Unlimited Vacation: Blessing or Curse?
I don’t usually get into discussing workplace stuff because it’s relatively boring. However, Unlimited Vacation is one perk that is really, really needs discussion. Let’s explore.
Perks and Jobs
I get it. I understand why companies offer perks. They have to offer perks for talent acquisition reasons such as:
- Companies must keep up with competition — If a company doesn’t keep up with what other companies are offering, they lose talent during recruiting
- Companies must offer perks that seem inviting — Again, this is a talent acquisition feather-in-the-cap sort of thing. It’s something the HR team can cross off the checklist of things to entice candidates
- Companies must offer perks that are inexpensive — Companies don’t want to give away the farm to offer a specific perk
What kinds of perks can you typically find in tech companies? You find perks like the following:
- A stocked kitchen — This includes soda, coffee, tea, milk / cream and then for food, this can include fruit, nuts, chips and cereal
- Bagel Friday — This perk includes donuts and bagels on Friday
- Lunches — Some companies offer subsidized and/or free lunches one or several days of the week
Those are all food related, however, other perks include:
- Day Care or reimbursement
- Commute expenses
- Free parking
- Tuition Reimbursement (job related)
- Training / certifications (job related)
- Paid sick days
- Paid vacation
- 401k
- ESPP (if public company)
- Company holidays
These are the HR type of benefits that many companies offer. Many of these have a real dollar based cost to the business. However, there’s a new perk that seems great, but really isn’t for several reasons. That perk is ….
Unlimited Vacation
This ‘perk’ (and I use this term loosely) is now becoming popular in businesses. Why? Because it doesn’t cost the business anything to implement and may actually save the company some money (or so companies think). On paper, the idea seems enticing, in reality it’s a pointless benefit to employees and actually encourages more employees to take vacation which may hinder productivity and deadlines.
Why is this benefit so bad? This benefit is pointless because there is no way any employee can actually use it in its unlimited capacity. If you were to try, you’d be fired and walked from the building. I don’t know of any business that doesn’t require approval for vacation from a manager. Even if you could request excessive amounts of vacation, it’s unlikely your manager would approve it. But, within reason, you can request time off and here’s where it begins to break down for employers.
The only people who can even use this benefit as unlimited are those who are in management positions, who don’t have to report their own vacation usage. In other words, subordinates won’t be able to use it, but managers will (and they will use it frequently).
This is one of those perks that will be abused by those in charge. Those not in charge will be penalized whenever they attempt to use it in any unlimited way.
Vacation Time
In general, asking for vacation time off is tricky. It must always be coordinated with ongoing projects, team commitments (i.e., on-call), other team member time off and holidays and requires manager approval. Even people who end up out sick can interrupt or force rescheduling of vacation time off.
Don’t be tricked by this perk, it doesn’t make vacation time off any more accessible and, in fact it is entirely designed entirely for …
Ripping off Employees
There are two fundamental problems with Unlimited Vacation. The first problem is that the benefit (ahem) is being implemented as a cost saving measure to rip off employees when they leave a company (and is designed to appear to save the company many thousands of dollars). This issue really only affects long term employees. You know, the ones who have devoted several years to your business. But now, you’re going to give them the finger on the way out the door? Smart.
With standard paid time off (PTO), you are allotted a certain amount of hours that accrue over time. Let’s say for every year of service that you complete, you will accrue up to 1 week off (with a maximum of 2 weeks that can be held in total). After 2 years of service, you’ll have those 2 weeks accrued, assuming you never take time off. If you leave the company after 2 years without taking any vacation, you’ll be paid out your accrued PTO balance for the 2 weeks that you didn’t take. That’s two weeks worth of salary you’ll receive upon exit, in addition to any other salary owed.
With Unlimited Vacation, that vacation payday goes away. Since it’s now unlimited, there’s no more time accrued and no more PTO to pay out for any employee. The only thing that payroll needs to keep track of is how much time you’ve used solely for timekeeping purposes. When you exit a company offering Unlimited Vacation, you won’t receive any vacation pay because they are no longer accruing any. This means that when you were formerly paid 2 weeks of PTO, with Unlimited Vacation you now get $0.
