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:
Integrate into a DVD player and NOT a “Internet STB”, and add NO extra fees for the service beyond existing Netflix monthlies.
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)!
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).
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).
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.
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.
Disclosure: I am a former employee of Sling Media.
I thought it made sense to get that out of the way up front. Was just reading an article at Ars regarding MLB’s latest feelings about that Slingbox company (nothing reflects better on someone who can’t even deign to get a company name right when quoted):
“Of course, what they are doing is not legal,” MLB general counsel Michael Mellis told The Hollywood Reporter Esq. “We and other leagues have formed a group to study the issue and plan our response. A lot depends on ongoing discussions. Plus, there’s no guarantee that Slingbox will be around next year. It’s a startup.”
I must say I enjoy picking apart quotes when given the opportunity. And that opportunity is now.
“Of course, what they are doing is not legal” - if it were “of course” why would they need to …
“We and other leagues have formed a group to study the issue and plan our response” - shouldn’t it be obvious? Maybe it’s not so “not legal” as he said up front? Maybe?? Probably.
Additional Disclosure: I am not a lawyer.
“A lot depends on ongoing discussions” - good, that’s always good. I wonder who’s in those discussions?
“Plus, there’s no guarantee that Slingbox will be around next year” - actually, unless the boxes are going to spontaneously combust in 2008, there is every guarantee they will be around next year. Unless he meant the company, I guess, in which case it’s just as fair to say there’s no guarantee that MLB will be around next year, they might just go on strike, again. Okay, I must admit I’m particularly bitter because I am a Montrealer, and lost my Expos to the insane greed propagated by MLB and the owners, particularly G.S. of N.Y. Washington.
“It’s a startup” - well, if it’s just a startup, and not even guaranteed to be around next year, then why get all fussy about it anyway?
Still more disclosure: I get all bent out of shape when I read such inanity. So much so that I use words like inanity without even verifying if they are real words.
Also from the article:
At last year’s Digital Media Summit, MLB VP George Kliavkoff said that a San Francisco Giants fan visiting Chicago and watching a Giants game via his Slingbox is “stealing” from whatever Chicago cable operator has the rights to carry the game in the Windy City.
This is a very interesting point, one in which MLB has fairly, well, dead-wrong. See, when I’m visiting Chicago, the local cable operator doesn’t really give much thought to me. Hotel room TVs aren’t counted for local advertising. So the provider there really ignores me. On the other hand, my local SF affiliate loves counting my eyeballs every time they can (not mine specifically per se, although almost mine).
I guess the part I most don’t understand is why they get quite so ridiculous about it. It reminds me of Hollywood starting out all anti-VCR, which turned out to be one of the most profitable avenues the studios ever saw. MLB’s response to placeshifting shouldn’t be to call in the lawyers and cry foul. I’d like to see them, as they say, “man up” about this. They should either:
COMPETE with Sling - Provide an alternative solution that is more compelling than a Slingbox
PARTNER with Sling - Find a way to leverage the Slingbox to generate additional revenue or business opportunities
MLB is a multi-billion dollar organization. Yup, that was with a “B”. Sling’s raised a total of about $57 million. Calling in lawyers to deal with this is like me calling Terminix to kill a spider in my house.
I’m heading down to (ugh) Santa Clara today to check out the annual Connections Conference, a show centered around the digital/connected home. I like the show, and even spoke at it a few years back (this whole “independent consultant thing” certainly seems to diminish the speaking opps). I’m curious to see the next wave of “the future of the digital home” visionaries strut their stuff. After all, this is the year of the digital home, right? Or was that last year? Or was that 2002? Or 1999?
… we can easily recommend it for people who are yearning for a simple way to show on their big TVs all that stuff trapped on their computers.
Apple is hoping that, just as the iPod trumped earlier, but geekier, rivals, Apple TV can do the same by making a complex task really simple.
