What is the future of the video rental business? It’s not an area that I cover very often as a journalist, but renting videos is something I do frequently as a consumer. So I decided it was time I looked at how all of the rental options might be affecting optical disc manufacturers, if at all. Is the amount of discs being rented changing, or is the same number of discs being rented the same, but is that number being divided up amongst more outlets than in the past?

I started out thinking that Blockbuster and Movie Gallery would have a lot to say about Blu-ray Disc stimulating the rental market, especially with the price of Blu-ray Discs for purchase remaining relatively high. Both companies have been around a long time and have had to reinvent themselves many times. Suffice to say, I called and e-mailed both of those companies several times asking for interviews, but they had nothing to say about Blu-ray.

I came to the conclusion that Netflix’s continued gains in the marketplace truly tell the story of how the market is developing now, since most of the company's gains have come at the expense of traditional brick-and-mortar stores. Netflix offers many different kinds of renting plans ranging from $4.99 per month to $16.99.

Another increasingly prominent option is Redbox. From an initial launch of 12 kiosks in 2002 in grocery and convenience stores, Redbox currently features more than 10,000 locations nationwide and is available in each of the contiguous United States. In January 2008, Redbox surpassed 100 million DVD rentals, but in December, Redbox VP of marketing Gary Lancina said that Redbox’s figures were now more than 250 million DVDs rented nationwide. Each fully automated Redbox kiosk holds approximately 700 DVDs, representing up to 200 of the newest movie releases. New titles are made available every Tuesday.

What’s up with video on demand, and how is that impacting the rental market? No doubt, there is a lot of experimenting going on with Blockbuster, Netflix, Amazon, and others. One question important for optical disc manufacturers is, will streaming and download wipe out physical format rentals? Not likely, at least not for a while. Netflix director of communications Steve Swasey expects Netflix's disc rental business to continue to grow for the next 5-10 years. Maybe these rentals will not come from new customers, but at least renting will remain consistent among current users.

The good news for manufacturers is that Netflix rents 100,000 different titles on DVD, whereas the typical video store has about 3000 titles, according to Swasey. Netflix ships more than 2 million DVDs a day, representing 46,000 different titles on average. This long-tail approach keeps more titles in play than brick-and-mortar stores can. "We have 42 million discs in our inventory. We buy from the studios or the replicators and then ship them to our distribution centers all over the U.S," Swasey explains.

All of these previously viewed discs in the market brings up the next question. Where are they all ending up? Netflix used to sell the previously viewed discs, but found that selling them to wholesalers who sell directly to the public makes more sense. In mid-2008, Redbox began offering used DVDs for sale at its rental vending machines in thousands of locations. At these spots, people can either rent Redbox titles for a $1 a night or purchase a previously viewed one for $7. Borders.com and Trans World have recently begun offering previously viewed discs as well.

Just last week, Video Business released a report on the growing used-disc market. It’s hard to find numbers on the actual size of the used business, but one distribution source told Video Business that used disc sales are less than 10% of the overall DVD business. Studios are not fond of this business since they don’t necessarily share the profits, but, to me, sales of used discs proves that consumers still have enthusiasm about physical product, which is always something replicators like and need to hear. 

Blu-ray also adds another dimension to the disc-rental business. It would seem more logical that early Blu-ray adopters willing to spend the money on full-blown home theaters would rather buy product. Netflix’s Swasey says that's not necessarily the case. "Blu-ray buyers are early adopters, but they their behavior is not all that different" from the average video consumer, he says. "They don’t want to spend $25 for a Blu-ray Disc unless they know they are going to love it. They rent it, then they buy it. America is a nation of collectors, but we collect wisely. More than 1,000 titles are available on Blu-ray right now. Do you want to own them all? Not likely. Do you want to watch all of them? Maybe," he said.
 
