Well, as we know, AT&T settled with TiVo in January. Yet the spat with Microsoft continued. Microsoft even ratcheted things up after the settlement, filing a complaint with the International Trade Commission (ITC) seeking to block importation of TiVo units for sale within the US. EDIT: This was my bad – as I wrote this I was thinking the ITC complaint was filed in January 2012, when it was January 2011. The late hour probably had something to do with it, but either way I apologize for my mistake.

However, it seems that with the primary impetus for the fight removed both sides thought better of spending resources on the legal battles. In a terse SEC filing Thursday, TiVo announced that both sides had decided to dismiss their legal claims against the other. TiVo also explicitly stated that they’d granted no patent rights to Microsoft as part of the agreement:

On March 21, 2012, TiVo and Microsoft reached an agreement whereby Microsoft has agreed to dismiss all of its pending litigation against TiVo, including its action in the United States International Trade Commission and both of its cases in the United States District Court for the Northern District of California. In conjunction with these dismissals, TiVo has agreed to dismiss its counterclaim against Microsoft in the United States District Court for the Northern District of California. No patent rights were granted to Microsoft by TiVo.

That seems to be all either side has to say on the issue, I couldn’t find any mention of this from Microsoft.

This is good news for TiVo, it removes the distraction of these legal issues. And they were always a sideshow to the AT&T suit anyway. TiVo only filed against Microsoft as a defense to Microsoft filing against them. TiVo’s strategy has always been to go after the service providers, like AT&T and Verizon, and not their technology providers. (EchoStar was an exception since that whole legal saga started before DISH Network and EchoStar split into separate companies.)

AT&T has settled with TiVo, offering payments that will total at least $215 million, and potentially much more, in exchange for a mutual patent licensing deal. TiVo will receive $51 million up front, followed by recurring quarterly payments guaranteed through June 2018, for a total minimum payment of $215 million. In addition to these minimum payments, AT&T will pay recurring per-subscriber monthly license fees should the level of U-Verse subscribers exceed“certain levels”. Just what those levels are wasn’t revealed in the press release, but TiVo apparently expects the total payments to“significantly exceed” the minimums. In this case what’s good for AT&T is good for TiVo – the more subscribers they get, the more TiVo makes.

The Form 8-K TiVo filed with the SEC regarding this settlement reveals more of the details about the payments as well as the patents involved:

Under the Agreement, AT&T has agreed to pay TiVo a minimum amount of $215,000,000 (the “Payment to TiVo”) plus incremental monthly fees per DVR subscriber if the growth of AT&T’s subscriber base exceeds certain pre-determined levels. Based on currently available industry forecasts, TiVo expects that the total fees payable to it by AT&T under the Agreement will significantly exceed the guaranteed minimum Payment to TiVo. The first $51,000,000 of the Payment to TiVo is due on January 3, 2012 and the remaining amount is due to TiVo in equal installments 30 days after the end of each calendar quarter in the amount of $5 million for the first four calendar quarters and approximately $6.5 million in subsequent calendar quarters through the calendar quarter ending June 30, 2018. Any incremental additional per subscriber fees are due to TiVo on the same schedule.

Pursuant to the Agreement, TiVo granted AT&T a limited license under its advanced television patents, including the patents that TiVo had asserted against AT&T (U.S. Patent Nos. 6,233,389, 7,493,015 and 7,529,465), to make, have made, use, sell, offer to sell and import advanced television technology in connection with AT&T multichannel video programming services, including AT&T U-verse, subject to certain limitations and exclusions. AT&T granted TiVo a limited license under its advanced television patents, including the patents that AT&T had asserted against TiVo (U.S. Patent Nos. 5,809,492, 5,922,045, 6,118,976 and 6,983,478), to make, have made, use, sell, offer to sell and import advanced television technology in connection with TiVo products and services, including products and services provided to other multichannel video programming service providers, subject to certain limitations and exclusions.

We may learn more about the terms when TiVo files their Form 10-K after their fiscal year ends on January 31, 2012.

In addition to the settlement payments there is also the indirect benefit to TiVo in reducing their legal costs by no longer needing to pursue the suit. It also eliminates the distraction and allows their legal team to focus their efforts on Verizon. Speaking of Verizon, that’s where all eyes are now as they’re currently the sole remaining target for TiVo’s patent suits. With victories against EchoStar/DISH and now AT&T, it doesn’t seem unreasonable to expect Verizon to taking a serious look at their chances of victory and weighing it against the cost of a settlement. I fully expect TiVo to also be making a reinvigorated push to establish deals with the remaining US cable providers, such as Time Warner Cable, Cablevision, and Bright House Networks.

