Leaving Las Vegas: Final notes from CES

January 9, 2009

I’m one of the lucky souls who is not staying for the last day and a half of CES. Farewell, ye who will endure to the end of the convention. I’ve posted several entries in response to specific announcements, but as I sit at the airport and enjoy the airport’s free WiFi (yes, free! Viva Las Vegas! Next time you drop a coin in the airport slot machines, know that I appreciate your subsidy), I find myself summing up the experience with a few thoughts:

1. CES was a shadow of its former self. There were empty spots on the show floor, there were very few lines waiting for cabs, buses, even bathrooms. CES didn’t even feel as big as NAB, which might be a slap in the face, depending on who you are. There weren’t even lines for the massage chairs. No, I did not try one. I was too worried someone would take a picture of me looking like this:

massage-chairs

2. The dominant theme was the economy. Everything was about value. Yes, TVs were even thinner, they were wireless, they had Internet connectivity, but the real message was how cheap they were going to be. One TV maker didn’t even launch a line they had intended to launch, preferring instead to focus on the value TVs they already have in the market. I guess 30″ is the new 40″. Perhaps the one outsized booth space  that didn’t get the message we were in a recession was Samsung’s. See the adjacent video to get some sense, but the video doesn’t do the scale of the booth justice.

3. Some of the most important products at CES aren’t even products. There are two industry groups who had significant presence at CES, though not on the showfloor. They are the DLNA and the DECE. DLNA is the certification body that makes sure TVs, Blu-ray players, set-top boxes, mobile phones, PCs, and printers will all be able to speak to each other, share content, and create a digital home that has no boundaries. DLNA has mostly been a great idea until this CES where they showed up with a list of hundreds of devices that are now DLNA certified. I got to walk through an example of picking up a Nokia phone; using it to browse the music, video, and photos on a media server across the room; then playing a video on a DLNA TV. It works, folks. The only problem is that other than the content you have ripped from your DVDs (illegally), the likelihood that you’ll have much to watch across the network is slim. That’s where DECE comes in. This group just formed last Fall and brings hardware makers, retailers, and content producers together to create a standard for digital media that would allow you to buy something on any device and automatically receive rights to watch it on any other device you own. Unlike most industry-led schemes for media distribution, this one actually makes consumer sense. These are two initiatives that I’m rooting for.

4. There were a few fun surprises. One of my favorite surprises was the disappearing display that is hidden inside a mirror. See the video below to see it (and me in the mirror, unfortunately). Nice touch, probably not a mainstream device, however.

micro-projectorsThe other thing I saw worth noting was this array of small “micro-projectors” which is a new category that we’re likely to see grow over time. These devices (which they wouldn’t let me take pictures of in action, but here’s the display case of devices turned off) project TV-sized images onto walls from unbelievably small gadgets. This company, Butterfly Technologies, has made a cell phone that can project images. Certainly something business people might find interesting. But I’m curious to see what happens in a few years when these are as cheap to include in devices as digital cameras are. Do we all have projectors embedded into any of our devices so we can easily show the pictures of our trip to CES with our friends?

5. Vegas is still surreal. I have a few things on my list here. First, were the large ads in the airport or atop the cabs promoting a place called The Gun Store. The purpose of this store, other than to sell guns, is to let you pay to shoot guns. Machine guns, hand guns, whatever floats your boat. Or sinks it. Second, the large ad in the airport that showed a single glass of water and a lengthy explanation of why waiters in restaurants might not provide water automatically. Because the good people of Vegas are trying to conserve water. After all, they live in a desert. Of course, all it takes is a walk down the strip or through a casino or even a ride past the golf course behind the strip to see the fountains too numerous to count. I’m sure glad they’re saving water by denying me a glass of it. Third, I had the misfortune of walking down the Venetian halls when the adult film industry convention was closing down for the night. It was relatively terrifying to see the kinds of people coming out of that convention. This is a family show, so I’ll spare you the details, but suffice it to say that all the innocent bystanders like myself were turning to each other to spontaneously remark, “Only in Vegas.”