For the first two weeks of 2009, rental spending was down 4 percent compared to the first two weeks of 2008, according to Sean Bersell, vice president of public affairs at The Entertainment Merchandisers Association (EMA). "We’re not sure whether this is due to belt-tightening by consumers, the weather, consumers buying discs to watch on big-screen TVs they bought for Christmas, or some other factor," he says.

One thing is for sure: With movie theaters--at least in New York--often charging upwards of $10 a ticket, renting a movie in any format is cheaper than a trip to the theater. Redbox says, "With the current state of the economy, the convenience and value [of Redbox rentals[ have made the service increasingly appealing to consumers. In fact, redbox recently broke a company record, renting more than 1 million DVDs on one day."

EMA does anticipate that the rental market will remain healthy for the foreseeable future. "Home video has always been about convenience and value," Bersell says, "and rental--whether from a brick-and-mortar store, a kiosk, an online DVD rental service, or a digital service--provides incredible convenience and tremendous value. We expect that consumers will continue to embrace rental, as they have done historically."

Debbie Galante Block (debgalante at aol.com) is a freelance writer based in Mahopac, N.Y.

The Authoritative Blu-ray Disc (BD) FAQ Has Moved!

Hugh Bennett’s The Authoritative Blu-ray Disc (BD) FAQ has moved to its new home at Hugh’s News (www.hughsnews.ca).

It can now be found at: www.hughsnews.ca/faqs/authoritative-blu-ray-disc-bd-faq

Philips and Lite-On Digital Solutions (PLDS), a leading manufacturer and developer of optical storage products, and Retail Profiling Consultants (RPC), a leading field sales development organization based in the UK, announced that they have signed a sales expansion agreement.

PLDS carries the Lite-On brand in its portfolio and has obtained a license from HP to sell certain HP branded products. Under the terms of the agreement, RPC will support the promotion and sales of all HP branded products carried by PLDS in UK independent retailers.

"In this competitive market we are looking for new market segments, where the company can increase its presence, for example in the retail channel." said Maulidya Diaz, Team Leader Western-Europe for PLDS. "RPC offers us a smart, interesting partnership in targeting the UK retail channel. They have established themselves as key player in retail promotion throughout the years. But unlike traditional field marketing companies they have always had a 100% focus on the ICT industry. Thanks to their established expertise and excellent knowledge of the ICT industry, RPC can offer us a very flexible, scalable and focused approach."

"RPC are delighted to working with PLDS in the UK. HP is a recognised ‘A brand’ and our Field Sales Developers will be taking a very positive message out to Independent Retailers. Our focus will be on delivering new trading partners for HP who are excited to be offering some great products to their customers." said Martin Barrett, Business Development Manager, RPC.

The sales expansion agreement between PLDS and RPC is effective as of now.

About RPC:
Retail Profiling Consultants (RPC) is a dynamic integrated sales support organisation providing field based solutions to the IT industry across the UK, Eire and Benelux. Over the past 14 years Retail Profiling has proudly supported many of the world’s leading software publishers and hardware manufacturers in developing their channel business.

www.retailprofiling.com

MPEG LA, LLC today announced that the coverage of its AVC Patent Portfolio License has been updated to conform with recent revisions to the AVC/H.264 Standard as defined in ISO/IEC 14496-10:2008, 4th Edition (2008-09-15). As a result of this update, the profiles now covered by the AVC Patent Portfolio License include Baseline, Main, Extended, High, High 10, High 4:2:2, High 4:4:4 Predictive, High 10 Intra, High 4:2:2 Intra, High 4:4:4 Intra, CAVLC 4:4:4 Intra, Scalable Baseline, Scalable High and Scalable High Intra.

The current royalty rates that apply to products and services which use one or more AVC/H.264 profiles remain unchanged during the current Term.

