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Seagate CEO: Blu-ray won the battle but lost the war


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#1 Ironman273

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Posted 09 January 2008 - 14:53

Seagate CEO: Blu-ray won the battle but lost the war

Posted by Michael Kanellos

LAS VEGAS -- The winner in the Blu-ray and HD DVD war is the hard drive, according to Bill Watkins, CEO of Seagate Technology.

"People are saying Blu-ray won the war but who cares? The war is over physical distribution versus electrical distribution, and Blu-ray and HD lost that," he said during a breakfast meeting at the Consumer Electronics Show here this week. "In this, flash memory and hard drives are on the same side. The war is over and the physical guys lost."

Watkins, naturally, speaks from personal interest, but he's got a point. (A former Army grunt and a decades-long Deadhead, Watkins is also one of the more entertaining CEOs in the technology industry to interview.) Consumers haven't been buying Blu-ray or HD DVD players and by the time they do, technology companies will likely be hawking sophisticated on-demand services and Internet Protocol TV. IPTV, in fact, is the dominant theme of the show. Sharp, Samsung, and Panasonic all unfurled content alliances that will let consumers look at headlines or videos from the Net on their TVs.

That's good news for Seagate, because electronic distribution means more hard drive sales. "If (data) is in the cloud I get more storage sales because you have to back up everything," he said.

"Surveillance is a big deal," he added. "You're being filmed right now (we were in a casino) and they've got to store it somewhere."

Hard drive makers are right now living through good times. In the 1990s, excess manufacturing capacity and price cuts led to stagnant revenues and losses for many companies. Since then, many players have dropped out. New markets such as digital video recorders opened up for drive makers. As a result, both Seagate and rival Western Digital are seeing double-digit growth. Seagate has already upped its revenue guidance twice for the quarter that just ended.

And the future continues to look good. Hollywood, Watkins said, will have no choice but to get into home delivery of content in a big way. People are leaving home less and less. And if the movie studios don't deliver their content to their home, people will watch whatever they can find on the Internet. At CES, XStreamHD is showing off a box that gets on-demand movies from a satellite. Actor Michael Douglas is an investor.

"They will watch lousy content if it is easy to do," he said.

Other notes from Watkins:

• Seagate doesn't have its solid state drive out yet, but it's coming.

• Flash memory, he added, will never completely take over the hard drive market. The demand for storage is too big. If a flash maker wanted to provide just 15 percent of the world's market for storage in 2012, it would have to invest $50 billion this year alone.

"And right now, no one has made that investment," he said.

He further argued that flash memory gets too much attention from Wall Street. "I'm making 75 cents a quarter, and I get half the valuation of SanDisk or Micron," he added.

• Consumers still seem buoyant in Europe and Asia, so a lengthy, full-blown global recession may not occur. Admittedly, he adds, that's his own spin.

• America has got to reform its immigration laws by letting in more immigrants. Nearly 60 percent of the companies in Silicon Valley were founded by people born outside the U.S. Last year, close to 70 percent of the students getting Ph.D.s in engineering were from other countries.

"And none of them got a green card," he said. "Because of this, U.S. companies will have to put R&D overseas."

• Speaking of foreign lands, the government-to-university-to-private sector triumvirate (the government provides grants, universities invent stuff, and the private sector sells it) that helped build the tech industry in the U.S. no longer works as well as it once did. However, they have copied it pretty well overseas.

"They are following the made us successful and here it's broken," he said. "We used to say that what is good for GM is good for America. Now, what is good for the stockholders is not necessarily good for America. That drives me crazy."


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#2 Budious

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Posted 09 January 2008 - 14:58

I'd have to agree with that assessment, imagine a Steam like service for Windows which was cross platform and service provider, purchase movies on your account and have them available anywhere. Have the freedom to login to your account from a TV in your hotel room and watch the content you have licensed under your account, that should be the future of HD delivery. I'll hold my breathe on it.

#3 shakey_snake

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Posted 09 January 2008 - 15:44

Consumers haven't been buying Blu-ray or HD DVD players and by the time they do, technology companies will likely be hawking sophisticated on-demand services and Internet Protocol TV. IPTV, in fact, is the dominant theme of the show. Sharp, Samsung, and Panasonic all unfurled content alliances that will let consumers look at headlines or videos from the Net on their TVs.

I hate to say "I told you so", but while Boz and Playstation diehards where busy yelling at each other, I've been talking about his for about a month now. (proof)

#4 Galley

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Posted 09 January 2008 - 15:47

Translation: Seagate wants each of us to by 30TB of hard drive space.

