The Weekly Riff: Technically Not a Blog

Regional DTV Transitions to Fuel IDTV Growth

Wed, 01 Feb 2012 08:47:00 -0700

Tuesday January 31, 2012 – Maya Jasmin

Coming off of my first Consumer Electronic Show (CES) earlier this month, I must admit that while I was definitely impressed I was not awestruck as the next-big-thing is seldom front and center at the confab. So amongst all the many gadgets in the likes of Ultrabooks, 3D gaming devices, Smart Cars, etc… smart TVs were the most alluring to me.

Of course, we’ve known for some time that 3DTV/Smart TVs are designed to bait consumers into buying new high-end sets. But with most of North America, Japan, and Western Europe at a point of saturation and in economic uncertainty, what is the outlook for new sets integrated with digital terrestrial TV tuners, Internet connections and 3D technology? DTC is forecasting relatively strong growth for worldwide Integrated Digital TV (IDTV) shipments but only in parts of the world where consumers have yet to experience the analog-to-digital TV transition; high-end bells and whistles will not likely boost TV sales in places where the transition has already occurred. DTC expects 147 million IDTVs to ship in 2012, growing to nearly 250 million in 2016, with growth generated in regions where tuner mandates are accompanying approaching analog shut-offs, namely Latin America, Eastern Europe and Asia Pacific.

So even with impressive displays at CES and ramped up marketing efforts by manufacturers, it seems that 3DTV/Smart TV sales, or lack thereof, is contingent upon external forces, namely the economy. And until it improves and consumers feel comfortable with making purchases outside of necessity’s realm, the 3DTV/Smart TV market will continue to be a niche element in overall IDTV shipments.

Solving SOPA

Mon, 23 Jan 2012 09:47:00 -0700

Monday January 23, 2012 – Stewart Wolpin

Wikipedia, Google, Reddit, Wired, et al, all have had their say about SOPA – the Stop Online Piracy Act, officially H.R.3261, and the Senate version, PIPA (Protect Intellectual Property Act), officially S.968 with their Web blackouts and/or protests on January 18. In the wake of the blackouts and White House opposition, several former Congressional supporters on both sides of the aisle have now turned against the measures as well.

Now what?

Silicon Valley may rightly disapprove of SOSA and PIPA, but no one disputes the need for some measure(s) to stem the tide of illegal content flowing from foreign servers serving the less scrupulous amongst us.

Many, including CEA, urge support and passage of the shockingly bi-partisan Digital Trade (OPEN) Act, which purports to more surgically target rogue Web sites than the more blunt instruments wielded by SOPA or PIPA. It's not known how the Web community will react to OPEN.

But it doesn't matter if what seems to be the perfect piece of legislation is composed and passed. If history has taught us anything, it's that it's impossible for the law to keep pace with technology. Hollywood studios ended up breathing a sigh of relief when its ill-considered law suits against Sony and the VCR failed, and it took 60 years for lawmakers to update the Telecommunications Act of 1936, and even then the 1996 bill fell short of dealing with the implications of the then-new Internet, to cite two examples.

An Anti-Piracy Prescription

What is needed is not continued division between copyright holders, Silicon Valley and Congress, but cooperation to wage a hearts and minds campaign. After all, these foreign Websites wouldn't be in business if folks in the U.S. didn't use them. And apparently, consumers don't conflate illegal downloading with walking into a store, shoving DVDs and CDs into their pants, and blithely walking out without paying.

For instance, Wednesday's Web blackouts and the attendant media coverage have raised the public consciousness of the issue. Someone/anyone/everyone should continue this education process to educate consumers about legal and illegal behavior where uploading and downloading copyrighted content is concerned, to make it clear what kinds of behaviors by ordinary citizens are legal or not.

Someone/anyone/everyone should create some sort of a "not-watch list," a directory of offending Web sites, technical methods – perhaps in parental controls – to restrict access to offending sites by children, and an FAQ on how to recognize illegal content and sites.

Search sites, ISPs, ad companies, financial institutions and Web sites themselves should publicize self-policing efforts and showcase successful efforts to keep sites legal.

Someone/anyone/everyone should initiate a social media campaign by anti-SOPA Web entities (Wikipedia, Google, et al) to equate illegal downloading with shoplifting, or otherwise socially demonize cyber content theft until the activity is considered akin at least to smoking.

Hollywood studios should stop acting – or at least appearing to act – so greedy. For one thing, studios should more quickly adopt UltraViolet, the industry effort to make it easier for consumers to enjoy content legally bought on a variety of devices and formats, regardless of how or where said content was originally purchased. (Or, something akin to it).

Finally, everyone needs to stop treating online piracy as a divisive advocacy issue. No one wins if the Web turns into a criminal paradise. A concerted social, economic and legal effort to combat online piracy would ultimately be more effective than a single piece of legislation, no matter how well-intentioned or written.

Can Dish Make the Set Top Box Cool Again?

Mon, 16 Jan 2012 12:51:00 -0700

Monday January 16, 2012 – Greg Scoblete

It's hard to remember a time since the advent of TiVo when the set-top box (STB) was actually cool. Sure, gadget connoisseurs might keep tabs on them, but few consumers pay them any mind.

Satellite provider Dish came to CES hoping (or rather, hopping) to change that with a new multiroom DVR/client device dubbed Hopper and Joey. The idea, explained CEO Joe Clayton during an introductory press conference, is to break the downward cycle of the pay TV price war and woo new customers with a technology-first pitch.

The Hopper is a multiroom DVR/server with a gargantuan 2TB hard drive. It’s a device capable of recording more TV than is healthy for any individual (or family) to consume. Indeed, when introducing the Hopper at a CES press conference, Dish communications director said that consumers were absorbing an average of 30 hours of TV a week – a figure that, astoundingly, has actually increased over the last year by 40 minutes.

The Hopper will incorporate three satellite TV tuners (a Dish spokesman also indicated an over-the-air tuner box would also be made available later in the year) to enable a feature Dish is calling "Prime TimeAnytime." Simply activate Prime Time v Anytime and the Hopper will record all of the major broadcast networks' prime time lineups in HD for up to eight days. An Internet connection will give the Hopper access to Blockbuster@Home, a streaming service owned by Dish that's designed to compete with Netflix.