The AVC Patent Portfolio License (available at http://www.mpegla.com/avc/avc-agreement.cfm) is offered for the convenience of AVC/H.264 users enabling them to obtain coverage under essential patents owned by multiple patent holders in a single license as an alternative to negotiating separate licenses. MPEG LA’s objective is to provide worldwide access to as much AVC/H.264 essential intellectual property as possible for the benefit of licensees (new patent holders and essential patents may be added at no additional royalty during the current term of the License). Any party that believes it has a patent which is essential to the AVC/H.264 Standard, as defined in ISO/IEC 14496-10:2008, 4th Edition (2008-09-15), and would like to participate in the AVC Patent Portfolio License is welcome to submit its patent(s) for an evaluation of essentiality by MPEG LA’s patent experts and inclusion in the License if determined to be essential. Interested parties may request a copy of the terms and procedures governing patent submissions by going to http://www.mpegla.com/avc/avc-licensors.cfm.

Current patent holders to MPEG LA’s AVC Patent Portfolio License include Apple Inc.; DAEWOO Electronics Corporation; Electronics and Telecommunications Research Institute; France Télécom, société anonyme; Fraunhofer-Gesellschaft zur Foerderung der angewandten Forschung e.V.; Fujitsu Limited; Hitachi, Ltd.; Koninklijke Philips Electronics N.V.; LG Electronics Inc.; Microsoft Corporation; Mitsubishi Electric Corporation; NTT DoCoMo, Inc.; Nippon Telegraph and Telephone Corporation; Panasonic Corporation; Robert Bosch GmbH; Samsung Electronics Co., Ltd.; Scientific-Atlanta Vancouver Company; Sedna Patent Services, LLC; Sharp Corporation; Siemens AG; Sony Corporation; The Trustees of Columbia University in the City of New York; Toshiba Corporation; and Victor Company of Japan, Ltd.

www.mpegla.com

Microboards today announced that a new version of its award-winning disc publishing software, PrintWrite™ will be available tomorrow, Feb 3rd, and features support for legacy systems as well as several languages. PrintWrite is included with every new Microboards Publisher and is available as a free upgrade for existing users through the Microboards website at www.microboards.com.

PrintWrite builds on the ability to automatically print and record DVDs, CDs, and Blu-ray discs by adding a step-by-step interface and a dashboard-style preview. PrintWrite 1.2 expands on the acclaimed disc publishing interface introduced in the original PrintWrite by adding support for many legacy system users, and by adding foreign language support for international users.

"PrintWrite has been accepted enthusiastically by our customer base, because it sets a new standard for reliability, flexibility, and ease-of-use in the disc publishing arena," said John Westrum, Microboards' Chief Technology Officer. "Its solid reception by the market drove us to make it available to an even wider set of users."

PrintWrite also comes standard with SureThing CD Labeler for designing labels. Users can access SureThing through the PrintWrite interface, or run it as a standalone application. Advanced error handling and diagnostics tools ensure optimal performance and rapid resolution of operating issues.

You can take a tour of the PrintWrite interface or request a copy for your legacy publisher by visiting www.microboards.com/printwrite.  

Supported languages include Chinese, French, Spanish, Japanese, and German. Supported legacy products include most previous versions of the MX-2, MX-1, GX-2, GX-1, and CX-1 disc publishers. Contact Microboards at 952.556.1639 or support(at)microboards.com for details.

www.microboards.com

SENSIO Technologies Inc. ("SENSIO") (TSX VENTURE:SIO), inventor of the SENSIO® 3D technology, announces that its SENSIO® 3D format has been officially accepted as an optional DVD standard like DTS for audio. From now on, manufacturers wishing to integrate the SENSIO® 3D format in their electronic equipment will have to do so in accordance with globally recognized specific standards and directives. This is the very first 3D format to be recognized by a standards organization for the distribution of 3D content in the consumer market.

"After 10 years of investment, development and commitment, we are extremely happy to be rewarded in this way, and that our format has been recognized by a standards organization. Our technology has reached the necessary level of maturity to become a standard, and its quality, reliability and robustness have been assessed and certified by a recognized global organization. We are confident that this certification will have a positive impact on manufacturers, and that it will enable us to facilitate and accelerate the integration of our technology into products for the consumer market", explained Nicholas Routhier, President and CEO of SENSIO.

