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Streaming Video -- and Microsoft -- Kill DVD Playback in Windows

The upcoming Windows 8 operating system will be missing a few things that consumers have come to count on. It seems unlikely, however, that many will care.

Starting with Windows 8 and Windows 8 Pro, Microsoft will no longer include Media Center or DVD playback as part of the operating system. While that seems surprising given the increasing popularity of digital entertainment, it reflects a larger trend in how people enjoy video.

Media Center first appeared in a version of Windows XP, and was designed to bridge the computer and home television, letting people connect them to either play locally stored videos on their televisions or use their computers as a DVR.

With game consoles, set-top boxes, and smart TVs now bringing online content to the living room, there's less need than ever for a couch interface. Apple removed its Front Row media software from Mac OS X 10.7.

"The trend seems to be moving away from these ten-foot user experiences, and a big part of that is because many alternatives have emerged, not only for acquiring movies without discs, but also for enjoying digitally distributed movies in the living room," says Ross Rubin, executive director and principal analyst of NPD Connected Intelligence.

Media Center will still be available to Windows 8 Pro users, but only as a paid add-on. Windows 8 users who want it will need to upgrade to Windows 8 Pro first.

Removing DVD playback seems, at first, a more extreme decision. While few people connected their televisions and computers even when Media Center was new, many people watch DVDs on their desktops and laptops.

But, removing DVD support from the OS doesn't mean that buyers won't be able to play discs. It simply means that computer-makers will need to provide the functionality themselves. Many will likely turn to free open source options, such as VLC.

"Most major PC vendors include third-party software from companies such as CyberLink or Corel, which acquired a company called InterVideo a number of years ago, and I believe there are other options to play back DVDs," says Rubin. "For customers of most of the major manufacturers, it shouldn't be much of an inconvenience, because the PC vendor will likely continue -- or, if they have not, they likely will -- bundle third-party software to play back DVDs."

With the popularity of slim ultrabooks and tablets on the rise, the number of computers that include an optical drive is decreasing, another factor driving Microsoft's decision.

While this seems like a major move at first, it's really one more step away from physical media and toward streamed media. Consumers are enjoying movies on their televisions and computers, but more often they're pulling it from online sources. For those who still enjoy physical DVDs and Blu-rays, open source software and living room DVD/Blu-ray players will handle the job.

The decision wasn't entirely based on users trends, though. By not including DVD or Blu-ray support, Microsoft avoids having to pay licensing fees for the required codecs. One former Microsoft employee familiar with the decision estimates the cost at around $2.50 per computer for MPEG2 royalties (which were paid to MPEG LA). Media Center also includes Dolby licensing fees, he says.

For consumers, the net result is a positive, thinks Rubin. "In not including Media Center, Microsoft is reducing the footprint of Windows and it's reducing the cost of Windows, which may be reflected in some cost savings to the manufacturer, who may pass on those cost savings to the consumer," he says.

"Relatively few consumers will feel the impact of it, at the end of the day," Rubin adds. "There are easy workarounds. It's really just reflecting the trends that consumers are exhibiting."

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