Unlimited Vacation is then an HR cost-cutting measure entirely designed to screw exiting long term employees over so companies no longer need to make any vacation payouts.
Here’s where the second problem begins. As employees realize this screw-over job and to make up for the lack of accrued time, this means employees will need to take as much vacation as is allowed without getting fired in the process. Since you can’t accrue, you now need to use.
Accrued PTO vs Unlimited Vacation
Businesses don’t seem to understand the ramifications of this perk on its workforce. The first ramification is that employees with accrued PTO no longer get the exit vacation payday. This is significant when exiting your employer and moving on. But, this only occurs on a termination event. Employees should remain cognizant of this event, but even more employers should remain cognizant of how this will change how vacation is used. As an employer, it means you need to understand how to retain your workforce better.
Here’s the second problem in a nutshell. PTO encourages employees to stockpile their vacation and rarely take it. Up to 50% of the workforce does this. However, Unlimited Vacation encourages employees to take as much vacation as they can legitimately get away with.
With PTO, employees might work and work and work with little time off. With UV, more employees will take more time off, thus working less. This is something that HR and management will need to understand about this benefit. If the point is to get people to take more time off, then UV is the answer. If you’re trying to encourage people to stay at their desks and work, PTO is the answer… but has the end payout.
It really all depends on how you want your staff to work. If you want people at their desks not taking time off, then PTO is your answer. If you want people constantly taking time off, then UV is your answer. Sure, UV saves you on the exit payments, but at the cost of people taking more time off throughout the year. It does one more thing.
The up to 50% of employees who rarely take time off will change their work ethic to include significantly more time off. Since they know can no longer stockpile and get that payday when leaving, they will now be encouraged to take time off to make up for that loss of money. This means that a workforce that you relied on to work excessive hours to make ends meet will no longer continue that trend in your business.
If you think that people will continue the same type of vacation behaviors they used with PTO when on UV, you’re mistaken. People will use what they are owed. If they are encouraged to take time off, they will whenever possible. This means that for the folks who rarely (if ever) took PTO days will now begin scheduling more time off throughout the year. That’s not because it’s unlimited, but because they understand that they no longer get the payout at the end. This compromise ensures they get the equivalent benefit and that means scheduling and taking time off. There’s entirely nothing the HR team can do about this change in vacation usage behavior when on the Unlimited Vacation plan.
It’s a use-it-or-lose it situation. If you never take vacation with PTO, you can justify it with the payout at the end. If you never take vacation with UV, not only do you get no time off, you get no payout at the end. It’s simple math. No payout at the end means using more vacation time to get the equivalent benefit. Employees aren’t stupid and they will realize this paradigm shift and compensate accordingly.
This outcome will happen. You can even watch your employees behaviors after you convert from a PTO to UV system. I guarantee, your employees will notice, understand and modify their vacation schedule accordingly. This may impact your business, so caveat emptor.
Good or Bad?
That’s for each company to decide. More employees taking more vacation is good for the employee and their morale. But, it may negatively impact the productivity of your business. With PTO, people not taking vacation means more productivity. With UV and more vacation time off, this likely means less productivity. It might mean a happier and less stressed workforce, but it likely also means less work getting done.
I’m not saying any individual will take excessive time off. No, I’m not saying that at all. That’s simply not possible. What I am saying is that if 40-50% of your workforce never takes time off under a PTO plan, you will likely find that number reduces to less than 10% of your workforce not taking time off with a UV system. That’s a significant amount more people taking time off throughout the year than on a PTO system.
If you delude yourself into thinking employees who don’t take vacation time off will continue a PTO trend on a UV plan, your HR team is very much mistaken. I can also guarantee that if managers deny vacation requests to keep employees at their desks, this too will backfire and your talent will leave. This will become a catch-22 problem in your business.
As an employer, you spend a lot of money hiring talent. You also spend a lot of money holding onto that talent. Why jeopardize all of that with a policy like UV that won’t really do what what you hoped it would? On paper, it seems like a great cost saving policy. In practicality, it will likely backfire on your company’s productivity efforts and cost you more money in the end, but not for the reasons you think.
Conversion Process
You may find that if you are converting from some other vacation system to unlimited that people do continue their traditional habits. However, that will change over time both as turnover happens and as people realize their loss of PTO payout. Once employees wake up to the realities of the new system, the amount of employees requesting and taking vacation will increase.