Taking a look at the top 10 US MVPDs (as of June 2011):

1. Comcast Corporation 22,525,000 – business relationship to allow VOD access to retail TiVo units, now in trials
2. DirecTV 19,433,000 – business relationship with licensing and new THR-22 DirecTiVo just released
3. Dish Network Corporation 14,056,000 – $500 million legal settlement and licensing
4. Time Warner Cable, Inc. 12,235,000 – no known agreement or licensing
5. Cox Communications, Inc. 4,838,000 – business relationship to allow VOD access to retail TiVo units, in development
6. Charter Communications, Inc. 4,413,000 – distributes TiVo directly to customers
7. Verizon Communications, Inc. 3,848,000 – ongoing patent lawsuit
8. AT&T, Inc. 3,407,000 – $215 million legal settlement and licensing
9. Cablevision Systems Corporation 3,284,000 – no known agreement or licensing
10. Bright House Networks LLC 2,139,000 – no known agreement or licensing

In addition, of course, TiVo is being distributed to customers of smaller cable MSOs Suddenlink (#11), RCN (#16), and Grande Communications (not in the top 25). Each victory, licensing deal, or business arrangement strengthens TiVo’s hand at the negotiating table. TWC, like Comcast, is large enough that they develop a lot of their technology and software in house. As such I don’t really expect them to adopt TiVo as their new platform, as Charter has. However, I would not be surprised to see them make a deal with TiVo to support VOD on retail TiVo units, just as Comcast and Cox have, in exchange for staying out of the legal crosshairs.

Verizon is more of a wildcard. They have a rocky track record when it comes to developing and releasing software updates for their FiOS STBs. And they have a small enough user base that outsourcing their software development to TiVo and benefiting from their economies of scale might benefit them. Their architecture is not all that different from Virgin Media in the UK and ONO in Spain. TiVo has already shown they can handle a hybrid cable/IPTV system with those networks, which is what FiOS is. To me that would be the ideal solution, as FiOS joining Team TiVo would increase development funding. And it is likely that they’d push the addition of features to match what they’ve implemented in house, which would benefit everyone. But they may also simply negotiate a licensing settlement like AT&T’s.

AT&T is pure IPTV and they’re using Microsoft software end-to-end. It was pretty much an impossibility that they’d adopt TiVo’s software for their STBs given the infrastructure they’re using. The licensing settlement is really the best result we could hope for in this case. Cablevision and Bright House could easily adopt TiVo as their next-generation STB platform. They’re smaller than Charter, who already has, and Suddenlink, also a TiVo user, is more than half as large as Bright House.

Oh, there is another reason I think TiVo will move more aggressively to establish deals with more MSOs on the back of this settlement: Google. More specifically Google’s pending acquisition of Motorola, the largest STB vendor for cable systems in the US, and Google TV. Back in August when I looked at the announcement, and specifically at the implications for TiVo, and then more recently in November, I stated that I full expect Google to bring the Google TV platform to Motorola STBs as a standard option.

More and more MSOs are looking at OTT (over-the-top) content to increase their competitiveness, which is a prime reason MSOs have turned to TiVo, and Google TV’s Android platform and apps would be a huge boon. Google has Sage TV to provide DVR technology and placeshifting, which also allows them to compete with EchoStar’s SlingLoaded offerings. They could build the streaming client into every Android phone and tablet sold, as well as Google+, that’s a very big stick – or carrot, depending on how you look at it. If Google’s acquisition of Motorola goes through, they will do this. I’m certain of it; it just makes too much sense.

But it will all take time, most likely a few years. The acquisition itself will take time. And then the work to port Google TV to Motorola HW and/or developing new HW to better support Google TV/Android needs to be done. Then they need to land MSO clients for the new HW/SW bundle, and get it deployed. It all takes time. And that time gives TiVo a window to expand their beachhead in the industry. Once an MSO has a significant deployment of TiVo HW and/or SW in the field they’re much less likely to walk away from that investment and adopt another platform.

I expect TiVo to redouble their efforts on the back of this victory. They may even have some deals in their back pocket to announce at CES this month. But for now they can celebrate one victory in an ongoing war.

