LIVEdigitally

Lots of musing yesterday that the new Mac Mini is a “Apple TV in disguise.”  It’s not.  Here’s why:

Watch live video from Jeremy Toeman on Justin.tv

For context, one of the “grand visions of the future” is how people from around the world will be able to watch TV “together”. It’s a wonderful idea except that the visionaries behind it seem to forget the pragmatic realities of how people actually watch TV…

Watch live video from Jeremy Toeman on Justin.tv

Stories I referenced:

• Why Google TV As A Platform May Push Apple To Build Televisions
• Google TV: Good Idea, Poor Initial Execution (this is the article I misattributed to Harry McCracken on the podcast – should’ve been Avi Greengart)
• Steve Jobs: Google TV Will Go the Way of TiVo and Roku

Google, Intel, and Sony have apparently teamed up (and Logitech too) to develop an Android-based platform for interactive television. Let me start my post with some important background points and disclosure:

• I was a cofounder of Mediabolic, a startup who built a platform for connected devices.  While there I designed about a dozen “convergence” products (one won a best-of-CES award), and the company eventually got acquired by Macrovision.
• I was an early employee at Sling Media, where I was responsible for developing the Slingbox (another best-of-CES award).
• I once interviewed at Google for a position in a “google TV” role, but didn’t feel it was a really great fit for me personally (not to mention the commute).
• I am currently involved with Boxee.TV, a startup in a highly-related field. There is some amount of overlap here, though that is in no way related to this blog post.
• I’ve also worked with VUDU, Clicker.com, DivX, and others on “future of TV” systems, services, and products.
• I was on the original working group committees for UPnP (AV) as well as DLNA (even before it was called that).

Through the above experiences, I have seen a lot of failure and some success in the “connected TV” space.  But mostly failure.

It’s a space where techies dream, entrepreneurs try, and companies fail. The list of failed convergence companies is notably longer than the list of successes. It’s a field where even Apple, the current king of the world when it comes to entertainment technology, can’t get a reasonable foothold in the home.

Most of the failure is due to deeply entrenched systems heavily controlled by huge corporations with little interest or need to innovate.  While we can yell and scream about how bad a job the Cable/Satellite companies are doing at future planning, the blunt reality is it’s hard to argue that it’s necessitated.  These megacorporations can drag their feet, and deploy mediocre DVRs and HD services, and consumers (for the most part) are satisfied with their experiences.  Further, due to their current business structures, the concept of opening up the market to third-party devices, content, services, or applications is not just daunting, but likely unprofitable.

When I consider the opportunity in the digital home, I am convinced it cannot come about by directly competing with traditional broadcast models. Broadcast TV, and all the services with it, are generally easy to use, convenient to pay for, and effectively “good enough” for most people – making “better than current TV” offerings a significant challenge to bring to market.  Historically, the only thing to attract the attention of consumers beyond their existing entertainment solutions are:

• Transformative content playback experiences. From VCR to DVD was one example, and from standard definition to HDTV is another.  The key word here is transformative – it can’t just be “better quality”, as evidenced by virtually all other introduced formats and technologies based around content.
• Notably difference content offerings. Again, moving up to HDTV-enabled set-top boxes was a natural flow, game consoles are the other shining example of a successful category.  Boxes that simply deliver “more of the same” or “stuff you can get elsewhere, now get it here (e.g. digital pictures)” are typically not big hits.  Consumers have to see some kind of service that’s worth the extra money.

Everything else has failed to make a dent.  Most “Internet Set Top Boxes” have been, and will be failures.  The typical logic that brings these products to market goes something like “consumers are about to cut the cables for their Internet content, and really hate watching it on their computers.”  The evidence behind this claim?  It’s in the same folder with the WMD evidence the government started a war for (zing!).

I’m very curious as to the potential from Google, Intel, and Sony.  Intel has wanted in on the “connected TV” for a long time (disclosure: they were an investor in Mediabolic), and has never really executed very well.  It’s not to say they can’t, but it’s safe to say the space is far far away from their core DNA.  Sony too has stumbled frequently in this space (here’s their version of a convergence device). Logitech? See Sony. And then there’s Google.