Joining the Hopper is the Joey - a thin client set top box that connects to the Hopper via coaxial cable to deliver all the features of the Hopper to multiple sets in the home.

So how important will the Hopper be for Dish? Well, it has its very own mascot - a kangaroo - which Clayton explained was in keeping with his corporate heritage (Clayton headed both RCA and Sirius, two brands with animal mascots).

It's interesting to contrast Dish's approach, which plays up the speeds and feeds of its hardware, with DirecTV. While DirecTV also has its own multiroom DVR server/gateway product (which beat Dish to market by several months), it came to CES touting a partnership with Samsung that eliminated the need for a set top box entirely. Well, almost entirely. Samsung will include DirecTV's RVU protocol in its lineup of Smart TVs, which essentially makes those TVs "thin clients" for DirecTV customers with the company's HD Home Media Center. But unlike Dish, DirecTV hasn't tapped the animal kingdom for branding purposes.

Analog to Digital Switchover and Asian Growth to Foster Moderate Growth

Mon, 09 Jan 2012 13:25:00 -0700

Monday January 9, 2012 – Jing Sui

As countries continue to transition from analog to digital terrestrial TV, set-top boxes (STBs) and Integrated Digital TVs (IDTVs) that receive terrestrial signals are in high demand. Digital TV receiver shipments, including both STBs and IDTVs, are expected to continue rising in the near future. DTC estimates that nearly 340million combined units shipped in 2011, and continuous growth is expected throughout the forecast period, yielding a Compound Annual Growth Rate (CAGR) of 7% between 2011 and 2016.

As an impact for DTT STBs, IDTVs log a CAGR of 12% from 2011 to2016 as more and more TVs are built with internal digital terrestrial tuners. Worldwide STB shipments for the digital terrestrial platform fluctuate because of the varied analog shut off schedules, the increased presence of digital tuners on TV sets and the proliferation of hybrid STBs, but overall the category is projected to produce a 4% CAGR between 2011 and 2016.

Digital Cable STB shipments overall exhibit stability even though they face competition from other pay TV platforms. The long-term outlook for DTH satellite and IPTV STBs is positive due to robust demand in Asia. Shipments of IPTVs have an especially good outlook, with shipments expected to double between 2010 and 2016, reaching 43 million units shipped.

The Coming Wi-Fi Revolution

Tue, 03 Jan 2012 13:03:00 -0700

Tuesday January 3, 2012 – Stewart Wolpin

Like the stirrings of a small cabal of rebels in the mountains, the seeds of a revolution are sprouting in the Wi-Fi world. But this is not mere blogging hyperbole. Before the end of the decade, all the current folderol over 3G and 4G high-speed cellular data connectivity could become an anachronism in a planet bathed with ubiquitous Wi-Fi connectivity.

Actually, there are two separate revolutions brewing: Wi-Fi Certified Passpoint, popularly known as Hotspot 2.0 (for those who have ever heard of it), and Super Wi-Fi.

The first, due to rollout in less than a year, will make Wi-Fi as easy to automatically access as cellular service is now; the second will create hotspots measured not in feet, but in miles.

Combined, these two efforts will disturb nearly every portable product paradigm, completely change how consumers interact with their gear and create entrepreneurs who are able to grasp and exploit the implications better than others. Like previous tech revolutions, the old and complacent will either adapt or die, and the new will rise to replace and dominate them.

It's all a matter of understanding what the revolution is bringing.

Wi-Fi Certified Passpoint

Its promoters are promulgating the idea that Passpoint will make Wi-Fi as easy to connect to as cellular.

The Wi-FiAlliance is now readying the first version of the Passpoint standard that will enable mobile devices worldwide to automatically detect and automatically and securely connect to Passpoint-certified hotspots. Consumers will be able to move seamlessly from hotspot-to-hotspot just like they can from cell-to-cell (although they haven't quite figured out hotspot-to-hotspot Passpoint VoIP call handoff – yet).

Meanwhile, the Wireless Broadband Alliance (WBA) is forging the business partnerships between hotspot providers such as Boingo, cellular carriers and cable providers, all of whom will simply add Wi-Fi connectivity to a consumer's current bill, offering per-usage or buckets of monthly connectivity plans, similar to cellular minutes.

Passpoint's implications are tantalizing. Wi-Fi connectivity is capable of theoretical speeds of 450 Mbps (and I'll be speaking of theoretical speeds so this is an apples-to-apples comparison). 4G LTE has a top theoretical speed of 12 Mbps. If my math is right, that's a nearly 400 times speed advantage. Future LTE revisions may bring theoretical top speeds of 50 Mbps; if Wi-Fi technology doesn't improve, that's still a hefty 9x speed advantage.

For mobile-optimized Web surfing, sending emails, uploading photos, this extra acceleration is nice, not critical. But if you enable it, they will come. Video calling can be buffer- and grain-free HD. HD video shot from a smartphone can be as mindlessly uploaded and passed around as photos are today. And I'm sure there'll be apps I can't even think of that will take advantage of this revolutionary blanket broadband coverage.

Super Wi-Fi

Wi-Fi hotspots are plentiful in urban areas; out in the hinterlands – not so much. And current hotspots are limited by their pitiful150-200 foot range, if you're lucky.

Super Wi-Fi will change all that.

Instead of transmitting in the 2.4 or 5 GHz bands, Super Wi-Fi, promoted by the SIG-like Wireless Innovation Alliance, lives in the so-called TV White Space band, 470-698 MHz.

This lower frequency band widens Wi-Fi signal propagation – at low, 40 mW power, a home or local Wi-Fi hotspot will reach three- to five-times the coverage as current Wi-Fi (future routers will likely be dual-mode since Super Wi-Fi speeds may be slower than high-frequency Wi-Fi); broadcast at a high-powered 4 watts, a rural Super Wi-Fi hotspot could stretch as wide as 40miles, depending on terrain. Lower TV White Space frequencies also mean more robust signals that more easily travel through obstructions that hamper regular Wi-Fi.