A UV policy will make it more difficult on the managers to juggle vacation timing, fairness and who can take what when. This will increase manager load by taking them away from managing projects and deadlines to managing the minutiae of juggling even more staff vacations.
Hourly Employees versus Salary Employees
This type of perk works best in salaried environments. With hourly employees, trying to offer a perk like Unlimited Vacation won’t really work well. This is particularly true of employees working in a call center or similar type environments. With salaried tech workers, this kind of benefit may work for you with the caveats that have been thus far described.
Startup or Established Company
If you run a startup, you should stay away from the Unlimited Vacation policy entirely. It won’t do your business any favors. Sure, it’s more cost effective, but only when long term employees leave. If you’re a startup, you won’t have long term employees to worry about for a while. Your duty is to entice your talent to stay, not leave. If you have a problem with a revolving door of staff, then you have a much bigger problem than a benefit like Unlimited Vacation. The problem for a startup is that a UV plan encourages more people to take vacation more often rather than stockpiling it for use later. Again, more workload for a manager to juggle vacation schedules rather than handling projects and deadlines.
In a startup, a UV policy means more people taking time off. This isn’t what you want when you need all hands on deck to keep the business afloat. You want most people at their desks and readily available at all times. When people take vacation, they expect to be cut off from their job including no email, no pager and no contact. And, rightly it should be. If you’re on vacation, you’re on vacation. PTO plans encourage staff to accrue now and take time off much, much later, perhaps years later. With a UV plan, this encourages more people to take vacation regularly. Not exactly what you need in a startup. PTO works for a startup because employees stockpile and then once the business is off the ground years later, they will then take their vacations. This is why PTOs are actually better for a startup than a perk like UV.
If your business is established with 500 or more employees, then implementing an Unlimited Vacation policy might be worthwhile depending. With larger numbers of staff, there’s more opportunity for someone to cover an employee who’s out. This means if your 40%-50% staff who are stockpiling decide to start taking vacation in increasing numbers, you can withstand this change in your workforce behavior.
It’s up to you to decide how to operate your business, but PTO vs UV is one perk you should thoroughly investigate and then weigh all pros and cons before implementing it. Don’t do it simply because it might (or might not) save you some cash when employees exit. Do it because it’s the right plan for your business’s current operating goals.
A history of the DIVX DVD
In 1998 (almost 20 years ago), a new DVD rental format arrived named DIVX (aka Digital Video Express). It purported to be a DVD rental format that had no late fees and the media didn’t need to be returned… at least those were the benefits purported to the consumer. What they didn’t tell you was that you would need to buy a brand new expensive DVD player to play them. Let’s explore.
DIVX versus DivX
To get this confusion cleared up quickly, DIVX was a brand name assigned to a new DVD rental standard introduced by Circuit City and the entertainment law firm Ziffren, Brittenham, Branca and Fischer in 1998. However, it’s not entirely clear what problem Circuit City was trying to solve by introducing the DIVX rental format when DVD was already useful enough for rentals.
The DIVX brand name, introduced by Circuit City, bears no relationship to the DivX or Xvid video encoding standards. Even though there is no relationship by Circuit City to the DivX encoder, there is a slight reverse relationship from the DivX encoder to the DIVX brand. In fact, the original name of the DivX encoder was actually DivX ;-)
Yes, this encoder name included the winking smiley. This smiley was actually a nod (and sarcasm) towards Circuit City’s then soon-to-be-defunct DIVX rental standard. Here’s what the DivX Wikipedia article says of the early days of the video encoder named DivX ;-).
DivX ;-) (not DivX) 3.11 Alpha and later 3.xx versions refers to a hacked version of the Microsoft MPEG-4 Version 3 video codec (not to be confused with MPEG-4 Part 3) from Windows Media Tools 4 codecs. The video codec, which was actually not MPEG-4 compliant, was extracted around 1998 by French hacker Jerome Rota (also known as Gej) at Montpellier.
So then, what does DivX ;-) have to do with the DIVX DVD format? Not much other than DivX ;-) making a tongue-in-cheek poke at Circuit City’s DIVX rental format. Hopefully, this clears up any confusion around this convoluted naming.
