Tuesday, April 1, 2008

Digital Distribution

So, I've been kind of kicking this around in the back of my head for a while, and it seemed like a good time to finally get around to writing it down (I think I first started contemplating this in, like, mid-October, or something). Anyways, all I hear in the tech press is how someday (in the near, but not too near, future) we're going to be moving away from physical media and digital distribution is going to be the way of the future. Now, personally, I think this is crap.

Before I begin, I would like to point out that I am in no way whatsoever qualified to make any sort of judgment about this at all, so feel free to take this with a couple grains of salt (of course, I'm not sure I've written a post that I was qualified to pass any sort of judgment on, so that should probably be a general tip for reading this blog, but back to the subject at hand). The only reason I can provide for why my opinion is worth listening to is that I'm one of the people who is actually going to be buying this content, so I might have something to say about what I'd want to be buying.

In case you haven't noticed, I'm kind of an entertainment whore. I go through multiple Netflix DVDs and Blu-ray discs a week. I bought a PS3 and am averaging a new game purchase every 2-3 weeks. I even buy additional content through the little Playstation store thing. I thought the iPod was the coolest thing I'd ever heard of from the moment Steve Jobs announced it (but I didn't convince my dad to buy me one until the 3rd generation...obviously, it took a significant amount of bugging him). I've downloaded music both legally and illegally, while the vast majority of the music on my iPod is content I ripped off of CDs I've bought. I've copied movies and TV shows to my iPod illegally and I've bought music and TV shows from the iTunes store (and I've even downloaded a legal copy of Night of the Living Dead to my iPod since it isn't protected by copyright). I regularly download anime fansubs, but I also buy anime DVDs and I also rent them from Netflix (both on Blu-ray and on DVD). I watch TV shows when they play on TV and I'll go to the network websites to catch up on episodes I've missed (but I don't illegally download those). I buy trade paperbacks of comics and I also read webcomics online (and I've even bought trade paperback versions of webcomics I read online).

In other words, I'm a major consumer of this industry. I absorb media in a huge variety of forms and I am willing and able to do it both physically and digitally, as well as legally and illegally (although I try to prefer the legal strategy whenever possible). So, the important thing to recognize is that whatever the future of entertainment distribution turns out to be, it will be people like me who have to be sold on it. And, right now, I'm not really seeing how people are going to sell me on digital distribution.

Most argument about digital distribution are simple: it's already happening to music and sort of starting to happen with TV shows and so therefore it will eventually translate into similar models for movies and video games. End of story.

If they want to make it sound extra-convincing they'll talk about the cost reduction of not having to product physical media and eliminating the middle man like GameStop and Best Buy or WalMart or whatever.

But, I don't think video games and movies are necessarily going to go the way of music, and it's not even clear that TV shows necessarily are going to truly go that way, either. Music is very well-suited for digital distribution. For one, the buyer is likely intending to experience this media many times in a variety of situations (as background music around the apartment, while jogging, in the car, at work, whatever). So, not having to carry around a physical version of this media is useful (I really noticed this when I went to college with my entire music collection in my pocket).

Compare this to movies and video games which are typically going to be experienced at a limited number of places (your TV, or the TV of someone you know). They don't need to travel conveniently, and they especially don't need to travel together (if I'm taking a copy of Serenity over to a friend's place to convince him that Firefly is amazing, I don't need to bring everything else with me).

In the future, this will supposedly be dealt with by providing a set-top box on the TV, much like an Xbox360, or PS3, or AppleTV. Since the media is very nearly stationary, having a stationary box for it (as opposed to the transportable iPod) should be an effective compromise.

But, this solution creates a new problem: space. Movies and video games take up a lot more space than music. A compressed music file takes up not much more than a megabyte per minute of music. A dvd quality movie takes up closer to 30 megabytes per minute of video. For those counting, that's an order of magnitude more space. Of course, a high definition movie costs closer to 600 megabytes per minute of video (note that this is another order of magnitude).

Now, clearly, the files can be compressed some, but we're still dealing with a situation where I will need two orders of magnitude more space for growing my video collection than my music collection. For comparison, my music collection on my iPod only takes up about 15 gigabytes, which in this day and age is not much more than spare change. On the other hand, I just counted and I own over 100 DVDs (most of these are collections, and over half of them are due to the fact that I own the entire X-Files TV Series). So, we can estimate that as costing about 500 gigabytes of space. Now, these days 500 gigabytes is nothing to scream about, but that is starting to create some storage concerns. Here's where it starts getting scary, though. Since I bought the PS3, not much more than 2 months ago, I've bought 5 games for it. Assuming 50 gigabytes per disc, that's 250 gigabytes of storage. In less than 3 months.

As for PS2 games, just for comparison purposes, I own approximately 20, but that's my collection on a student's budget. I wouldn't be surprised if I had bought well over 30 games for my PS3 by the end of it's life cycle (if not 50...hopefully not 100, because that would be a lot of money spent on video games). So, in short, if I wanted to store the video I currently own in a standard definition format on my set-top box connected to TV, I would probably want a minimum of 1 terabyte, but more likely I'd prefer more than 2 terabytes, unless the cost was completely unreasonable. And that's standard definition.

