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Microscope contributor


Holiday season is fast approaching, and even in a financial downturn, some consumers will be looking for ways to store their multimedia at home. Which storage formats are available, and how can they be most effectively sold?

Blu-Ray is the darling of the home media storage sector. The optical disk technology, which initially battled HD-DVD, was developed by a consortium of organisations led by Sony.

It increases the available storage on a DVD-sized disk medium by using a blue laser to write to multiple layers within the disk material.

Blu-Ray was officially announced as a project in 2002, and Sony gathered a selection of supporters to join the Blu-Ray Disc Association.

Specifications were finalised and the first disks shipped in 2006, around the same time that HD-DVD titles hit the market. The two standards battled it out until January 2008, when movie studio Warner finally tipped the balance in favour of Blu-Ray by abandoning HD-DVD.

At that point, Toshiba, which had pioneered HD-DVD, effectively killed it, and retailers subsequently began offering trade-in deals on HD-DVD players.

Now that the format war has been won, the signs are that Blu-Ray is beginning to power ahead, as consumers who were previously wary about buying high definition formats in an unclear market are encouraged to make the switch. In Canada, retailer Futureshop says it has 700 titles available in the format, and that roughly 15% of the movies it sells are Blu-Ray-based. Newer titles tend to sell even more, with some estimates suggesting that up to 25% of all new titles are sold in Blu-Ray format.

The inclusion of a Blu-Ray player in Sony’s PS3 console went a long way towards securing the format’s future, argues Bill Foster, chief technology consultant at analyst firm FutureSource.

“Ninety per cent of all Blu-Ray devices sold are PS3s, and a few
people may buy them as a cheap Blu-Ray player but the primary function is to play PS3 games,” he says. Nevertheless, once someone has bought the player it may make them more likely to buy or rent Blu-Ray movies in the future.

Microsoft goes it alone

In terms of storage formats, this leaves Microsoft in a dire position with the Xbox. The company had opted for HD-DVD, and was left without a format to support when Toshiba lost the format war. Now, the company sells the Xbox without a player option, and insiders have confirmed that it will not be supporting a Blu-Ray player in the device (or an add-on from Microsoft) in the foreseeable future.

Foster still sees Blu-Ray sales climbing relatively slowly. “Blu-Ray penetration of movies is creeping up, but it’s a slow burn. We don’t see it surpassing DVD sales for another four to five years,” he says. Sales of DVDs have still been rising, while the value of those disks has been going down, he adds.

While non-recordable Blu-Ray is making respectable inroads, recordable versions of the technology still aren’t taking off. Some devices have been released, but the main adoption seems to be in Japan, where FutureSource says 90% of the Blu-Ray devices sold double up as recorders, often with built-in satellite and over-the air receivers.

Companies such as Other World Computing are selling external recorders, while Sony ships them in some Vaio notebooks, but Apple surprised the market when it failed to include a Blu-Ray drive in its latest MacBook Pro release.

As recordable Blu-Ray becomes more popular, it is set to become the storage medium of choice for people backing up their hard drives, because of its greater capacity. A dual-layer Blu-Ray disk can store 50GB of information, compared with 8.5GB per side for dual-layer DVD recording.

Blu-Ray is already undergoing several changes. Several movie studios are planning to offer BD Live, a feature that allows an internet-connected Blu-Ray player to download extra online content designed to complement a movie title. The system will allow for assets including games and extra video clips to be downloaded.

However, it isn’t yet clear how well evolved these offerings will be for international markets. Studio spokespeople are already saying that while parts of the content will be available outside the US, some will be restricted to US viewers for copyright reasons, which will anger and frustrate some UK consumers.

One significant aspect of Blu-Ray is the adoption of Digital Copy technology by retailers. Just as they did with DVD, several studios are now providing a second disk in Blu-Ray packages with a copy of the movie designed to be copied to a hard drive. This lends further credence to the idea of hard drive-based media storage.

Home media servers


Several companies are now selling home media servers – essentially boxes full of hard drives designed to store content and stream it to a TV. The ideal situation involves a media server tucked away in a cupboard, feeding a hard drive-based video collection to viewers in the living room.

Microsoft entered this market late last year with Windows Home Server, which was effectively a dumbed-down version of Windows Server for the home. It struck a deal with HP, which produced a small format tower server designed for home users, loaded with Microsoft’s software.

The server is optimised for multimedia storage, but also offers the other features of a server that SMBs would be used to, such as centralised file backup and remote online access off-site. Users install agents on the PCs in the household, and then the server configures the agents to back up files automatically.

“It gives you the ability to add hard drives so you can put in up to four different ones in some products,” says Laurence Painell, Microsoft Windows OEM and WGA product manager.

“It also lets you automatically mirror what’s on each one.”

Disk mirroring will be important for users worried about losing their home video collection, for example.

The backup software is important. “Backups simply aren’t taking place,” says Jane Shields, a research analyst at Park Associates who studies the growth of hard drive storage in the home. Research conducted by Microsoft supports the view that home users aren’t backing up.