What about the rest? Windows came in a distant, distant third with 2.4% of the market on 400,000 units shipped. Which double’s RIM’s 200,000 Playbooks shipped. 500,000 other tablets shipped, many of those likely WebOS TouchPads HP dumped on the market.

With the TouchPad out of the market and the Playbook stagnant, and Windows 8 tablets still a ways off, iOS and Android should take even more of the market this quarter. And Android should take more market share from iOS as more Android tablets hit the shelves, not the least of which will be the $200 Amazon Kindle Fire. Well, if you can really call it an Android tablet given how heavily customized it is.

Via The Register.

This acquisition has spurred talk in some circles about TiVo’s fate. Why? Well, a number of people think TiVo is a candidate for a buyout. TiVo still has a poison pill to prevent a hostile takeover, but that is expiring in November. And even with the pill in place the BoD can accept a buyout offer at any time without triggering the pill. The pill just helps prevent hostile bids.

There has been speculation that Google could be a suitor. TiVo has a history with hardware, a successful DVR platform, and deals with MSOs. All things Google could use to beef up Google TV – but now all things they have in Motorola, only moreso.

On the other hand, TiVo is involved with patent lawsuits with Verizon (who uses Motorola HW) and AT&T (who also uses Motorola HW), having recently finally settled with Dish Network for $500 million. If Google feels that they may have a liability in these suits, it is possible that they would seek to have them settled as part of the acquisition. Possibly even buying TiVo in order to do so, along with acquiring their patents which could be useful for Google TV and Motorola’s own DVRs. Though I think that’d be a drastic step to take, they could likely settle with TiVo for less than the cost of a buyout. They’d really have to see value in owning the whole package to go that far.

Personally, while my dream marriage would be Google buying TiVo and integrating it into Google TV, I think that is much less likely to happen now that Google has MMI – on top of their recent SageTV acquisition. They’ll have everything they need to roll their own super STB in house once the Motorola deal closes.

On the other hand, if I’m Cisco, Motorola’s largest competitor in the STB market, I might be looking to beef up my product offering. Cisco and TiVo already work together – Cisco is providing the hardware for Virgin Media in the UK and ONO in Spain. So they have a solid track record. Cisco’s STB software has perhaps a worse reputation than Motorola’s, and offering a TiVo-based solution could be a real shot in the arm for them. Especially if Google does push Google TV onto Motorola DVRs.

Cisco also has a retail presence through Linksys, and increasingly under their own brand. They’re familiar with STB hardware, DVRs, retail, and TiVo’s software. They could conceivably add the TiVo Premiere, Premiere XL, Premiere Elite, and Preview to their STB lineup as is for both retail and MSOs. Motorola did something similar when they offered a couple of Moxi-based DVRs and the MoxiMate to MSOs. Those units were unlike any others in their lineup. That would be a rapid way for Cisco to offer a TiVo-based solution, and then they could incorporate the interface into their other STBs going forward.

Of course, that’s all pure speculation. Cisco seems to have little to lose in buying TiVo though. There’s nothing to upset the existing MSO deals in the US, or in most other countries. Most of the foreign TiVo deals are using TiVo developed or Cisco HW already. It could cause some friction with the DirecTV deal as that is using Technicolor HW, same for the Scandinavian deal with Canal Digital, but that could be addressed in contracts. And even if it killed the deals, I think Cisco could live with it. The DirecTV deal is approaching two years past due now and there’s reason to be skeptical about it ever coming to fruition at this point anyway.

I don’t think it would cause an issue for deals like the Best Buy Insignia TVs as there is no direct competition with any Cisco products. They’re complimentary, not competitive.

On the other hand it would give Cisco’s STB product line a boost when trying to land deals with MSOs against Motorola, especially if the latter gets Google TV.

In light of the Google-Motorola deal, as pure speculation, I think I’d consider Cisco the leading candidate to acquire TiVo at this point. I don’t necessarily think it will happen, just that if anyone did I’d put them in the lead.

As for other suitors that have been speculated on.

Apple – No way. They have a strong ‘Not Invented Here’ culture. TiVo is Linux based, Apple uses BSD, it’d be a major rewrite to bring TiVo over to iOS to merge it with Apple TV or the like. And Apple is all about providing content silos via iTunes, I’m not sure a DVR fits their plans.

