Google, Intel, and Sony have apparently teamed up (and Logitech too) to develop an Android-based platform for interactive television. Let me start my post with some important background points and disclosure:
- I was a cofounder of Mediabolic, a startup who built a platform for connected devices. While there I designed about a dozen “convergence” products (one won a best-of-CES award), and the company eventually got acquired by Macrovision.
- I was an early employee at Sling Media, where I was responsible for developing the Slingbox (another best-of-CES award).
- I once interviewed at Google for a position in a “google TV” role, but didn’t feel it was a really great fit for me personally (not to mention the commute).
- I am currently involved with Boxee.TV, a startup in a highly-related field. There is some amount of overlap here, though that is in no way related to this blog post.
- I’ve also worked with VUDU, Clicker.com, DivX, and others on “future of TV” systems, services, and products.
- I was on the original working group committees for UPnP (AV) as well as DLNA (even before it was called that).
Through the above experiences, I have seen a lot of failure and some success in the “connected TV” space. But mostly failure.
It’s a space where techies dream, entrepreneurs try, and companies fail. The list of failed convergence companies is notably longer than the list of successes. It’s a field where even Apple, the current king of the world when it comes to entertainment technology, can’t get a reasonable foothold in the home.
Most of the failure is due to deeply entrenched systems heavily controlled by huge corporations with little interest or need to innovate. While we can yell and scream about how bad a job the Cable/Satellite companies are doing at future planning, the blunt reality is it’s hard to argue that it’s necessitated. These megacorporations can drag their feet, and deploy mediocre DVRs and HD services, and consumers (for the most part) are satisfied with their experiences. Further, due to their current business structures, the concept of opening up the market to third-party devices, content, services, or applications is not just daunting, but likely unprofitable.
When I consider the opportunity in the digital home, I am convinced it cannot come about by directly competing with traditional broadcast models. Broadcast TV, and all the services with it, are generally easy to use, convenient to pay for, and effectively “good enough” for most people – making “better than current TV” offerings a significant challenge to bring to market. Historically, the only thing to attract the attention of consumers beyond their existing entertainment solutions are:
- Transformative content playback experiences. From VCR to DVD was one example, and from standard definition to HDTV is another. The key word here is transformative – it can’t just be “better quality”, as evidenced by virtually all other introduced formats and technologies based around content.
- Notably difference content offerings. Again, moving up to HDTV-enabled set-top boxes was a natural flow, game consoles are the other shining example of a successful category. Boxes that simply deliver “more of the same” or “stuff you can get elsewhere, now get it here (e.g. digital pictures)” are typically not big hits. Consumers have to see some kind of service that’s worth the extra money.
Everything else has failed to make a dent. Most “Internet Set Top Boxes” have been, and will be failures. The typical logic that brings these products to market goes something like “consumers are about to cut the cables for their Internet content, and really hate watching it on their computers.” The evidence behind this claim? It’s in the same folder with the WMD evidence the government started a war for (zing!).
I’m very curious as to the potential from Google, Intel, and Sony. Intel has wanted in on the “connected TV” for a long time (disclosure: they were an investor in Mediabolic), and has never really executed very well. It’s not to say they can’t, but it’s safe to say the space is far far away from their core DNA. Sony too has stumbled frequently in this space (here’s their version of a convergence device). Logitech? See Sony. And then there’s Google.
Part of me thinks Google believes that all devices are effectively the same, and their (limited) success in the phone market implies opportunity in the TV market. Another part of me thinks Google is just so big they take on any sector they see opportunity in. But most of me thinks Google wants to get firmly entrenched in the biggest advertising market there is – television. And as hard as doing phones might be, doing TV boxes is much much harder. Here’s why:
- Phones play highly restricted media types. Converged TV devices are expected to play all media types. This topic alone is probably worthy of a blog post, but trust me when I say – it’s hard.
- Consumers buy new phones on a recurring basis (multiple times a year in some countries). Consumers replace TVs infrequently, and buy TV “accessory” devices only a couple of times per decade. While the market is huge, it’s hard to get new devices into the home.
- Carriers are motivated to push new devices and services into the hands of their customers, it’s part of their business model. TV service providers are not motivated to do so (as discussed above).
