December 30, 2005

Another Side of the Apple Shift to Intel [12:09 pm]

New Focus for Intel: The Home

When Paul S. Otellini, Intel’s chief executive, takes the stage at the [Consumer Electronics] show Thursday, he is expected to present a new Intel focused on selling a digital lifestyle rather than hardware.

Instead of bits and bytes, Mr. Otellini, the first nonengineer to run Intel, is expected to spend much of his time talking about cool new music and video features that will be made possible by the new home entertainment platform, called Viiv, and Core, a low-powered chip that will eclipse the Pentium M chip for portable computers.

The transformation of Intel will, in part, be defined by its new alliance with Apple Computer, which has come to dominate the digital music business and is entering the nascent digital video market with its iPod players.

[...] While an Apple-Intel living room alliance might not emerge as early as January, most industry observers say they believe that Intel’s alliance with Apple was shaped in part by Microsoft’s decision to pick the I.B.M. PowerPC chip for its Xbox 360 game machine.

“Intel has begun tuning up Yonah for an orchestra we haven’t heard yet,” said Richard Doherty, a computer industry analyst and president of Envisioneering Inc. in Seaford, N.Y.

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LATimes Editorial On The Sensenbrenner Analog Hole Legislation [11:13 am]

Interestingly, even the industry’s hometown paper doesn’t think it’s a good idea: Congressional copycats [pdf]

The studios have an understandable interest in combating piracy. But Congress should not be mandating the technologies used to fight it, particularly when they aren’t proven. As Sony BMG learned when it used a new technology to prevent CDs from being copied, unanticipated glitches can inflict more than enough pain to offset any reduction in illegal copying.

At any rate, this legislation won’t stop determined video pirates, who will find other ways to make bootlegs. Its effect would be mainly on typical TV viewers, who would be prevented from doing a number of things they expect to be able to do with video. Maybe you’re an HBO subscriber who recorded an episode of “Curb Your Enthusiasm” to watch on the bus the next morning on your way to work. Today, you can use analog connectors to convert that recording into a digital file suitable for your iPod or Sony PSP. If the bill became law, the tools needed for the conversion would be illegal.

[...] Such connectors are gradually disappearing from TVs and video recorders anyway, so this “hole” will eventually close on its own. In the meantime, if the goal is to deter illegal copying, Hollywood should work harder to help viewers watch what they want when they want to. And Congress should understand that piracy cannot be curbed simply by giving Hollywood more control.

Related: the LATimes’ end of the year roundup - High-tech Hollywood [pdf]

HOLLYWOOD CONTINUED ITS love-hate relationship with new technology in 2005. The industry made a few breakthroughs that will benefit entertainment’s producers and consumers alike — while still seeming to take one step backward for every step ahead.

One of the most promising children of the marriage between Hollywood and Silicon Valley was the deal between Apple Computer and a handful of TV executives to let Apple sell downloadable versions of their shows for the iPod. It was a small step in the grand scheme of things but a breakthrough nonetheless: It showed the networks’ willingness to experiment with new business models even if they conflict with the desires of affiliates and syndicators.

Meanwhile, Apple’s iTunes Music Store continued to dominate the market for downloadable songs, which grew about 150% in 2005. That growth helped ease the industry’s pain from yet another drop in CD sales. Yet revenues were comparatively small, showing that masses of consumers had yet to be persuaded to pay for music or video online.

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The Movie Industry and China [11:07 am]

An article on the contradictions and opportunities being pursued in the Chinese market by US movie companies - challenges of ideology, distribution and culture: Crouching U.S. studios, hidden Chinese market [pdf]

If Hollywood is ever going to find its way through the cultural mists and mazes of China — or get some of those 1.3 billion butts into seats for the next “Shrek” or George Clooney picture or whatever it is Spielberg decides to make — it is going to have to figure out how to get money out of people like Al Yon.

Yon already loves Hollywood. Loves American movies — even adopted his first name back in high school English class in honor of Al Pacino. Loves American TV too. “Seinfeld,” “Frasier,” “Friends,” “Sex and the City.” He’s seen every episode.

[...] And Yon should be Hollywood’s dream customer: a smart, young, urban guy in the world’s fastest-growing market, with a voracious appetite for just about anything the American pop culture machine throws out. ” ‘Desperate Housewives’ — I love it,” Yon says.

Problem is, Yon has never paid a dime to ogle Charlotte or snicker at the inside jokes with Jerry and Kramer. Never plans to. All that expensively produced American culture is being piped into his bedroom on the Internet, “shared” among Chinese consumers who swap digital files free. And Yon’s not some geek operating on the fringe. He’s the Chinese mainstream. He’s not even one of those consumers who get their Hollywood fix from buying pirated DVDs for a dollar.

“Why would I pay a dollar,” Yon asks, perplexed, “for something that is free?”

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