#5 guru

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Posted 09 January 2008 - 15:53

Translation: Seagate wants each of us to by 30TB of hard drive space.

if they price it at $200 it'll sell more than Blueray/HD-DVD combined :p

#6 bitbucket

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Posted 09 January 2008 - 15:57

I'd have to agree with that assessment, imagine a Steam like service for Windows which was cross platform and service provider, purchase movies on your account and have them available anywhere. Have the freedom to login to your account from a TV in your hotel room and watch the content you have licensed under your account, that should be the future of HD delivery. I'll hold my breathe on it.


i'd love for this to happen, but i'd hate to be the one having to pay for the download bill in countries like mine (australia) where broadband download "quotas" are shockingly low & very expensive.

Even now i cringe at wanting to download a game, demo or other content from the likes of Playstation Store or xbox live!

#7 The_Decryptor

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Posted 09 January 2008 - 16:00

Translation: Seagate wants each of us to by 30TB of hard drive space.

And I want to buy it off them.

Edit: Yeah, IPTV or and such won't be taking off here for a while, 20GB or so (which is very large compared to some plans) doesn't go that far (I've been throttled for the last week and a half)

#8 A10

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Posted 09 January 2008 - 16:13

Call me crazy, but I like to have the physical media in my hands rather than having to buy a 250-300 dollar hard drive(1TB) then turning around and paying something like 15 dollars per download or per month for streaming. This magical service must have excellent uptime/stability use a mystical codec that has crystal clear 1080p video, 5.1 sound and small download sizes.

What about people out in the sticks stuck with satillite internet that cuts you off if download more than 800mb or stream heavy video some will say those who live in the boonies could care less about this sort of stuff yeah maybe. Not everyone has an expensive dsl or cable package with no throttling or download restrictions.

What about DRM say the drive containing your files goes belly up will it be like Itunes were you have to beg and plead to redownload your files. If it's streaming how will things like featurettes, pip, and other things bluray and HD-DVD have.

If the price of flash goes down, and the read/write deterioration is all but nonexistant then one day we can walk into a store and buy the movie on a flash disc be it USB or some form of eSATA, etc..

#9 QuarterSwede

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Posted 09 January 2008 - 16:18

This guy is right but wrong about the timing. Blu-Ray will be what we'll everyone transitions to. All IP distribution schemes are currently garbage which is why it won't catch on until someone finally does it right and there is a standard in place. I'm guessing 5-10 years from now.

#10 Michael Lacey

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Posted 09 January 2008 - 17:34

I don't agree with this. Many people, like myself, would much rather have a physical copy of what they paid for. And then there are the technologically illiterate, who saw a display in a Wal-Mart and told themselves they simply must have HD. I'm sure many people don't want to mess with having to download or stream their movie, when they can just buy a hard copy and shove it in their player.

#11 Miuku.

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Posted 09 January 2008 - 18:09

Sure digital distribution will win, look at how majority of people already have 100Mbps connections and every ISP can ..

Oh who am I kidding - as of now there's not enough infrastructure in most counries out there to even cover all the bittorrent and web traffic, much less streaming tens of millions of live MPEG4/1920x1080 streams or even transfering the movies "non-real time".

#12 ablack6596

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Posted 09 January 2008 - 18:14

Yes we'll all be downloading our movies eventually, but that's not in this war. By the time downloading movies becomes feasible for the majority, Blu-Ray will already have many years as the top format for buying movies in.

#13 Novaoblivion

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Posted 09 January 2008 - 18:42

personaly I would much rather have a physical copy of something.

#14 Eric

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Posted 09 January 2008 - 18:50

LOL... I agree with what the article said about winning and losing at the same time, but really, the CEO of Seagate? His company sells loads of Blu-Ray and HD DVD hardware, then?

#15 dvb2000

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Posted 09 January 2008 - 19:06

if they price it at $200 it'll sell more than Blueray/HD-DVD combined :p


But the retailers won't promote it.

Retailers push blu-ray because they make more profits on it. Once the early adopter market (who will spend any amount of money to get the latest technology) get bypassed by the price concious mass market I think we might see HD-DVD become more popular.

Today there is pretty much zero interest (in real terms) for either blu-ray or hd-dvd. the standard DVD looks fine to most people with large screen TV's so why spend more money on new players and more expensive DVD's.