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Survey: Dealers React to DVD CCA vs. Kaleidescape

CE Pro survey indicates 57% of integrators are “not really” concerned about their own legal liability and 42% say they’ll continue to sell Kaleidescape movie servers while injunction is appealed.


Bloggers, pundits, digital rights fanatics and enthusiasts have all chimed in on the recent injunction order against Kaleidescape in its seven-year legal battle with the DVD CCA (Copy Control Association).

A Santa Clara, Calif., judge issued the injunction against Kaleidescape’s DVD movie servers, but Kaleidescape has appealed the decision and believes the injunction will be stayed pending the outcome of that appeal.

So what about the people with the most skin in the game: Kaleidescape dealers and the larger community of custom electronics integrators?

In a flash survey of dealers via Linkedin, 158 CE pros responded to questions about Kaleidescape and the future of movie servers.

Not surprisingly, the survey is heavily skewed towards Kaleidescape dealers. Exactly half of the respondents say they sell Kaleidescape products.

Most dealers (86%) are only “mildly” or “not really” concerned about their potential legal liability in selling movie servers – Kaleidescape’s or otherwise.

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In our quick research, only 5% of respondents say they will stop selling Kaleidescape as a result of the injunction. Last week, Kaleidescape CEO Michael Malcolm issued a notice to dealers that the injunction “may never go into effect,” and even if it does go into effect, “we believe our dealers will not be subject to the injunction because they act independently and outside of Kaleidescape's control.”

Lawsuit 'Clearly Ridiculous'


Regardless of how they will respond to the ongoing legal battle, dealers overwhelmingly agree with Mark Nettleson of Recluse AV in Melbourne, Australia, who calls the latest ruling "clearly ridiculous."

He comments, "Kaleidescape are being punished when they have done so much work to legitimise movie servers. Do the DVD CCA not realise that they are going to do more damage than good if they take down Kaleidescape?"

Another dealer wonders, "Is DVD such a hot category that it needs protection like this?" He [we assume it's a "he"] suggests, "This is a power move by manufacturers of DVD products to "stay relevant" which they are going to ultimately lose anyway."

EJ Fuelner, managing director of HiFi House, Broomall, Penn., writes:

This is a travesty for our industry and for small, innovative companies across all industries.

To think that a 'sanctioning body' can stifle innovation of a product and product category by shutting down a company that is fully compliant and legal to the letter of the law is an embarrassment to both our industry and the greedy Hollywood establishment fat-cats pushing this anti-competitive agenda.

The facts are that Kaleidescape probably did more to promote DVD sales than any of their myriad money-grubbing schemes ever could. And it does so with absolutely NO risk of copying, stealing, or infringing on any Hollywood content or rights.

Hollywood, MPAA and DVD CCA need to wake up. Aren't their bigger fish to fry causing more harm than Kaleidescape could in a million years?

More dealer comments can be found in the survey slideshow.





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Article Topics

News · Product News · Slideshow · Research · Video · Digital Media · Media Servers · Kaleidescape · Dvd Cca · All topics

About the Author

Julie Jacobson, Co-Founder, EH Publishing / Editor-at-large, CE Pro
Julie Jacobson, recipient of the 2014 CEA TechHome Leadership Award, is co-founder of EH Publishing, producer of CE Pro, Electronic House, Commercial Integrator, Security Sales and other leading technology publications. She currently spends most of her time writing for CE Pro in the areas of home automation, security, networked A/V and the business of home systems integration. Julie majored in Economics at the University of Michigan, spent a year abroad at Cambridge University, earned an MBA from the University of Texas at Austin, and has never taken a journalism class in her life. She's a washed-up Ultimate Frisbee player currently residing in Carlsbad, Calif. Follow her on Twitter @juliejacobson. [More by Julie Jacobson]

11 Comments (displayed in order by date/time)

Posted by Chris  on  03/20  at  05:47 PM

One dealer tells CE Pro: “I consulted an attorney who specializes in this area and she told me that my company cannot be sued but my bigger concern was what to tell our clients before they make a purchase.”

Hmm…better find a different attorney and/or gain a better understanding of whether or not your company can be sued.

Posted by CaW  on  03/23  at  08:42 AM

Kaleidescape is fighting a losing battle.  Unless the DMCA is repelled… fair use no longer applies to digital media.  The studios are spending a ton of money to get streaming services to become the norm for delivering content and allowing consumers to legally build their own servers is in direct competition to that model.

