LIVEdigitally

I try to keep the “plug Jeremy” posts to a minimum, but it’s my blog, and I can do what I want, right?

I’ve been invited to participate in Jeff Pulver’s exciting new event at CES 2009, called “Social Media Jungle.”  During the daylong session, a variety of very accomplished speakers will present on a variety of topics pertaining to social media and trends for 2009. In my case I’ll try to “bridge the gap” to address the CE industry.

Jeff’s description of the event:

“The Social Media Jungle at the 2009 International CES brings to light how the advent of social media is changing the way we work and live. Sessions include state-of-the-industry updates and a candid look at how social media disrupts the workplace by empowering companies to lower burn rates. Plus, learn how companies can motivate consumers through social media to drive product sales without increasing costs.”

Here’s the agenda:

8:30 - 9:00: Real-Time Social Networking
9:00 - 9:20: Welcome to the Jungle, Jeff Pulver
9:20 - 9:40: Navigating the Social Media Seas, Chris Brogan
9:40 - 10:00 - Industry Perspective & Update
10:00 - 10:20 - Industry Perspective & Update
10:20 - 10:40 - What to Look for in Social Media Platforms in 2009, Robert Scoble
10:40 - 11:00 - Return on Social Media Investment, Ben Grossman
11:00 - 11:20 - [ break ]
11:20 - 11:40 - Learn, Baby, Learn: Turn Your Social Media Addiction Into An Asset!, Jeffrey Sass
11:40 - 12:00 - Social Media Principles, Chris Heuer
12:00 - 12:20 - Naked PR: What Marketers Need to Know in the Age of Social Media, Susan Etlinger
12:30 - 2:00 [Lunch Break]
2:00 - 2:30 - How Reporters Have to Think of Themselves as an Entrepreneur and a Publisher Using their Company as a Platform, Daniel Honigman
2:30 - 2:50 - New Media Strategy in Challenging Times: Conquering the 3 Screen World: Dean Landsman and Howard Greenstein
2:50 - 3:10 - How Small Business can use Inbound Marketing/Social Media to Help Increase Their Business, Justin Levy
3:10 - 3:30 - The Convergence of CE and Social Media, Jeremy Toeman
3:30 - 3:50 - Managing Your Reputation While Being Genuine and Authentic Online, Dave Taylor
3:50 - 4:10 - How to Botch an Agency Briefing (No Matter How Cool You Think Your Product Is), David Berkowitz
4:10 - 4:20 [break]
4:20 - 4:40 - How Trust Drives Transactions During a Down Economy, Eric Weaver
4:40 - 5:00 - Leveraging Social Media for the Social Good, Rebecca Bollwitt
5:00 - 5:20 - How New Media is Changing the World, Brian Reich
5:20 - 5:40 - Transforming Unemployed BabyBoomers via Social Media, Carlos Hernandez
5:40 - 5:45 - Wrap up

I’ll be talking about how “social media” is infiltrating consumer electronics devices.  There are already a handful of products on the market or coming to the market with built-in social services.  The future of devices is clearly all around connectivity, and the interesting phase will be understanding how we get from today (mostly disconnected islands of functionality) to tomorrow (intelligent data sharing between devices and Internet services).

Registration costs: US$ 295 / 395 (Social Media Jungle page on the CES website and Facebook page).

My insufficiently geeky readers probably won’t get the 42 reference, so I’ll assume you read this reference before continuing. Of all the convergence I’ve seen that bridge gadgets with Web services, I think the implementation of Pandora’s free Internet radio service onto the Sonos music system is probably the best.   The single “snag” in the entire system is that you actually need to (1) have a Pandora account, and (2) own a Sonos.  If you don’t, I recommend correcting the situation immediately.

In a nutshell, Pandora works by building “radio stations” based on artists and/or tracks you like.  If you pick Frank Sinatra, boom, you have a Frank Sinatra Radio Station.  Add other artists, and create your Smooth Crooners Radio Station.  If you don’t get it yet, well, go to Pandora and set up an account, it is free after all.  The super delicious part of the story is how well they integrated with Sonos.