DIVX as a rental standard
The primary impetus to build the new DIVX rental standard by Circuit City was probably brand recognition. At the time, Circuit City was considered the second largest electronics retailer behind Best Buy. The Circuit City management was obviously willing to do anything to become the number one electronics retailer, including dreaming up technology ideas that didn’t need to be built. Meaning that by 1998, Blockbuster had the rental market sewn up. However, Circuit City sought to disrupt that by trying to create a new standard that not only simultaneously upset Blockbuster’s cart, but introduced a new format that would bring more recognition to the Circuit City brand (and, of course, generate more hardware and rental sales). As a side note, Circuit City was also the second largest appliance retailer behind Sears at that time.
Here’s the Circuit City DIVX promo video (skip to 0:17 to begin an unrealistic family scenario, press 1 to skip the intro entirely or jump to 4:19 to begin use case demonstration). Don’t feel obligated to watch the whole thing.
Now, let’s watch this training video to better understand how then CEO Richard L. Sharp saw DIVX’s future within Circuit City. Pay close attention to his statements during the opening segments of this video. Again, don’t feel obligated to watch the whole thing.
Unfortunately, Circuit City’s management goals were way too ambitious and overconfident. They also dropped into a rabbit hole with this DIVX venture that took them away from their core retail business and caused them to spend millions to create and support a format that didn’t live up to the hype. In fact, it might even be considered that failure of the DIVX format ushered in the downward slide of Circuit City into oblivion. While Circuit City was a reasonable electronics retailer, they didn’t have any presence in the video rental market. When they introduced DIVX, the assumed strategy was to add $4-5 rentals and boost DVD player sales in the Circuit City and Good Guys stores. The management team thought that this rental business would somehow take them to the next level. If only they had adopted standard DVD rentals instead.
As shown in the demo, DIVX boasted a 48 hour rental period with no need to return the disc when the rental period ended. However, to use DIVX, you had to invest in a brand new type of DVD player that also supported the DIVX format. Tada! Here’s the catch. This is also where Circuit City comes into the picture. You’d have to run on over to your local Circuit City (or one of several other retailers owned by CC, like Good Guys) to buy one of these newfangled DIVX DVD player doodads. A doodad that might cost you $100-150 more than a DVD player without DIVX. At least, this is what the management at Circuit City hoped you would do.
This idea for introducing this new format was a huge misfire for Circuit City. In addition to the picture quality problems described just below, the DIVX player contained a modem that required the player to dial-up and register itself before you could play any DIVX discs. It also apparently dialed-up twice a day to register any new purchases and download advertisements. This modem required a physical telephone line plugged into the unit to dial home. This then authorized not only your player, but supplied the player with the necessary information to authorize playback of a rental disc you recently picked up. This concept all worked reasonably well, except for the fact that several privacy groups felt that this dial home feature meant that Circuit City (or whomever) could keep tabs on your viewing habits. Little did we know then exactly how much spying would become commonplace with sites like Google and Facebook. Anyway, that privacy concern didn’t help boost efforts to sell DIVX into main stream. Of course, it wasn’t the only problem.
Poor Movie Quality
The actual DIVX DVDs themselves failed to contain the more advanced features found on a standard DVD, such as 16:9 anamorphic widescreen needed to fill a large flat panel. DIVX movie discs also failed to contain alternate audio commentary and extra features commonly found on standard DVDs. Instead, these DIVX DVDs simply contained 4:3 cropped pan and scan versions of the film… a subpar version. This was a huge misfire for the format. When you can get a better looking film on standard DVD, why would you rent the crappier DIVX format for $5? Yet more consumer dilemma.
Consumer Misunderstanding
Because a DIVX DVD appears to be a standard DVD (it looks the same), some consumers didn’t understand that they needed to buy a new player to play the DIVX media. Instead, they bought the DIVX disc, took it home and inserted it into their regular DVD players only to find that it failed to work. They would then find that they couldn’t return the disc because it was open. The misunderstanding of this new format caused grief among would-be consumers and left a sour taste for this format. This problem only served to fracture the DVD market. Worse, who’s willing to buy a brand new and expensive DIVX player just to recover a $5 loss? Not many. This problem didn’t serve Circuit City well.
