Devices, Media, And The Future Of Everything

Internet Video Devices: Post-Apple TV Summary

[Josh] Today I visited AT&T, Intel, Sling Media, and TiVo. And, of course, we heard from Apple at MacWorld -- my colleague Charlie Golvin was there for that announcement. So here's a rundown of the necessarily incomplete list of Internet Video Devices with some brief analysis for each. This is random and not parallel, but hey, I thought you'd like to see the results of a few days research.

• Apple TV. We've been talking about this product for a year -- and we described a version of it earlier in this blog, under the name AppleVision. The Apple TV product is $299, with a 40 GB hard drive and connections to wireless home networks and output up to 720p HD. It features the usual iTunes video content and movies from Disney and now, Paramount. Also shows photos and plays music. PROS: Apple design, broad content collection, lots of Apple advertising to sell it. CONS: Set top boxes rarely, rarely catch on (CDi, WebTV, there's a whole slew of examples). They have to replace something (DVDs and DVRs replaced VCRs, for example). So forcing this onto the TV will be tough. $299 sounds great, but then you have to pay for all those movies and shows. No renting. And your home network had better have pretty good throughput if you don't want to wait for those videos (this applies to all the products below that use a hard drive).

• AT&T Homezone. Combines Dish Network satellite service with an AT&T broadband connection. Features a wide selection of content from Akimbo and MovieLink (see previous post). PROS: If you're getting Dish Network this is a hell of a deal, bundled service plus a nice DVR. And the movie selection is far broader than typical cable VOD, over 1000 movies. They're advertising heavily, too. AT&T will make sure your home network delivers. CONS: Only available in AT&T areas (remember, that now includes BellSouth). And you have to switch to Dish Network to get it.

• Moxi. So far just a plan to go into retail with their current cable box, and a CableCARD connection. PROS: People seem to really like the interface, nice integration with Internet and video content. CONS: Not available yet, don't know what content it will feature or pricing. And it's a new brand consumers don't know.

• TiVo. Internet content available through "TiVoCasts." These include CNET, the New York Times, RocketBoom, iVillage, and soon, some stuff from CBS, Forbes, and Reuters. You subscribe to them as you would to a season pass. PROS: Comes with a TiVo people already like, and there are about half a million TiVos connected to the net already. CONS: Not much of a content selection so far. And you have to buy a TiVo if you don't already have one.

• Xbox 360. If you connect it to the Net, you can get access to content downloads including Paramount and Warner movies and a bunch of TV shows. PROS: Probably has a head start of about a million Xbox 360's connected to the Net. Very simple, and the Xbox is already there. And the more Xbox's sell, the more prevalent this will get. The clear leader so far. CONS: When will YouTube get there . . . never. Could use some more download content, and some streaming content as well.

• Windows Vista PCs. Connect one to your TV and you can use the 10-foot interface and see content from . . . well, so far, from Showtime, Starz/Vongo, Nickelodeon and Fox Sports. PROS: The PC already has a net connection, and can function as a DVR. And some models will have CableCARD slots. CONS: Let's see. It's a PC, so it's expensive and an odd thing to hook up to your TV set -- are you only going to use it for games and video? And why so little content. The Web is full of video -- but not for the 10-foot interface in Microsoft's view.

• Sony Bravia TVs. Will feature an optional module that connects to the Net and streams content, including some from Yahoo! and AOL. PROS: Built into the TV (sort of), use the TV remote to access the content. CONS: You'll have to wait for Sony to get the content you want. And streaming has significant limitations because of home network bandwidth.

• Sling Catcher. This new product from Sling Media will come out by mid year. A hard drive accessory is optional. It will show video from your SlingBox on your TV, along with Net video from a PC. PROS: Low price, nice setup for your vacation home or spare bedroom TV. CONS: Like the Apple, is there enough in this device to get you to buy one and hook it up? And stay tuned, we'll find out more about the content for this soon, but for now, that's unknown.

Our report that lays this all out will be available to Forrester clients soon. But this was definitely the story of CES this year, as we had anticipated.