On your Sonos, you simply need to add your Pandora username/password, then you have access to virtually all Pandora features.  Key to it is how easy it is to use on the Sonos, including bookmarking content and creating new stations.  One of the softkey (programmable) buttons is labeled “ratings”, the other “Pandora”.

Click “ratings” to rapidly Like, Dislike, or Not hear a song for a month.  Perfectly logical, works just like Pandora on the Web does.  This feature is one of the key parts to how Pandora works - while you can’t specifically pick songs to play, the collaborative filtering system (recommendations) works extremely well.

The “pandora” button allows you to add the given song or artist to your current radio station, or build a new station based on the song/artist.  Again, this implementation is exactly how it should work.  Within minutes I created five different stations, all in different genres, with practically no effort.  You can similarly bookmark content to retrieve later at pandora.com.

I’ve ripped my 800+ CD collection into MP3.  We have access to tons of other streaming Internet content.  I can say without hesitation that 90% of my Sonos listening will now be over Pandora (and my new house has 7 Sonos zones planned).  Amazing job to both companies.  BTW, Sonos also introduced an iPhone app, but since I’m not an iPhone guy I’ll let the pro’s talk about how great that is instead…

Saw a thread on Techmeme this morning about wireless HDTV technology. Looks like some big companies are banding together to provide (yet another) wireless HDTV service. Over at Crave I read that while it’s a year away (read: 2-5 years away), it’ll be fairly low-cost, as in ~$100 (read: ~$500) per set to enable the technology. There’s also multiple competing standards, and as MG points out, two of the companies involved are participating in both platforms (updated: now both PCMag and Ars weigh in as well). This is a lot of big companies spending big budgets to build multiple technologies and standards in the space.

I ask “why?”.

Seriously. What’s the point here? So people can one day wirelessly stream video from a hard drive/PC in one room of their house to the plasma display in another room? Really? Don’t get me wrong, it sure sounds like a fun idea, and there’ll be some percent of the market willing to do it, but most definitely not the majority.

The other argument for it is just to have a short range, enabling me to “cut the cables” from my plasma to my HD set top box. Only one catch here: very few people will be willing to upgrade both their boxes and sets just to hide one cable, especially considering they still need the power cord! While the WAF is certainly a powerful force in every home, I don’t think anyone can argue that a plasma should be replaced to reduce a single cable.

I’m sure I’m missing some points here, but having spent the better part of 8 years working with organizations like UPnP and DLNA, it seems like neither the “connected home” nor “interoperability” are initiatives which win (ask Apple how interoperable the iPod is). There’s a lot of money being spent on R&D labs for this type of technology. Whenever it gets out of the labs it will need to go into *massive* testing before any cable company even considers distributing a box with new technology (ever wonder why it took Comcast 3 years to ship a DVR? it wasn’t a lack of technology, it was testing, and even then they still did a mediocre job with it). As a final point on the market opportunity here, just remember how well this must be testing in focus groups…

Would you like it if your plasma display worked wirelessly (not including power), and only cost $100 more?

Golly, sure I would!

Would you be willing to replace your cable box if you could get one that didn’t need any wires to hook up to your plasma?

Gee whiz, absolutely!

Anyone notice that the #1 seller of plasma TVs is not a participant here? Considering how well Vizio’s taken over the market, it seems pretty clear that customers are trying to save $100 by purchasing a brand they’ve never heard of before. But $100 for wifi HDTV streaming to/from nebulous devices with multiple standards? Yeah, that’ll happen.

Bringing you up to speed: Netflix announced a $99 device that hooks up to your TV and streams movies (free to Netflix subscribers) from your queue straight to your set. This is not the first “Internet set-top box” to come out, nor will it be the last. But it’s definitely one of the more interesting ones to discuss. Here are my thoughts on it, in a semi-organized manner:

What I like about it:

• Price point: under $100 is great (under $50 is perfection), especially in conjunction with free movies.
• Netflix brand extension: the company’s followers tend to be fairly loyal (I’ve heard an estimated 5-10% churn before, which isn’t too bad considering the space they are in), and have the financial resources to make a $100 box a near-no-brainer purchase.
• K.I.S.S.: the pictured remote only has a few buttons, and they aren’t making an “all in one killer box” (which would be much harder to market than a specific, focused product)
• HDMI: absolutely essential.

