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PS3, Zune, and More Highlight This Black Friday

Later this week, millions of American families will sit down together, fill themselves with turkey, give thanks, and watch football. After thanks, food, and football, though, comes another Thanksgiving tradition: Black Friday planning.

For those who don’t do their Christmas—or bargain—shopping on the first day of the holiday season, the term Black Friday might sound like an ominous day set aside for remembering the plague. But to retailers across the US, the black in Black Friday is fully positive, signifying the single day of the year in which all retailers traditionally set their annual one-day sales records (and on which many hope to finally go into the black).

So what does Black Friday have to do with the streaming world? Turns out, several of the hot products on the market this year either use streaming or some other form of internet-based media delivery. Let’s look at a few here:

PlayStation 3 (PS3). This is the product that everyone’s heard about, even if they’re not gamers. While some of the news has been of notoriety—think police escorts, robberies of new PlayStation 3 owners, and massive markups on eBay—the product actually provides a few firsts of interest to the streaming community. The biggest news is that a PS3 is the least expensive way to get a Blu-ray DVD player. Blu-ray and its rival, HD DVD, have been out for almost a year, and the list of movies in each format has been growing. Yet until the very recent introduction of the Xbox 360’s HD DVD add-on and the PlayStation 3 just before Thanksgiving, the cost of standalone players has been quite high (at $499-$599, the Xbox 360 with HD DVD and PS3 are still quite expensive for movie players or game machines, but as multifunction devices, the value proposition starts to look a little better). As such, demand for the high-definition formats that both discs are capable of displaying—VC1, MPEG-2, and H.264—has been somewhat lagging.

With PS3 sporting a Blu-ray player, and Xbox 360 offering both Blu-ray and an add-on HD DVD player, not to mention the games and ability to surf the internet directly from the box, the reasons not to own one of the next-generation DVD formats are falling like a house of cards. The good news for the streaming industry, and especially companies like Inlet and Digital Rapids that focus on high-definition encoding, is that consumer adoption of these codecs will finally begin in earnest in early 2007.

1080p monitors. In order to take full advantage of the new gaming consoles and next-generation DVD players, the consumer needs to have a high-definition LCD, plasma, or rear-projection display capable of displaying 1080p HD signals. 1080p is a progressive display format that displays a 1920x1080-pixel resolution. While these monitors have been available for more than a year, this year’s crop is available at significantly lower costs. We recently installed four, ranging from 40 to 46 inches, in several office lobbies in a newly opened business for about 150% of last year’s total price for a single 1080p monitor. Some manufacturers, such as Philips, are also enhancing the ability of the monitors to play back video content via the use of internally mounted USB or FireWire ports that accept flash memory or external hard drives. These monitors will typically play content in all major standard-definition formats, while a few now allow playback of high-definition formats directly from the ports or from an internal 100Mbps Ethernet port.

Zune.While initial sales of this digital music and video player have been somewhat less than threatening to the iPod’s dominance (to say the least), two areas of interest in Zune’s debut bear watching. First, this newest entrant to the personal entertainment appears to be setting a new business model: sharing the profits with a music label for every device sold, prior to any music being installed on the device. Universal Music Group announced last week that it is receiving an unspecified royalty for every Zune sold. The public justification is that devices like the Zune and the iPod are used to steal music—and hence revenues—from the music labels, so the labels should be compensated by the manufacturer just in case the consumer chooses to use the device to steal music.

While this might be spun by critics as just another attempt by a dying industry to extend its greedy reach into the manufacturer—in this case, Microsoft—rather than suing consumers one at a time, the move is not without precedent: in Europe, where the Zune is more likely to find traction at the expense of the iPod, there are already several countries that tax blank CDs and DVDs as a pre-emptive compensatory measure to the music industry. France, home of Universal Music’s parent company, made headlines last year when it attempted to apply the same tax to the iPod, and Microsoft—albeit not directly—has chosen to "pay the tax" in the form of a royalty to Universal.

The Zune also introduces wireless sharing to the personal entertainment device space. This feature is certain to attract the attention of both competitors and consumers, as owners of devices are allowed to share their files with other Zune owners, who in turn are allowed to view or listen to the content a particular number of times before being prompted to purchase the content for further enjoyment. It’s unknown whether it’s this wireless sharing that prompted the royalty to Universal, but the expectation is that the social networking aspect of this ability to share music will drive up sales of content that other consumers recommend to one another.

Space doesn’t allow for detailed descriptions of several other products on the market, including low-cost HDV cameras and high-resolution still cameras with built-in networking, but rest assured the 2006 holiday season will be full of digital media delivery goodies in stockings and family rooms across the country.

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