Part of me thinks Google believes that all devices are effectively the same, and their (limited) success in the phone market implies opportunity in the TV market.  Another part of me thinks Google is just so big they take on any sector they see opportunity in.  But most of me thinks Google wants to get firmly entrenched in the biggest advertising market there is – television.  And as hard as doing phones might be, doing TV boxes is much much harder.  Here’s why:

• Phones play highly restricted media types.  Converged TV devices are expected to play all media types.  This topic alone is probably worthy of a blog post, but trust me when I say – it’s hard.
• Consumers buy new phones on a recurring basis (multiple times a year in some countries). Consumers replace TVs infrequently, and buy TV “accessory” devices only a couple of times per decade. While the market is huge, it’s hard to get new devices into the home.
• Carriers are motivated to push new devices and services into the hands of their customers, it’s part of their business model.  TV service providers are not motivated to do so (as discussed above).
• As much as phones are “closed systems”, a manufacturer is able to purchase equipment and get a device certified and get it on the network without too much involvement by a carrier.  While the path is actually similar (CableCard Tru2Way certification), the realities for both the manufacturer and, more importantly, consumer are much much worse.
• Again, as stated above, consumers are generally dissatisfied with their phones (a problem unlikely to go away) and are excited about new ones.  Consumers literally dread changing equipment in their living room – even us geeky dads with cool quadrophonic sound.

Now with all that said, I’m truly excited about the future of converged entertainment in (and out) of the home. I remain mostly cynical about seeing any real change anytime soon.  I think there are a few companies who have built the right foundation to make some inroads, but I’m hoping everyone involved is prepared to win their “realist” and “slow and steady wins the race”  badges over the next few years-to-decade (or longer).  Can Google be the catalyst of change, or will they just be the next in the long list of companies who tried and missed the mark?

For all intents and purposes, TiVo “invented” the DVR. Actually, they didn’t, but it’s a fair statement that they first successfully commercialized it and brought the concept to the massess.  Further, they did it with competition (ReplayTV), which is often the exact thing that stalls new consumer technology adoption.  The company’s product was loved by those who used it (I had the original 14-hour Philips version), and switching from TiVo to another DVR was a painful process for those of us who had to go through it (for whatever reason).  But switch we did, as the company slowly got pushed out of dominance by failing to keep a healthy relationship with DirecTV (and Philips, Sharp, and others), and all other cable/sat co’s offered their own (mediocre at best) versions of the DVR.  And when a consumer is given the choice of an effectively “free” DVR (an additional $5/mo = free in a purchase decision-making process when already spending $50-$100 on a bill) versus buying one with an upfront fee and a monthly tally, it’s a no brainer.

Over the past few years, the company has slowly settled from being the leader in both installed base and most evolved product into a bit of obscurity with the mainstream (other than potentially owning the brand-category, which doesn’t do much good for running a business).  Their Series 3 and other launches in the late ’00s didn’t bring in a new rush of users, and last week’s launch of the Series 4 (aka TiVo Premiere) is at best a late entry in a crowded market, and at worst a product that massively missed the mark with modern day expectations. On the date of the launch, the company’s stock moved a little bit upwards.  Not too shabby, but also not too interesting.

The next day, however, proved much more interesting, with a 61% increase in value:

What happened? In a nutshell, federal courts found TiVo’s patents held up against a Echostar/DISH claim.

I’m not a lawyer, nor do I generally support the present-day patent system, but that’s not really the point here. What is more relevant is that TiVo appears to have drifted from being a pioneer in the digital home to being a patent player. Instead of betting on the strength of their product team, innovation, and marketing, they are now betting on their lawyers.  And I think that’s a sad state of affairs.

The digital home is a noisy, confusing place, fraught with terrible products. Further, most of the products I’ve seen on the radar or know are shipping soon are also now extremely impressive.  In other words, there’s tons of opportunity today and in the future to build (and monetize) exciting products.

I’d love to see TiVo make a change in direction here.  It’s time for the company to act like a startup again, and show real innovation like they once did.  Truth be told I know the TiVo Premiere is unquestionably a better product than my Comcast DVR (a truly awful product).  But as has been said many times before, and is unbelievably relevant in the convergence space, Good Enough is the biggest enemy of Great products. It’s going to take a heck of a lot more than “slightly better than the last version” for TiVo to regain a leadership position.  The company needs to rebuild it’s team with new innovators who can build on the legacy, and stop investing in “me-too” minor touches, “dongles”, and other things that won’t move the needles. CableCard? Still? Come on.

If companies like Apple, Palm, and so many others can attempt to reinvent themselves, I think TiVo can too.  Please try.

In proper form,I shall now review my own predictions of the iPad from my first two posts on the subject (parts 1 and 2).  Let’s start with…

What I got wrong:

Productivity Apps
I said: “Unlike the Microsoft approach to “ecosystem” – where everything other than the Xbox is able to view and edit Excel spreadsheets – my hunch is the iPad is all about lifestyle, the Internet, and entertainment.  I’d guess there’s a native version of Safari, some kind of simple email and calendaring, and that’s about it.”