“About a third of households didn’t back up their data on a regular basis, if at all,” says Painell. “Over 60% of the people polled said they would be devastated if they lost any of their media, but especially photos.”

He points to the trend for larger pictures (thanks to digital cameras with higher megapixel counts) as another reason why centralised, high-volume storage should be making its way into the home.

However, the big worry is how resellers are going to sell and install a product that straddles the home storage and audio/visual product lines. Should a conventional computer reseller install this, or is it something an AV specialist should tackle?

NAS devices

Netgear, which sells a network attached storage (NAS) media storage device, has paid extra attention to how the channel handles these products. The company’s offering comes in two, four and six-bay versions, and it sells the products both populated and unpopulated with drives. If resellers buy the unpopulated version, they can make a bit more margin when sourcing their own drives.

Mark Power, UK managing director at Netgear, says the products initially appealed to prosumer users who were able to look after themselves in terms of installation, but the company is trying to appeal to the less technical consumer market with the two-bay version (which slightly cannibalised the four-bay unit’s sales).

“At the moment it’s very hard to sell it on the back of a box,” he says. “The main tool right now is the education. We trade with about 6,500 resellers on a quarterly basis in the UK, and we run a lot of accreditation and training courses for them. We educated a lot of resellers so that they can go out and support users.”

The company also has a small collection of specialist audio-visual resellers who specialise in home theatre equipment, and is pushing the equipment through that channel too.

However, industry luminaries think that the idea of trying to bring hard drive storage connected to the TV into the home is still premature. In a recent earnings call, Steve Jobs called the Apple TV a “hobby” for most people, adding that the economic outlook would continue to make it a hobby in 2009.

At least connecting an Apple TV or a NAS box directly to a computer is relatively easy. Trying to hook up a home media server to a home network is still beyond many users, especially if it requires, say, running cables to a closet somewhere. However, George Zervos, general manager for Europe and Africa at SMC (which also sells a NAS box designed for home multimedia storage) says this is changing thanks to the evolution of wireless networking.

“Most people have a wireless network at home and it’s easy to get access to these devices,” he says.

“Those users are approaching it from a much lower technical level, and they’re the next wave. Our challenge is to make that technology as plug and play as possible and once it is, that’s the format that people are going to be using.”

However, that still ideally requires 802.11n speed wireless networks, which can shunt hundreds of Mbits per second around the home, especially as we move into the world of higher definition video.

In the meantime, according to Shields, there are still perception problems with media server products, with customers unable to understand the benefits of more technical concepts such as disk mirroring and high-speed access for multimedia.

“They’re still being sold in the storage solution aisle, and customers can’t see why they’d spend the extra money to get the same hard drive,” she says. “That’s where the media server industry really has trouble conveying to consumers the purpose of the media server.”

Shields believes things may change as more movies are sold using Digital Copy technology. This allows a DVD to be electronically copied once to a hard drive for access on a computer or to be downloaded from a specific URL with an access code, may make non-technical customers more willing to invest in multimedia hard drive storage.

While people wait for the home media server market to take off, the set top box market is picking up the slack. With many set top boxes now doubling as digital video recorders (DVRs), customers are happy to simply record their TV shows on those.

Shields explains that vendors are now releasing hard drives that connect to DVRs using an E-SATA data port – a connectivity standard that has been around for a while but is picking up for this application in the entertainment market.

Before the high definition format war was even won, Bill Gates was predicting that Blu-Ray and HD-DVD would be the last physical storage formats we’d need. Download speeds will increase sufficiently that we’ll simply be able to store all of our media online and access it when we like, he predicted.

Cloud storage

The idea of storage in the cloud is already partly happening. You could argue that video on demand services over IPTV and cable, which are becoming more commonplace, are the first examples of the transfer between physical and cloud-based video. With people now able to rent movies over their TV online (or via the iTunes store on their home computers), the revolution is definitely on its way.

Now, several cloud-based backup services have appeared that offer customers the chance to upload their personal data. Mozy, a service offered by EMC, is available as an enterprise service but was originally launched into the consumer space. It backs up your data remotely online.

The idea of the cloud already pervades traditional applications like email, points out Foster.

“For other applications, it’s going to happen, but whether or not consumers will be prepared to keep their personal photographs or not, I don’t know,” he says.

“There may be a little bit of good old-fashioned resistance to
having Google hold your data and suddenly not turn up for work one morning.”

With the likes of Flickr and Photobucket already holding millions of consumer photographs, online storage already holds appeal, but such services are largely there for their social photo sharing capabilities. How many consumers are using these services as their primary photo storage mechanism?

Margin-grabbers
We’re nowhere near the stage yet where the majority of people will be using the cloud for their primary storage, so resellers still have opportunities to sell storage media solutions into the home.

Understanding the different technologies and being able to support home media storage NAS solutions for the central storage of data could be a margin-grabber for resellers eager to sell into the home market – although with the credit crunch already biting, the channel will have to work with rapidly
dwindling disposable income in the consumer base. That could make elaborate home storage solutions more difficult to sell than ever before.

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