Advertisements

Sezmi opens the door to a new kind of set top box

January 9, 2009

I have written a lot over the past two years about the future of the set top box, both on the cable and satellite side as well as on the consumer retail side. On the consumer retail side, there are boxes that are designed to simulate the cable DVR experience like those sold by TiVo (and as announced at CES this week, by Digeo). And there are those designed to provide over-the-top video experiences like the Roku Netflix player, the Apple TV, and the like. 

Though TiVo has tried to provide the best of both worlds — its DVRs can play a wide variety of over-the-top content from online streams to Amazon Unbox video on demand — because it requires a cable subscription, it ends up feeling like a more expensive version of cable.

So far, no one has seriously offered a DVR that doesn’t require cable or satellite service, even though 60% of what people watch is offered for free, over the air, via antenna. And in most major markets, it’s broadcast in HD.

Let’s do some thinking: imagine a DVR that pulls down CBS, ABC, NBC, FOX and PBS from the air, in HD quality, so you have continuous access to the vast majority of content you are interested in. You pay no subscription for this content. And because you’re one of the 62% of US households with broadband, you also have access to millions of online video experiences, some of which are free and others — like Blockbuster OnDemand and Amazon UnBox — are pay-per view experiences that are at least as good as what cable offers, with the extra advantage that they can be managed with a PC.

This DVR could be sold at retail for a few hundred bucks. It would carry no subscription fees and for at least 20% of the population, it could replace cable. Only the people who have to have Showtime and HBO would be left out in the cold, as long as ESPN, Discovery, and CNN keep putting so much of their content online.

Welcome to the world of Sezmi (as in “open Sezmi” — cute, eh?): an over-the-air DVR that adds online video. And if my estimations are correct, you’ll be seeing Sezmi sold by major retailers later this year.

sezmiThink about it — for those of us who spend $100 a month on cable, wouldn’t Sezmi’s value proposition be a great relief? That’s what Sezmi is banking on and the retail partners it’s in hushed conversations with here at CES. I sat down with Sezmi yesterday in their private suite at the Venetian (much nicer than my discount room at the Sahara, I’ll confess). This is a company I’ve been following since they were just a rumor in mid-2007 and were called Building B. They re-branded as Sezmi in 2008 and I last met them at NAB last year where they talked about offering their set top box to tier 2 telcos as a way to compete with cable without having to lay miles of fiber. At the time, I told them that the telco solution was nice, but that I thought they stood a chance of offering this box at retail and that 20% of the population would be interested. That’s 22 million households. That’s more people than have an iPhone. In other words, it’s a target worth pursuing.

Imagine how pleased I was yesterday to hear that they are pursuing both avenues aggressively — working with telcos as well as going straight to retail. I have no doubt we’ll see the boxes in retail later this year. And I’ll be one of the first customers in line. In my case, I won’t be replacing cable, I’ll be adding TV to another room of the house that currently doesn’t have it. That’s a use case I haven’t even modeled and would potentially open a much bigger target audience. Even those economics are attractive, because the additional DVR in my spare room would run me $14 a month — more than $150 a year. One Sezmi box, even if it were priced at $300 would pay for itself after two years of use.

This is Sezmi’s potential even without considering the very elegant consumer interface their box offers or the potential solution they have to solve the ESPN, Discovery, even Showtime problem over time.

Too bad Sezmi wasn’t in retail for this past holiday season. In the words of one retailer who is in talks with Sezmi: “If we had this thing in stores last October as the recession hit, we would probably have 5% market share right now.”

Agreed.


Vizio takes connected TV to the max

January 8, 2009

I’ve spent much of the week blogging about pre-CES and CES announcements related to bringing the Internet to the TV. I’ve seen many of the things I was expecting: more Netflix in more devices, Blockbuster announcing it would connect to the TV, in short, big names making big plays to get to IP-delivered video and interactive content to the TV screen instead of the PC monitor.