Microsoft – Doubtful. MS is mildly allergic to Linux. They already have Media Center and successful IPTV STB software – AT&T runs on it. They also have the Xbox 360 for OTT content. Media center extenders are neglected, but still out there too. If MS wanted to get into the DVR business I think they’d roll their own based on their existing STB software before buying TiVo.

Rovi – Maybe. Rovi, formerly known as Macrovision Solutions Corporation, has several product lines, including software for set top boxes. If they had an inclination to get into DVRs and get onto more MSO boxes, they might do so via TiVo.

Dish Network or EchoStar – Doubtful. There was speculation that they may buy TiVo as a way to settle their long-running lawsuit. But now that they’ve settled the case I don’t see Dish or EchoStar having a good reason to buy TiVo. EchoStar already has one of the better DVR platforms out there, along with Slingbox, so they have little to gain in a buyout.

DirecTV – Doubtful. With the new DirecTiVo sliding further and further to the right, DirecTV hardly seems excited about TiVo. They already have a deal in place that covers TiVo’s patents, and they seem to be happy evolving their own DVRs. And they already acquired ReplayTV’s IP a few years back, so they have DVR patents of their own too.

I’ve seen other speculation – that NDS might buy them to kill the competition off or that Comcast (or another MSO) will buy them to monopolize the TiVo interface on their network, etc. But all of those seem even less likely to me.

Right now, I think Cisco would gain the most from acquiring TiVo.

Of course, then again, Cisco has been pulling back from consumer products, such as in shutting down Flip. So I might be completely off base.

But, like I said, this is all just speculation. It is fun to talk about, but I’m not going to put down money on any of these deals happening.

So, what do you think? What does the Google-Motorola deal mean for TiVo, if anything? Or who do you think might be a suitor for TiVo? Or do you think that’s backwards and TiVo is going to use part of their $500 million award from EchoStar/Dish to buy someone else? Or just grow organically?

Leave a comment with your thoughts!

10% of HDTVs in the US are now Connected TVs, like the Insignia TiVo models launched last week. The FMA study also indicates 6% receive OTT content via TiVo or other DVRs (I’m guessing mostly TiVo, since few other DVRs offer OTT content). Apple TV and Google TV account for 4% each, Roku nabs 3% while Slingbox and Boxee each grab 1%. I’m not sure what Slingbox is going in there, since a Slingbox is a sending device, not a receiving device. And the SlingCatcher surely doesn’t register.

I think the most surprising number out of all of these is that Google TV is 4%. It is only in a handful of devices, I find it hard to believe it would have more penetration than Roku. It just seems strange. The price on the Logitech Revue was slashed just last week. (Mine arrived yesterday, BTW. I haven’t had time to set it up yet.)

Also somewhat surprising, the study says only 7% of US households have a connected Blu-ray player. With network connectivity seemingly standard in so many players today, I’d've thought that number would be higher. But I suppose it hasn’t been that long since the trend started.

The end result of all this? 10% of adults watch at least one video a week on their TV via one of these devices.

Via MediaPost.

As you can see in the graph from comScore Data Mine, Google’s Android operating system had astounding growth from May 2010 through May 2011 – 634%! In the past year Symbian has fallen from the top spot in the UK market to #3, behind Apple’s iOS and Android, dropping 10% to 22.5% of the market. Google’s Android, at 26.7% remains a hair behind Apple’s 27.1%, but is increasing as a much faster rate – 634% growth to 46% – and Android should be in the #1 spot soon, if not already. RIM, which has been taking a beating in the US market, surprisingly grew their share by 59% over the year, and if the trends continue RIM could knock Symbian into fourth place.

As they say, a rising tide lifts all boats, and the UK smartphone market overall is experiencing significant growth. A year ago 27% of mobile users used a smartphone, in 2011 that figure was 42%. Which helps explain how Android alone could add 4.7 million users in one year without gutting the other players. And also helps explain RIM’s growth, I’d think.

Microsoft, knocked from fourth to fifth place by the Android explosion, is not doing well, losing 32% of their share in a year. This is surely due to the decline in Windows Mobile use and the lackluster response to Windows Phone 7 to date.

Via Engadget.

How things can change in a year.

For the second quarter of 2011 the iPad’s share of the market dropped to 61.3%, while Android tablets had clawed their way up to claim 30% of tablet sales. You might’ve noticed that, jointly, they claimed 91.3% this year – but 96.9% last year. So where did the rest go? Well, coming in at number three, Windows tablets claimed 4.6%. Yes, Windows tablets. What about RIM’s PlayBook, which launched during the quarter? It managed a measly 3.3%. These figures are according to a study by market research firm Strategy Analytics.

