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Tag Archives: streaming

Is Amazon Building a Kindle Set-Top Box?

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I'm awesome at photoshop! I hope it doesn't look like this!

I’m pretty sure the headline here says it all.  Let’s review the facts (it might be worth re-reading my bit on why HBO doesn’t go direct to consumers, as many of those issues are addressed here):

  1. Amazon has a large content library. They are actively increasing it.
  2. Amazon has a content distribution platform already capable of streaming to non-PC devices.
  3. Amazon has a recurring billing relationship with consumers.
  4. Amazon has a (phenomenal) marketing and distribution channel for getting devices into consumers houses.
  5. Amazon has a strong brand in the hardware space.
  6. Amazon has the customer service & support infrastructure needed to deal with service issues.
  7. Amazon has the ability to build hardware and deal with supply chain issues.
  8. The TV services industry is huge, and Amazon wants in.

Even if they don’t plan to decouple content from Amazon Prime, making a box is a very viable, and, in my opinion, a likely move.  In addition to all of the above, it is a strong move versus Apple (and possibly Google and Microsoft too).

A $99 Amazon Kindle TV box would not surprise me this coming holiday season (how about a September launch, right in time for school?).  But then again, I occasionally get Kindle predictions wrong.

Kinda saw this one coming, didn't ya?

Oh, and one more thing.  What if they do it by acquiring Roku?  Let’s review that scenario:

  1. Roku already has something better than a minimum viable product.
  2. Amazon could skip all the work on developing a new UI/UX (regardless of your feelings on the Roku UX, it is well more than functional).
  3. Roku isn’t a sustainable business yet, enabling Amazon to purchase at a reasonable price.
  4. Roku has a team with a strong background and industry knowledge relevant to the TV/Device space.
  5. Amazon can distribute the same hardware at the same price point (which seems to fall in the not-too-profitably category), yet supplement with reliable recurring revenue.
  6. Amazon wouldn’t have to drop the Netflix service, but could slowly chip away at it from within.
  7. It’s cheaper than trying to buy Xbox from Microsoft (though that’d be quite the coup, plus nobody would even need to relocate)

I don’t really think Amazon *needs* to buy Roku, but it would probably let them fast-track a bunch of steps.  And then it could be a $49 Kindle TV, which just sounds so… right.

15 vs 50: The Battle of the Future of Television

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When you look at the stats for video consumed on computer screens, it’s fairly staggering.  Literally hundreds of millions of videos per day on YouTube alone, 26 billion videos online in the month of September, averaging about 10 hours per month per person.  From one perspective, this could be considered inconsequential relative to the estimated 8 hours per day on the old fashioned TV set (though that stat is open to some interpretation).  However, considering this is still the early days of quality content being available online, it’s pretty safe to say that the computer (and of course Internet) is a successful media playback device.  So is the future of entertainment going to live on the 50″ HDTV display or the 15″ laptop?

The old argument: the PC is a terrible entertainment platform
At my job a decade ago I used to travel around the world meeting with virtually every company who built PCs, phones, and other gadgets.  At the time the focus was on the emerging “digital home”, a wonderful place where we envisioned the PC (for sake of typing, when I say “PC” I mean “computer” and include Macs in this generalization) as the “server” device, providing media to enjoy on connected TVs and stereos. We used to talk about how terrible a laptop or desktop was as a media consumption device, and how nobody would really want to sit around a small screen to watch any kind of premium content.  Other than the time I thought Amazon wouldn’t get anywhere selling books online, I can’t think of a time I was more wrong about something.  In reality PCs are now phenomenal media devices.  Laptops are unbelievably convenient when it comes to portable entertainment, and you can readily purchase surround sound setups for desktops.

All the ways the PC rules
The computer is unquestionably the most versatile product since the invention of the wheel, and when it comes to entertainment offerings, there’s no shortage of tools and services to enhance one’s experience.  With a computer and a high-speed Internet connection, we are a hair’s width away from a true all-content on-demand any-time lifestyle (and for those willing to skirt some pesky laws, they are already living that way).  Whether it’s Pandora or last.fm, Hulu or Windows Media Center (or even the remote possibility that TV Everywhere actually delivers as promised), you can have truly personalized media experience, all the time.

The kids today…
As a youth I distinctly remember our home’s expansion to a few dozen channels and our fancy remote control (which was actually wired to the cable box).  By the time I was in college, we had a couple of hundred channels, pay-per-view content, and premium cable offerings.  The living room was the only real place in the home for entertainment, with our CRT TV, video game console, cable box, and VCR.  College-age kids today have a very different perspective.  Paying for content (other than video games) is a generally foreign concept, as they’ve been surrounded by free for a long, long time.  And this is nothing compared with young children who are growing up in the post-DVR, on-demand world, where programming schedules seem utterly arbitrary.  People under 25 (and some above, of course) are used to taking their entertainment with them, and the only reason to bother going into the living room is to use their game console for gaming, chatting with friends, or watching movies – all activities they’d prefer to do in their own space anyway.

So is my $4000 (2000 1000 500!) high definition set with surround sound a dinosaur?
Ask me that after I watch Dark Knight in 1080p for the 3rd time. Or during the Stanley Cup Finals. Or even for an episode of Glee (yeah, I watch it, but I offset it with Man vs Wild, so back off). There’s just some content that, if given the option, I’d rather watch on a humongo-screen with amazing sound.  And no matter how much time we spend watching content on our laptops or phones, it’s just a different type of experience.  Further, the TV industry isn’t about to go quietly into any goodnight – innovation in televisions is probably moving faster than we’ve seen in the past 3 decades.  Today you can already buy TVs with built-in Internet streaming from a variety of sources, and we’re seeing numerous experiments with 2-way interactivity and 3d displays.  So the era of “making em bigger and cheaper” seems to be fading into the era of “making em do more”.