It seems that Circuit City’s commercials likely didn’t much help clear this misunderstanding. Let’s watch a Circuit City commercial from this era with that same guy from the Demo reel:
There were also a number of commercials released during 1998 and 1999 that failed to mention DIVX at all… like the following commercial from 1998. You’d think a company like Circuit City spending millions to try and force adoption of their new brainchild would advertise the DIVX format on every commercial, if even only a mention at the very end. Nope. You can’t sell something if you don’t market it.
Landfill Problems
One of the touted benefits to consumers would be throw-away discs. You’d spend $4-5 for each disc, but you didn’t need to return any discs after the 48 hour watching period was over. This also meant no late fees. You simply tossed the disc into the garbage can. This idea was to hit Blockbuster where it hurt. Blockbuster was the king of late fees at the time. A few months after introduction of this idea, Circuit City stores set up recycle containers to entice users to recycle used DIVX discs at Circuit City stores instead of throwing them into the trash. Not sure how well that worked. I don’t think this wasteful idea went over well with consumers, particularly after AOL’s constant barrage of wasted CDs ended up everywhere at the time.
Licensing Issues and Retailers
As a result of Circuit City’s involvement with DIVX (along with a legal team), for other retailers to sell DIVX compatible players required paying a licensing fee to Circuit City. As a result of the licensing fees, Best Buy and other retailers shunned the players choosing to avoid paying those fees. It’s no wonder, either. Why would you ever agree to pay another retailer money for the privilege of selling that retailer’s product in your store? You wouldn’t. This was a completely foreseeable miscalculation by the Circuit City management team.
This meant that Circuit City and other stores owned by Circuit City ended up the sole sellers of these players (and the DIVX format). Without wider support via other retailers, this format really had no hope of surviving. Circuit City should have dropped the idea for licensing fees quickly just to get better entrenchment for the format. It’s not like it wasn’t already costing Circuit City a mint to keep this format alive. Stupid is as stupid does.
Movie Studio Support
On the plus side for the format, because of what studios considered weak protection technologies associated with standard DVD (CSS), many studios jumped on board with the DIVX’s CSS + Triple DES protection standard. This boosted the initial ~20 titles when it arrived in summer of 1998 to well over 400 titles by early 1999. Some early studio adopters were 20th Century Fox, Disney and Dreamworks. Wikipedia says:
The initial trial of the DIVX format was run in the San Francisco and Richmond, California, areas starting on June 8, 1998. Initially only a single Zenith player was available, along with 19 titles. A nationwide rollout began three months later, on September 25, with players and 150 titles available in 190 stores. In total 87,000 players were sold during 1998, with 535,000 discs across 300 titles being sold.
The studios felt that the DIVX format offered a more solid encryption technique to protect their movie content. I’m sure they did. Due to the arcane structure needed to authorize the movie rental, it meant jumping through hoops just to get your movie to play. The movie studios love making consumers jump through hoops to play their content.
This quick studio adoption rate was a bone of contention because some studios began exclusively releasing their films onto the DIVX format instead of DVD. This issue caused further problems for the format and more consumer backlash erupted and threatened to fracture the industry into a new format war.
On the other hand, Sony and Warner Home Video, which at the time apparently comprised up to 40% of the movie rental market, refused to release their movies on DIVX. The primary reason for this refusal was that both of these companies had a stake in the success of standard DVD format. Supporting the DIVX standard would be a conflict of interest.
By spring of 1999, the number of titles had increased to over 410. Little did Circuit City or the consumers realize the end was near for DIVX. Due to mounting pressures and costs, Circuit City didn’t realize how much of an albatross that DIVX would become. There was just no way Circuit City could go this new format alone without wider industry investment and consumer acceptance.
Overconfidence
Circuit City’s biggest mistake was its heavily miscalculated financial ability to support this newly created format. After all, Circuit City is a retailer, not a tech innovator. Driving a new tech format through a retail company already has many hurdles and reputational issues to overcome. Circuit City was also too confident in its ability to entice other retailers to make this format succeed. Those retailers didn’t bite. Even in 1998 when this format came about, Internet RFCs were still a thing. Circuit City entirely avoided the RFC and Whitepaper approach that had become commonplace to announce new technologies. Instead, they launched this format without much fanfare hoping that the party train would show up. It didn’t.