Now, as a consumer of said future digital media, there is no way I would even consider buying something in standard definition. It would be a waste of my time. I spent a significant amount of money on a glorious 42 inch TV. My purchasing decision is pretty much HD or bust (and, admittedly, due to the cost of HD stuff, I often opt for bust, but that is neither here nor there...or rather, that's what Netflix is for). And, if I wanted to store a digital collection of content in high definition, I would probably need a set-top box with storage capacity closer to 10-20 terabytes at minimum (and assuming there's some major compression going on).

Now, there's two ways to deal with this problem. The first solution is to say: well, large scale digital distribution won't be feasible for at least 5 or 10 or 15 years, so by that time we'll be knee-deep in terabytes and people will be talking about exabytes or whatever and it won't be an issue anymore since a typical hard-drive will have more than enough space for all the movies and video games you could ever want to download. The second solution is to say: we'll store it on the server side and either stream it to the users on demand or allow them to download it at will and watch it and delete it at their convenience.

Both of these solutions provide the next point of challenge: getting the content to the consumer. We're talking about distributing file sizes that are in the 10s of gigabytes. Currently, I'm ecstatic when I'm pulling down just 1 megabyte per second on my broadband line (at that rate, I can download 1 gigabyte in just over 15 minutes). So, downloading a dvd quality movie is going to take about 4 times that long, or about an hour, which is long, but not unreasonable. Now multiply that by 10. That should be closer to the file size for the high definition version. For the record, 10 hours is getting to be a long time to download something.

Obviously, this can be remedied by speeding up internet connections (if we can get average transfer rates up to 10 megabytes per second in 5 or 10 or 15 years, than the high definition version won't take any more than an hour). However, how exactly do you go about speeding up internet connections? You do that by convincing ISPs that they want to build out new connection technologies with faster data transfer rates. Maybe in 15 years somebody'll make that happen, but it's not going to happen fast. That kind of extensive build out is costly as all get out, and there isn't really a clear way for the ISPs to benefit from it (besides attracting additional customers...and then price gouging them, which I'm not necessarily a supporter of, by the way).

Also, content providers will have to actually create, support, and maintain the infrastructure to maintain servers to distribute the content to the consumers, long after the customer has purchased the content. This is the case for both instances of digital distribution, but it will be much more intense if the second solution is used (that is, if we don't continue along the exponential growth curve for hard drive size and so people can't obtain multiple terabyte hard drives in a couple of years down the road, and I'll admit that it's a toss up for whether we can actually maintain the growth rate for hard drives, but I imagine there must be a limit sometime). The second solution puts a huge amount of burden on the servers to be able to serve all the customers their content on demand, which would probably necessitate it to become a subscription service, rather than a single payment (think of Xbox Live, where you're paying for the service and the content). Now, personally, I'm not interested in a subscription service, and don't really intend to ever be (aside from Netflix, which is kind of a special case...and digital cable, I guess I subscribe to that as well...and, well, I guess I'm an internet subscriber too, but that's totally not the point).

In any case, I don't really like the idea of paying someone to store my stuff. I especially don't like the idea that if I stop paying them, I won't get to keep my stuff (which is the same reason I'm not interested in subscribing to any music services). That second strategy for digital distribution sounds a little bit too much like that kind of future, and I can't imagine that this would succeed. There's too many people who are like me and want to be sure that they own what they bought, and they don't just own the right to download it so long as the service is running.

So, that's the situation. In order for digital distribution to really be feasible, there needs to be major progress in two industries that don't have much of anything to directly benefit from changing between physical and digital media (aside from selling more of their services if digital distribution becomes the norm, of course, which is hardly nothing).

On the other hand, I see little reason why Blu-ray discs shouldn't be the culmination of physical media for video, kind of like how CDs are for music. CDs contain the uncompressed audio in detail that far surpasses the human ear's capabilities to distinguish. We can compress the files significantly (as in down to mp3) and most people still can't hear the difference, but the trained ear can (to at least some extent...note that I'm hardly one of those trained ears). Similarly, unless TVs start getting a whole lot bigger (which I'm kind of doubtful they'll do), 1080p is pretty much the limit that the human eye is going to be able to distinguish the details from as well. So, there should be no reason for us to ever need higher definition video, but once we've seen HD video, it's very hard for us to go back to standard definition.

So, I think Blu-ray discs are going to be hanging around for a long while. At least as long as CDs hung around before digital distribution kicked them to the curbside (although I still prefer to buy a CD and rip it to my iPod over downloading the CD from iTunes directly). And, well, maybe I'll even buy one someday (and stop just renting them). Also, for the record, the idea of renting HD videos, which would eliminate both the ownership challenge as well as the client-side space problem still faces the download time/infrastructure challenge. Admittedly, right now I'm waiting two days between rentals of my Netflix movies, so if they were to find a cost effective way to provide HD digital rentals, it's possible I might start sniffing around (considering that 10 hours is already a lot less time than 2 days). The challenge, though, is that it would have to be no more expensive than Netflix (but, it would be okay for it to be a subscription service...I guess).

That is all.


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