What I don’t like about it:

• Price point: seems like they could’ve found a way to make it free with a committed subscription. I personally pay $17.95/mo for my Netflix subscription, I have to think there’s a point ($25.95?) where I’d upgrade my service for the box. This is how the cable companies “get ya” and I think should be considered by the company.
• Roku’s brand: it’s effectively nonexistent with the masses, which is who this product is targeting. I don’t feel Netflix gains much (other than possibly having complete control over the product, a la Apple)
• It’s a box: like Thomas Hawk said, people don’t want more boxes in their living rooms.
• Competing with cable companies: Comcast offers me dozens of free HD movies per month (hundreds of SD ones), and lots of PPV content to boot. I’m concerned that for $100 I don’t really feel I get much extra, and as I state above, I now have to deal with an extra box in the mix.

Other misc thoughts:

• Initial reviews seem positive, I’m hoping to try it myself soon. I think for the box to succeed it has to be better than “easy to use”, it has to be “compelling to use”. A slam dunk would be my wife not just using it, but loving it enough to tell her friends (which was not true of VuDu, and only partially true of Moviebeam). The process of selecting movies to watch and the actual playback have to work great (think TiVo). Ditto for setup.
• According to CNET, HD content is coming soon, and I think this is a questionable move. I believe launching with HD would make a huge difference in the marketability of the box. Also, it seems that it doesn’t offer upscaling on the SD video, which means I’ll be watching content that looks less good than a standard DVD.
• I wish they had taken a page from the Apple playbook and made a more interesting/attractive product. Either that or follow the Slingbox “purple cow” approach. I totally understand the reasons for the generic gray consumer electronics product, but I feel it’s a tactical error in this case. Netflix has always stood out from the crowd, and I think their box should do the same.
• Their biggest competitive threats are, in order: nothing, a digital cable box, a DVR, a computer (media center or not), an Xbox 360, and maybe an Apple TV. I don’t really see anything else currently on the market as actually competitive.

Back in January I voiced my concerns over this exact product. I like where they’ve gotten so far, but still have a lot of concerns over market viability. I believe with some polish and evolution, combined with paying a lot of attention to early adopters’ feedback (different from beta testers!), and great marketing, they might be able to turn this into a big hit. I’ll definitely be watching!

As I write this, Comcast is worth 67 billion dollars.  Their stock has split 4 times in 20 years, and has grown massively over that time.  They have over 24 million subscribers.  They are one of several US cable companies, who take on the 2 satellite service providers as the main players in the TV space for the US.  And startup Sezmi was labeled today as a cable killer, with TV 2.0, whose advanced set-top box apparently blows away the TV.  Wow.  That’s quite a strong billing, don’t you think. The last device I recall with this type of hype was supposed to transform the way we build cities.

This isn’t just David vs Goliath by the way, this is David the little tiny ant versus Goliath the elephant.  Not only does Sezmi have to compete against huge players, they are doing it in a massively entrenched industry that spends ridiculous amounts of money advertising their own services.  And let’s think about that advertising for a second - where exactly is Sezmi going to run their ads?  Are they going to pay the very networks they need to compete with?

Now I do need to make a very clear disclaimer here: I have not used their product, nor even seen a demo.  I will go on the leap of faith that they have built the very best darn box ever built (even better than the ones I’ve built!).  I’m going to assume it’s utterly amazing, and the content quality is stellar, it’s really usable, etc.  I’ve only seen one such demo in recent months, but that’s another story for another time.  Let’s assume that in the world of “terrible Internet set-top boxes” they’ve built the iPhone of the batch.   I still think they have a huge challenge ahead.

First, they need to market the heck out of this thing.  I’ve watched MovieBeam try and fail, ReplayTV is gone, Akimbo is a service now, and even everybody’s favorite TiVo isn’t exactly a commonly owned product (somewhere around 5ish million homes is the latest I’ve heard).  Each of these companies have spent millions of dollars trying.  And I can name a dozen others who’ve tried.  Even Apple can’t really move the AppleTV in massive quantities.  And massive quantities is the only way to be successful as a startup in this space.

