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

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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:

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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.

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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)

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

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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

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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!

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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)

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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..

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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.

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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.

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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".

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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.

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

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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?

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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.

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You know I am honestly looking at flash drives being the next big hit. I see us going to the store and buying movies and music on flash drives in the coming future. Which I think would be great.

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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)

I'm sorry but I've been saying this since last year

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I'm sorry, but unless the consumer is given no choice, online distribution isn't going to cut it. When people spend money, they like having something physical to show for it if that's what they're used to. Consumers are weary of simply buying things online, and it will take a very, very long time to get everyone to adapt. Unless distributors simply stop selling discs and other physical alternatives altogether, it's not going to happen.

Every technology company likes to think they're on the cutting-edge, and what they do is going to be what defines the market. Why would a Seagate CEO say something contrary to what would benefit his company? Answer: he's not. Bill Gates seems to think this is the future as well, but wasn't he also the one who said tablet PCs were going to be all the rage? That prediction sure worked out wonderfully, as did the whole UMPC thing too, huh?

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i disagree what we gonna do download a movie for 2 weeks on our rubbishy 1.5/2mb broadband connections. Dont think so, give me a disk anyday.

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You people fail to see that (in US alone) broadband speeds by 2009 have been announced to be between 50-100 mbps. Satellite services like xStreadHD have proven quite possible delivering 80mbps streams that can carry full 1080p / 7.1 DTS-MA HD streams and allow you do download them to your hard drives and watch them on any DLNA device in your home (PS3, HD DVD player, computer etc)

With cheap hard drives with enormouse capacities optical media has already lost. What the hell are you gonna do with 50gb you can overwrite and access times are crap. How many times have you used DVDs in your computer, or burned one? I have not burned a CD/DVD in ages. I have 5 external hard drives ranging from 250gb-1tb. I have no REASON to burn anything. I have a media center computer and PS3 in my living room that accesses EVERYTHING on them too, so there's absolutely no need for me to burn the disc for anything.

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You people fail to see that (in US alone) broadband speeds by 2009 have been announced to be between 50-100 mbps.

You can announce any kind of speeds you want - that does not make them a reality or provide you with a constant guaranteed speed. Do you seriously, honestly think that people with 100Mps connections currently are actually getting

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I'm sorry but I've been saying this since last year

Where? From what I can tell this is you completely changing directions since HD DVD is on the way out.

For every "internet distribution = good point" you made you've made 1000 HD DVD is t3h b3s7 evar posts.

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Personally I would opt for media on the HDD but my only fear is that the hard drive would fail/die too quickly. The best option is physical media. As long as you take good care of it, it could last forever. Sure with subscription base hi-def media downloadable, you can download it anytime but if you're a casual movie viewer where its not your life mission to watch every film in existence, it might cost more in the long run.

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You people fail to see that (in US alone) broadband speeds by 2009 have been announced to be between 50-100 mbps. Satellite services like xStreadHD have proven quite possible delivering 80mbps streams that can carry full 1080p / 7.1 DTS-MA HD streams and allow you do download them to your hard drives and watch them on any DLNA device in your home (PS3, HD DVD player, computer etc)

With cheap hard drives with enormouse capacities optical media has already lost. What the hell are you gonna do with 50gb you can overwrite and access times are crap. How many times have you used DVDs in your computer, or burned one? I have not burned a CD/DVD in ages. I have 5 external hard drives ranging from 250gb-1tb. I have no REASON to burn anything. I have a media center computer and PS3 in my living room that accesses EVERYTHING on them too, so there's absolutely no need for me to burn the disc for anything.

I understand that, but quit telling me what is possible and start telling me whether or not consumers want it.

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You can announce any kind of speeds you want - that does not make them a reality or provide you with a constant guaranteed speed. Do you seriously, honestly think that people with 100Mps connections currently are actually getting the full speed all the time or anything even close?

Good lord you've never worked at the telecommunications industry, I can guarantee you wouldn't post crap like that if you were.

And how many movies do they currently offer for live streaming or download? How can you "request" particular movies to be added to the collection should you wish to acquire them? How long does it take for the provider to add these movies?

I can guarantee you my access time for movies will be quite a lot lower than yours when you'll be waiting for either the movie to appear to the list from your provider or you'll be congested by the others trying download while I go pick it up from my local video retailer.

I have about 800 maybe 900 burned DVDs (-R or -RW) and countless CDs that I quite often either put in my PS3/PC/Mac.

Well it's good to know you = the world. Your needs are the needs of .. everyone? Right.

I think the irony here is that I'm pretty much posting opinions that contradict with what I work with every single day - after all, being an employee at a Digital broadcasting corporation working with emerging technologies would make me more receptive towards the idea of IPTV, eh? It does - it does not however make me blind to the fact that the infrastructure isn't anywhere even CLOSE to being ready to support the immense needs of people who wish to view multiple video streams, multiple channels and the sheer storage capacity required to deploy true unlimited vod experience.

My cable box's video on demand operates via a dedicated, built-in DOCSIS cable modem. Movies start instantly and can pause and rewind fine. And in HD. Even when something else is recording... Are you saying that's not possible?

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