Because the 470-698 MHz TV White Space band is unlicensed, rural entrepreneurs could rush to build 4-watt multi-mile hotspots, then make deals with cell carriers to get them incorporated into Passpoint networks. Forward-thinkers may find Super Wi-Fi a new cash crop once the first SuperWi-Fi gear starts rolling out in late 2013/early 2014, a process that has just started.

The downside is a Super Wi-Fi land rush that could force the FCC to impose stricter rules or open up more space to accommodate expected expansive usage for spectrum.

But imposing order on what promises to be a wild Wi-Fi West is further down the road, after the Passpoint and Super Wi-Fi revolutions succeed in disrupting the current Wi-Fi status quo.

If You Build It, They Will Video Phone

Mon, 19 Dec 2011 13:48:00 -0700

Monday December 19, 2011 –Stewart Wolpin

In the future, all TVs…

RING! RING!

Oh, could you hold on a second? My TV is ringing.

As I was saying (sorry, it was someone taking an opinion poll), in the future, all TVs will be equipped with Web cams and microphones and will become our major home telecommunications device. I'm no Nostradamus, Criswellor even Punxsutawney Phil, nor do I have to be. It's going to happen.

What, you, say? It's already happening? No, not really. Yes, LG, Panasonic, Samsung, Sony, Toshiba and Vizio all sell HDTVs to which you can attach a separate Webcam/microphone/processor array to turn the TV into a phone.

But asking consumers to buy a $2,000-plus TV PLUS another$150-$300 to buy an attachment box is an incredibly dumb way to move us to the video phone future.

What gnaws at me like the waste of unrealized potential is that these same TV makers have the answer right in front of them – build the damn Web cam and its processing guts into the bezel.

Will this make the TV more expensive? Yup. So you do what gadget makers have done for decades: you build this slightly expensive new feature into the top-of-the-line models. Then, as time goes on and people start buying them, economies of scale let you start building it into increasingly less expensive HDTVs.

This isn't rocket science nor is it news. HDTV execs I've spoken to know building a webcam into the TV is the right thing to do. They've seen what happened in the PC business – a few desktop PCs had built-in Web cams, then a few more, then a few laptops had 'em… Now ALL desktops and laptops have built in Web cams and mics, and when they built it, we came, and lots of other capabilities became possible.

HDTV makers are setting themselves up for a crash. As we're all sitting here, a certain fruit-named company is readying an HDTV that sure as shucks will have a built-in video telephony capabilities that can communicate with millions of the single most popular smartphone on the planet and the single most popular tablet on the planet. Maybe this fruity company's HDTV with a built-in Web cam (and who knows what else) will carry a premium price and therefore won't pose real competition in the HDTV space – but this kind of willful blindness has been the ruin of many of the cocky who have gone before.

I hope I see some HDTV makers with webcam-equipped sets at CES, I really do. It'll be good for them to gird them against the PC-like smart HDTV coming (and so their boob tube wares don't look so archaic when it does), and good for those of us who'd like to answer the phone with our TV remote control. I hope I will, but I doubt I will.

Viva Vita?

Mon, 12 Dec 2011 09:32:00 -0700

Viva Vita?

Monday November 12, 2011 – Stewart Wolpin

As the residents of Rock Ridge prepared to evacuate their small town ahead of the invasion by an outlaw horde organized by Hedy ("that's HED-ley") Lamarr, Sheriff Bart confronted leading citizen Howard Johnson.

"Can't you see," Sheriff Bart pleaded, "that this is the last act of a desperate man!"

Replied Mr. Johnson, "I don't care if it's the first act of Henry the Fifth! We're leaving!"

I thought of this scene from Blazing Saddles when getting a hands-on demo of the upcoming Sony Vita, the company's successor to the seven-year-old (a century in tech years) PlayStation Portable (PSP) and what could be Sony's – or anybody's – last desperate act to sell a dedicated handheld gaming device.

If Vita proves vital, it'll be because hardcore gamers still bring enough of the juice to slow a powerful trend – the explosive growth and sudden dominance of smartphone-based gaming.

The numerical advantage smartphones have in the gaming arena -- Android and iOS game downloads are measured in the billions, while dedicated disc-based game sales are measured in the millions -- is daunting. Are the casual smartphone gamers eating into the dedicated portable video game market? It seems reasonable to conclude that some folks who may have dabbled with a PSP in the past will forego the dedicated portable device, especially if they are only casual gamers. But, will the smartphone category eat into the hardcore gamer market?

So the question for Sony is, when Vita goes on sale February 22, will consumers buy a dedicated game player for $250 (Wi-Fi) only or $300 (Wi-Fi+3G) when they can buy a packed smartphone for the same price or less?

Dedicated vs. All-Purpose

This same dedicated device vs. smartphone scenario is being played out in both the portable navigation device (PND) and digital camera markets. In all three cases, dedicated device manufacturers are burning the midnight LEDs to come up with specialized functions and features not found on smartphones just to keep themselves in the consumer choice conversation.

As such, Vita promises a far richer and powerful gaming experience than smartphones and far richer than any previous portable game player.

Aside from duplicating a smartphone's magnetometer, gyroscope and accelerometer, similar wireless network connectivity capabilities for downloading content and communicating with fellow players, Vita adds quad core processing for more sophisticated game play, a rear touch control surface for extra features, dual joysticks – a portable first, handheld-to-PS3 (and back) Cross Play and Cross Save game transfer, the capability to add your avatar to a game character, geocaching of digital objects, and Near – the ability to detect fellow players within several kilometers to engage in multi-player game orgies, all on a five-inch screen.

These all add up to a unique portable gaming experience unequaled on a smartphone.

But the question is:

Who cares?

Vita is saddled with a couple of groaners. Vita's got no built-in memory. It requires a new proprietary micro SD-like memory card called, cleverly, "removable memory." Proprietary for security reasons, says Sony; proprietary my butt will say consumers. And Vita doesn't come with even a 4 GB card pre-installed to get you started. Hope someone tells each customer before they get home with a game machine they can't download games to.