In reality: native new version of iWork!

Reaction: I’m pretty surprised by this move. I certainly see the case for casual work-like content creation (make a simple budget, add some numbers, etc), but figured this would be much more of an afterthought. Further, without an input mechanism (camera – more below) beyond the touchscreen, I don’t quite feel the product “fits” as a content creator.

Augmented Reality/Content Creation
I said: “I’d predict there are several native applications and services that provide very cool augmented reality features.  I’m firmly in the camp of one or more cameras on the iPad, and I think Apple will include one or more fun exploits of the concept from the get-go.”

In reality: zero cameras.

Reaction: This is unquestionably the most questionable aspect of the iPad (like how I did that?). There’s one in the Nano, but not here? Just doesn’t make sense to me, nor most of the people I spoke with during and post the event.  My colleague Jim Schaff thinks this is effectively a beancounter’s decision – the numbers were run that showed adding a camera could/would cannibalize from either MacBook or iPhone sales, and thus the camera was dropped.  Other folks I’ve spoken with theorize it’ll show up in a rapid revision of the product (something I don’t agree with, as they had no specific reason to rush the iPad to market, and could easily have waited until it was working).  My other theory here is that it’s not a hardware issue, but a product/software complexity issue, and the overall impact of adding a camera would have created too significant a product development challenge in the short term.  Gotta crawl before ya run.

Hardware ins/outs
I said: “It’ll have the iPod connector, USB, DisplayPort and an SD card slot.  A webcam is highly probably, and I wouldn’t be surprised with an IR interface as well.”

In reality: custom dock connector, USB, no other ports.

Reaction: I’m disappointed at the lack of SD card reader, especially in context of the photo frame use-case.

What I got right:

The name
I said: “iPad”. 

Heavy software emphasis
I said: “Everything that ships on the iPad will be designed completely to work in a touch fashion, or it won’t be included period.  I’m still torn between whether it’ll be a version of OS X or a version of the iPhone OS, but either way, the device will ship with oodles of applicable software, custom-built to be great in gesture, touch, multi-touch, or even by looking at it the right way.”

Closed app infrastructure
I said: “I expect the iPad will sit somewhere between the iPhone, with individually manually approved apps, and the OS X platform.  Based on the reports today that some apps are supposedly already being run on the iPad (of course these reports prove absolutely nothing, as it could either be an updated iPhone with a new OS, or simply another “labs” product running around campus.  but where would modern tech blogging be without unsubstantiated rumor circulation and amplification?) , my leaning is a differentiated version of the iPhone OS, with more leniency in app approval, but still not open. Many will complain, many will profit, and many will love it.”

Single carrier support
I said: “And since the former isn’t very Apple-y, it’s much more likely there’s only one carrier involved” and “It’ll have 3G services built-in.  I’d hope for Verizon, but that limits Apple to its international possibilities.  And there’s no way they’d waste the money on two different 3G chips.”

Note that I’m surprised, but not shocked, that it’s still just AT&T.

Media Slate as product definition
I said: “So picture a device that’s sleek and sexy, can play back movies, TV shows (including live TV), Internet radio (lala), show pictures/slideshows, play simple games (app store), and be otherwise completely entertaining.  It connects from anywhere, has enough internal storage to last a nationwide flight, and is all about fun.  Further, it comes with numerous context access options, including free services, a la carte purchasing/rentals, and subscription options.  It probably also has a Webcam and native iChat support. I’m fairly bullish on this concept, as it seems to fit in with the Apple iLifestyle very well, and makes for a useful product.”

Parting thoughts:

I’m actually going to write another blog post with my specific thoughts on the iPad (and I’m the only guy doing that!).  My quickest reactions are that I’m impressed with the price point, but shocked about the lack of camera.  I think they *will* sell millions of units, and it’ll be more compelling to a more mainstream audience than many others think, though I still find flaws in the overall offering.  In reality, this device is actually a very good alternate “home computer” for the average person who only needs web surfing, email, media playback, and entertainment. It’s certainly more compelling than a Netbook.

For some final fun, here’s the blog post I wrote predicting roughly this device. Of course that was back in July 2007.