In 2008, a process to add a 3D video specification to DVD was launched. In order to collect information about the various 3D methods and technologies available, a wide appeal was done. Several companies submitted their technology to be standardized for DVD. At the end of the assessment, the only format to be kept and included in the DVD standard is SENSIO® 3D, as this was the only one to satisfy the criteria set out.

With this standardization, SENSIO has come closer to its aim of becoming the global 3D standard for the distribution of 3D content in the consumer market and will probably boost soon the content available in the SENSIO® 3D format, adding films to its already existing library.

http://www.sensio.tv/en/default.3d

Silicon Mountain Holdings, Inc., (OTCBB: SLCM), a technology company specializing in high-performance interactive computing solutions, today announced the release of Allio™ Lite, the newest addition to the tremendously popular Allio converged LCD HDTV-PC product line at a lower price point.

The latest Allio HDTV / PC models are manufactured using the same clear, high-quality 42" 1080p and 32" 720p displays as the standard Allio models and include the same selection of inputs and outputs as the original, at a lower price point. Allio Lite extends the product line by integrating an Intel Atom-based computer and DVD-CD player/writer to deliver a simple, low-cost converged multimedia experience that brings a whole new generation in HD TV and Internet entertainment to the living room!

Since its release in 2008, Intel Atom technology has been associated with light computing products like netbooks and nettops, and has been favored for its low-power requirements, low-heat and low-cost. While the Atom powers Allio Lite, there is plenty of muscle for integrated TV-PC functions. Allio Lite features the Intel dual-core Atom 330 CPU with hyper-threading. The most powerful of the three Atom processors, this "Dual Diamondville" 1.6 GHz model delivers an exceptional media experience for the price. Unlike most light-computing products, Allio Lite HDTV / PC also features Windows Vista Home Premium, a DVD super-multi optical drive, as well as plenty of storage (250MB HDD) and memory (2GB RAM).

The Allio Lite TV-PC brings the incredible experience of converged high-definition TV and internet content experience together for the first time in large screen LCD clarity. Users can easily check email while watching a television program, enjoy a movie on DVD while working on a spreadsheet, or stream high-definition content to the large screen with free sites like Hulu or TidalTV while updating a Facebook page.

Along with the standard Allio models, a working prototype of Allio Lite was featured in Las Vegas at the 2009 CES expo earlier this month to rave reviews. Heading into the consumer electronics industry's biggest show, ChannelWeb listed Allio at number two on its "25 Hot Products to See at CES." After seeing Allio first-hand at the show, TopTenREVIEWS ranked Allio at #4 on their Top Ten of CES 2009 list, calling Allio, "frankly the best integration we've seen of HDTV and PC."

"We have been overwhelmed by the positive reception and accolades that Allio and Allio Lite HDTV/PC received at the 2009 Consumer Electronics show," said Tre' Cates, President and CEO of Silicon Mountain Holdings, Allio's parent company. "The response at CES was clear – converged entertainment is something that the consumer wants, and Allio Lite with its simple feature set and appealing prices really caused a stir at the show. Early adopters normally pay a premium for convergence. Allio stands alone as the market leader in this category and Allio Lite represents value during the introductory phase of digital convergence."

While Allio is an entirely new breed of converged entertainment device, the company behind this product is not a startup. Allio and Allio Lite are designed and assembled in the US by Silicon Mountain, a publicly-traded company with over 14 years experience in the computer industry manufacturing high-performance servers, gaming PCs and digital storage.

Pricing for the 42-inch Allio Lite model featuring the dual-core Intel Atom 330, Windows Vista Home Premium, a 250GB hard drive, 2GB of RAM and a DVD-CD player/writer retails for $1599, while the 32-inch model sells for $1299.