To Cross Play and Cross Save, consumers will be forced to buy two versions of the same game, one for PS3, one for Vita. There is an internal Sony discussion to provide both PS3 and Vita versions in a discounted bundle, but – with apologies to Seth Meyers – really? Forced to buy two full-priced copies to play the same game? Really? Ever hear of Blu-ray's "digital copy"? Really?

Vita will play all previous PSP games, but there are only 15 Vita-specific games right now, with the promised "more to be announced at CES." Tens of great Vita games to choose from priced likely at tens of dollars from vs. a quarter million decent time-killing games on Android and iOS to choose from priced at tens of cents – or nothing?

These may be niggling hiccups to high-end gamers drooling at Vita's prospects for compelling portable play. But millions of smartphone owners are apt to shrug their shoulders and be satisfied to simply sling fuming fowl at egg-stealing swine – or just slide simple solitaire – on their smartphone.

As such, Sony will likely settle for a dedicated D-SLR-like specialty high-end gamer demographic to support Vita – since that's likely the only demographic Vita is likely to attract. Given the speed at which smartphone screen size is increasing and processing power is progressing, Vita may be anyone's last dedicated portable gaming act.

AVC Products Forecast Overview

Mon, 28 Nov 2011 09:51:00 -0700

Monday November 28, 2011 – Jing Sui

With more efficient coding and higher-quality play back, MPEG-4 AVC has expanded into every consumer digital video category going far beyond the ubiquitous MPEG-2 standard. The AVC market continues to exhibit notable growth and a majority of the product categories are experiencing growth.

DTC’s latest data narrates the trends of categories including AVC consumer electronic products, set-top boxes (STBs), mobile devices, PC and PC related products. Among AVC consumer electronics product families, integrated digital TVs (IDTVs) anticipate double-digit growth rates and experiencing the greatest compound annual growth rate throughout the forecast period. STBs are projected to have shipments of over 140 million units in 2012. Shipments of MPEG-4 AVC mobile handsets, due in part to the popularity of smartphones and high-end media handsets, are expected to grow to over 1 billion in 2016. Other AVC CE products, such as Blu-ray disc devices and video game consoles, are also consistently seeing healthy growth throughout the forecast period.

What Business Are Amazon and Barnes & Noble In?

Mon, 21 Nov 2011 06:34:00 -0700

Monday November 21, 2011 – Stewart Wolpin

This seems to be color LCD e-reader week, what with Amazon's Kindle Fire and Nook's Tablet charging into both online and retail shops within days of each other.

What is difficult to suss out is what business Amazon and Barnes & Noble think they're in – the content business or the device business?

Or, perhaps more importantly, is either company in the business of making money?

It looks as if Amazon is leaning toward being in the content business but, harkening back to its early days, not making money. Priced at $199, each Fire sold will reportedly lose Amazon $50.

Amazon figures it'll make up the difference on its content cornucopia – e-books (duh), magazines, movies, music, et al. After all, buyers will want to fuel their Fires.

It's harder to discern B&N's content v. hardware focus, though.

B&N's challenge

Barnes & Noble must think it's in the gadget business since it's selling the Nook Tablet for $50 more than the Fire, assumedly to make a profit on the hardware (or at least break even).

B&N's pricing makes sense on the surface, since the bookseller lacks the multimedia content to offset a lower tablet price as Amazon does.

Of course, B&N can't discuss its content deficiencies compared to Amazon. Instead, it will attempt to justify its higher price by stressing Nook Tablet's technical advantages – it has twice as much RAM (1 GB for Nook vs. 512 MB for Fire) and twice as much flash memory (16 GB vs. 8 GB) as Fire, plus a MicroSD card slot.

E-reader consumers, however, are unlikely to look past the price, especially since all purchased content from both book sellers can live in the cloud, and they perceive they don't need a lot of digital storage space for books.

And that's not even considering the insulting new price on the original Nook Color. The gleaming new Fire for $199, or B&N's old, clunky POS that's already been replaced for the same $199? Ooh, there's a decision!

With this ridiculous $199≠$199 price equation staring them in the face, consumers will need to be blown away by something wondrous on the Nook Tablet to justify spending an extra $50 – and they won't be. Consumers will project the poor value proposition of the over-priced old Nook Color onto the new Nook Tablet since the two are essentially twins, a similarity made more stark since they'll likely be placed in close proximity to each other in B&N stores.

In fact, it'll be the Fire that blows consumers away, thanks to its fiery moniker, its sleeker looks and its revolutionary lickety-split-loading Silk Web browser.

A different approach?

What puzzles me, considering the uphill device and pricing scenario it created for itself, why B&N didn't attempt a radical pricing approach.

What about a subsidized pricing model such as the old book and record clubs – you know, four books for $1, 12 record albums (ah, remember records?) for a penny (plus the hidden 13th), as long as you bought lots of books/records over the next year or two.

Imagine how Nook Tablet would sell if it were priced at, say, $149 (and blew out the old Nook Color at $99), and how many e-books it would subsequently sell. At $249, B&N risks losing the gains it made vs. Amazon with its only-LCD-e-reader game-in-town Nook Color, and losing the e-book battle.

Of course, both booksellers realize they are not just competing against each other. They also are competing against Apple, which suffers none of Amazon's or B&N's hardware pricing problems or content vs. hardware business schizophrenia.

This may be LCD e-reader week, but it's going to be a fascinating LCD e-reader fourth quarter.

What TV Could Be (If Steve Jobs Had His Way)

Mon, 14 Nov 2011 10:37:00 -0700

Monday November 14, 2011 – Greg Scoblete

In Walter Isaacson’s widely cited biography of Steve Jobs, we learn that Jobs “never put profits ahead of products.” Such was his devotion to making an insanely great consumer experience that he was willing to shun Business 101 in his pursuit of perfection. At least, that’s the myth. In reality it sounds just a wee bit self-serving, like an artist declaring that they would never value material success at the expense of their “art” only after they’ve become a blockbuster success and no longer subsist on mac-and-cheese.

However many grains of salt you want to sprinkle on the “products before profits” ethos, it’s pretty clear that whatever’s driving the pay TV industry, it's often the inverse of Jobs' mantra. The end-user’s experience - what they can watch, where they can watch, how they watch, etc. - is not a thing of beauty. What's frustrating for many observers is that it could be.