Technorati tags: Bernoff, Forrester, Internet video, Apple TV, AT&T Homezone, Moxi, TiVo, Xbox 360, Windows Vista, Sony, SlingCatcher

IVDs, CES, and Technology On A Bike

[Josh] LAS VEGAS -- today starts my CES experience. In addition to the keynotes, I'll be meeting personally with Sony, TiVo, AT&T, Sling Media, and Microsoft. My colleagues will be visiting with DirecTV and Apple (at MacWorld). So come back daily for updates on IVDs at CES.

For those who haven't experienced CES, it can be a dehumazing experience. 140,000 people crowd into the city and at any given time they are all milling around Las Vegas' huge convention center or the other major CES venue, the Sands/Venetian. Getting around is impossible -- cab lines run to 30-45 minutes, the new Monorail is crowded and doesn't stop at all the venues. Or you can take the shuttle buses the show provides, if they happen to be there when you need them, and you don't mind waiting in line with hundreds of other people. Renting a car doesn no good since parking is neither widely available nor near the venues, and if you like to walk, you'll soon find out that Las Vegas is spread out over sites miles apart.

There's only one answer -- find another way. So I did. For the second year in a row, I'll be biking between venues. Roger Kay, formerly of IDC and now independent, started it, and it works great (so long as it doesn't rain!). I wear a bright yellow fleece in an attempt not to get killed by the Las Vegas drivers, who aren't used to seeing bikes on the strip. So if you see a flash of yellow zipping by your gridlocked cab at CES, it's me.

Biking also gives you a unique view on the show. As I passed the stretch limo for Garmin (GPS) driving up to the Hilton near the convention center, it was all I could do to resist knocking on the window and asking the driver "do you need directions?"

See you at the show.

Why Internet Video Devices Matter: Over The Top TV

[Josh] Now that we've published our report on Over The Top Television, I can explain a little more why Internet Video Devices make a difference.

My clients in the television business have become very interested -- okay, obsessed -- with the question of whether producers and networks can deliver content directly to the TV. Why not bypass the cable operator and send video directly to the consumer? Whether you make your money from advertising or direct consumer payments, this sounds great.

Well, it's too great to be true -- at least for a while. There are four key obstacles.

1. Devices to connect the TV to the Internet. This is what everybody's trying to do at CES and MacWorld. But it's not enough, even when those devices get going, you also need to solve . . .

2. Better home bandwidth. Right now you can't stream HDTV over home networks, and streaming DVD-quality is iffy. You can do downloads, but that means the device needs a hard drive, and you can't cache the entire world of Net video in one person's house. But you'll also need to solve . . .

3. Business models. Cable networks get paid $0.10 to $3.00 or more per subscriber per month out of your cable bill. Why would they give that up to try to get money from you directly? And then there's the wildcard.

4. Navigation. It's hard enough to find Internet video on a PC. Try navigating 500,000 Internet videos with a TV remote -- you can't. That's why preference engines like Choicestream and new pointing devices like Hillcrest's Loop are important.

Solving all of those challenges will take years. CES is just the first step. But look for new video -- especially niche video -- to come to a TV near you within the next few years. And TV will never be the same after that.

Technorati tags: Bernoff, Forrester, Internet video, Over The Top

Here come the Internet Video Devices

[Josh] Happy new year everyone. You have exactly 14 seconds before the onslaught of new device comes straight at you.

We're tracking a new series of devices we call "Internet Video Devices," most launching at the CES show next week. An IVD is a device (DVR, cable or satellite box, game console, TV set, or standalone device) that allows you to see Internet video on a TV.

Here are some we know about:

- TiVo Series 3 with Internet "TiVoCasts"

- Digeo's Moxi DVR, spreading from cable distribution to retail

- AT&T Homezone, a satellite box with a net connection.

- Xbox 360 with TV and movie downloads

- HP's Mediasmart TV sets, connected to your home network

You'll also possibly see announcements from DirecTV, Apple (we called it last year) and another big company we can't talk about yet. But this is the story of CES.

The problem now is this: we asked consumers and only 20% have any interest in getting a device to watch Internet video on their TV, only 3% if they have to pay even $100. So those marketing these devices have a big uphill battle. But so be it -- now that it's possible, it's required. Let the games begin!

If you know of any others (and there are lots) drop me a comment.

