MAY 07, 2012
Microsoft says users must pay for a Windows Media Center add-in to Windows 8 Pro if they want to play video DVDs, citing codec costs as the reason. Really?
By Woody Leonhard | InfoWorldFollow @woodyleonhard
Buried deep in an explanation of how Windows Media Center turned into an extra-cost add-on in Windows 8, came a startling admission from the Microsoft Building Windows 8 team: Windows 8 won't be able to play video DVDs. "Windows Media Player will continue to be available in all [Windows 8] editions, but without DVD playback support."
Hard to believe but true. Windows Media Player has been able to play DVDs since the start of the Stone Age -- or at least since WMP 6.1, which shipped with Windows 95 for heaven's sake. But starting with Windows 8 there will be no native support for playing videos on DVD. If you want that support you have to pay for Windows Media Center, which is an extra-cost add-in to Windows 8 Pro.
Customers who buy Windows 8 (and don't know enough to install VLC) will have to pay for the double-upgrade to both Windows 8 Pro and Windows Media Center if they want to play DVDs. Unless they can find some third-party software that'll fill in -- perhaps from their PC manufacturer or from a USB DVD manufacturer.
Microsoft assures us that the Media Center Pack pricing "will be in line with marginal costs." But it's highly likely that the jump from Windows 8 to Windows 8 Pro will be anything but marginal.
How did Microsoft get into this mess? It's all about licensing the MPEG-2 decoder. Microsoft provides a detailed description of its licensing woes in a follow-on FAQ: "[W]hen you add all this up and apply to all Windows PCs, it is an ongoing cost of hundreds of millions of dollars per year to the PC ecosystem, well over a billion dollars over the lifecycle of the operating system and yet by most predictions the majority of PCs will not even be capable of playing DVDs."
As soon as I read that, I got on Twitter and raised two eyebrows, tweeting: "Sinofsky: 'By most predictions the majority of [Windows 8] PCs will not even be capable of playing DVDs.' Huh?" It's awfully hard for me to believe that the majority of Windows 8 PCs won't be capable of playing DVD movies.
@BuildWindows8 tweeted back: "Cons. PCs are 60%, moving to ultrabooks/tablets rapidly (80%+ are mobile). Biz PCs are 40% (SFF, AIO) rarely optical drives"
Of course, Microsoft has better records on Windows sales than anybody, so I readily defer to their market share analysis -- amazing that more than 80 percent of new consumer PCs are mobile -- but still, the numbers don't add up.
Let's say Microsoft sells 300 million PCs in the year after Windows 8 launches, and only -- what? -- 40 percent of them can play DVDs. Let's be super-conservative and say that just 100 million of those PCs can play DVDs.
According to their licensing terms summary, Microsoft would have to pay MPEG-LA, the MPEG license consolidator, a maximum of $6.5 million per year for a blanket MPEG-2 decoder license. Unless I misread the licensing terms (which is always possible with dense legal documents), it seems to me that Microsoft would have to pay about 2.2 cents per copy of Windows in order to offer DVD playing capabilities. If only a third of those PCs were capable of playing DVDs, the price jumps up to 6.6 cents per capable PC.
Sure, you can argue that hardware manufacturers pay for MPEG licenses and third-party software manufacturers pay for MPEG licenses, and the whole thing is horribly wasteful. Microsoft has tech support costs, and they'd have to build some sort of fancy high security AutoRun capability into Windows Media Player. But the bottom line, as best I can see, is that Windows 8 has lost DVD-playing capabilities because Microsoft won't pay 2 cents per license for the decoder -- or 6 cents per DVD-capable PC.
I also don't see how a billion dollars is floating around. It sounds to me like Microsoft tried to bring MPEG-LA's prices down, and didn't get anywhere.
Did I miss something? Tell me what in your comments.
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