If technology had its way, our pay TV universe would look considerably different. For instance: you wouldn't have channels. Instead, you'd have apps. No more asking yourself, in the wee hours of the night, what's on channel 7,334. Instead, you'd navigate a sleek UI to find your app of choice.

Once you're in the app, you could choose from a linear offering (particularly useful in the sports world) or from a video-on-demand catalog. The app model provides the content provider with a wealth of opportunities to integrate more interactive content, contests, games and social interaction. Content owners would naturally charge a subscription fee for an app, but consumers could pick-and-choose only the apps they wanted instead of being saddled with content they're indifferent to.

These apps could be hosted on a "smart TV" or, more likely, a wireless home gateway capable of streaming to additional thin clients attached to televisions around the home.

None of the above is terribly high-tech. With technologies like Adaptive Bit Rate Streaming making Internet-delivered video ever more enjoyable to the end-user, it could be done tomorrow. It's the business models that don't work. Profits are trumping products.

But it needn't necessarily be so. Selling bandwidth into the home can be profitable. At the recent Telco TV show, many small and rural service providers without a video offering were taking a keen look at over the top video delivered over their broadband network as an easier entre into the triple play.

Even established service providers might eventually grow weary of the retransmission battles and black-outs. The future is out there. We just need to think different.

How Smart is the Perfect Smart TV?

Mon, 07 Nov 2011 15:49:00 -0700

Monday November 7, 2011 – Stewart Wolpin

Most high-end TVs have an Ethernet port for access to online content. But does that make them “smart?” As I see it, there are five components for TV manufacturers to cover to successfully conquer the evolving digital TV business:

• Hardware

• Software

• Content

• Search

Let’s use the rumored Apple television that could go on sale as soon as the 2012 holiday season or, according to a flurry of more recent reports, 2013 as our example.

Hardware-wise, guessing what an Apple television would look and act like physically and technically is as difficult as predicting who's going to be the Democratic presidential nominee in 2012 – it'd be a giant iMac with all the appropriate media slot and external connections.

On the software side, any well-designed smart TV will have a stable operating system, easy access to storage (be it in hardware or in the cloud) a way to distribute content to other devices inside and outside the home, and a way for consumers to use a QWERTY keyboard (be it hard or soft or touch) to interact with the TV.

And, a programming guide will need a major makeover which will include search abilities presented in a unique way. Apple will presumably have a new EPG co-developed with Rovi (Apple signed a deal with about a year ago). This is what Google TV tried but failed (so far) to do.

And for the final interface trick – since we’re basically writing a wish list here – let’s have a voice activation application. Well, a bug free voice activation application.

That leaves content.

How do we watch?

The way in which viewers consume content has been evolving over the past dozen years as viewers time shift with DVRs, and watch TV shows and movies on their computers and through their streaming devices.

Now that we viewers have more freedom to cherry pick the programming we want to watch when and where we please, there is more pressure on pay TV and broadcast networks to provide more flexibility for viewers. There’s also more pressure for them to make it easier for us to source programming from multiple places. To do that we’ll need an intuitive and well-designed program guide so that current channel-centric TV search capabilities, which are like looking for a person's name in a phone book arranged only by address, are a thing of the past.

In order to keep customers, pay TV providers will have to accommodate new ways of viewing, sourcing and displaying content. That will probably mean a little less content bundling and a little more à la carte action.

The iPad Effect

And content providers (and some pay TV providers) seem willing to give a little more à la carte a try.

The red-hot tablet market (mostly iPad) has every content provider rushing to create an app filled with its programs. And, of course, there are already a variety of programming sources that deliver à la carte programs from the Internet -- Amazon Prime, Netflix, Hulu, and iTunes. Perhaps traditional distributors of programming finally realize the à la carte programming future is tailgating them.

The combination of a thoroughly well designed smart TV (we’re not there yet), seamless programming guides across multiple programming sources, and wireless access of programming by multiple devices could usher in new business models and a whole new definition of what it means to “watch TV.”

Over Connected?

Tue, 01 Nov 2011 15:16:00 -0700

Monday October 31, 2011 - Jing Sui

If there’s any doubt that the consumer electronics industry doesn’t understand the importance of content delivery via the internet, take a look at the number of connected devices shipping over the next few years. Over 111 million living room-centric connected devices (including game consoles, Blu-ray Disc players and connected TVs) will ship in 2012. The number of these devices shipping will experience a 50% increase between 2012 and 2014, and almost double between 2012 and 2016.

In addition to Blu-ray Disc players, game consoles and connected TVs, tablets and smartphones are already streaming video direct to consumers (many while sitting in their living rooms), and many pay TV suppliers are specifying Ethernet ports in the next generation of set-top boxes.

Soon your entire living room will be full of connected devices. But is it necessary to include an Internet connection in every consumer electronics device? Are consumers really going to use all of these connections? We suspect that there may be some consolidation in living-room connected devices in the near future, but for now it looks as if few consumers will be without a connection….or two, or three, or more.

Over Connected?

Mon, 31 Oct 2011 05:30:00 -0700

Monday October 31, 2011

Smartphone Wars: The Empire(s) Strike Back

Mon, 24 Oct 2011 11:52:00 -0700

Monday October 24, 2011 – Stewart Wolpin

This has been one wacky and wild week for smartphones, lots of fun if you're an analyst or tech pundit, not so much fun for consumers trying to make heads or tails of this sudden series of one-upmanship announcements.

Earlier this month, Samsung fired the first shot with its three Galaxy S II models, two versions sporting a 4.52-inch screen and the T-Mobile edition humming on a 1.5 GHz dual core engine.

BOOM!

Late last week, in case you missed the news, Apple unleashed the iPhone 4S starring Siri, the voice-controlled comedienne…er, personal assistant.

WHAM!

Then this past Tuesday, Motorola smacked down with its skinny 7.1mm thin Droid RAZR that supplies 12.5 hours of talk time.

SMACK!

Almost simultaneously, beleaguered BlackBerry quietly announced BlackBerry BBX, its long-awaited one-OS-to-rule-them-all (all being BlackBerry smartphones and the Playbook tablet).