We’ll have to see how they all fair this quarter, and we have a new entrant in the fight, the HP WebOS Touchpad. But the wave of Android tablets also continues to build. The best selling Android tablet, and second best selling tablet overall, the Asus Eee Pad Transformer could’ve sold even more if not for supply issues. Asus seems to have ironed out the issues, and the supply of Transformers has already begun ramping up and will continue to do so. The T-Mobile G-Slate (aka LG Optimus Pad) shipped just before the end of the last quarter. The Toshiba Thrive has just launched.

The Samsung Galaxy Tab 8.9 is slated to launch next month, sliding in between the 7 and 10.1 inch models, giving consumers more choice. Lenovo has just announced the IdeaPad K1, aimed at consumers, and the ThinkPad Tablet, which is aimed more toward business users – right at the RIM PlayBook. The delayed Cisco Cius, also aimed at businesses, will ship at the end of the month. Archos has a couple of models pending, Vizio has their tablet, etc.

The reality seems very different from the impression you’d get reading articles about the tablet market. From the articles you’d think that everyone wants an iPad and no one is buying anything else. Sales of Android tablets have been weak, makers are even considering pulling out of the market, it is all doom and gloom. Android Honeycomb, the first version of Android optimized for tablets, only released in late February with the Motorola Xoom. That’s when the Android tablet market kicked off for real.

Remember how dismissive articles about Android phones were in 2009 – right up until the Motorola Droid hit the streets with Android 2.0? In the year and a half since then which mobile OS has taken the top spot in sales? It’s been less than five months since Honeycomb hit the streets. 30% of the global tablet market. Let’s see what things look like at the end of the year, by which time Ice Cream Sandwich will be out too.

Report figures via Boy Genius Report.

“Eventually, we’ll give customers instant access to any movie on any device with an internet connection and a screen,” vowed Blockbuster Chief Information Officer Keith Morrow in an interview with the Dallas Morning News.

When I read“instant access to any movie on any device with an Internet connection and a screen” my first thought is instant streaming access, not download to watch. But that’s marketing spin for you.

Picked up from MarketingVOX.

There’s some more interesting news in this area that I’ll be able to share soon…

Microsoft recognizes the impact of this technology on our customers and partners. We are working to enable support for the CableLabs SDV Tuning Adaptor for Windows Media Center Digital Cable Tuners, ensuring that Windows Media Center users will be able to access switched content.

While we have no further details at this time, we will keep you updated as more information becomes available.

While it is good news that MCPC users will be getting SDV support, I’m sure the users with cable systems using SDV would like to see it sooner rather than later.

The experience may prompt Messrs. Ballmer and Liddell to seek out home entertainment targets that better fit Microsoft’s culture. The logical choice, said [Stephen Smith, senior managing director at Arma Partners], is set-top box specialist TiVo, since the xBox could serve as the hardware for TiVo’s television-recording software. “TiVo is the Apple of that category,” he said. “And Microsoft could buy it without antitrust concerns.”

Perhaps, and TiVo is working with Nero on TiVo software for the Windows PC. So it might not be as difficult to port to the Xbox 360 as it would at first seem. And Microsoft has repeatedly tried to get into the cable STB software business, without much success. Having TiVo’s OCAP software, already picked up by Comcast and Cox, would certainly help in that arena.

But, really, I don’t see it happening. Microsoft already has Windows Media Center as the 800 pound gorilla in the PC market, and they can bring that interface to the 360 should they want to. I think it is just analyst speculation, looking for someone, anyone, that Microsoft could make a play for.

“Not a consumer interviewed wants to buy another set-top box,” said Richard Doherty, research director for research firm The Envisioneering Group.

I certainly can’t argue with that, I’m loathe to add another STB to my stack. And I’ve said so repeatedly. I think that gives TiVo and the Xbox 360 an edge – people buy them for other functions (DVR & gaming, respectively), and the downloads are kind of a bonus. And when it comes to HD, I have to agree with this as well:

Richard Bullwinkle, chief evangelist for Macrovision, predicts a layering effect. Macrovision has looked at TiVo, Xbox 360, Vudu and Apple TV.

