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Kaleidescape Loses: But Is It A Tempest In A Teapot?

As everybody even remotely involved in the AV and CE channels knows by now last week Kaleidescape lost its attempt to appeal the injunction ruled against the company in its seven years-long battle with the DVD-CCA.

Saxe Brickenden, president of distribution company Evolution Home Entertainment points out that the ruling against Kaleidescape underlines a shocking double standard that has come to exist in the two big stored media worlds: music versus movies. He points out rather tartly that Hollywood and the music industry have demanded treatment of their products that is inherently in conflict. Says Brickenden: “Empirically, they are both stored bits of information purchased by consumers who wish to transfer their purchases to stored memory for convenient playback when, and where, they wish. Even if we take the same example in two analogous scenarios — music and movies, and we look at applications for an individual’s own enjoyment only, as opposed to using them for resale, or to sell tickets to their friends, we will see two very different treatments by the law.” He further points out that in the case of music media, iTunes is most often the software choice of the consumer. But due to the very different evolution of copy code implementation, movies are treated differently by the law, and he thinks that’s silly.

He further asserts that the implications of the Kaleidescape decision will be felt by the clientele and their integrators. “Another hardware category, and the services sold to support it, will disappear,” he says.

But integrators would be well advised to embrace the change by re-thinking the type of services they provide, and that’s a positive in his book. He says, “While there will undoubtedly be an accelerated adoption of Apple TV, and a skipping of the extra step of ripping an obsolete spinning technology, the more widespread and almost universal use of iTunes means that the progressive integrator will be spending less time toiling simply, “making it work,” and more time getting creative and, ‘making it cool!’” He backs that up with the observation that he’s seen the same thing with the adoption of Savant by his dealers. “Our integrators are spending less time writing code to make it work, so they could dedicate more time to making automation do what the client wants it to do, in the way they want to interact with their devices.” As with many things in life, every scenario, even the death of DVD ripping, has an upside.

However, at least according to some industry veterans, the decision appears to be Sturm und Drang, with few real ramifications. When asked for his feelings about the ruling, Igor Kivritsky, owner of high-end Vancouver shop HiFi Center replied with two words “WHO CARES?”

Actually, he responded with a lot more words than that, but that was just his opening salvo. In Kivritsky’s opinion, the last seven years have been an colossal waste of time and money. “Like bitter relatives, the DVD-CCA can’t even remember why they’re fighting,” he says. “They even acknowledged, in writing, that Kaleidescape’s technology has not negatively impacted their business. Instead it’s been a legal catfight, probably prompted by their lawyers, pushing the right buttons in order to keep the billable hours rolling.”

And in all that time, during which the DVD-CCA was trying to stop Kaleidescape from breaking the DVD codec in order to store movies on servers, the world has changed, and passed DVD ripping by. “Let me put this in perspective,” Kivritsky explains. “The minimum buy-in to get your own Kaleidescape is fifteen grand. If you have that much money to spend, you’re spending fifty, one hundred, five hundred-thousand on your AV system. Those clients who are spending that kind of money want the best AV experience possible. DVD just isn’t good enough anymore.”
Kivritsky further asserts that “in the past year one hundred percent of our Kaleidescape business has been either Blu-ray Vaults for new clients, or existing Kaleidescape owners upgrading to Blu-ray Vaults.” More specifically, they’re paying HiFi Center to rip out their old DVD RAID servers and replace them with Blu-ray management. So what are his clients doing with their old DVD collections if they’re moving to Blu-ray? “They’re giving them away or throwing them away,” Kivritsky states bluntly.

“Kaleidescape lost a court battle against them for a business that they’re not even in anymore,” concludes Kivritsky. “If that doesn’t make the DVD-CCA look like a bunch of clowns, then I don’t know what does.”

Lee Distad is a rAVe columnist and freelance writer covering topics from CE to global business and finance in both print and online. Reach him at lee@ravepubs.com

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