The Allio Lite integrated high-definition LCD HDTV, DVD player and PC is available for sale now direct at alliotv.com, or from resellers like Amazon, TigerDirect and Visionman.

www.slcmholdings.com

LightScribe Direct Disc Labeling today announced its five-year milestone, with an expanded base of over 100 licensees that highlights broad adoption of LightScribe's CD/DVD labeling technology and reflects enthusiastic customer response worldwide. Over 115 million LightScribe-enabled drives have shipped to date and LightScribe represents approximately 40% of worldwide DVD writer sales with the installed base growing at approximately five million drives a month.* Additionally,over one million LightScribe.com visitors a month are viewing LightScribe's Design Center and downloading Template Labeler, label designs, and Windows and Linux software development kits.

LightScribe -- a laser DVD/CD label burning technology found in many popular brands of DVD/CD burners, laptops and PCs -- gives people the ability to easily burn silkscreen-quality photos, graphics, images and text directly onto LightScribe CDs and DVDs. A simple title printed in normal mode will typically take a couple of minutes. A fuller disc image will take approximately 15-20 minutes. LightScribe CDs are available in gold, red, orange, yellow, blue and green.

LightScribe Direct Disc Labeling technology is now being incorporated by over 100 personal computer, optical drive and media manufacturers, software developers, and media and hardware brands worldwide, including the following:

• Personal computer manufacturers: Alienware, Asus, Equus Computer Systems, Evesham Technology, Founder, HP, Lenovo, Medion, MESH Computers, Packard Bell, Paradigit, Samsung and Targa
• Hardware brands: Ahtec Computer, Alienware, Apricorn, Asustek, Ativa, BenQ, Buffalo, Candy Technology, Evesham Technology, Freecom Technologies, Gear Head, Gericom, HP, I/OMagic, LaCie, LG Electronics, Lite-On IT, Medion, Memorex, Packard Bell, Pacific Digital, Paradigit, Philips, Pioneer, Samsung and Sony
  
• Media brands: Aleratec, Ativa, BenQ, Digitex, Esperanza, HP, Imation, Infiniti, Intenso, KODAK Media Products, Maxell, Melody Technology, Memorex, Microboards, Mitsubishi, Omega, Philips, Platinet, PRIMEON, Ricoh, River Pro Audio, TDK, Vakoss Verbatim and VinPower
• Optical drive manufacturers: Asustek, Hitachi-LG Data Storage, Lite-On IT, Panasonic Communications, Panasonic Shikoku Electronics, Philips LiteOn Data Systems, Pioneer, QSI, Sony Optiarc, TEAC and Toshiba-Samsung Storage Technology
• Software developers: Acoustica, BHA, Corel, CyberLink, Droppix, Honest Technology, Kandalu, MicroVision Development, NEATO, Nero, NewSoft Technology, NewTech Infosystems, Roxio, SmileOnMyMac, Sonic Solutions, Target Cast and Ulead
• Duplicator and Disc publishing systems manufacturers: Acronova, Advanced Digital Research, Alea, Aleratec, Amtren, CD PRO Resolu, Datatronics, Mexty Productions, Microboards and VinPower
• Media manufacturers: CMC Magnetics, Mitsubishi Kagaku Media and Moser Baer India
• Hardware component manufacturers: Marvell, MediaTek, Sony Semiconductor and Sunext Technology
• System integrator: Micro-Star International

"Over five-years since the initial public announcement, LightScribe users have creatively personalized their digital content and, for businesses, improved impressions serving their commercial interests," said Kent Henscheid, marketing manager for LightScribe. "In the last several years, LightScribe streamlined its software environment to broaden accessibility for developers, and we now see applications well beyond single-user computing, including content duplication and numerous vertical markets. Following key business goals of broad adoption and technology simplification throughout its life cycle – coined as 'burn/flip/burn' - LightScribe is a success story in driving complex technology to consumer ease-of-use and affordability."

LightScribe-enabled CDs, DVDs, software, desktops, notebooks, aftermarket optical disc drives and duplicator systems are available at major retailers worldwide, as well as through most leading online stores.

www.lightscribe.com