“The best experience on a large TV is Blu-ray,” he said. “None of the download boxes gives you the same experience.”

But I thought what they said about TiVo in particular was unfair.

But download times are long, nothing is available in high-def, and the 24-hour rental period once the movie has started can be problematic.

The download times are roughly comparable to other services – but it, of course, will vary a lot. The TiVo Series3 and TiVo HD have had progressive download since 9.2 – which means they can start playback once enough of a buffer has built up, with no need to wait until it is all downloaded. I’d expect the Series2 to get the same in the next update. (They’re still on 9.1.) And the article makes the 24-hour window sound like a problem unique to TiVo when it is common to all of the download rental services. They don’t mention it when talking about the three other products, so readers who don’t know what will think this is a TiVo limitation. But there is more:

However, Bullwinkle said, TiVo offers the worst quality of any of the movie downloading options he’s tried, and the number of TiVo owners who download movies is small.

Ouch. That especially stings given who it is coming from. Why? For those who don’t know, once upon a time Richard Bullwinkle was known online as TiVolutionary. He was one of the early TiVo employees and their primary online evangelist on forums like TiVoCommunity.com. Back in May of 2002 he left TiVo and went to work for ReplayTV. And now he’s with Macrovision.

The quality issue is largely subjective, so I’ll leave that as may be, but how does he know how many users download movies? I don’t believe TiVo or Amazon release those numbers. Did they do an independent survey of TiVo owners? Where is the data to back up the claim?

But TiVo isn’t the only one to get a little heat in the article. All four products get what I consider to be fairly poor reviews, highlighting their shortcomings. But read the article for yourself.

TiVo also got another mention in this issue, with a small article on the roll-out of TiVo Desktop 2.6. (And I apologize for not having my review of said up yet, the behind-the-scenes work on the renaming took a lot more time than I expected.)

This issue of Home Media Magazine also includes an article which states Sony and Microsoft are in talks to bring Blu-ray to the Xbox 360. President of Sony Electronics U.S., Stan Glasgow, said that a Blu-ray drive could be incorporated in the Xbox Elite model, or as an add-on, as originally reported in the Financial Times online edition. Glasgow also said that Sony is in talks with Apple about the use of Blu-ray in Macs.

As a result of recent decisions made by Toshiba, Hollywood studios, and retailers, Microsoft plans to withdraw from HD DVD. Xbox will no longer manufacture new HD DVD players for the Xbox 360, but we will continue to provide standard product and warranty support for all Xbox 360 HD DVD Players in the market.

See their post for the full announcement. This isn’t surprising, of course, as everyone is pulling out of the format at this point. But it clears up the uncertainty over timing, as well as laying to rest the rumors about pricing changes, etc, with continued sales. At this point the drives will probably end up on clearance soon. If you have an HD DVD collection the Xbox 360 drive could be a good buy as an insurance policy against future player failures. Even if you don’t have an Xbox 360, the add-on drive also works as a PC USB drive.

Via Engadget.

They repeat a rumor I’ve seen reported elsewhere, that Fox has been considering switching to HD DVD, and if they did Warner was going to go HD DVD exclusive as well. The studios want the format war to end, and Warner knew that without one of the BD studios defecting to HD DVD that the format wouldn’t have the critical mass to win. The rumor is that Fox was ready to make the jump with Warner, to end the war, but at the last minute the BD camp, likely Sony, paid Fox $120 million to stay with BD. When Fox backed out, Warner recognized that the only option to end the war would be for them to go Blu as well. There are rumors that Warner was paid $400-$500 million to go Blu, but Warner has denied a payoff, saying there was no ‘bidding war’. They point out that the market at stake is worth billions, so any payoff would be a drop in the bucket.

Gizmodo says that, from their contacts, the feeling within the HD DVD camp is that HD DVD is done for. They report that the rumors of Universal’s HD DVD exclusivity contract being expired are false and that it runs into 2009. And that Universal would only be able to release Blu-ray if HD DVD is declared no longer viable, so Universal is hanging on Toshiba’s word. Microsoft has also deferred to Toshiba on the fate of HD DVD. And everyone seems to be watching Paramount & DreamWorks Animation. If they begin releasing Blu-ray again, that could be the final tipping point for Toshiba to throw in the towel.