Because of all of the above and including backlash from consumers and lack of retailer support, Circuit City way overestimated its ability to get this format adopted… and why would anyone want to adopt this format? With licensing fees, there was no incentive for non-affiliated retailers to adopt some other retailer’s idea as practical or realistic… especially when the standard DVD already provided a better rental and sales format.
Without the necessary support by consumers and other retailers alike, the format was doomed from the go. By the summer of 1999 (just 1 year after it launched), the format officially died on June 16th, 1999 (almost exactly year since it had launched). However, due to format commitments to existing consumers, it would limp this format along until 2001. Wikipedia writes of the DIVX demise:
The format was discontinued on June 16, 1999, because of the costs of introducing the format, as well as its very limited acceptance by the general public. It was shot down by Blockbuster Video stores not wanting to carry it. Also Circuit City announced a $114 million after-tax loss, and Variety estimated the total loss on the scheme was around $337 million. Over the next two years the DIVX system was phased out. Customers could still view all their DIVX discs and were given a $100 refund for every player that was purchased before June 16, 1999. All discs that were unsold at the end of the summer of 1999 were destroyed. The program officially cut off access to accounts on July 7, 2001.
Retail, DRM and Tech Innovation Don’t Mix
Due to the conflict of interest between the Circuit City chain, other retailers, licensing and this new format, there was ultimately no way this idea could survive. Circuit City made so many missteps along the way to adoption, the format was doomed from the outset. Even the management should have been able to foresee this event. If Circuit City had spun off the DIVX idea into a separate holding company that Circuit City had founded and enticed other retailers in (to avoid licensing requirements), the standard might have had a chance of surviving. While DRM was a relatively new thing in 1999, consumers could already begin to see how it could become a problem in the way they viewed content with DIVX (and other formats).
The Future of the Movies at Home
Even if DIVX had managed to make the slightest dent in the rental market (hint: it didn’t), the future of Internet streaming movies would have still seen to its demise. Even in 1997, a year before DIVX came to exist, Reed Hastings was in the process of setting up Netflix. By 2002, Redbox led the downfall of Blockbuster through it’s DVD rental kiosks. Some people blame Netflix on the death of Blockbuster, but it is firmly the self-service and low cost nature of the Redbox kiosk that ushered Blockbuster out the door. Yes, Netflix started Blockbuster’s problems, Redbox nailed Blockbuster’s doors shut. Blockbuster simply couldn’t compete with $1 DVD rentals at a time when Blockbuster was still charging sometimes $5 per disc. Netflix chose a per month plan fee with limits and was (and still is) charging well more than $1 per disc that Redbox adopted. In fact, Redbox is still the best deal going for both DVD and Blu-ray rentals, even though their prices have somewhat increased.
Getting back to DIVX, Netflix’s movie streaming, along side Redbox, Amazon, Hulu, Vudu, Crackle, YouTube, YouTube Red and others would have killed the DIVX DVD format anyway. Ultimately, DIVX didn’t have a place in the market or a problem to solve. It was already behind the times when it was introduced by a company that didn’t have the capital to invest in the longevity of such a format.
In short, Circuit City bit off well more than they could chew with DIVX. Today, these DIVX players are essentially worthless for playing DIVX format discs. Because the players could play standard DVD format discs also, this is their only redeeming point. There’s no way to authorize the players or discs as the service has been dismantled. If you have any DIVX discs in your collection, they can no longer be played as there’s no way to authorize the players or discs.
Even today, DVD is so behind the times when compared with UltraHD 4K, even that would have killed DIVX in short order. Ultimately, even if DIVX had managed to survive longer than 1 year on the market, it would have eventually died because of movie streaming services. There was just no way for DIVX to compete with that. However, it died long before that happened simply because of Circuit City.
Final Death of DIVX
The DIVX format supported limited viewings as well as unlimited viewings (DIVX Silver). Limited viewings of a disc were based on your rental period. Unlimited viewings cost more and was known as DIVX Silver. Why this is important is that the players still needed to dial home to verify the viewing of each play of the movie. After June 30, 2001, the DIVX service was shuttered including the dial home feature. For those who had purchased into DIVX Silver for some of their films, they could request a refund before the service was shuttered. This meant that any further viewings of DIVX movies after June 30, 2001 were impossible, rendering the DIVX format and the DIVX portion of the players useless.