The other day I surmised on what the iPad (still calling it that – it’s the shortest option) might be, as a device.  With only three days left to go prior to launch, I still find myself pondering the “how do they build something at the right price point that’s useful beyond the context of novelty and/or on the commode?” question. While many are going gaga over pretty much anything that could come out, I in my stubborn fashion still just can’t conceptualize what we are about to see.  Of course I’m effectively ready to pre-order it, but I still can’t piece it all together in my head.  So as the follow-up to what might the product be, I thought I’d amble on about what I don’t think we’ll see…

Hardware without software
One of my general rants about Tablet PCs is the lack of compelling software.  Sure Microsoft splashed some “touch features” across the OS, but for the most part it’s a trainwreck.  Apple won’t do this. Everything that ships on the iPad will be designed completely to work in a touch fashion, or it won’t be included period.  I’m still torn between whether it’ll be a version of OS X or a version of the iPhone OS, but either way, the device will ship with oodles of applicable software, custom-built to be great in gesture, touch, multi-touch, or even by looking at it the right way.

Niche or otherwise narrow market scoped
I stated in my last post that a possible product category is just a heads-on Kindle killer.  I’d characterize this as a small opportunity – yes, it’s been great for Amazon, but the market for “better than Kindle e-readers” is small. The only small product Apple still ships is the Apple TV, which they’ve characterized as a hobby product (and rightfully so) from day one.  Granted they haven’t actually said anything about the iPad yet, but their PR machine is too smart to let this much buzz build up and fall that short.  Then again, if this thing doesn’t come with an espresso maker and difribulator, some people are going to be disappointed.

An open platform

Focused on productivity
Unlike the Microsoft approach to “ecosystem” – where everything other than the Xbox is able to view and edit Excel spreadsheets – my hunch is the iPad is all about lifestyle, the Internet, and entertainment.  I’d guess there’s a native version of Safari, some kind of simple email and calendaring, and that’s about it.  I think Apple doesn’t have any interest in trying to build buzz or sales into the corporate world, and will instead stay close to their home turf with consumer appeal.  I’d go so far as to say it’ll be fun to use, and the new user experience will center entirely around delivering entertaining content.

Support every mobile carrier
Okay, this is one of those “I think I’m right, but what if they really figured it out???” things (Google didn’t really, and they’ve got some smarty folks too).  Supporting all the US carriers is cost prohibitively “impossible” – you’d need a minimum of 2 different antennas/chips and the relationships in place.  Doing this adds to cost, which is transferred somewhere (consumers), and for the most part neither manufacturers nor consumers like to have “wasteful” componentry.  Which means it’s much more likely there’s either multiple SKUs, or only one carrier.  And since the former isn’t very Apple-y, it’s much more likely there’s only one carrier involved – or none at all (which makes some sense, if this were 1997).  Further, this gets messy when we consider Verizon, the best network in the US, as their CDMA platform is unused in Europe, a place where Apple sells a lot of stuff.

I could probably add a few more pages of the what I don’t think will happen variety, but they start getting less interesting in my own opinion (5 colors of iPads! – not).  I did have one more “I’ll bet they do” item, which is…

Embrace Augmented Reality Even More
Lots of hot trends in the technosphere, from Twitter to FourSquare, from App Stores to Cloud Computing.  But Augmented Reality is actually an interesting one, has more usefulness than others, and is right up Apple’s alley.  I’d predict there are several native applications and services that provide very cool augmented reality features.  I’m firmly in the camp of one or more cameras on the iPad, and I think Apple will include one or more fun exploits of the concept from the get-go.  I don’t know if it’ll be as awe-inspiring as PlayGunman, our amazing lasertag on iPhone game, but hopefully it’ll be close (disclosure – I’m extremely involved in it. also, I’m joking around – if Apple can’t make our game look like Adventure on the 2600, I’d be stunned. and it’s not like our guys are slackers, but it’s freaking Apple).  Apple will definitely do some kind of boundary-pushing move with this device, and I’d hunch that augmented reality is one of the areas they could truly make us think a little differently.

When you look at the stats for video consumed on computer screens, it’s fairly staggering.  Literally hundreds of millions of videos per day on YouTube alone, 26 billion videos online in the month of September, averaging about 10 hours per month per person.  From one perspective, this could be considered inconsequential relative to the estimated 8 hours per day on the old fashioned TV set (though that stat is open to some interpretation).  However, considering this is still the early days of quality content being available online, it’s pretty safe to say that the computer (and of course Internet) is a successful media playback device.  So is the future of entertainment going to live on the 50″ HDTV display or the 15″ laptop?

The old argument: the PC is a terrible entertainment platform
At my job a decade ago I used to travel around the world meeting with virtually every company who built PCs, phones, and other gadgets.  At the time the focus was on the emerging “digital home”, a wonderful place where we envisioned the PC (for sake of typing, when I say “PC” I mean “computer” and include Macs in this generalization) as the “server” device, providing media to enjoy on connected TVs and stereos. We used to talk about how terrible a laptop or desktop was as a media consumption device, and how nobody would really want to sit around a small screen to watch any kind of premium content.  Other than the time I thought Amazon wouldn’t get anywhere selling books online, I can’t think of a time I was more wrong about something.  In reality PCs are now phenomenal media devices.  Laptops are unbelievably convenient when it comes to portable entertainment, and you can readily purchase surround sound setups for desktops.

