Kaleidescape Loses Legal Appeal - Might Be Forced To Stop Making Products

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Kaliedescape, a leading maker of ultra-high-end standard definition video servers, today in a surprising decision lost an appeal on its ability or rights to rip DVD-Video material onto their well regarded videophile movie servers. The company had won a case in March 1997 based around the "scrambled CSS data" used on their servers. Today that decision was overturned, thus forcing the company to take matters to the California Supreme Court. In a worst case scenario, Kaliedescape could be forced to stop making their high-dollar video servers. Other decisions could potentially affect how easily the company will be able to add Blu-ray disc material for high definition content.

Looking at Kaliedescape's rise to power shows a company that was able to exploit the weaknesses of Media Center PCs with a closed ended system that featured a stunningly beautiful and easy to use operating system and the type of no-fuss no-muss installations that installers love to sell. Dealers loved the "easy get" big ticket sale, especially when the housing market was booming and clients loved their Apple-like access to movies in many if not every room of the house. The result was that Kaliedescape developed a very robust dealer network very quickly and holds that position today.

But things are not all rosy for Kaliedescape today. Putting their legal issues aside - Apple's Apple TV product offers HD content (albeit at 720p) via a simple, wireless connection that quickly and easily networks with a family's computer for thousands upon thousands of dollars less than Kaliedescape's least expensive system. Microsoft's Xbox 360 is reported to be offering 1080p HD downloads coming this fall from its popular and very affordable game console. More and more cable and satellite providers are offering pay-per-view and on-demand HD video content at 1080i and 1080p resolutions.

Kaliedescape deserves some credit for fighting for the rights of all of us to rip DVDs onto our devices; however once they get past their legal issues - the company needs to be prepared to be more in the selling software and download business than the selling $8,000 plus standard definition video servers, as customers can get a lot of the Kaliedescape experience today for a fraction of the price from companies that are household names.


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