The LA Times wrote of DVIX’s failure on June 17, 1999:
But the venture never connected with consumers and represented a major miscalculation of both the market and the video industry by the nation’s second-largest consumer electronics retailer.
The failure of Divx is an embarrassment for Richard Sharp, chief executive of Circuit City Stores. Sharp fought an uphill battle to promote the venture, which became a significant drag on Circuit City’s bottom line.
Sharp declined to comment Wednesday, but the market cheered the decision to junk Divx. Circuit City’s stock closed at $90.38, up $8.38 on the New York Stock Exchange.
A Cautionary Tale
This whole DIVX situation serves as a cautionary tale for early adopters of technology when produced by a company that’s never been in that business. This is particularly a problem considering the DIVX players required so much constant hand-holding with home base. If that home base connection was unavailable (i.e., Circuit City closed the service), the movies would stop working, which is exactly what happened in the end. Why would you, as a consumer, want to buy into a media format that’s so heavily dependent on a third party’s continued success? The other problem is that the players chose to use a phone line instead of phoning home over the Internet. Of course, had the format lived, it would have been relatively trivial to introduce new players that supported Internet always-on capabilities.
The real cautionary tale here is that consumers should never early adopt into entertainment content that relies on phoning home to authorize each viewing. One could argue that Netflix is a form of this, but I’d argue it isn’t. When you use Netflix, the movie is either there or it isn’t. There’s no pulling-the-rug-out-from-under tactics. Meaning, you leave your media sitting for a few months only to find that it will no longer play. Standard DVD movies have never required authorization per play. However, Blu-ray technology has instituted a somewhat similar phone home approach, but so far this hasn’t been an issue. However, should Sony die or the servers cease to exist that enables a specific Blu-ray to function, we could find that Blu-rays become coasters at some point in the future like the DIVX media.
If you happen to own a DIVX player and any DIVX media, know that it’s dead and it’s not coming back. There is really no way to revive it. The decryption keys and the authorization service that allowed each movie to work have long been dismantled. As far as I know, there has never been anyone willing to reverse engineer this phone home service to allow old DIVX media to play. Though, why bother? The movies were mostly of inferior quality. Other than as a novelty of showing a functional DIVX movie off on a YouTube electronics history channel or possibly for nostalgia, there’s no other legitimate reasons to want to watch DIVX movies today.
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3D TV: Flat cutouts no more!
So, I’ve recently gotten interested in 3D technology. Well, not recently exactly, 3D technologies have always fascinated me even back in the blue-red glasses days. However, since there are new technologies that better take advantage of 3D imagery, I’ve recently taken an interest again. My interest was additionally sparked by the purchase of a Nintendo 3DS. With the 3DS, you don’t need glasses as the technology uses small louvers to block out the image to each eye. This is similar to lenticular technologies, but it doesn’t use prisms for this. Instead, small louvers block light to each eye. Not to get into too many technical details, the technology works reasonably well, but requires viewing the screen at a very specific angle or the effect breaks down. For portable gaming, it works ok, but because of the very specific viewing angle, it breaks down further when the action in the game gets heated and you start moving the unit around. So, I find that I’m constantly shifting the unit to get it back into the proper position which is, of course, very distracting when you’re trying to concentrate on the game itself.
3D Gaming
On the other hand, I’ve found that with the Nintendo 3DS, the games appear truly 3D. That is, the objects in the 3D space appear geometrically correct. Boxes appear square. Spheres appear round. Characters appear to have the proper volumes and shapes and move around in the space properly (depth perception wise). All appears to work well with 3D games. In fact, the marriage of 3D technology works very well with 3D games. Although, because of the specific viewing angle, the jury is still out whether it actually enhances the game play enough to justify it. However, since you can turn it off or adjust 3D effect to be stronger or weaker, you can do some things to reduce the specific viewing angle problem.
