Yahoo! TV Widgets are the Belle of the CES Ball

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.

Not 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.

Samsung adds Yahoo Widgets to its TVs

In yet another Pre-CES announcement — eerily similar to the one I blogged about yesterday when LG pre-announced that it was putting Netflix into some of its HDTVs — Samsung late yesterday announced it was putting the Yahoo Widget Channel into some of its 2009 HDTVs. Rather than online video delivery like LG announced, this channel will be an interactive ticker that will provide layers of information (read: traffic, weather, shopping) as well as opportunities to augment TV shows with application widgets.  

Let’s see: Internet content, easily delivered to the TV. TiVo, Roku, SlingCatcher, LG, Boxee, now Yahoo and Samsung. I sense a trend here, no?

In fact, I spent some time taping CES interviews with CNBC that will roll out over the week. Like every other press outlet, they wanted to know what I expected the big trends to be this year. I had to confess that the big trends are mostly going to be the same trends that we saw at last year’s CES. Only this year, they would matter.

That’s not to say that Sony and HP’s Net-connected TVs weren’t important trailblazers on the path to the future, they were. Even Verizon FiOS, which has been playing with TV widgets for two years now, was a critical first explorer of this new territory. But their wagons have bogged down in the mud and LG and Samsung are building a nice little interstate behind them. 

The big difference between these announcements from LG and Samsung and prior efforts is that the 2009 solutions are based on open content that already has an audience. Netflix has 9 million subscribers who want that content. Yahoo provides toolbars and web experiences to millions of people each day. Plus, both solutions will gradually be augmented by adding more open content experiences such that the TV is worth one thing the day you buy it, and more later down the road when the additional content and widgets are added.

It’s the culmination of many things I’ve been writing about, so obviously I’m excited about it. However, a sober note is always in order. I’m not suggesting Samsung will sell a million of these. Even between LG and Samsung, they won’t sell a million this year. TVs just don’t sell that fast. But learning from these examples, everyone else who makes TVs will work out similar solutions (dare I ask once again for a Hulu TV?). And Blu-ray and even DVD makers will do the same. 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. 

Specific to TVs, my public prediction from 2008 was that in 2013, 40% of all TVs sold that year will have Net connectivity. After that period, the number will rise rapidly, not even because all people will want that, but because — like the digital camera in your cell phone — TV makers will find it easier to include Net connectivity than to exclude it.

Stay tuned for more CES announcements throughout this week. I am on CES-lite this year, only spending two days there, but will have ample opportunity to spot the best and brightest in the world of video.

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

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.

Did Sony block its movies from Netflix’s Xbox 360 player?

Interesting little fight brewing in the obscure world of online movie streaming. It seems that when Netflix agreed to send its streaming movies to the Xbox 360, at least one of Sony’s movie studios (Columbia Pictures, according to this Engadget report) took issue with that. 

Whether this was malicious on the part of Columbia Pictures is open for debate. If this were a Sony strategy, it would be likely that all Sony Pictures Home Entertainment content would drop out as well, but it hasn’t. Official word from Netflix suggests that this is normal in the course of licensing content — the original licenses probably didn’t include specification of all the possible outputs for Netflix. It’s reasonable to assume that there’s some renegotiation likely to occur.

Whether this was something Sony did on purpose or whether it was a coincidence (the timing is suspect because today was the launch of the new user interface for the Xbox 360, including prominent display of the Netflix streaming option), I don’t think this will stick. For two reasons.

1. The public sentiment is already turning sour against Sony. Without evidence that Sony was acting out of malice, the gamer/movie viewer community is already moaning and complaining loudly. Just read any blog comments on this topic to find plenty of Sony vitriol to go around. It’s almost as bad as the political season we just went through.
2. Sony doesn’t really work like that. It would be very unusual for Sony’s video game unit to be able to exert such specific pressure of a subsidiary of the Sony Picutres side of the house. I won’t offer specifics here, but suffice it to say that Sony is not ruled by one point of view. It’s a house of many different views and I find it unlikely that this would be part of a master conspiracy to punish people for having an Xbox 360. Think of it this way: Sony doesn’t prevent you from watching Sony DVDs on Samsung DVD players, right?