Beyond just “extremely good” marketing,  it’s a big uphill battle for Sezmi.  Both PaidContent and Engadget refer to the company as confusing.  In the articles I’ve read the company’s advantages seem to lie in (1) price, and (2) Internet services.  I don’t believe these to be true competitive differentiators in the “taking on the cable industry” space.  The players that be have effectively infinite dollars to throw at the problem, and we know they are all working on introducing Internet-enabled devices themselves.

Having spent most of the past 10 years of my career attempting to introduce products just like these, with variations here and there, I do wish the founders the best of luck with the effort.  I would love to try the box out, see if it’s exceeding expectations and get a sense of how they plan to accomplish their arduous task.  I think the visions of wanting to “change television” are noble, but unrealistics.  Just because we have deregulation and things like OpenCable doesn’t mean the window of opportunity is open.

I do believe we’ll see additional interesting new media concepts for digital devices and platforms, but I don’t believe going after the big guys is the way to be successful.   It isn’t about a “better than your cablebox” or a “more channels than you have now” or even a “get the Internets on the teevees” kind of play.  It’s about counterprogramming against the TV itself.  It’s about innovating on other, existing platforms.  It’s about moving around the concept of the cablebox and cable company completely.  Is Sezmi here with that new Innovator’s solution?  We’ll find out soon enough.

There’s only room for 4 devices in the average living room. They are: a display (LCD/plasma/whatever), a cable/satellite receiver (aka set top box or STB), a DVD player, and a game console. For travelers, you can add a Slingbox to that list, but that’s about where I draw the line (sounds like Erick at TechCrunch has a similar philosophy). Remember, I said “average” living room. I’ll expand on my four device theory at a later date.

Netflix was rumored to be building its own box, a project I was sure to see fail. Instead (or in addition or in replacement of) they are going to integrate their Internet delivery service into some future LG products. This is, in my opinion, the only path for success. By doing so they eliminate all risk of becoming a hardware company, which surely would have sent them on the path to failure.

Don Frommer at SAI asks 5 good questions, but of them I feel only one is extremely relevant: how much will they cost? On the PC you get one movie per dollar you spend per month with Netflix. If that model translates to the TV box, then we have a winner. If, on the other hand, I have to spend per movie, then Houston, we have a problem. That would put them squarely into competing with cable/satellite on-demand services, and Comcast has a much bigger war chest in that arena.

Over at NewTeeVee the question of competitive services is raised, citing AppleTV, VUDU, Amazon Unbox/TiVo as comparison products. In my eyes, none are competitive. The “smart” marketing of the (rumored) $799 HD/Blu-Ray player will simply label it as having Netflix “built in” or something like that. It won’t get marketed as “The Netflix Box” (except, of course, FROM Netflix). Consumers have shown resilience to these boxes, and the Netflix brand simply isn’t strong enough in that sense. We all know what movies are, and we are used to a bunch of existing models. Having the top-of-the-line LG DVD player include movies “as if by magic” is a winning combo.

My friend Dave Zatz is a little less enamored with it: “As I said recently, given content licensing fees and Netflix’s low-cost subscriptions, I don’t see how unlimited streaming could be an economically viable business plan… Time will tell if they stick with it.” I think it’s a fair point, with a big however. The however is I’m sure some math genius at Netflix has all sorts of cost/usage estimates that predict a certain quantity of movie watching. Again, just a guess of mine, but I would presume they have a long way to go before it becomes overly costly.

So to summarize - the path to success from here:

1. Integrate into a DVD player and NOT a “Internet STB”, and add NO extra fees for the service beyond existing Netflix monthlies.
2. ???
3. Profit.

I’ve seen lots of Top 10 lists on the subject, and I’ve decided to try a different format for my own prognostications. Instead of by rank, I’ll do a list by industry.  Also, I have way more than 10 predictions to make.

TV Technology

• Every major cable company will increase it’s rates by more than 3%. Nobody will complain, and our government will (again) fail to protect us from them.
• A resolution above 1080p starts appearing in demos and labs, I’d predict a bump up into the 4000 vertical lines space.
• Bluray and HD-DVD continue to duke it out while consumers continue to not care.
• One of Hulu, Joost, etc get integrated into the Xbox 360 and/or PS3.
• Google launches “Android for Set-Top Boxes” but gains little traction in the foreseeable future.
• Anyone who is not a telephone company that tries to launch an IP-streaming set top device has a very rough year.
• Despite near-constant predictions of their demise, TiVo makes it through another year, possibly getting acquired (by DirecTV, Comcast, Netflix, Blockbuster, or someone out of the blue like Amazon or eBay).

