e.Digital Corporation (fka EDIG)

[Tinroad]

WHAT'S NEXT AFTER THIS NEXT SONY CLIE?
Wednesday, January 29, 2003

Sony is on a tear with the latest version of its Clie Palm OS PDA, the PEG-NZ90. What makes this $799 (retail list) handheld so interesting is the integration of a 2 megapixel camera and MPEG 4 movie recording and playback. It has an empty slot for Sony's own $149 (read overpriced) 802.11b card, but has Bluetooth built in. I think it should have been the other way around. It still requires Sony's Memory Stick Flash RAM media for movie or MP3 audio playback, though. These handhelds, which are rapidly leaving behind their roles as personal info managers in favor of portable media players and communicators, scream out for tiny hard drives, like Toshiba's 20 GB PCMCIA drives that are in Apple's iPod, or Hitachi's upcoming 4 GB Microdrive. And Sony has opted to use a 200 MHz processor rather than a faster CPU, too. Obviously, the generation of these things that will catch on -- regardless of which operating system is running it -- will be a model that is still pocketable while offering digital photo functions, MPEG 4 recording and playback, movie playback (from a variety of codecs), wireless connectivity to a phone network, wireless LAN, MP3 audio (now a triviality), and some form of visual real-time communication via the wireless phone network or wireless LAN, at least 10 GB of HDD storage. Oh, yes, one more thing: a pricetag south of $400. Can't happen soon? Look at the current generation of PocketPC handhelds, now offered at a sub-$300 price point. If I had to bet on this, I'd put it at 24 to 30 months from happening.


IT'S THE CODEC, STUPID
Monday, January 27, 2003

(Note: this is long, but if you read it, I think you'll be ahead of the game.) You've often heard the manta chanted: "the Internet changes everything." No doubt, that's true in many cases. But for the entertainment business -- music, and now film and video -- the agent of change is not the necessarily Internet itself, but the codec. A codec, as you know, is that piece of digital software that allows wide-bandwidth audio, video and images to be compressed and uncompressed (coded and decoded, hence the name) so that they can be conveyed on modern (read "slow") data networks. It is not the Internet that is causing the near collapse of the music business, but the codec known as MP3, formally known as MPEG Audio Part 3. Indeed, the Internet is the means of conveyance for these compressed files, but without Fraunhofer's MP3 codec, the Internet would be of little use in the conveyance of audio files, since a 74-minute CD is 650 megabytes in size, vs. approximately 1/11th of that size when compressed in a manner most listeners find acceptable. Nobody, even on a cable modem, would wait all day to download a single CD. But an hour is an acceptable length of time.
Now, once you change your thinking to being codec-centric, not network centric, you get a much better idea of what is in store for the motion picture and television businesses. This is because the digital revolution is not either network-oriented or packaged media-oriented, but will remain, just as it is today, accommodating of both delivery methods. Audiences (users) are fond of packaged media because they love to build libraries in which physical objects represent information and entertainment assets, and they like new high-capacity media like DVDs because of what they mean to quality. Yet these same customers also want the flexibility that easy-to-convey digital files convey, especially as more new hardware to play them -- most of which are networkable -- are introduced. The network is the highway that runs between the library shelf and the new consumer media hardware, and customers (as we have seen with MP3) are willing to trade a little quality for flexibility and portability.

It is this error in accurately identifying the codec as the agent of change that caused, in my opinion, the collapse of the SDMI, the music business's Secure Digital Music Initiative that was intended to solve the record labels' problems with a wave of the technology wand. You might also argue that another fundamental flaw -- like the assumption the rest of the world would go along with what was ostensibly an American solution -- did in SDMI. But I believe it was the fact that the self-absorbed SDMI bunch was entirely focused on networked audio devices like the RIO MP3 player and similar portable music players based on Flash RAM cards. I think SDMI was undone, in the end, by the 25-cent recordable CD, since there was no provision for an SDMI solution that covered CD players capable of playing CD-ROMs containing MP3 files. It was a HUGE hole in their thinking, and caused, no doubt, because they were not codec-centric in their thinking. While there are still Flash RAM MP3 players on the market, they are few and comparatively expensive. There are lots of cheap MP3 CD players and boom boxes, though.

Unbeknownst to the vast number of entertainment company executives, they are marching into the same maw as the SDMI guys because they haven't yet figured out that it's the codec that counts. If you mention H.264, the new and impressive codec also known as MPEG 4, Part 10, the average entertainment business person will glaze over. Yet this codec -- or Windows Media 9, or DivX or another as-yet-uninvented video codec -- will permanently change their business. If you simply consider how MPEG 2 was a vast improvement in quality and efficiency over MPEG 1, and permitted digital video to match or surpass the quality of the best analog video (at least to viewers), you'll understand the implications of this next generation of codecs. First, because these new codecs are more efficient (MPEG 2 is anything but), bit rates will be much lower, and so file sizes will be dramatically smaller. The importance, here, is two-fold. First, of course, the files can be more easily conveyed on the Internet. A file download that would have taken a day as an MPEG 2 file, can now be sent in real time, or near-real time over a typical cable modem or DSL wire. (See the similarity to the MP3 vs. CD situation, here?) This makes digital delivery of files (if not actual video on demand) practical almost immediately, opens the door for the telcos to deliver video products, and the studios to directly deliver their movies. And, second, it renders the recordable DVD moot, since a two-hour movie at near-DVD quality can now be stored on a single recordable CD at a bit rate of 800 kbps or less. This, in turn, means that they will be multiple millions of recording and duplication devices capable of duplicating movies -- CD burners -- already in place in American homes. The cost of a blank disc to record a movie drops to a quarter (or whatever CD blanks are these days), and the recordable DVD, then, becomes the leading candidate for recording high-definition content at home.