Technorati tags: Bernoff, Forrester, Internet video, TiVo, Moxi, Homezone, Xbox 360

When TiVo met cable . . .

[Josh] It's always revealing to see how the theory of devices stands up to what happens in practice.

Yesterday I installed my TiVo Series 3, the new HD box from TiVo. It includes two CableCARD slots, which are designed to eliminate the need for a set-top box, and with it, the complex and flaky cabling that is sometimes are necessary to connect Tivo or other third-party electronics to your cable.

Comcast cable guy #1 showed up yesterday at 1:30 with the two CableCARDs. Installation didn't work right so he called up Comcast cable guy #2, the tech wiz. An hour later cable guy #2 had installed the CableCARDs and gotten them working.

In theory this means that I can now record and watch HDTV shows on my TiVo. And it works great, except for one little thing . . . the CableCARDs won't receive all the channels properly. In particular HBO doesn't work -- when you tune to it you get a screen full of text with lots of ID numbers, generated by the CableCARD, along with a phone number to call (which is, of course, 1-800-COMCAST). Sort of jarring in the middle of the work of art that is the TiVo interface. And when you call, they send various signals down the wire which, at least in my case, don't fix anything.

Now after explaining this to my wife, she asked the obvious question "Who's fault is this, Comcast's or TiVo's?" I opened my mouth to answer but found I had no answer -- and thereby hangs the problem. Comcast doesn't really want you to use somebody else's DVR, so they want to blame the problem on TiVo. And TiVo says they've designed the device properly, the problem must be on the cable side. In reality, the problem is that the conditional access system and all the other communication between devices and the cable head end is complex, and clearly this CableCARD thing isn't quite ready for a device as complex as a TiVo.

What do you think?

Technorati tags: Bernoff, Forrester, TiVo, CableCARD, TiVo Series 3

Broadcast television shrinks

[Josh] Earlier this year the UPN and The WB collapsed into the CW. Now the Journal is reporting that NBC will abandon high-priced dramas and comedies in the 8:00 hour and concentrate on lower-cost shows like "Deal Or No Deal."

What's going on here? In a weak market, the weakest get picked off. The weakest networks this year were UPN, WB, and NBC.

Is this the end of broadcast television? No. But if you look a the pyramid below, you can see what's happening. The top of the pyramid is getting narrower -- fewer big audience hits. And the bottom is getting broader -- more videos on YouTube and its brethren. The real problem happens next -- in this big morass, how do you find what you're looking for? And how much of the bottom is fed off copyrighted snippets from the top?

Would love your comments, as always.

Technorati tags: Bernoff, Forrester, CW, NBC

Why YouTube Might Not Go Down

[Ted] Okay, time for me to weigh in here. While I trust and respect Josh's experience with content piracy -- after all, who else wrote a piece called "Music Lessons" that used the Kubler-Ross model of grieving to analyze the music industry?

But, I can see a way out for YouTube, and it goes something like this:

• Do lots of deals quickly to make YouTube a legitimate video destination. The deal with Warner Music Group is a good start, but hardly enough. What about sports bloopers from CNN or Sopranos outtakes from HBO? Share that traffic, split that ad revenue, love those guys to death.
• Listen carefully to the jungle drums of Universal to see if there's a way out.
• Lobby hard for copyright protection, publicly and visibly in the site experience.

With those steps, YouTube will likely survive, even if battered, an onslaught of the video industry legal attacks. But if YouTube fails on all three accounts, I have to agree with Josh.

Disagree? Lemme know.

[signed] Ted

YouTube is goin' down

[Josh] There once was an Internet company that made its business, mostly, from allowing people to get whatever content they wanted, copyrighted or not. "It's not up to us to monitor the content our users share," they said. "If you tell us of an infringing user, we'll take him or her off the system."

That company was Napster and, not surprisingly, it got sued. And it lost, decisively. The result was that it quickly figured out how to remove all that copyrighted content, leaving . . . well a lot of stuff that wasn't very interesting to people. The users left, and the company went under. Bertlesmann, which invested in it, found itself under suit from other copyright holders. The only thing of value was the name, which they sold to the legitimate music service that now uses it.

