November 17, 2009

Blu-ray Meets Internet TV

The market for Blu-ray Disc (BD) players opened up last year after winning the standards war against the competing High Definition (HD) DVD format.

According to Digital Entertainment Group (DEG), an industry trade group, in the first three quarters of 2009, sales of BD players in the United States increased 13 percent over the same period last year. The U.S. accounts for a third of the world‘s 30 million players, which include PlayStation (PS) 3 consoles.

So what’s next? Possibly a link to another rising star: online video.

Common software

One of the world’s largest BD player original equipment manufacturers (OEMs), Videon Central, announced deals this fall to improve the player’s services and functionality. The goal? Turn the player into a fully-fledged set-top box for viewing Internet TV.
 
Videon is working with Related Content Database (RCDb), an open BD-Live software shop, to include interactive TV client software on each player. Another partnership with ActiveVideo Networks will improve the ability to access cloud-based video services delivered over the Web that support both linear and broadband programming.

The AVN deal also brings interfaces and graphics optimized for the TV and remote control navigation.
 
“The Blu-ray platform is not a movie platform; it is a software platform that can play movies,” RCDb President Herve Utheza said. “It supports the same underlying technology as tru2way….This will allow content providers and service operators to leverage the same content and applications.”

The RCDb client enables a BD player to load and unload applications and connect with a flexible, updateable set of third-party services and content offerings controlled by the player manufacturers and their retail partners.

The wide availability of this kind of client promises to open up BD players as universal client for Internet TV. This could allow consumers to watch movies and TV shows over their disk player without the need to purchase extra hardware.

A unified market

Utheza said the BD player has the potential to replace the numerous specialized Internet TV boxes such as the Apple TV, VUDU and Roku players.

“More devices are getting connected to the Internet, but the standards for interactive content are still immature,” he said. “A lot of these have their own way of presenting data and information.”

A digital media veteran who previously has worked with Thomson-RCA, OpenTV and Liberate Technologies (now owned in part by Comcast), Utheza said his firm is aiming to integrate the device and content worlds around the large base of connected BD devices.

Today most of the online content providers, such as Netflix, Pandora, and Amazon have to develop service integration using code written in C and C++, which is heavy and complicated. Utheza believes that the use of the standards built into Blu-ray and Java could help accelerate the creation of new services that can work across equipment from different providers.

In early November, RCDb provided a concrete example. It announced that it had entered a licensing agreement with Netflix to develop a Blu-Ray disc enabling Netflix members to watch movies and TV episodes on their PS3 consoles. (A partnership launched in July 2008 between Netflix and Microsoft Xbox has generated 1 million users.)

Complement or compete

The Videon Central deals likely will enable millions of BD players to deliver VOD services either in competition or collaboration with cable operators.

Thanks to the work of companies like Panasonic and Oracle/Sun, BD and tru2way are very close. Both support a common global execution model (GEM). But despite the similarities, some analysts doubt that MSOs will offer both technologies.

“It is hard to see a Blu-ray player and the set-top box coming together right now,” Park Associates Research Analyst Jayant Dasari said. “Blu-ray is more of a mainstream CE device, while the set-top box is an extension of the service provider into the home.”

Economics would explain some of the hesitation. “Including Blu-ray is only going to raise the cost of the set-top box and indirectly increase the cost for each home,” he said. Then there are potential operational expenses.

“Cable players are reticent to support third-party devices because of the additional service calls it could generate,” Dasari said. As an object lesson, he pointed to TiVo, another popular CE device with a cable-ready version that nonetheless posed obstacles for subscribers.

Consumer demand is strong for both HD content and time shifting. And like TiVo, BD players also have a built-in penchant for the Internet. According to the DEG, 80 percent of BD devices are BD-Live capable.  

–George Lawton