SHHH!

At around the same time during Apple's quarterly briefing, CEO Tim Cook noted the company had sold "just" 17.07 iPhones in its fiscal Q4 compared to 20.3 million in Q3.

DAMN!

But then we heard a record 4 million 4Ss had been sold in the phone's first weekend of availability.

SLAM!

Tuesday night/Wednesday morning (depending on which side of the international date line you were on) in Hong Kong, Samsung swung back with its Galaxy Nexus with a 4.65-inch screen and the first smart phone running Android 4.0 Ice Cream Sandwich.

SWEET!

At around the same time (again, I'm getting a headache about relative time in Hong Kong, New York and London), Microsoft CEO Steve Ballmer confirmed new Windows Phone 7.5 "Mango" phones would be coming from Nokia next week. This follows up last month's announcement of the Samsung Focus S and Focus Flash Windows Phone 7.5 phones.

THWAK!

The next day (Thursday), Samsung swaggered that it had sold more phones than Apple in its last quarter, more than 20 million units.

POW!

I need a nap.

What it all means

My head is swimming not just with this sudden swirl of smartphone spectaculars, but how radically the cellphone space has changed in just a couple of years when Android appeared to give Apple a run for its iPhone core and made the flip phone as old-fashioned as a corset.

Three things are striking about all this recent activity.

1. If iPhone 4S had come from any other phone maker, it would have been laughed off as hopelessly antiquated – a "new" 3G phone with a 3.5-inch screen? That's sooooo 2010!

2. Yes, Samsung sold more smartphones than Apple last quarter – before iPhone 4S, after Apple pulled back the 4 in anticipation of the 4S, and before Apple spread its distribution wings to include Sprint domestically, moved more aggressively internationally (Apple says 12 percent of its Q4 revenue came from China), and started selling $99 and free iPhones, finally recognizing true market growth lies at the low end of the market.

3. In cases of too-little-too-late, are BlackBerry and Microsoft Windows Phone doomed? With the way Apple and Android have seemingly split the smartphone market between them, and considering the failure of the PlayBook, BlackBerry's recent service outage and subsequent reports of a mass migration of BlackBerry users to iPhone, and how late Microsoft has been to roll out Windows Phone updates and products, it's hard not to think the A's have it.

The Siri affect

The game changer in this competition free-for-all could be Siri. She (yes, I'm already anthropomorphizing her) has generated an immense amount of positive publicity that has smothered the specification drawbacks of iPhone 4S as well as both Siri's serious side and her drawbacks (you have to connect to the Internet to do everything and anything, even local tasks such as simple voice dialing). As if in a final tribute to the late Steve Jobs (RIP), Apple's reality distortion field perception has once again triumphed over reality.

But you can tell Apple's competitors are spooked by Siri – both Microsoft and Google have taken swipes at her while touting their own sound solutions. Only the worried malign new competitive features with absurdly dismissive "man will never fly" predictions.

Regardless of her pros, cons and sideline sniggering, however, bear in mind, Siri is technically still in beta. She's already proven to be a sexy prodigy, so she has nothing but upside potential as she grows up and moves to phones with faster network connections and more powerful processors. (Personally, I'd play Yenta and try and match Siri with IBM's Jeopardy-champion Watson. What do you get for the couple who knows everything?)

And we know the last project Steve Jobs was actively involved with before his death was the true iPhone 5. Due next summer, this is the iPhone we geeks were all expecting and presumably will be a 4G model (finally!) with a larger screen (finally!) powered by the company's new quad core 1.5-1.7 GHz A6 processor, which should provide Siri with the platform that could turn her into a supermodel.

And probably one more thing…

POW!

Will TV Everywhere Kill Set Top Boxes?

Mon, 17 Oct 2011 11:52:00 -0700

Monday October 17, 2011 – Greg Scoblete

As someone with little interest in watching TV on the TV, I've never quite understood the appeal of watching it on devices that are not the TV. But I also understand that my tastes are hardly mainstream and are probably downright un-American, and so the "TV Everywhere" trend gains steam. As it does, it raises an inevitable question: if you can indeed watch TV everywhere, what becomes of the set-top box (STB) market?

In the past few weeks, its turf has definitely been assailed. Microsoft fired a volley with the announcement that it would offer both free and pay TV on the Xbox 360 gaming console. Among the providers lining up to offer their content were some big names: Comcast, HBO, ESPN, Bravo and SyFy. The TV functionality isn't confined to the states either, with European providers, such as BBC, Canal+ and Lovefilm signing on.

The Xbox deal doesn't sideline a pay TV STB - at least one box would be required in the home to deliver programming. But it might convince some consumers to forgo a second box for ancillary TVs used for gaming. Economically, it's something of a wash: to access pay TV on the Xbox 360 requires a $60 annual subscription to Microsoft's XBox Live, about what you would pay per annum to rent a basic STB. The Xbox itself probably couldn't push the needle on STB shipments, but if Sony and Nintendo hop onto the bandwagon, that's another story.

DirecTV also made a move to disperse its programming to mobile devices with a product that's, dare-we-say, slightly Slingbox-ish. Dubbed the Nomad, this small STB lets consumers view DVR-recordings on up to five mobile devices. It can't stream live TV but can automatically sync DVR recordings with mobile devices.

Outside of devices, apps have been proliferating that let users view TV on their mobile phones and tablets. Not every content provider is enthusiastic about TV Everywhere, however. YES is battling Cablevision over the latter's iPad app, saying its programming cannot be distributed to mobile devices outside the home (a stance echoed by Viacom). But clearly more pay TV providers are looking for alternative means to give their customers their TV fix beyond the set top box.

Does this mean STB shipments will wither? Probably not in the short-term. TV Everywhere is aimed at out-of-home viewing - for those forlorn commuters stuck in a train or an airport. If you have access to a secondary TV in the home, it's unlikely you'd pop open the iPad to squint through the latest Mad Men. In the longer term, if the Xbox experiment proves successful and other game systems and content providers saddle up, it could make it easier for service providers to skip additional box installations. There's a clear benefit there for the pay TV provider - fewer boxes to inventory - and for the consumer as well, as they'll be one less device cluttering up the entertainment center.