Some infallible predictions:

  • The popular categories of TV sizes will remain the same for the foreseeable future
  • PC/online media consumption rates will increase (rapidly) over the next 5 years
  • TV viewing rates will NOT decrease over the next 5 years
  • Cable attachment rates (# of people who pay a cable/satellite company) will decrease over the next 5 years, specifically due to people “cutting the cord” and consuming Internet-provided content instead
  • All major sports will have full live and archived streams available online within 2 years
  • At least one major sport will provide direct-to-TV streaming services within 2 years
  • Blu-Ray will continue to flounder, but will show continued (mild) growth for the next few years
  • Real-time interactivity will be tested on major TV shows in the next 2 years (and it’ll be more than just a twitter stream!)
  • Apple will do something more interesting in this space than Apple TV.
  • 3D will not drive the sales of new sets anywhere near what “the industry” hope or project
  • The biggest growth area will be the confluence of laptop use simultaneous to TV viewing
  • There will likely be a resurgence in more dedicated portable media players (that aren’t iPhones) with native streaming services.  They will fare poorly.
  • The concept of the “convergence/Internet set-top box” as well.  These too will do poorly.
  • In 3 years there will be 14 different versions of CSI on the air. Also, the writers of Heroes will still fail in their attempt to kill a character permanently.

I’m loving it
Let’s face it, this is an exciting time for being entertained.  There are so many ways to consume content, and so many interesting experiments occurring around the industry.  Further, many “standards” are pretty well in place, meaning the 720p 42″ plasma you bought 3 years ago is still going to work just fine 3 years from now.  This is unquestionably a good time for innovators, entrepreneurs, and consumers alike.  If you find yourself bored and you have a screen somewhere nearby, you just aren’t trying hard enough.

Disclosures: I was on the steering committee for UPnP, DLNA, I built the Slingbox, and have consulted on topics related to convergence and marketing/PR for Boxee, DivX, VUDU, Clicker.com, NETGEAR. As such, I’ve attempted to avoid anything specific to those companies in this post. In no way are any of my consulting clients related to my tech blogging, though one could argue I’ve seemed to align myself with companies who build cool stuff in the convergence space – and they would be right.

Samsung Adds Final Nail to Blu-ray's Coffin

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One of the greatest challenges of building consumer electronics devices is dealing with that awkward timeframe between announcing new/next-generation products and ending the lifecycle of current ones.  Sales tend to plummet and huge price incentives are thrown at customers to try to get the units off the shelves instead of in the dumpster.  Naturally as a CE manufacturer you typically want to keep that window as short as possible, as it is otherwise harmful to pretty much in the foodchain, often including consumers.

I was, therefore, quite surprised to read an interview with a Samsung exec predicting the demise of the Blu-ray format within the next 5 years.  I can’t see any possibly upside to this statement for Samsung, content makers, other device manufacturers, etc.  As I’ve blogged about before, I’m still far from being sold on Blu-ray as a “winner”, but I guess that needs more context.

The NPD Group puts home DVD players at having penetrated 85% of US homes.  That’s a win, unquestionably.  It seems highly unlikely that Blu-ray will ever get to the same level.  I’ve yet to hear/see any real positive word-of-mouth happening for the format, and the reasons seem similar as when I blogged about it last time.  Here are my biggest reasons against mass-adoption of Blu-ray as a format:

  • Without extremely big, high-quality screens, it’s challenging to see the “ooh, ahh” factor of 1080p over even an upconverted standard DVD.
  • Upconverting DVD players are pretty much the standard already, and are available at extremely reasonable price points.
  • Consumers are still enjoying their 720p (the current HD standard) content, so seeing something “marginally better” doesn’t make too much of an impact.
  • Small content selection at a high price point.

Finally, I also believe we’re going to see an “iPodification” of video.  In the 90s we were well on our way to replacing the CD as format, with SACD and DVD-Audio as possible follow-ups.  Both offered vast improvements in sound quality that were pretty apparent with a decent stereo.  Today, however, the average person is listening to music at worse-than-CD quality, on their iPods/iPhones, home stereos, Sonoses (or is that Sonii?), etc.

It seems fairly likely that the same pattern will occur with video, based on the combination of iPods, mobile video (cell phones), YouTube, Hulu, Amazon’s new service, and anything else that brings low-to-medium quality video to our eyes on a recurring basis.  Don’t get me wrong, the big flat panels will still make it to the common living rooms, with glorious 5, 7, 11, or 2834-channel surround sound systems.  But the time invested in these playback experiences is already in a questionable state (some say its on the decline, though there’s little real-world evidence as of yet), and all things being equal, seems unlikely to grow.

My hunch is the DVD as we know it today will be around for a long, long time, and the replacement format for it won’t involve physical media.  TVs with built-in streaming capabilities are coming to store shelves (I’d probably avoid the first generation if I were you), and we’ll see a new generation of set-tops and gaming consoles with higher quality video when the time is right.  Blu-ray definitely beat HD-DVD, but I still don’t believe it’ll ever be a dominant format for the masses.