Maybe I’m just a nice guy. Do you think I’m wrong? Is this a nefarious plot? Or just awful timing for a rights negotiation to come up?

More on Blu-ray in a recession – forecast down 25%

According to this article from Jacqueline Emigh at BetaNews, Parks Associates (technically a competitor, but a respectable one so I’ll give them their props) has reduced its forecast for standalone Blu-ray players this year to to 4.3 million globally or 2.2 million in the US.

This comes as I’ve been writing about Blu-ray prices falling to $199 for the first time and the economy’s effect on home video overall. First of all, I’ll say that Forrester has never produced a forecast for standalone Blu-ray players so I’m not in a position to comment on the specific number, however it is interesting to note that this new forecast puts the Parks number in line with the Jupiter Research number from earlier this year. (Jupiter Research, as you may know, was a competitor until just a few months ago, we now are one family, which is great as they are some smart folks.) Jupiter had predicted approximately 3 million total Blu-ray homes in the US by the end of this year, on top of just under 1 million last year, which comes out to something north of 2 million in sales this year. So the new Parks numbers line up with the Jupiter numbers. I’m inclined to believe both. (It is important to note that both these numbers are far short of the projections Blu-ray manufacturers are working from.)

The most interesting question is whether PS3 will now have a more cannibalistic effect on standalone Blu-ray sales or less of one. 

The thinking goes like this: PS3s used to be the cheapest way to get a Blu-ray player, and it also happened to play games. However, now that Blu-ray standalone players are so cheap, that is no longer the case. Is it possible that people will postpone PS3 purchases in favor of a $199 Blu-ray player, thinking they can upgrade to the PS3 when the economy improves? or will they instead go from standalone players, spend a few extra bucks to get a PS3, and pat themselves on the back for getting a system that can do gaming and video?

I doubt either will occur, actually. Instead, people in the market for the PS3 will still get one, possibly with fewer accessories, but they weren’t in the market for a standalone player anyway so the effect is not cannibalistic. People in the market for a standalone Blu-ray player will do one of two things: either move downmarket to a $199 or $229 model or just postpone the purchase for next year, assuming that prices will only go lower. In the meantime, the upconverting DVD player they bought last year for $50 will do them just fine.

What are you going to do? Did you plan to buy a Blu-ray player or PS3? What will you do now?

Flip digital video cameras get personal

You’ve seen Dell and Sony’s sexier laptops, you may have even seen Fujitsu’s recent announcement that its Lifebook A1110 series comes with a detachable lid that can swapped for all sorts of cool designs and colors. And, of course, you’ve watched as Apple jazzed up the colors on its iPods. It’s a trend we’ve heralded at Forrester as The Age of Style in consumer PCs and electronics (see my colleague JP Gownder’s excellent report on this topic). 

Today, Pure Digital, maker of the immensely popular Flip digital video cameras, announced that it’s about to put everyone else’s attempts at personalized style to shame with its completely customizable Flip Mino cameras. Check out the home page at theflip.com to see it for yourself. 

 

Choose one of three cool ways to personalize your camera. Or, I guess you can do black or white, but why?

I’m already big on these cameras. They’re unlocking a whole new kind of home video: gone are the 45-minutes of soccer game footage, in are 30-second slices of life captured and easily uploaded via the camera’s built-in USB jack. Evidently consumers agree with me, buying more than a million Flip cameras in just over a year. These cameras can be personalized in three equally cool ways: you can put a picture on it, choose from hundreds of pre-loaded designs, or use a strangely compelling pattern generator to craft a pattern suited to your tastes.