But in this instance, content is king. Despite the impressive roster of names, the Xbox still doesn't boast the kind of channel line-up your average pay TV consumer has access to.

Digicam RIP

Mon, 10 Oct 2011 15:18:00 -0700

Monday October 10, 2011 – Stewart Wolpin

As the new iPhone 4S arrives, and as Android acolytes chuckle at iPhone 4S’s suddenly tiny screen and Android-like notification pulldown bar, and Sprint agrees to buy $20 billion worth of iPhones over the next three years, one segment of the tech industry, digital camera makers, may just accuse Apple of murder.

With iPhone now sporting a CMOS 8 MP camera with face detection and 1080p video recording, the cheap digital camera could be dead-tech walking.

But iPhone 4S's enhanced camera specifications are the least of the problems facing point-and-shoot digicam makers.

Psst! Wanna cheap iPhone?

Apple (or, rather AT&T, Verizon and Sprint) will be giving away the iPhone 3GS – as in free, with a two-year contract – and selling an 8 GB iPhone 4 for $99.

Hmm, let's ponder the digital camera buying dilemma as a consumer would. A whole iPhone 4 with a 5 MP camera and 720p video recording for $100, or a digital camera that can't upload pictures to Twitter or attach snaps to a text message for around $150?

Okay, maybe that's not much of a dilemma.

Yes, digital cameras have better lenses and can do a lot of other fancy photographic tricks. But face tracking, funny frames, funhouse effects or in-camera editing can't come close to compensating for connectivity.

Plus, who says a cheap digicam is a better camera than a smartphone? While I still use a high-end point-and-shoot camera for business, I suffer no geeky qualms leaving it at home for casual candids. iPhone 4 takes remarkably good photos and, presumably, the iPhone 4S will take even better ones. In fact, I recently took similar night shots with an iPhone 4 and with a new digicam, and the iPhone shots were far superior – with no special exposure or "night scene" settings.

I'm also playing with both the Sprint and AT&T editions of the Samsung Galaxy S II smartphone, each with an 8 MP camera and 1080p video capture, and I'm shockingly impressed with the results of both.

And, I'm guessing, so will the great unwashed. Camera, shmamra. Camcorder, camshmorder. Who needs 'em? And the numbers bear out this dismissive attitude.

Apple outsells whole industry?

According to DTC, 440 million smartphones will shipworldwide this year – and that projection was made before anyone knew Apple would expand iPhone 4S sales through Sprint and offer a free and sub-$100 iPhone.

In its last quarter, ending in July this year, Apple sold 20.3 million iPhones. Anyone doubt iPhone shipments may surpass 50 million by the end of the year? Anyone? Bueller?

Conversely, DTC projects only 121 million digital cameras will be shipped worldwide this year. In other words, Apple alone could ship the equivalent of 40% of the total number of digital cameras that will ship worldwide this year.

Oy.

And then DTC believes only a third of all digital cameras are capable of recording HD video, the only digital cameras providing a true alternative to the iPhone 4 and most of the new 5 MP/8 MP-720p/1080p-equipped Android phones introduced this year.

Double oy.

And, again, this is a projection made before Apple announced AT&T, Verizon and Sprint would give away iPhones. Anyone now doubt this digital camera shipment projection may be a bit short? Anyone? Bueller?

Yes, the new iPhone 4S is good news for lots of folks in the tech biz. But smartphones have practically made pocketcams obsolete, and now have their laser sites are targeted at the digital camera business.

Content Can't Be King Without Customers

Mon, 03 Oct 2011 08:41:00 -0700

Monday October 3, 2011 – Greg Scoblete

It's been a raucous few weeks in the pay-TV space. First, Netflix suffered the mother of all PR debacles as it split its streaming and rental service into two entities, causing rampant consumer confusion and forcing the CEO into a public apology. (To add comical insult to injury, the Twitter handle adopted by Netflix's new brand Qwikster, was already occupied - by a foul-mouthed, pot-smoking malcontent).

News of the bifurcation of Netflix and the company's expectation that it would lose a million more subscribers than they initially thought as a result, sent the company's stock plummeting. Suddenly, formerly bullish analysts were realizing that Netflix's streaming library didn't have quite the roster of attractive content that its disc business did (an artifact of an increasingly anachronistic law that treats digital distribution differently than physical distribution).

Then, Starz piled on, by pulling out of Netflix's service after the two failed to come to terms. It turns out that Starz wanted Netflix to charge customers even more for "premium" movies, above the monthly $7.99 fee for Netflix's current streamed offering.

But perhaps the bigger news, at least potentially, came from Reuters, which reported that several cable operators were "privately working on a plan to force programmers to unbundle their networks and allow customers to subscribe to channels on an individual basis."

This move to "a la carte" programming has long been resisted by pay TV providers, who have argued that consumer choice would leave niche programming to whither on the vine. But now it's appearing like an economic imperative not only for them, but their customers. Take the economics of the pay TV providers first. They are being battered with soaring retransmission fees. In 2010 alone, those fees soared a whopping 46.7 percent and, according to Reuters, have been outpacing inflation in the past decade with growth between six and 10 percent. Do you remember your last 10 percent raise? How about your last 46.7 percent raise?

Typically, pay TV providers handled these increases by passing them along to their customers. But then the global economy collapsed, taking millions of American jobs with it. According to Felix Salmon, a stunning 40 percent of U.S. households today spend all of their income on food, shelter, transportation and healthcare. Even if that number is wildly inflated, it's obvious that the consumer, at least in the U.S., can no longer absorb such price hikes - and the pay TV providers know it.

Netflix and other Over the Top providers were seen as a possible solution for these penny-pinchers - a way to preserve access to content without the steeper monthly fees of a cable or satellite bill. But a la carte pricing could strangle a nascent OTT threat in its crib - if the pay TV and content providers can agree to favorable terms. The content providers in particular need to think long and hard about a pricing strategy that involves ever-escalating costs to the end-user in an era of economic austerity (or, worse, depression). Content may be king, but what good is a kingdom without any subjects?

Who Ate the PPV Cake?