The review continues on, and Walt gushes about the device quite a bit. The only competitor he points out is the Xbox 360, which he dismisses because it’s twice the price. I think this is a dangerous dismissal, as the price points aren’t really the issue in this category yet. We are in early early adopter-land, which means the people who really want it, are gonna buy it. $299, $399, $599, whatever. The bigger question to ask is: is this really a market they can dominate?
In 2 years, over 20 million Xbox 360s have shipped, and as The Online Reporter observes, the biggest Apple TV competitor could already be on the market. Xbox 360 owners who have the Live service tend to love it, my friend (and fellow blogger and now Sling Media employee) Dave Zatz told me he felt the 360 was the best device he bought last year. Also, the NETGEAR EVA8000, which I reviewed last week boasts a more robust feature set at a similar price point. I read a lot of conjecture about how “Apple TV is just like iPod year 1″ but folks, I’m saying now it’s not anywhere close.
When Apple launched the iPod, the category already existed (even if you ignore other mp3 players, people already were comfortable with buying portable music devices). The problem then was: there was no really convenient way to get existing and new music collections on to portable MP3 players. I had a Rio Karma, it was great (like really great), but you had to be pretty savvy to get music onto it, and there was ZERO services on the Internet with new content. In the living room, on the other hand, it’s not just a question of simplicity and furthermore, there’s tons of content out there. It’s not hard to get “mainstream” video to a TV set, especially in comparison with the challenge of getting “mainstream” music to an MP3 player (circa 1999).
Now I’m not dismissing the product, nor am I dismissing Apple’s ability to move their marketing muscle into the living room. But this certainly isn’t a slam dunk. Take a time out to read Thomas Hawk’s list of why he isn’t interested in the “dongle”, then go check out Phil Swann’s reasons why he thinks Apple TV will “bomb”. If you aren’t too saturated, I’d also stop by WIRED’s fair and balanced thoughts on why it “rules and sucks”.
Here are some of my specific problems with the product (note that I haven’t used it hands-on, so I have no comments about it’s user interface, which is probably great):
No YouTube support. This is a very questionable move at this stage of Internet/video/PC/TV convergence. The EVA8000 does it, and after a few days using it, it’s a very fun application.
Widescreen-only. I love the HDTV market, and about one third of all new TVs sold are flat (which implies widescreen), so that’s a lot of screens (I’ve read before the number of households is in the 20 million range, but cannot find that source to quote here). But this is the kind of product decision that creates returns, something I have a feeling Apple doesn’t have to deal with in other categories. Also, there’s a distinct lack of HD content offered at launch, which makes this even more… ironic?
A computer must be on all the time. One thing I like very much about my Sonos and EVA8000 setups are they work directly with my networked hard drive (aka a “NAS“). With the Apple TV, I need a PC/Mac on all the time, and while this is clearly a growing trend, it’s a requirement I don’t like in a product this expensive (it’s one thing for a $99 media adapter, it’s another at $299).UPDATE: I was corrected (by Ben at EngadgetHD), I misread the usage with it’s internal hard drive.
Is it a good product? Probably. After all, Walt is a pretty picky guy, and even though he clearly has an affinity for Apple products, he seemed impressed (although he didn’t really talk about video quality in the review, which is an interesting omission). Also, Apple does tend to make the product experience great, and I’ve got to assume that heavy iTunes customers are going to think this thing was sent down from the stars above. As Sonos’ worldwide PR manager Thomas Meyer said to me, “Mr. jobs is definitely going to do this right.”
My hunch is they’ll do a very good job appealing to that core market, but have a tougher time getting beyond. I don’t think they’ll be as strong in the HDTV segment as they want to be, as even enthusiasts such as Ben Drawbaugh (contributing editor at Engadget HD) who thinks “it’ll be awesome” (and has blogged about wanting one) doesn’t think it’ll be all that useful for HD content. If I were Apple, I’d be doing everything I could to get associated to HDTV, as betting on the future is more important than the past.