3D Live Action and Films
On the other hand, I’ve tried viewing 3D shorts filmed with actual cameras. For whatever reason, the whole filmed 3D technology part doesn’t work at all. I’ve come to realize that while the 3D gaming calculates the vectors exactly in space, with a camera you’re capturing two 2D images only slightly apart. So, you’re not really sampling enough points in space, but just marrying two flat images taken a specified distance. As a result, this 3D doesn’t truly appear to be 3D. In fact, what I find is that this type of filmed 3D ends up looking like flat parallax planes moving in space. That is, people and objects end up looking like flat cardboard cutouts. These cutouts appear to be placed in space at a specified distance from the camera. It kind of reminds me of a moving shadowbox. I don’t know why this is, but it makes filmed 3D quite less than impressive and appears fake and unnatural.
At first, I thought this to be a problem with the size of the 3DS screen. In fact, I visited Best Buy and viewed a 3D film on both a large Samsung and Sony monitor. To my surprise, the filmed action still appeared as flat cutouts in space. I believe this is the reason why 3D film is failing (and will continue to fail) with the general public. Flat cutouts that move in parallax through perceived space just doesn’t cut it. We don’t perceive 3D in this way. We perceive 3D in full 3D, not as flat cutouts. For this reason, this triggers an Uncanny Valley response from many people. Basically, it appears just fake enough that we dismiss it as being slightly off and are, in many cases, repulsed or, in some cases, physically sickened (headaches, nausea, etc).
Filmed 3D translated to 3D vector
To resolve this flat cutout problem, film producers will need to add an extra step in their film process to make 3D films actually appear 3D when using 3D glasses. Instead of just filming two flat images and combining them, the entire filming and post processing step needs to be reworked. The 2D images will need to be mapped onto a 3D surface in a computer. Then, these 3D environments are then ‘re-filmed’ into left and right information from the computer’s vector information. Basically, the film will be turned into 3D models and filmed as a 3D animation within the computer. This will effectively turn the film into a 3D vector video game cinematic. Once mapped into a computer 3D space, this should immediately resolve the flat cutout problem as now the scene is described by points in space and can then be captured properly, much the way the video game works. So, the characters and objects now appear to have volume along with depth in space. There will need to be some care taken for the conversion from 2D to 3D as it could look bad if done wrong. But, done correctly, this will completely enhance the film’s 3D experience and reduce the Uncanny Valley problem. It might even resolve some of the issues causing people to get sick.
In fact, it might even be better to store the film into a format that can be replayed by the computer using live 3D vector information rather than baking the computer’s 3D information down to 2D flat frames to be reassembled later. Using film today is a bit obsolete anyway. Since we now have powerful computers, we can do much of this in real-time today. So, replaying 3D vector information overlaid with live motion filmed information should be possible. Again, it has the possibility of looking really bad if done incorrectly. So, care must be taken to do this properly.
Rethinking Film
Clearly, to create a 3D film properly, as a filmmaker you’ll need to film the entire scene with not just 2 cameras, but at least 6-8 either in a full 360 degree rotation or at least 180 degrees. You’ll need this much information to have the computer translate to a believable model on the computer. A model that can be rotated around using cameras placed in this 3D space so it can be ‘re-filmed’ properly. Once the original filmed information is placed onto the extruded 3D surface and the film is then animated onto these surfaces, the 3D will come alive and will really appear to occupy space. So, when translated to a 3D version of the film, it no longer appears like flat cutouts and now appears to have true 3D volumes.
In fact, it would be best to have a computer translate the scene you’re filming into 3D information as you are filming. This way, you have the vector information from the actual live scene rather than trying to extrapolate this 3D information from 6-8 cameras of information later. Extrapolation introduces errors that can be substantially reduced by getting the vector information from the scene directly.
Of course, this isn’t without cost because now you need more cameras and a filming computer to get the images to translate the filmed scene into a 3D scene in the computer. Additionally, this adds the processing work to convert the film into a 3D surface in the computer and then basically recreate the film a second time with the extruded 3D surfaces and cameras within the 3D environment. But, a properly created end result will speak for itself and end the flat cutout problem.
When thinking about 3D, we really must think truly in 3D, not just as flat images combined to create stereo. Clearly, the eyes aren’t tricked that easily and more information is necessary to avoid the flat cutout problem.
Random Thoughts - Randocity! 
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