Gizmodo goes into some of the behind the scenes drama involved with Warner’s pre-CES announcement. One source told Gizmodo that the surprise announcement caused Bill Gates to drop a segment of his CES keynote which was to focus on HD DVD, pledging continued support. And we already know the HD DVD Promotional Group canceled their press release at CES. In fact, HD DVD had almost no presence at CES after Warner’s announcement. Toshiba and the studios pulled all of their planned HD DVD announcements.

Taking a cynical view, the current Toshiba price cuts on players could be a way to clear out existing stock before making any kind of announcement. If the HD DVD camp throws in the towel Toshiba and the studios would be left with a lot of stock. And waiting until the return windows close on holiday sales could avoid a rash of product returns from those with buyers remorse. There have already been reports from users returning their HD DVD gear due to the Warner announcement.

New Line has not only announced that they’re going Blu-ray exclusive, but it is effective immediately. All of their announced future HD DVD releases have been canceled. And their sole existing HD DVD release, Pan’s Labyrinth, will cease manufacturing and once existing stocks are depleted it will no longer be available. Via High-Def Digest.

Digital Playground, an adult film studio which only recently went neutral from being HD DVD exclusive has decided to fully back Blu-ray along with HD DVD on all of their high-def releases“until there is a clear-cut winner” according to a statement made before Warner’s announcement. One has to wonder if, in light of the announcement, they might consider Blu-ray a ‘clear-cut winner’ at this point. CE Pro via EngadgetHD.

And the Times Online out of the UK is reporting that as many as 20 of the studios that are part of the HD DVD Promotion group are looking to have their names removed from the roll.

Pony Canyon, a major Japanese music, animation and film studio and part of the giant Fuji Television media empire, said that although it was currently part of the HD-DVD Promotion Group, the decisions of US studios meant it would “choose Blu-Ray in the end”.

Several other Japanese firms – including content producers and electronics component makers – said that their support of HD DVD was “under review” and that they knew of many others in the same position. Others, who admitted that they had previously been waiting for “clear market momentum”, said that it had now probably arrived.

I think we’ll be seeing more HD DVD studios going neutral, as well as out-right defections by both HD DVD and neutral studios to the Blu camp now, especially if Paramount returns to being neutral – definitely if they go fully Blu. At this point any party who really wants to end the war should throw their weight behind Blu-ray. If studios, retailers, rental chains, etc, shunned HD DVD it would be hastened to its end. Times Online via AnimeOnDVD.

While this is happening, Microsoft seems to be hedging their bets with respect to the Xbox 360. They seem to be softening a bit toward the idea of the Xbox 360 supporting Blu-ray via an add-on drive:

“It should be consumer choice; and if that’s the way they vote, that’s something we’ll have to consider,” Albert Penello, group marketing manager for Xbox hardware, said when asked whether Microsoft would support a Blu-ray DVD accessory in the event that HD DVD failed.

I think they’re setting the stage to hedge their bets in case HD DVD does fail, as is looking likely. They can soften their stance, and then they won’t look as bad if they start supporting Blu-ray. From CNET News.com.

Well, CES 2008 is just a couple of weeks away, so we may hear something this time around. But Chris Lanier has some interesting info in his blog. He spotted a job posting which indicates Microsoft is still working on satellite TV support in Vista:

We are delivering next generation TV Tuners designed to deliver Premium TV experiences from world class Satellite TV network operators into the Media Center Edition PC. TV Experiences such as PPV, H.264 HD, in-band guide loading, all on newly developed dual-tuner TV receiver devices makes this job exciting and fast moving.

DirecTV isn’t mentioned by name, and the technologies listed apply equally to DirecTV and DISH Network, as well as other DBS providers outside the US, but it does provide some hope. He also found a second job posting which indicates the satellite TV support will not be confined to the US:

Working with Satellite TV providers, both in U.S. and Europe, you will help deliver native Satellite TV tuners allowing native content to flow directly into Media Center, opening up HDTV and NetOp experiences/services directly into the PC.

So it seems the project, at least satellite TV support in Vista Media Center in general, isn’t dead just yet. It remains to be seen if Microsoft and DirecTV are still actively engaged, or if this is just a platform development by Microsoft that would allow such support in Vista. In any case, it certainly has taken a while since the initial announcement, which made it sound like it would be seen in the then near future.

Picked up from EngadgetHD.

The press release:

Dec 13, 2007 09:00 ET

Microsoft Releases Xbox 360 HD DVD Emulator to Help Speed Content Production and Lower Development Costs

New tool streamlines development and testing process for HD DVD content, accelerates advancement of next-generation interactivity, including experiences powered by Microsoft HDi technology.

