far more interested in devices that either require less energy to operate, or save me time. How about integrating a WiFi system with the heating and home security systems? Surely then the system could be given a nice easy to use interface that could be operated from the web browser of my computer, and it could even decide how to heat the house based on the whether report for the day (downloaded from the internet). It could even ensure I've locked the house up properly in the morning when I've gone off to work.

Re:The big problem with paper

[cpt kangarooski]

You misunderstand Bobbs-Merrill.

In that case, the publisher asserted that their copyright gave them the power to control resale; it did not. As the Court noted, there was no issue of whether there was a contract at work in the case, which might have produced a different result:

The precise question, therefore, in this case is, Does the sole right to vend (named in 4952) secure to the owner of the copyright the right, after a sale of the book to a purchaser, to restrict future sales of the book at retail, to the right to sell it at a certain price per copy, because of a notice in the book that a sale at a different price will be treated as an infringement, which notice has been brought home to one undertaking to sell for less than the named sum? We do not think the statute can be given such a construction, and it is to be remembered that this is purely a question of statutory construction. There is no claim in this case of contract limitation, nor license agreement controlling the subsequent sales of the book.

In our view the copyright statutes, while protecting the owner of the copyright in his right to multiply and sell his production, do not create the right to impose, by notice, such as is disclosed in this case, a limitation at which the book shall be sold at retail by future purchasers, with whom there is no privity of contract.

Where there is a contract -- which is what many courts have been finding in EULA cases -- then limits on first sale and so forth are entirely acceptable. In fact, the seminal EULA case, ProCD, dealt with public domain data, which as it was uncopyrightable, had to be protected by contract or not at all.

EULA cases have nothing to do with machine-readable formats. They're more common in the software industry (despite typically being utterly pointless) more out of historical accident than anything else. But you can use them with paper, or other consumer goods, just as much as you please, as far as the courts seem to be saying lately.

We'd be better off abolishing the practice altogether, however. It's dangerous.