Portable Devices That Are Not Cell Phones

• Zune 3.0 launches. It’s very very good. Further, iPod’s market share dips, although they still have an increase in overall unit sales (in other words: the pie gets bigger faster than their sales do). That said, a new iPod is even more betterer than all previous versions, making everyone who recently bought a prior generation a wee bit annoyed, but gosh that Steve Jobs is so charming they just don’t care. After all, that’s technology!
• At least two major camera vendors introduce integrated wifi cameras, but no more than one uses an open service, the rest have some proprietary, closed, annoying-to-use system. Ideally one of them buys Eye-fi.
• Digital picture frames continue to grow in market share, but still don’t “tip” into the mainstream.
• More companies introduce e-book readers despite general malaise in the category. Kindle II is launched with mild improvements.

Enterprise Services

• I have no clue, I don’t follow the space. Hello, this is a consumer tech blog!

Computers

• Apple’s new laptops will include an ultramobile, a tablet, and a “desktop replacement” OR a “gaming model” (they may combine the first two). Enhancements will include a card reader, 3G access as a built-in option, and new gestures. Market share continues to climb.
• Microsoft continues to spin about how amazing Vista is. Michael Gartenberg’s observations are probably the most poignant as to why it isn’t.
• Asus or Dell acquires or merges with one of HP, Acer, Toshiba, or other “meh” PC maker.
• Sony continues to make subpar Vaio laptops. And for the last time (I think) in 2007: don’t buy the Sony Vaio VGN-SZ4xx series laptops, they are just plain terrible. I’ve now had the chance to voice my discontent directly to the Vaio PR team (at Ruder Finn) who have yet to write me back on the topic.
• Nobody makes my awesome dual-screen laptop concept, thus leaving me the opportunity to make zillions one day.

Social Networking

• Facebook continues to get backlash from the media and tech community, meanwhile its user base continues to skyrocket. Further, they hire another 1000 people, yet only make modest improvements to the site itself. I’d add a 33% chance that they “pull a Netscape” and go after the desktop or the browser or some other place they really don’t belong.
• Randomly pick some names from the huge list of other social networking sites and some of them merge.
• Adults who didn’t grow up with social networking services experience burnout of being bitten by zombies after a few months, and many stop checking in four times per day. Those who went to school during the Facebook era continue to complain about all the old fogies (like me) polluting their sacred resting ground. They also continue to put radically inappropriate pictures of themselves online, blissfully unaware of the interviewing process.

Mobile Tech

• A few Android-powered phones ship, but not as many as the tech community would like to see. Again showing why the Razr can utterly dominate the market despite a closed architecture and terrible user interface.
• Apple launches the iPhone 3G, the iPhone nano, and the iPhonePro. Ok, I’m not 100% sure on the third, but I am betting on the first two. Also, one of these new phones comes unlocked OR on a carrier other than AT&T.
• Some major lawsuit occurs between a carrier and either a cable company or a broadcaster, all about mobile video rights. All parties involved appear as nothing but greedy to outsiders.
• Something new comes out in the phone space that’s more astounding than the iPhone. It’s possibly: uber-small, has a radically better battery life, does something funky like synchs with the Wii, or works with all US carriers.

Gaming

• With lots of stealth, a new console comes to market. It might only be a moderate shift from a prior model, or possibly be a whole new entrant.
• Rock Band 2 and 3, and Guitar Heros 4, 5, 6, and “Eddie Van Halen” editions come out, however nobody licenses the Harmonix engine to make “Jazz Trio”.
• Someone comes up with a really impressively new concept for the Wii. Good odds, however, that they wrap it inside a crappy game.
• More really amazing HD gaming occurs, continuing to drive HD adoption faster than the meager channels the cable companies try to placate us with, despite the fact that they raise prices again. Did I already say that?