In one of my posts earlier this week, I wrote:

Soon, there won’t be a TV maker who doesn’t offer this connectivity; that includes Vizio, in my opinion, who will clearly see the writing on the wall here. In fact, if Vizio announces something innovative early, it could really maintain its growth position in the US market.  (from Samsung Adds Yahoo! Widgets to its TVs).

As if in fulfillment of my wishes, Vizio yesterday announced exactly that. What makes the announcement worthy of a post is that Vizio not only added one or two things, it added the whole boatload. In fact, when the CES dust settles, we’ll probably find Vizio — a relative newcomer to the TV market and certainly a newcomer to the Connected TV business — will hold the title as the maker of the most connected TV. Here’s a list of partners Vizio is incorporating: Accedo (for games), Adobe, Amazon VOD, Blockbuster VOD, Netflix (so last year by now), Pandora, Rhapsody, and the Yahoo TV Widget Engine I wrote about this morning, which means Vizio will have many more content plays beyond this list relatively soon.   

Vizio is the TV maker to watch as of this moment.

Even the fact that I can no longer call them just a TV maker (they announced a $200 Blu-ray player yesterday as well) is evidence that Vizio is ready to make this recessionary year a big one for the company. And they’re in a good position to do so: value-priced and distributed through value-oriented channels, Vizio can provide high-tech at low cost without having to swallow any pride.

Vizio earns my attention because they are the first to really bring a “many devices, many services” model to the TV. This is something I have written about a lot lately, as I have been predicting it for the past year and have started to see it come to fruition. For example, last year in a speech to a 100 people, I walked them through a 2009-and-beyond TV scenario in which the new TV you bring home literally asks you which services you already subscribe to and immediately connects you to them. By bringing Amazon, Blockbuster, and Netflix into the same TV, Vizio is making my scenario real. The only thing it lacks from my scenario is a pleasing computer voice to help you navigate your many options. And I was just kidding about that part anyway.

As soon as another TV maker catches up to Vizio, my “many devices, many services” model will be complete. Now, the only thing all of these announcements are missing that I explicitly asked for is…Hulu. Add Hulu to this Vizio solution and you almost don’t need cable. Almost. But I’ll save that for another CES post after I meet with Sezmi… TTFN.


Yahoo! TV Widgets are the Belle of the CES Ball

January 8, 2009

Yahoo! has surprised me. Back in August it announced a new TV development platform called the Yahoo! Widget Engine. Developed together with Intel, this Widget engine was billed as the way to get Internet content and functionality to the TV set.

I’ll admit I was skeptical. We’ve heard so many announcements about getting Web content to the TV that my response was, “I’ll believe it when I see it.” Today I’ve seen it.

yahoo-widgetsNot just a demo of proposed functionality as is so often the case. But I’ve seen a line of partnerships on the device and content sides that backs up Yahoo!’s claims. And though it will be hard for average viewers to grok why, this is the most important TV-related announcement to come out of CES.

Why, you ask? Because most CES announcements are specific to one device or service. A new video editing software suite, a new portable media player, a new 3D television. Even the announcement from LG that it would build Netflix into a line of TVs is a single-device announcement. Interesting, innovative, and pointing us in the right direction, but ultimately limited by the reach of that single device.

Yahoo!’s announcement, on the other hand, is already having a broad impact. Check yesterday’s press release for more detail if you need it, or better yet, see the whole scenario by visiting the Yahoo! Connected TV site, but here’s the list of TV makers who have signed on to build Yahoo! Widget capabilities into their TVs: Samsung, Sony, LG, & Vizio. Three on that list are hungry market share grabbers who are rising rapidly. Sony is a long-established player whose inclusion on the list teaches us something about the future of the connected TV.