Best thing for consumers to do is just do it themselves.  Kaleidescape is going to run out of money trying to fight a battle against deep pockets.

The studios have always wanted a system that had a direct line to your wallet when you watch content.  Instead of paying once unlimited view, you are going to have to pay $5+ everytime you want to enjoy your favorite titles.

Posted by joel degray  on  03/23  at  10:31 AM

You are honestly willing to pay ticket price everytime you step into your own home theater? It’s only a loosing battle if you give up, and from what I have read, most of you are just going to roll over and take it.
How small…

Posted by CaW  on  03/23  at  10:47 AM

I don’t want that system either… but Kaleidescape is not going to win.  It’s not like Kaleidescape is some big name that consumers recognize.  They are a small player catering to the high-end crowd.  Their are much chjeaper options for creating movie servers for those with some tech abilities.  It is not as pretty as a Kaleidescape system, but it does the same function in the end.  Hollywood is going to have a hard time reigning the DIYers in.  Kaleidescape is an easy target to make an example of some company.

The only way they can curb the DIYer is too eliminate physical media all together, but I am sure at some point someone is going to figure out a way of taking a stream and convert it to some file type that can be pirated.  I don’t advocate it, but Hollywood is going through the same pains the record industry went through.  The more they try to dictate how their content is going to be delivered the more illegal ways will become prevalent.

Posted by CaW  on  03/23  at  11:00 AM

My primary source currently are Blu-ray discs.  I am willing to pay up to $25 for BD 3D titles.  I don’t necessarily hate all the streaming options.  Some of them like Vudu deliver very good quality in HD.  I think streaming is a good option to replace the physical disc rental market, but I do think that the content especially HD is overprice for the streaming model considering for most popular titles you can go to the local Red Box and get a BD for $1.50/night when Vudu, Amazon and iTunes want to charge up to $5.99 for a 24 to 48 hour window.  Now if the standard price for HD dropped down to between $3 and $4, I might use the services more for casual renting as long as Blu-ray discs were still available.  As soon as they try to take away physical media, I am not spending any more money on Hollywood entertainment.

Posted by joel degray  on  03/23  at  11:04 AM

So, if it were Apple, might would make right?

Posted by Chris  on  03/23  at  11:26 AM

Isn’t the 25,000 dollar entry fee (Blu-ray vault, server and 3 zone players) a pre-paid ticket price to watch a movie?  That’s just for the system, now you have to add discs at 15-30 dollars each…more ticket price.  Then, when you run out of space…more ticket price. 

The basic server will hold 150 Blu-ray or 900 DVD or a combination thereof.  Many people only watch a movie once so every time they want a new movie, yep another ticket price.  This isn’t even taking into consideration the time/inconvenience of the purchase/import process.

How is getting up with the times rolling over?  Kscape is and always has been fighting a losing battle, and the consumer is paying for that battle with overly inflated products that are merely on the market to prove a point.  People want convenience and they want their media ‘now’.

Posted by CaW  on  03/23  at  11:49 AM

Did you even read what I posted?  I said as long as streaming is NOT the only option for getting content.  If the industry forces streaming as the only way of getting content then I have serious reservations about it.  My only problem currently with the streaming rental services is the overpriced HD content.  With many other sources for HD content now, they can’t gouge consumers on price. 

Although I do have an iPhone4 (my first BTW) and an old iPod nano I am not an Apple fanboy.

For all this stuff we hear about eliminating physical media, I still see books, magazines, CDs, DVDs, Blu-rays and game discs being stocked and sold at the local retailers.  IOW, it is going to be a long time before the consumers interest wanes in physical media.

Posted by joel degray  on  03/23  at  02:32 PM

Entry Price on a Kaleidescape is well below $10K.

Posted by suzee creamcheese  on  03/25  at  06:00 PM

kaleidascape is a fringe product serving a nich market.  At the end of the day who cares.  Well I care.  Kaleidascape is a company.  With employees and they made a model for some high end systems.  A hard drive only has a very limited number of commands.  Whats the purpose of wasting time on destroying a company that wont make a difference to the digital rights movement.  Its a horrific waste of money.  The drma should be poking their fingers into some chinese bung hole instead of a company residing in Canada.  Unbelievable.

Posted by suzee creamcheese  on  03/27  at  12:54 PM

Well the kaleidescape was denied their stay.  Truly ridiculous. The average customer has about 500 disks that they load onto their servers.  These arent the people that should be shot.  How come this planet is engaging in some seriously stupid activity.  Is it something we are drinking or in our crops?  Totally insane.

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