I tried all three options. The tools are super easy and I can’t imagine why anyone would buy a Flip Mino unpersonalized in the future. There are some hot designs pre-loaded, and the pattern designer, while mesmerizing, failed to compete with the option to use my own image. Appropriate to the season, I uploaded a photo to create a Flip Mino masterpiece I call, “Sunset on the Monster.” See the picture below to know what I’m talking about. If you can’t tell, shame on you, Yankee’s fan.

The personalized designs don’t cost extra. As Simon Fleming-Wood, VP of Marketing for Pure Digital (see interview with Simon about the economy) explained it to me, they think the value of the camera is that it lets you capture memories and express yourself. Charging extra to go one step further with self-expression just didn’t seem right. And it doesn’t. This is a rockin’ idea and I’m impressed they’re going to do it — only through their direct channel, of course, where I assume they have room to play with the margins a bit. 

Reminds me of the old days in the Internet Economy when we talked about Mass Customization. Never happened, did it? This gets as close as I’ve seen. 

PS, let’s go, Red Sox.

Dow down 18% in one week — what does this mean for video?

I’m busy working on a piece for Forrester about what a down economy does for video. I’ll be finished next week and can share more then, but in the process of speaking to people in the industry, I came across a bright spot, at least as Simon Fleming-Wood, VP of Marketing for Pure Digital, the maker of the phenomenal rags-to-riches Flip digital video cameras. In a recent conversation, I broached the topic of a down economy and mentioned that while many were optimisitc about the future of free services like online video (for obvious reasons), some are nervous about the prospects for devices this holiday buying season. But Simon isn’t seeing it:

We are cautiously optimistic.  Our retail partners have increased their forecasts for sales of our products over the last 3 weeks. The President of the United States went on television in an unprecedent event to tell the nation that we were in an economic crisis. Yet our sales went up that week.

Bully for Pure Digital. It helps that the Flip cameras are positioned as low-cost digital video cameras, of course. I don’t imagine Sony and Canon are as sanguine about their prospects this quarter. But it goes to show that even in a down economy, the right product targeted at the right market with the right features can succeed.

What do you think? Are you afraid for any particular products or services? Will premium cable channels suffer? Will that 2nd DVR get postponed to next year? Will Hulu.com take over the world with its free content?

Tell me what you think will happen or what you are doing personally. For example, I’m cutting back on premium movie channels (that I don’t watch enough anyway). What about you?

Sony and Wired magazine Blu-ray disc giveaway

I picked up my copy of the October Wired magazine and felt it was a little stiffer than usual. Sure enough, there was a Blu-ray disc sealed inside the magazine’s pages (page 123, to be exact).
 

I’m a fan of Blu-ray. Forrester actually called the Blu-ray vs. HD-DVD battle as early as 2005 (I can’t take credit for it, my colleagues Josh Bernoff and Ted Schadler were on the task back then).

But I’m also acutely aware of what a tough job Blu-ray has ahead of it. Not competing with digital, not even competing with VOD, but just competing with DVD (see my report from earlier in the year for more detail). DVD rocks. It’s easy to use. It’s ubiquitous. It’s cheap (follow this link to Walmart.com to see that at the time of this post, there were 14 DVD players under $50).

So when I saw this Sony promotion of the format I admired their gumption. The promotion itself actually focuses on Coma, an original Web series with some big budget names on Crackle.com. (By the way, this triggered me to see how Crackle has been faring lately, the answer: surprisingly well. Check out this link to see that according to Compete.com, Crackle is now at the same level as Metacafe and Dailymotion in the US.)

Back to the promotion: Make sure you read the fine print on the back of the ad which says “Blu-ray Disc Media/Formats are not universally compatible.” This is the embarrasing part because when I took my sparkling new Blu-ray disc to my Sony Blu-ray player, I got this message (which you probably can’t see because of the lighting, but it says: “Cannot Play”).

Ouch. More evidence that the format needs some time to work the kinks out.