REDMOND, Wash., Dec. 13 /PRNewswire-FirstCall/ — Microsoft Corp. today announced the release of the Xbox 360 HD DVD Emulator, enabling film studios and disc authoring companies to model the behavior of HD DVD disc content, including encoded video and HDi interactivity, in a virtual environment before committing to burning a single HD DVD disc. This comprehensive tool is among the first commercially available, software-based solutions of its kind, eliminating the need for expensive hardware or time-consuming and costly trial-and-error processes for testing HD DVD titles, helping to ensure that titles ship error-free.

(Logo: http://www.newscom.com/cgi-bin/prnh/20000822/MSFTLOGO)

The enhanced content and rich interactive capabilities of HD DVD increase the need for an efficient way to troubleshoot coding to maintain the highest-quality consumer experiences. The emulator uses a combination of available hardware (the Xbox 360 video game and entertainment system and the Xbox 360 HD DVD Player) and specialized emulation software to ultimately enable playback of near-final assets from a network storage share, portable hard drive or optical disc. This allows focused testing of the layout, the menus, and the behavior of the interactivity functionality of a title. Detailed log reports from the Xbox 360 HD DVD Emulator deliver valuable tracing information to help quickly and easily pinpoint problems with advanced interactivity code that otherwise could take hours of manual debugging.

“We are committed to supporting and advancing the HD DVD ecosystem, and the new Xbox 360 HD DVD Emulator reflects these efforts by providing developers with the software-based tools they need to efficiently deliver the highest-quality content,” said Jordi Ribas, general manager of HD DVD at Microsoft. “Microsoft developed the Emulator to help save studios and postproduction houses time, resources and costs involved with the creation of HD DVD content, and let them focus on what really matters — pushing the envelope with the format.”

Sessions using the Xbox 360 HD DVD Emulator are designed to complement existing workflows so that tests can be run at various stages. The tool offers several choices for how to run a session: directly from a network storage share, from a USB drive connected directly to the Xbox 360 console, or from an optical disc in the Xbox 360 HD DVD Player. While the tool enables the testing of content playback on the Xbox 360 HD DVD Player specifically, it effectively eliminates layers in the testing process for other HD DVD players as well.

Validated by the Industry’s Leading HD DVD Production Houses

As part of the development process, Microsoft implemented a beta program from July through November of this year, involving more than 40 participants, including Deluxe Digital Studios, Enteractive GmbH, Imagion AG, Memory-Tech Corporation and NetBlender Inc. Participants found that the tool significantly decreased the number of hours and reduced the costs associated with the production process, freeing up time to refine and improve content.

“The authoring process for HD DVD is more complex and expensive than the process for standard DVD, and as with any new technology, it can require a lot of time and resources,” said John Harrington, CEO of NetBlender. “In the process of working with the new Xbox 360 HD DVD Player Emulator, we were able to cut the number of test discs needed per month from roughly 200 down to 50, saving more than 100 work hours per month. This positively impacted our business essentially overnight. We estimate we will recoup the low cost of the tool in less than one month’s time.”

Setting up the Xbox 360 HD DVD Emulator simply requires establishing a connection to Xbox LIVE, navigating to the Download Games menu, and adding the Emulator software to the hard drive of the Xbox 360 console. The one-time licensing fee is $2,999.

As scenarios for next-generation interactivity continue to expand and evolve, streamlining the production process for HD DVD titles frees up resources that licensees can use to focus on refining and improving content — maximizing the potential of HDi to create compelling user scenarios. The Xbox 360 HD DVD Emulator is available for sale immediately at http://www.thisishddvd.com/emulator.

More information on the Xbox 360 HD DVD Emulator and HDi License Program, as well as a downloadable case study of NetBlender’s use of the emulator, is available at http://www.thisishddvd.com/emulator.

Founded in 1975, Microsoft (NASDAQ:MSFT) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.
Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20000822/MSFTLOGO
AP Archive: http://photoarchive.ap.org/
PRN Photo Desk photodesk@prnewswire.com

Source: Microsoft Corp.

CONTACT: Dane Estes of Weber Shandwick, +1-425-452-5400,
destes@webershandwick.com, for Microsoft Corp.

Web site: http://www.microsoft.com/
http://www.thisishddvd.com/emulator