This is hilarious, because the arrival of HDTV packaged media is currently being debated long and hard by the entertainment business and consumer electronics behemoths. One aspect of this debate is between camps supporting the new Blu-Ray disc format -- an expensive, technologically sophisticated disc with a much higher capacity -- vs the original "red ray" disc, the conventional DVD encoded either with improved MPEG 2 video or, as Toshiba demonstrated at CES, encoded with the new H.264 codec. The debate is focused on which disc to use to introduce playback-only HDTV DVDs to the consumer market, but along the way, the answer to the problem of recording HDTV at home just got solved. Of course you'll use the current DVD-R (or +RW, or whatever), because with one of these new codecs, you'll get acceptable performance at home without the need for the new, ritzy, expensive Blu-Ray media and new burners. HDTV disc recorders might be on the market tomorrow (figuratively, if not literally) if you simply buy into one of the new codecs. But, if you're stuck on MPEG 2 as the proponents of the Blu-Ray disc are, then you'll wait considerably longer for the debate to settle down, the politics of who gets what licensing money to be solved, and to decide which digital rights management system is finally adopted. At that rate, HDTV, already in the middle of a long, painful labor, may be stillborn before it begins life. Even worse for the entertainment business and the big CE manufacturers, this delay opens the door for a renegade company (or group of companies) to introduce a High-Def video recorder based on the current DVD burner hardware and H.264 as a fait accompli, relegating their effort to the same round file in which SDMI now resides.

Now, some entertainment industry technology guys have already dismissed H.264, DivX and Windows media as not having the horsepower to get the job done. One of my studio friends sniffed at the Toshiba HDTV demo using H.264. "Unacceptable," he said. I reminded him that that was my opinion exactly the first time he showed me a DVD movie encoded with an early version of MPEG 2. But MPEG 2 got better -- much better -- just as these new codecs will.

The new codecs are also why I am so enamored of the new networked media players -- those settop boxes that play video, audio and image files stashed on you PC on a living room TV set or stereo. DivX and Windows Media 9 mean they will play movies with fidelity that comes surprisingly close to DVD, and gives me the flexibility to enjoy a massive MP3 library in the living room with guests.

My studio friend isn't dumb. He's quite smart, actually, but I don't think he understand that it is the codec that changes everything. This is the reason why music industry guys are going to be taking early retirement, and why the movie and TV companies don't yet understand what is causing the profound change in their businesses.

It's the codec, stupid.

http://mishima.onosko.com/~tim/2003_01_01_Archive.html


Sharp eyes pocket video - Portable MPEG player on sale in Japan

Sharp Electronics has developed a pocket-sized video recorder and player that can store and play a full episode of "The Sopranos" in high-quality video.

Sharp's customers in Japan can buy the player now and use it to watch movies or TV shows on their lunch breaks or while they ride the bullet trains.

But it may be a year or more before the player is available in the United States.

The player was on display last week in the Sharp booth at CEATEC, Japan's version of the annual Consumer Electronics Show. It's also for sale in a few stores in the Akihabara, Tokyo's famous electronics shopping neighborhood.

The Portable AV Player has a color LCD screen that's about 2.5 inches square built onto hard plastic frame. Record, play, pause, forward and reverse controls are built into the top of the frame.

The device can be held in your hand or positioned like a picture frame on a desk to other hard surface.

The unit uses the MPEG-4 video format, which compresses video images but retains a high level of resolution and detail. The samples playing on Sharp's demo units matched the quality of broadcast images displayed on a similar-sized screen.

The player that Sharp sells in Japan comes with 64MB of storage in its internal memory. That's enough storage to hold about one hour of video.

The units also had a slot to accept an SD memory card, which currently offer up to 128MB of memory.

Theoretically, a user could store an entire feature film on one of Sharp's players. But company officials said the battery used in the player would run out before the movie ends.

Sharp officials said they want to increase battery life and lower the price of the player before bringing it to the U.S. market.

The units on sale in Japan carry a list price that equates to about $350. Sharp thinks that's too expensive for teenagers, the group that it thinks will be most interested in the player.

The player would also benefit from a more convenient source of program content, such as programs pre-recorded on SD cards.

Anyone wanting to use the player to watch a TV show would have to record the program in digital form on a computer, convert the file to the MPEG-4 format, then download it to the player.

Only the most tech-savvy teenager -- or the most devoted "Friend" fan -- would tackle a chore like that.

http://portables.about.com/library/weekly/aa101002.htm