- As much as phones are “closed systems”, a manufacturer is able to purchase equipment and get a device certified and get it on the network without too much involvement by a carrier. While the path is actually similar (CableCard Tru2Way certification), the realities for both the manufacturer and, more importantly, consumer are much much worse.
- Again, as stated above, consumers are generally dissatisfied with their phones (a problem unlikely to go away) and are excited about new ones. Consumers literally dread changing equipment in their living room – even us geeky dads with cool quadrophonic sound.
Now with all that said, I’m truly excited about the future of converged entertainment in (and out) of the home. I remain mostly cynical about seeing any real change anytime soon. I think there are a few companies who have built the right foundation to make some inroads, but I’m hoping everyone involved is prepared to win their “realist” and “slow and steady wins the race” badges over the next few years-to-decade (or longer). Can Google be the catalyst of change, or will they just be the next in the long list of companies who tried and missed the mark?
Excellent analysis as always, but I would add one thing.
The next device has to be a bridge, meaning it has to be just as easy to access new content sources as old. One new FCC initiative that might make this much easier for companies like Boxee is that the FCC doesn’t believe that software needs to be CableLabs certified like hardware does. This means that anyone could write support for an existing certified CableCARD tuner and gain access to that world of content without paying $100k for a CableLabs certification.
Either way, things are changing, but it is happening so slowly it’s hard to tell where we are going.
This is a great article.
I think there’s two big factors right now that make the set-top Box/Connected TV market ripe for change.
(1) The amount of online video content coming online is staggering. There’s over 24 hours of Youtube video uploaded every minute, as well as hundreds of hours of content streamed from Justin.tv & Ustream. Consumers want to watch this content, but right now it’s impossible to watch it on your TV without an internet-enabled TV or set-top box. This goes to your point about transformative playback experiences. There’s now a ton of content that you can’t watch on your TV unless it’s internet-enabled.
(2) Just as an app-store on the iPhone led to an explosion of “touch” smart-phone adoption, an app store on an Android TV device will let developers create compelling new experiences for the TV that will further attract consumers to internet-enabled TVs.
Two years ago, a fraction of the video content we have online today existed, and Apple’s iPhone app store didn’t even exist. I think the combination of (1) and (2) will create “notably different content offerings” which will be the catalyst in driving dramatic Connected-TV/set-top box adoption.
“The amount of online video content coming online is staggering.”
Quantity does not equal quality. Most of the stuff on YouTube and Ustream is short form. And junk. As Mark Cuban said recently, “The future of TV, is TV.” He’s got a point. I don’t want beef jerky, I want a professionally prepared filet.
Well said Jeremy. Obviously everyone in the industry takes notice when Google enters their market. It is important not to take a Steve Job-like approach, in which he is severely damaging his own products and hurting his customers by trying to stall Google entering the phone business, but by the same token, none of us want to roll over and let Google take over.
The TV space is going to undergo major change in the next 5 years. In that time, more content will be available online for download or streaming than is currently broadcast on all the networks combined. Viewers will have a bit of a hobby-project figuring out if the show they want to watch is best viewed live, on a DVR, or streamed at their convenience. Add to that the complexities of whether or not family members have already purchased the content, and whether or not it’s already in the house somewhere on a hard drive, and it gets almost impossible for most viewers to manage.
Is Google really trying to help fix that problem? Like you, I don’t know. A very smart colleague of mine, Sean Besser, described Google as a highly sophisticated ad-delivery company. Online content (content over the internet) still has very weak advertising. If Google could help shift the ad-dollars from traditional broadcast to online distribution, they might be a very welcome new player in the TV ecosystem. While customers want the convenience of online content that can play where and when they want it, they don’t want to pay twice for the same content they’ve already paid their cable company. Perhaps Google’s advertising platforms might help that problem.
Without ESPN all of these boxes / services will fail. Whoever gets ESPN and live sports will win, but they will have to pay at least $3 per subscriber for the privilege (just for ESPN). Until somebody gets live sports it is at best netflix, not a cable replacement.
It is not Steve Jobs that is stalling Android on the phone. Google and its partners are responsible for that, Apple is not a member of their “alliance”.