Web Services/Misc

• A wide swath of “Web 2.0″ companies will go dark, primarily out of an inability to either figure out a business model for their product, or an inability to successfully market their service outside of the Bay Area.  They will quickly be forgotten and replaced by new ones with even goofier sounding names like Froobooloo.com.
• No major Wimax deployments occur.
• The digital transition date looms, starts creating a lot of media hype a la Year2000 mania.
• RFID continues to be a fun topic for the media, but all that happens is Walmart continues to make small vendors spend loads of money for the privelege of selling there.
• Bloggers fret about not being recognized as “press”, yet continue to spend too much time/energy gossiping about other bloggers, an activity the general public remains disinterested in and doesn’t give extra respect/credibility for.  This circular logic is baffling, I know.
• We lose even more rights to big media, because few Americans are willing to take even the tiniest steps to do anything about it.  PLEASE PROVE ME WRONG (start here)!
• I still don’t Twitter.

See you in 366 days to see how I scored!

First, let me say I very much like Amazon, and about 90% or more of my online shopping goes through them, in virtually every category. Used books, new games, my soon-to-be-replaced 32″ Olevia LCD, baby apparel, rechargable Xbox controllers, and even Kangaroo Ribs - all from Amazon (sorry, the kangaroo meat vendor seems to have disappeared, but its hopefully temporary. tastes like chicken). But no matter how much I may like them doesn’t change my belief that their new electronic book reader device will fail, and fail terribly.

Electronic readers are one of those categories that sound really great in a boardroom. They demo great, and technologists tend to love them (yup, that includes my friends). I’m sure they even test well in focus groups, and will rapidly admit that there is *some* market for them. But that market isn’t the masses, it’s a small niche. And unfortunately, small niches are hard to sustain if you are a gadget maker.

The way I like to look at a new gadget is generally inspired by the language Pip Coburn uses in The Change Function. Is the market today “in crisis” when it comes to books? No. Next, is there a perceived pain in adopting electronic book readers? Absolutely. Now that’s not enough to completely rule out the category, but it certainly is a quick and dirty way to see why it’s not quite a slam dunk either.

In my eyes this is one of those technologies that is still searching for a problem. At $399 + $9.99 per book, it’s certainly not a cost-competitive solution to purchasing books, unless you are comparing solely against new, hardcover prints. Further, it’s not exactly a challenge to find and buy books, whether online or offline, new or used. In fact, it’s pretty hard to argue that an electronic reader will vastly improve the book discovery, purchase, and consumption experience (unlike how much an MP3 player was able to do that exact thing). The only really viable argument against physical books is they are bigger and bulkier, but that really only applies to hardcover books.

I can go on at length about all the different use-cases for why an electronic reader can’t win, but then I think this would become one of those all-too-wordy posts I tend to use. So, I’ll jump into quick bulleted list format for the rest:

• Unlike newspapers and magazines, the content of books isn’t about timeliness, so digital versions do not offer an advantage. While those industries are in a change-or-die crisis, books aren’t.
• Book consumption is unlike any other form of media, and cannot be compared to music, videos, news articles, blog posts, etc.
• The “barriers” to buying a book today involve knowing where to buy a book. Anyone savvy enough to buy Kindle knows where to buy books, and it is highly unlikely they are in massive dissatisfaction with that process. Compare this to the perceived barriers about an electronic reader.
• Most positive comments on e-readers have tons of “ifs” in them. IF it has good battery life. IF the screen looks good. IF buying books is easy. IF its very “booklike”. This isn’t a sound argument for a product, it’s instead presenting a very narrow window and how to look through it in order to see the light.
• For the most part, consumers do not buy technology products because of technology. They buy products for the services they provide, and the experiences that go along with them. Kindle would have to literally knock it out of the park to pass this criteria, not to mention everything I’ve mentioned above. The reality is the mass market of consumes tends to resent most new technology, since it tends to be overly hyped and well-marketed, yet do little more than frustrate and fail to deliver on expectations (much like the Sony Vaio VGN-SZ460N, an utter failure of a laptop).

Lastly, it’s most prudent to think about the real-world use case for reading books. How many people are really in a position where they need a mobile library of 200 books with them to choose from? Few. In my years of experience designing products for consumers, they routinely react to new device categories extremely poorly. I obviously don’t know how much money Bezos & Co is willing to throw at the Kindle, so I can’t possibly predict how long until it disappears from the catalog, but I’m definitely willing to predict it doesn’t go the distance.