In the old days (read: 2008), connected TVs were built around walled content gardens that required the TV maker to strike content deals and figure out how to promote the content to the viewer. TV viewers are notoriously routine-driven so breaking into their routines was particularly difficult to do. Hence, connected TV activities on HP and Sony devices have been modest to date.

In the new world, TV makers will simply provide access to a common platform, the way a PC does. Think about it: when you buy a PC from Dell, you aren’t limited to the software that Dell has programmed, or even software that Dell has chosen to license to you from 3rd parties (the way the iPhone app store works, hmmm, how old fashioned, eh?). You buy a PC from any maker, it runs software from any developer.

That’s the promise of Yahoo!’s TV Widget Engine. As long as sufficient TV makers adopt it, it will become an open standard for putting content on the TV. Open standards, once adopted, enable content innovation.

What content, you say? Here’s a list of people beyond Yahoo! itself developing TV Widgets so far, a list which is likely to increase by a factor of 10x as soon as a million people have Widget-capable TVs: Flickr, eBay, MySpace, CBS, The New York Times, Netflix, Amazon, Blockbuster, Showtime, USA TODAY and Twitter. All major names whose inclusion is likely to tempt others to fall in line. 

I’m meeting with Yahoo! at CES to talk about the future later today. For the first time in a long time, I see Yahoo! playing a significant role in the future of interactive content. Bully for them. It’s just a question of how long until Google decides to jump in and whether TV makers will want to support multiple widget or application systems on their TVs. Plus, I wonder what the long-term payoff to Yahoo! is for building this open system. We’ll talk all of that through. 

This is yet another example of how the software and Internet community is innovating ahead of cable. TV widgets are something cable and satellite have been toying with for years. But they develop too slowly and reach too few customers with their trials to have had an impact. We’ll see how quickly Yahoo!’s Widget Engine can make us forget cable’s attempts to add interactivity to the TV screen.


LG adds Netflix to TVs in a small step with big implications

January 5, 2009

Surely hoping to jump ahead of the CES announcement blizzard that is about to strike later this week, LG and Netflix have announced that LG is releasing the first TV sets that stream Netflix titles directly to the TV, without the help of a separate box (as is the case with the myriad solutions we have already discussed on OmniVideo like Roku, Xbox 360, and even LG Blu-ray players). See Brad Stone’s piece at the New York Times for some more reporterly detail. 

This is a big deal. LG wants to do this because it needs to keep TV prices from the gutter; giving people content that they already have access to — but on the more pleasing screen known as the TV — is a great way to keep prices up.

Netflix obviously wants to do this because in its plans for world domination, offering a service that can serve you across channels (with DVDs and online streams) is a great way to provide the best of the analog and the digital worlds. Even though our own research has shown that the recession is convincing nonsubscribers that they don’t need Netflix, moves like this one certainly reassure existing subscribers that they’re getting their money’s worth.

I make a big deal out of this because of the model change that it represents for both the manufacturers and the content providers. It circumvents cable, it puts CE makers in a new role of content acquirers, and it signals a new way of looking at devices: as conduits through which many services can be delivered. I call this the “many devices, many services” model. With that paradigm in place, expect rapid innovation in products and services. Even in a recession, perhaps especially so.

However, a note of context is in order. A big question I’m hoping to answer with surveys this year is how many people will own Net-connected TVs by the end of the year. It can’t be many. If you imagine that 10% – 12% of US households buy a TV each year, it’s hard to believe that even 10% of them (1% of total) will be Internet-connected. Mostly because there aren’t that many Net-connected TVs on the market. A few from LG, Samsung, HP, Sony, with more likely to be announced this week at CES. And they haven’t sold well to date because there wasn’t much to offer through them other than walled content gardens with a smattering of swimsuit videos and re-runs of Facts of Life

Which is why the next big thing I’m waiting to hear at CES (or if not then at NAB) is a Hulu-connected TV. I’ll let you know when it happens.