One should note that Google is not in any of these businesses because the love them or have any ideas how to improve them. They enter the market with something just good enough so consumers accept it if its free. It is simply cheaper to destroy the businesses in a market than paying the mfor adspace. Google makes business on the ads – and their clients (they care about) are the ad-buyers. Not the consumers.
Personally I have withdrawn from almost all Google services by now. I cant stand the arrogant snooping and control-mania displayed by Google.
Note that most things Google do is closed and secret. And even things like Android is 100% controlled by Google – they just publish a snapshot of the source to its “partners” now-and-then. The Linux crowd just banned Android from calling itself a Linux distribution – to many hooks into proprietary Google services.
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Great article. I agree with the commenter that the ‘transformative’ experience will be availability of web-hosted or web-streamed content, particularly as the likes of YouTube move more and more into live events as they did recently with Indian cricket. This will only grow with time and content will begin to appear exclusively as web-streamed or hosted events, just as it did with satellite and cable in years gone by when they were trying to differentiate themselves. The web-hosting and web-streaming companies will be motivated to get exclusive rights to content. One company operating in this space is JumpTV. There are others.
The problem is that video hosting providers are almost exclusively clip-based. This is important because ‘clips’ are the ‘filing system’. This works great in an interactive experience where you have a mouse or trackpad in your hand and can skip around clips as your mood dictates, but fails miserably on a TV interface. It’s too much ‘work’ from a user-interface standpoint to pull up a 2 minute clip on a TV. It goes against 60 years of habits, and old habits die hard – people watch TV to relax, and they don’t want to ‘change the camera angle’. This is why Interactive TV never worked despite hundreds of millions spent on it.
The answer I believe (and I do have a vested interest) is turning online video into a TV-like experience. Turn clips into channels effectively. This is what WorldTV.com does and over 200,000 such channels have been created out of more than 2 million web-hosted clips.
From a set-top box standpoint, services like WorldTV.com and other TV-centric portals that will surely launch, offer standard formatted content (Flash Video or H264) in a TV-like interface. The set-top box can be a simple full-screen, chromeless browser that connects to the Internet via Wi-Fi. It’s not intended to replace your existing set-top box, not yet, so it doesn’t need all the other file formats or cablelabs certification. Over time perhaps it will replace cable boxes, you’ll pay a subscription instead to (effectively) an IPTV provider or web video portal.
At the end of the day, it’s the delivery medium that is changing, and we’ve seen that happen before. TV broadcasters will offer their signals to the web video portals who want to carry them – and indeed it’s already starting to happen.
I should just say GREAT header image and leave it at that. But I like to hear/read/sing to myself to be profound. Here goes.
As a new Android phone tester (to go along with the iPhone 3G that I am also testing-E.G. no phone service because of #callfail) I cannot wait to see all of the Google warnings on the TV set like what they have employed in the Android mobile downloading on the handset. “This program gives access to your: Power button, Ethernet Jack, IP address, Cable modem.” That alone will really freak my mom out if they do anything like their handset warnings.
Truth be told, Apple TV did the device “rightish” and everything else is a clever hack. Boxee is the most powerful hack, everything else is WebTV. Oh, speaking of the 1998 technology, I just downloaded Kuro.TV and installed it. It’s WebTV upside down. Anytime I see a URL bar on my TV, that’s a fast fail.
And Sony, remember, spent years developing WebTV products. Mine has the sweet IR accessory keyboard! 🙂
I have Apple Tv, Western Digital Live TV, Boxee , Panasonic Blueray DVD player with internet and apps. I prefer the open platforms so i can customize my experience. But the hacked versions of Apple TV, Boxee with Hulu, WDTV live are more complicated thanaverage consumer would like. Love Apple Tv for music and WDTV live for simple viewing of HD video stored on HD and Window Home Server codec issues and ” this format not supported messages ” are the biggest hassle of video viewing. I hope to test the boxee device and hope that is supports the most codecs and HD video formats to simplify my video viewing experience. Waiting to see a mac mini with Intel I5 chip and hdmi video and then I would choose that.Have tested xboxx 360 and windows media pcs like Win 7 with limiited success. Also issues with HDMI switching thru a receiver sometimes confuse WDTV or other connected media players. Give me apple tv interface, hdmi, and codec support, MkV playback, a few cool apps like i have on my android phone and I am interested.
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