UPDATE: I just read Seth Godin’s thoughts on Kindle. One of the marketing blogs I definitely enjoy, and his post on the topic is pretty good. But he mentions something that again shows me how off the mark even “industry experts” can be. He writes “The challenge that my hero Jeff Bezos has is that if he’s really really lucky, he’ll sell a million of these things in a year.” I think he’s missing about 5+ “really”s here. If he’s lucky he’ll sell 50,000 in a year, really lucky is 100,000, and really really lucky is about 200K. Moving 7 figures worth of hardware per year is VERY VERY hard! VERY hard. And that’s in an established category, let alone a speculative one.

It seems fairly apparent that AppleTV is nowhere near the runaway success the company’s enjoyed recently.  It’s been called a “hobby” by some, and that’s about as flattering as it gets.  It might actually be the best examples of why…

• Convergence products suck - they are too hard to explain to consumers, too hard to get working properly (yes, you need a computer running iTunes to get content into it, but no, it doesn’t have to be on all the time.  gah!), and they can’t satisfy even their own users all the time due to incompatible networks, formats, codecs, etc.  Sneakernet is a better solution for getting digital media off a computer, as the standalone products violate my “4-boxes in the living room, and no more” rule (which I have not yet written, but will do soon).
• Good UI isn’t enough - it doesn’t matter how nice it looks if there isn’t enough substance to support the product.  Yes, the AppleTV has a better UI than the NETGEAR Digital Entertainer HD and probably any other streaming media device in the past, but it’s still a convergence product (see above).
• Walled gardens are clearly annoying customers - let’s face it, there are just too many content options available today to try to trap consumers into a limited set.  The only reason the iPod was more successful at this game is that it’s main value proposition when it came out was about the ease of ripping and synchronizing, not the iTunes store.

So now let’s take a step back.  Apple makes a beautiful (yet pricey) 30″ LCD monitor - it’s more expensive than the 46″ Samsung LCD I’m considering.  One of the reasons it’s so expensive is the resolution is so high.  They could easily drop it down to 1080p, up the sizes to 36, 42, and 46 inches, and pow, it’s a TV.  Next, they could throw the guts of an AppleTV inside, and you’ve got a great-looking display with built-in media streaming capabilities, and they could probably hit a pretty affordable price point.  My hunch is it would sell better as a $1999 TV set than the $299 box does today.

While they are at it, I’d love to see them apply some Apple-goodness to the EPG, and throw a DVR into it. There’ve been rumors that they’d buy TiVo for years, I hope they don’t.  They can out-TiVo TiVo in my opinion.  Better yet, they should throw in the ability to synch it back to an iPod, or to your .Mac account online (for an additional fee).

That’s a winning convergence product in my eyes.

Don Reisinger wrote a good article on NewTeeVee the other day, outlining 5 alternatives to AppleTV, one of which being the Xbox 360.  I took fault with part of his argument against the 360..  He wrote:

Is it as simple to use as the Apple TV? Yes. But unfortunately, the barriers to entry (mainly cost) are a bit too high for those on a budget. You can have the Xbox 360 at most major electronics retailers for $279.99 (core system) to $449.99 (Elite).

To which I commented:

Uh, let me see if I got this logic right… AppleTV is $299. Xbox 360 is $279 (and up). And yet “But unfortunately, the barriers to entry (mainly cost) are a bit too high for those on a budget.”

So you can have one for $20 less AND it plays video games, but it’s too expensive an option for those on a budget?

And as a final “nail in the head” on this argument - is there some huge market segment of people with lots of digital media files that they want to stream to their plasma yet are constrained by a budget of under $400 to do so?

Now I shouldn’t have taken the derisive tone, I apologize for that.  But I believe my point as merit. Don did write a followup comment:

If you don’t have a MCE (or Connect360), the costs are much higher than an Apple TV — computer and console?. To make matters worse, would you actually use the core bundle to do what I’m suggesting in this post? I certainly wouldn’t.