I’d guess they can out-market a company like NETGEAR in this space (but will probably drive them unit sales for some of the reasons I stated above). I think they’ll probably be the #1 leader in “digital media adapters” by the end of this year, and can probably move over 100K units in 2007 alone. That said, I don’t think they are positioned to utterly dominate the living room the way they do in the portable space.
Intro
In 1999 when I cofounded Mediabolic, we had a vision of the “connected home” that we pitched all over the world. In 2000, I first started hearing (and using) the phrase “THIS is the year of the Digital Home” (yes, in all-caps). I’ve heard that phrase every year since, but have yet to see the vision come even close to reality. So when I saw the first demo of NETGEAR’s Digital Entertainer HD at CES 2007, I was fairly impressed, and began pestering them to try it day-in, day-out. With my current role as the company’s current guest blogger, I got exactly that - early access to play with the EVA8000 (which formally launched earlier this week).
Unfortunately, I got my unit with less than 10 hours before I hopped on a flight to the East Coast, but like any good geeky blogger would do, I spent about half the night playing with it. Not only that, I spent most of that time videoing my efforts, and edited it down to about 20 minutes (most of which shows the interaction with the device, it’s GUI, etc). The videos are available on YouTube (in 3 parts, because of their filesize limitation) and you can watch them here (for people in RSS readers, here are direct links to parts 1, 2, and 3):
Product Details
For those of you who don’t want to watch the video, here’s a quick summary of the main EVA8000 features:
Connects to your TV and your home network
Streams music, photos, and videos from connected PCs as well as from the Internet
Support for numerous video formats, and stream quality is up to 1080p HDTV resolution
Works with YouTube, Flickr, and BitTorrent content, and can display RSS feeds
Networked DVR (”TiVo-like”) features to stream live TV from PCs with TV tuner cards
Makes a mean bowl of tomato soup
Pretty simple and straightforward, eh?
The product retails for $399, which is probably high in the long-term, but for now is a decent price point. Since we’re still in such an early adopter timeframe for digital home products, I don’t think there is a real urgency to focus on the mass market. Further, if you consider the pricing on HD/BluRay DVD players, it really fits in pretty well (especially since the amount of content it can play is staggering). Obviously sub-$300 prices would be ideal, but, as someone who comes from the other side of the field, I understand exactly why it’s priced this way. Also, don’t forget that it’s always possible to have a sale, but never possible to raise a price…
Using the Digital Entertainer HD
Onto the EVA8000 itself. I liked the user interface (GUI) in that it’s simple and navigates quickly (much faster than, for example a MovieBeam or Comcast HD-DVR menu). If you’ve ever used a TiVo or Media Center PC, you shouldn’t have any problem getting it up and running. The installation is also quite simple, and the unit has all the important outputs (HDMI, SPDIF, and optical audio) as well as the less-important-but-probably-necessary-ones (component, composite, and stereo audio). For connectivity it has built in wireless 802.11g (with support for all the security formats - excellent), Ethernet and a couple of USB ports as well.
The setup went mostly smoothly (although I think I found a weird bug in the HDMI settings, but that’s a minor thing), and it was able to find my network, get online, download an update, and find my networked hard drive with me just following along with the remote. This is very important people - I didn’t have to install any software, drivers, or anything, and was able to get my music, photos, and videos all streaming in a matter of minutes.
There was one exception to the above: if you want to watch YouTube videos, you do need to have the PC software installed. Furthermore, please remember that I already have a properly configured networked drive (Maxtor Shared Storage Plus) streaming music to my Sonos, so I didn’t have to adjust any settings. If you haven’t ever streamed media on your home network before, this might take you a little longer, and you may need to use the PC software.