All the ways the PC rules
The computer is unquestionably the most versatile product since the invention of the wheel, and when it comes to entertainment offerings, there’s no shortage of tools and services to enhance one’s experience.  With a computer and a high-speed Internet connection, we are a hair’s width away from a true all-content on-demand any-time lifestyle (and for those willing to skirt some pesky laws, they are already living that way).  Whether it’s Pandora or last.fm, Hulu or Windows Media Center (or even the remote possibility that TV Everywhere actually delivers as promised), you can have truly personalized media experience, all the time.

The kids today…
As a youth I distinctly remember our home’s expansion to a few dozen channels and our fancy remote control (which was actually wired to the cable box).  By the time I was in college, we had a couple of hundred channels, pay-per-view content, and premium cable offerings.  The living room was the only real place in the home for entertainment, with our CRT TV, video game console, cable box, and VCR.  College-age kids today have a very different perspective.  Paying for content (other than video games) is a generally foreign concept, as they’ve been surrounded by free for a long, long time.  And this is nothing compared with young children who are growing up in the post-DVR, on-demand world, where programming schedules seem utterly arbitrary.  People under 25 (and some above, of course) are used to taking their entertainment with them, and the only reason to bother going into the living room is to use their game console for gaming, chatting with friends, or watching movies – all activities they’d prefer to do in their own space anyway.

So is my $4000 (2000 1000 500!) high definition set with surround sound a dinosaur?
Ask me that after I watch Dark Knight in 1080p for the 3rd time. Or during the Stanley Cup Finals. Or even for an episode of Glee (yeah, I watch it, but I offset it with Man vs Wild, so back off). There’s just some content that, if given the option, I’d rather watch on a humongo-screen with amazing sound.  And no matter how much time we spend watching content on our laptops or phones, it’s just a different type of experience.  Further, the TV industry isn’t about to go quietly into any goodnight – innovation in televisions is probably moving faster than we’ve seen in the past 3 decades.  Today you can already buy TVs with built-in Internet streaming from a variety of sources, and we’re seeing numerous experiments with 2-way interactivity and 3d displays.  So the era of “making em bigger and cheaper” seems to be fading into the era of “making em do more”.

Some infallible predictions:

• The popular categories of TV sizes will remain the same for the foreseeable future
• PC/online media consumption rates will increase (rapidly) over the next 5 years
• TV viewing rates will NOT decrease over the next 5 years
• Cable attachment rates (# of people who pay a cable/satellite company) will decrease over the next 5 years, specifically due to people “cutting the cord” and consuming Internet-provided content instead
• All major sports will have full live and archived streams available online within 2 years
• At least one major sport will provide direct-to-TV streaming services within 2 years
• Blu-Ray will continue to flounder, but will show continued (mild) growth for the next few years
• Real-time interactivity will be tested on major TV shows in the next 2 years (and it’ll be more than just a twitter stream!)
• Apple will do something more interesting in this space than Apple TV.
• 3D will not drive the sales of new sets anywhere near what “the industry” hope or project
• The biggest growth area will be the confluence of laptop use simultaneous to TV viewing
• There will likely be a resurgence in more dedicated portable media players (that aren’t iPhones) with native streaming services.  They will fare poorly.
• The concept of the “convergence/Internet set-top box” as well.  These too will do poorly.
• In 3 years there will be 14 different versions of CSI on the air. Also, the writers of Heroes will still fail in their attempt to kill a character permanently.

I’m loving it
Let’s face it, this is an exciting time for being entertained.  There are so many ways to consume content, and so many interesting experiments occurring around the industry.  Further, many “standards” are pretty well in place, meaning the 720p 42″ plasma you bought 3 years ago is still going to work just fine 3 years from now.  This is unquestionably a good time for innovators, entrepreneurs, and consumers alike.  If you find yourself bored and you have a screen somewhere nearby, you just aren’t trying hard enough.

Disclosures: I was on the steering committee for UPnP, DLNA, I built the Slingbox, and have consulted on topics related to convergence and marketing/PR for Boxee, DivX, VUDU, Clicker.com, NETGEAR. As such, I’ve attempted to avoid anything specific to those companies in this post. In no way are any of my consulting clients related to my tech blogging, though one could argue I’ve seemed to align myself with companies who build cool stuff in the convergence space – and they would be right.

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!