Tue, 27 Sep 2011 11:55:00 -0700

Tuesday September 27, 2011 – Jing Sui

The worldwide traditional digital pay TV market continues to grow despite a dragging economy and an increase of viewing of movies and TV programs on the Internet, and we expect to see continued growth as many traditional pay TV providers are increasing their use of the latest video compression technology -- MPEG-4 AVC -- on existing networks. While DTC estimates that subscribers to these pay TV systems will grow from about 142 million in 2011 to 354 million in 2015, sales of premium MPEG-4 AVC video on demand (VOD) content by traditional pay TV providers are estimated to be much lower. DTC projects only 27 million VOD units will be purchased in 2011, and just over 81 million units will sell in 2016 across all three platforms.

This imbalance exists, in part, because the percentage of VOD content purchased remains small in comparison to free VOD (free with subscription) content as the overwhelming majority of activity is taking place within existing basic or premium “all you can eat” subscription plans. Adding to the low sales numbers are the additional (and sometimes free) alternatives pay TV subscribers have when watching content on an on-demand basis with the proliferation of over-the-top (OTT) video services from providers such as Netflix and VUDU.

PPV and VOD have traditionally been a hard sell for pay TV operators, and the combination of free on-demand content, subscriber VOD, OTT TV and movies, and a dragging economy are all contributing to a lack of appetite for purchasing PPV/VOD titles.

A Bit Bubbly?

Mon, 19 Sep 2011 06:00:00 -0700

Monday September 19, 2011 – Greg Scoblete

A sustained period of low interest rates, a rash of tech-sector IPOs with soaring share prices, fawning media profiles of Silicon Valley entrepreneurs and venture capitalists - for many in the tech industry, it's déjà vu all over again.

I'm talking, of course, about a bubble. The last time the tech industry was in the grips of these dynamics was at the turn of the century, when the Internet was minting millionaires at an unseemly clip and Initial Public Offerings ran the Nasdaq up to a dizzying height. Today, the names have changed but the similarities are eerily familiar.

Or are they?

In truth, while many of the macro-economic conditions that gave rise to the Dot Com bubble are the same, the world has changed. For one, the Nasdaq is worth roughly half of what it was during the Dot Com era. If another bubble is forming, it may have considerably more headroom before it pops.

More importantly, the tech firms are different. As Daniel Hom of IPO Dashboards has observed, some of the big technology firms that have made their IPO or are nearing that point are actually (gasp) profitable and most are generating hundreds of millions in revenue. The business models, in other words, are already being subjected to a real world stress test and many are enduring. Companies like Facebook and LinkedIn have also been incorporated for longer than the ill-fated poster child of the Dot Com bust - Pets.com (which, we must all remember, burned through $300 million in investment capital in about two years before being put to sleep).

Finally, the Internet is more mature. There are roughly 10 times more people online today than there were 10 years ago and a slew of mobile devices and operating systems have created an entirely new eco-system of applications and opportunities for investment.

That said, the greatest delusion when analyzing any market is the assumption that "this time is different." Even if we're not in a tech bubble today, it's hard to imagine a prolonged period of low interest rates not producing some speculative mania somewhere. Indeed, while LinkedIn and Facebook may hum along profitably for many years to become, the explosive growth of venture capital-funded mobile apps certainly appears a bit, well, frothy.

Defining 'E-Reader'

Mon, 12 Sep 2011 10:07:00 -0700

Monday August 29, 2011 – Stewart Wolpin

You of course know a dolphin, even though it has fins and lives its entire life in the ocean, is a mammal – the suborder odontoceti, to be exact. But the similar-looking and similarly-toothed (well, not similar, exactly – there's a slight size and sharpness disparity) shark, however, is a fish, of the superorder selachimorpha.

Both lobsters and land-lubbing woodlice (aka "armadillo bug"), which would never be confused in the kitchen, nonetheless belong to the subphylum arthropoda – crustaceans.

And both the horse and the rhinoceros are dues-paying members of the eutheria infraclass and the order perissodactyla. I wonder if they have a bowling team?

Biological taxomic ranks – scientifically determining why one animal is different than another – may be something we in the gadget gazing business, with the exploding number of multi-use gadgets, ought to adopt.

Order evidentiary hearing

Classification-confusing Exhibit A is the iPad. For more than a year, we digital Darwins have been trying to figure out if the damned thing is of the computer class, the laptop superorder or a mutant deserving of its own family. We have to count iPads – but as what?

A second related classification accounting conundrum is the Nook Color and its e-book reader-cum-tablet ilk, such as the Kobo-powered Aluratek LIBRE Touch, the Gemei GM2000, the two Naxa Noodle Colors and the Barnes & Noble-compatible 7- and 9-inch Pandigital Novel color e-readers, likely to be joined by a similar Amazon Kindle e-reader-cum-tablet sometime later this year. And the Tribune Company is reportedly readying a newspaper-reader-cum-tablet.

Neither you nor I want to be keep typing "e-reader-cum-tablet" each time we have to talk about these e-reader-cum-tablets (and not just because it's too long, if you catch my drift). So, what are they?

There's the always popular walk-like-a-duck/quack-like-a-duck test; these…things…are equipped with a 7-inch touch LCD screen, run a version of Android, are equipped with Wi-Fi to surf the Web and check email.

That sounds like a tablet to me. And yet…

A dolphin looks and acts like a fish, but it's not; a rhino looks little like a horse unless you count unicorns; and, if you try and serve me a woodlouse when I ordered lobster, there's going to trouble (after my Mr. Creosote imitation, of course).

And what happens when we start getting e-ink color e-readers?

E-reader-cum-tablets aren't our only digital definition issue. With Blu-ray players increasingly adding streaming IP content, at what point do we start counting them as media streamers? Digital cameras and camcorders, both capable of shooting high-def video and multi-megapixel stills, are beginning to merge. When Mobile DTV broadcasting begins to launch in earnest, what multi-function devices with built-in tuners will be defined as portable TVs and which as multimedia devices?

Perhaps it's time we geeks created our own technology taxonomy system so we all know what what is and how to analyze them. Before someone on Top Chef serves up Woodlice Thermidor.