Regarding media playback performance for a moment. I looked at quite a few photos, and I didn’t really feel they were being displayed at the maximum resolution possible. This could be a trick of the eyes, but I was expecting the pictures to look “HD-like” since they are all resolutions of 720p (at a minimum), so I’ll have to look into this further to see if it was just user error or if the box can’t display them at full resolution. Music playback was spot-on, with only a minor delay between songs. Again, I need to dive deeper to understand the feature set around queuing music, making playlists, and performance with huge collections, but when I selected “play something” from my 15,000-song MP3 (and WMA) collection, it did exactly that. Last up is video - I didn’t have a chance to really put the HD features to a test, but will do that next week. The videos I played were in a range of formats, and the highest bitrate I used was a 2Mbps WMV clip, which looked perfect (yes, even wirelessly). I am curious to see how it stands up once I get the 6+Mbps videos going, but I don’t have any reasons to doubt its potential there.
One key set of features with the EVA8000 is its ability to act as an extension of a PC with a TV tuner card. This means you can have a PC in one room of the house and stream its live/recorded TV to the living room. As a Slingbox owner, this wasn’t something I needed personally, but if you do have a TV Tuner and use Orb or another service, you should look into the Digital Entertainer HD. Also, the hardware was designed to support multiple Entertainers on the same network, and even have them control each other (there’s actually a whole suite of “Follow Me” features that I missed out on since I only had the single unit). Naturally, I wasn’t able to try any of these features myself, so I’ll hope to come back and revisit in the future.
One ding to the product is in the PC software. While it was easy to install and seems to have a pretty low impact to performance, it did create a whole new “sound card” in my computer. This means Windows thinks there is another audio output, and it threw off a couple of programs until I realized it had happened. I didn’t see any way to disable this on installation, so once you’ve completed setup, you might want to double-check your PC’s audio settings.
I really enjoyed the integration with both YouTube and Flickr. I was browsing through my own content in just a few minutes (you can use the remote control’s 10-key for text entry the same way you use your cell phone’s keypad). While I couldn’t quite navigate the collections and all the settings both services offered, the EVA8000 is remote upgradeable (I’ve already gone through one upgrade process - worked fine), so I’m sure the folks at NETGEAR can react and add new options dwn the road. The unit also is compatible with RSS feeds and has a few built-in offerings, including some weather features that were quite nice (even a snow report for the Tahoe crowds). I didn’t try the BitTorrent services, since I am not a user (believe it or not, I’ve never ‘Torrented).
Conclusion
If you skipped the videos and just read the text, you missed half the story, so here are (again) links to parts 1, 2, and 3. Now Apple TV is coming soon (possibly within days or hours), and the Xbox 360 has a lot of personal media services as well. I like the EVA8000 against Apple specifically because it can play so many different file formats and is focused on open services, while Apple’s will have a much narrower set and is a completely closed platform. It seems like everyone’s utterly ceded control of music to them, I sure hope it doesn’t happen again in the living room. With products like the Digital Entertainer HD, it’s good to see they have a pretty strong set of competitors.
Overall, the product impressed me (a lot more than I was expecting - no knock to NETGEAR, but I’ve just seen so many similar products that were just terrible in the past). Perfect? No, but I’ve yet to see a single product in the “connected home” that is. The interface was clean and simple, and the unit performed as it should. A few nice bells and whistles of Internet content services did a great job rounding out the personal media streaming features. $399 is a little high (it’s $349 on Amazon), but it’s also the only game in town with both full 1080p support and the built-in integration with YouTube content, all delivered direct to the boob tube.
I really have to dive in even deeper to understand the full spectrum of features the unit offers, and figure out which ones I like/dislike, but most importantly - the product’s basic value proposition is definitely delivered in a good way. With the feature set I’ve seen so far, it is a very strong contender (quick and simple setup as well as HD streaming is a huge factor there). So if you are looking to find a way to play your digital videos on your TV, stream your MP3s to your stereo, and bring some Web media services straight to the living room, the EVA8000 is a solid option for you.
Disclosure: At the time of writing, I am working on a consulting project with NETGEAR, but this is of no bearing to this review. Furthermore, my Guest Blogger status merely granted me access to a unit, I was given free reign to write the review as I saw fit.