Now I tell this fable because now, more than five years later, YouTube is in an analogous situation. YouTube is romancing media companies, just as Napster was. YouTube will take down copyrighted content if you complain, just as Napster would. And YouTube's model is based on masses of material available without regard for copyright status, just as Napster's was.

So, mark my words, YouTube will get sued. And it will lose. The tools it is talking about, that identify and remove copyrighted content, will have to be rushed into practice. And when nearly every clip that has copyrighted content -- music in the background, video of Bart Simpson, photos stolen from movie posters -- is gone, YouTube's going to be a lot less interesting.

You may tell me that companies like Warner Music are happy to work with YouTube, just as Bertelsmann was willing to work with Napster. But for every company that wants to do a Warner-type deal, there will be others like Universal that won't stand for it. It only takes one unhappy media company -- Disney, Sony, CBS, or News Corp. for example -- to force the company's hand. And the cases on this point, from Napster to Grokster at the Supreme Court, are clear.

Please, please, don't harangue me about whether this is morally right. That's not what I'm talking about. It's not about what's right, it's about what's going to happen. YouTube is goin' down. Don't you think?

Comments welcome.

Technorati tags: Bernoff, Forrester, YouTube

Apple brings net video to the TV

[Josh] Sorry for the brevity, filing this one between meetings in Sao Paulo, Brazil.

As we expected, Apple announced movie downloads -- and a new device they call iTV. We predicted this back in January -- only we called it "Applevision." Apple knows video isn't really worth doing unless you can get it to the TV. iTV won't be out until next year.

What's right about iTV: (1) it's on the TV, (2) it potentially gives access to Internet videos to the TV, (3) it's cheap, less than $300.

What's wrong, or at least open questions: (1) it doesn't have a hard drive or tuner to store programs, (2) wireless video streaming is verry iffy in terms of quality, (3) Will it support the thousands of videos out there not in QuickTime or FairPlay format, like Google video and YouTube? Probably not. (4) What kind of picture quality can you get from stored, streaming video. (5) New set-top boxes that don't offer spectacular functionality typically don't do well.

We'll see what happens, but this is not going to be a runaway success. Put in a cablecard, a tuner, and a hard drive and then I'll get interested. What it may do, though, is stimulate companies like Motorola/Comcast, DirecTV, Cisco, and Microsoft to build set-top boxes that are also DVRs and can access Internet video. And THAT would be interesting. (Although it would reveal just how crappy Net video really looks on a TV set.)

Technorati tags: Bernoff, Forrester, Apple, iTV

Let's not get too excited about mobile video

[Josh] CNBC is having me on today to talk about mobile video. I love all this attention to video on new devices, but let's have a look a close look at this.

Cell phones can do video now -- that is, increasing numbers of them can. Verizon is pushing VCast, and MobiTV has reached 1 million subscribers.

And portable devices can do video too -- movies come out on Playstation Portable, and Apple has sold (as of last announcement) 15 million downloadable videos at $1.99 a piece.

So why am I underwhelmed by the potential of mobile video? Because:

1. It's too small. The right size for video is a 42-inch plasma or LCD screen -- and that makes for an awfully big phone, don't you think? Instead we have the very nice 2.5-inch screen of the video iPod and the similar small screen of the PSP (and the even smaller screens of most mobile phones). Now if you happen to be running on the treadmill at the gym, or waiting for the bus, this will do. But it's no way to watch video that's produced at 1 million dollars per half hour.

2. It's too expensive. Forget the cost of the devices. Video online generally requires a subscription, and most people don't want to pay. Forrester's surveys show that even among the youth that are supposed to be all excited about this, less than 10% are willing to pay even a token amount. And advertising, which supports the rest of TV content, isn't a factor here. Advertisers need measurement, which is missing. And they need an effective delivery of video messages that's biggest enough to make an impression (see 1. It's too small.) And I'm not convinced consumers will put up with ads in mobile video, especially if they have to pay some amount for it as well.

So, where do I come down? Mobile video will become a niche market. There will be people interested in it, and there will be lots of content, but compared to television -- hell, even compared to online streaming video, which is doing great -- it will look very, very small.

Technorati tags: Bernoff, Forrester, Mobile video, iPod video