Also, I do think people are constrained to $400. I’m happy for you if you’re not, but not all people are so lucky. Some save up for quite some time to get a plasma and buy digital media files when possible.

First, you don’t need MCE or Connect360.  All you need is Windows Media Player 10 or 11, which runs on about 97% of computers.  So, again, where are the extra costs?  YES, if you are Mac-based, this is a pain, no question about it, but that wasn’t the premise of the argument.Also, you can get the NON-core for $349, it’s the Elite that’s priced at $449.

Lastly I don’t agree with Don’s point that consumers “save up” only to splurge on a plasma.  They may buy it on credit card and pay it off (likely due to the debt that most Americans seem happy to incur - especially the U.S. Americans), but at $1500+ it’s hardly the purchase being made by those on a budget.  Having spent the better part of the past few years actually marketing consumer electronics devices to consumers, I don’t really know where the $400 as a magic price point (in my opinion, the ‘budget-conscious’ customer isn’t spending more than $99 for a streaming media player anyway).  The $400 seems pretty arbitrary, and I’d love to see the basis for it.  Either way, the Xbox is in range.

Personally, I’m using the Xbox 360 with my Maxtor NAS running Twonkyvision.   It’s a bit of a kludge, but it works extremely reliably.  In fact, the only problem now is my MacBook doesn’t do a great job generating WMV files from iMovie - one of my only issues since I stopped using the Sony Vaio VGN-SZ460N (aka the VGN-SZ470N) laptop.  I stopped using it because it’s not even a very good paperweight.  Don’t buy it.   But you can safely buy a 360!

Saw on the AppleInsider that there’s an Apple announcement coming next Tuesday, with the explicit “no iPod, no iPhone news” comment.  My prediction is they are going to launch an ultraportable table MacBook (or some other fancy name).  I specifically think it’ll be a 12.1″ display and be the width of the iPhone, have no keyboard at all, USB, FireWire, BlueTooth, WiFi and possibly built-in AT&T Edge access. Here’s my rationale:

• I can’t believe they’ve invested so much R&D to make touch screens work well, yet only deploy it on the iPhone.  Seems like they’d want to reuse that technology.
• Further, since the iPhone runs OSX (sorta), there’s no “porting” to make it work on the other hardware platform.
• Speculations of an ultrathin keyboard would be a natural fit to an all-touch computer.
• Since Apple always tries to do things “the best” it seems logical that they’d do something revolutionary with their ultraportable, which everyone seems to agree they’ll be building.
• I’d hazard a guess that the new iMacs are just a cover story that’s let them slip under the radar on this.
• Just like they blew people away with the iPhone, they’d love to be first at making a touch-based computer that people really like to use.

If I’m right, I’m buying one.

Important Disclosure: I was born in Montreal, Canada, home of the greatest NHL team of all time as well as the baseball team “that got away” - and yes, I’m bitter.

Sling Media and the NHL just announced (although my friend Om seems to have gotten a bit of an earlier scoop than old JT) that they are working together to enable NHL content within the forthcoming Clip+Sling technology (more from SlingCommunity, refresher details here, beta signup here - don’t know if they are still taking, but it can’t hurt to sign up!).  Now if this were any decade prior to the 90s, I would probably insert nice gloating comments about how much I would use this to show my Habs trouncing their opponents, but, uhm, they, er, kinda, sorta missed the playoffs this year. 

Now granted, NHL’s TV licensing business isn’t quite the same as MLB’s.  Furthermore, this deal isn’t about to change the bottom line for the organization during the 2007-08 season.  But that’s not the point: it’s that they are working with Sling to see what the future holds, not working against them to see how lovely the fresh air was back in the 1970s.  MLB can’t act like the music industry when it comes to Internet distribution, they must make deals with tech companies, experiment, and look to increased revenue through innovation, not lawsuits (refresher on this one here).

While Bettman’s antics over the past 15 years haven’t done much to bring the NHL out of 4th place when it comes to professional sports in the US, he’s certainly enabled his organization to test the waters when it comes to new technology.  It’s not quite enough to excuse him for moving teams to North Carolina and Florida (two of em, in fact), but it’s certainly a step in the right direction.

Disclosure: I’m a former Sling Media employee, but I think the hockey/Canadian disclosure was more important.