CES Trends: 4K 0

Get ready to hear a lot about 4K TV.  At the 2012 International CES earlier this year we saw 4K (and 8K) television prototypes from a number of OEMs. LG and Sony, among others, are expected to start shipping 4K TV offerings within the month.

Around CES there was much written regarding 4K television (see here and here as examples).  There is more to come.  I want to highlight a few key points to consider:

  1. While the initial models will be expensive from the perspective of a mass market consumer, prices will move down over time (typical for nascent technologies after first launch).
  2. As of right now, there are no single definitions/standards for 4K. CEA is actively working to bring together 4K stakeholders and solidify relevant definitions for 4K.
  3. The origins of 4K is the cinema. The imminent launch of 4K TVs will usher in 4K  as a home entertainment technology.
  4. The first 50K or 100K units sold will come relatively easy.  The real test for 4K will come after those initial units are sold.
  5. Resolution is a function of an individual’s distance from the display. In order for a 4K display to provide a meaningfully improved viewing experience in the home, the display will need to be large or individuals will need to sit closer to their TVs.
  6. 4K displays can provide am improved 3D experience.  Passive 3D essentially cuts the viewing resolution in half so with a roughly 4K display viewers can still watch passive 3D in full HD.

 

The Killer App for the Television 0

Over the last two days I’ve been attending and speaking at the TV of Tomorrow Show in San Francisco.  One thing said several times is how the “Killer App for TV is TV.” This feels shortsighted to me.  In the years before touch and gesture we could have said “the keyboard is the killer input mechanism for computing.”  Before MP3 players and digital music we could have said, “audio tapes are the killer media for mix tapes.”  Before the DVR we could have said “VCRs are the killer device for recording content.”  I don’t like absolute statements that limit the future solely because we haven’t identified or innovated that future yet.

Boxee Box adds OTA Tuner – Does it Matter? 0

Gigaom reported that a future Boxee Box upgrade will allow users to access live over-the-air TV programming.  I’m a big fan of Boxee and of the Boxee Box.  The ability to search across different video content services is a key element of what TV needs to be.  As I’ve written about in the past, universal search – if it can ever be delivered – is an important aspect of the future of TV.

Certainly OTA matters. Something like 40-60 percent of the TV programming US households watch still come from the channels available free over-the-air.  But with the OTA tuner dongle, users will still need to install a digital TV antenna and herein lies the hurdle.  OTA programming can be great uncompressed HD content – but the need to set-up the antenna is still a big (enough) hurdle from keeping many from relying solely on OTA and other Internet-delivered content. When the mass market can access “OTA” video programming across an Internet connection and not be beholden to an antenna, then will consumers truly start to move away from traditional paid TV services to other online delivered content.

Expect Promotions on TVs in Q4 0

No surprise we’ll see TV promotions this holiday season. TVs have been a key holiday tech category for several years. With volume down domestically in 2011 and concerns of macroeconomic-led weakness in Q4 the category is well positioned for promotions. More, inventory levels for other tech categories are low on a seasonal-basis.

But for further proof, check out Samsung’s recently quarterly report here.  As you can see here from slide #12, the Q4 Outlook suggests strong promotional activities.  Expect to see promotions especially pronounced for higher-end sets (3D, connected/smart, LED, and large-screen).  Samsung states their goal in Q4 is to “outperform the market and enhance profitability through the peak season marketing and sales expansion of premium/localized models.”

 

 

Universal (content) Search 0

Universal search – the ability to search for content across sources – is one of the holy grails of consumer content management.  Over the last 5-6 years search has improved significantly and become more ubiquitous.  Google Desktop is a great search tool across locally stored files.  I’ve written in the past about Xobni and the ability to search and organize across email content (your inbox and archive files). Adding the link in the previous sentence was easily done using the search capabilities in the Wordpress link tool.

Google – through Google TV – is (trying to) make a strong push into video content search.  Crestron has been active here as well. @juliejacobson writes about a Crestron patent published a few weeks ago.  The patent abstract describes the pantent as:

a method for obtaining a single set of media search results from a search of media sources. The method includes providing a search query, executing a search of each of the media sources for media based on the provided search query, generating results of the searches, and consolidating the results of the searches into the single set of search results that include a list of media items with associated metadata.

This is exactly what is needed in content management.  Content is exploding across a myriad of sources and the ability to search across these sources with a single gesture is extremely limited.  One of the greater obstacles thus far in this endeavor is that the approaches have been hardware-centric. In order to gain wide acceptance, I think universal search will need to take place across a number of devices.  Services like Netflix have gained ubiquity because they are available across content-oriented devices. Universal content search will not reach a similar ubiquity until is is hardware agnostic.

Further Fragmentation of Video Distribution Services and What it Might Look Like 0

We’ve already seen some fragmentation of video distribution services and it begets the question if this is just the beginning.  Further fragmentation will have some common characteristics.

First, I believe this further fragmentation will happen around lower dollar value digital assets.  These types of digital assets have the likeliest chance of propagating further fragmentation because their appeal will be strongest among niche segments of the population as opposed to mass audiences.  Therefore, these lower dollar value digital assets will generally have older publication dates and be less likely to potentially damage existing owner-distributor relationships – like the relationships between studios and MSOs.

Secondly, as alluded to above, fragmentation will occur (and ultimately be most successful) where niche audiences exist.

Third, fragmentation makes sense where there is a concentrated appetite for given digital assets (ie content genre) and there is also a wide assortment available to distribute.

Fourth, fragmentation makes sense where renting v. owning makes sense.  One can easily argue we are already there on this fourth point.

NetFlix is of course the first-mover here and I think their recent price increases were a move to increase the dollar value of the digital assets for which they have rights.  But if we apply the NetFlix model to other lower dollar value digital assets we can imagine low cost streaming services for niche content like fitness videos, certain foreign films (by language for example), or other niche content.  These type of content have concentrated value within the niche.  So they won’t damage owner-distributor relationships, but they’ll be able to support a monthly subscription fee.

As Internet-enabled TVs generally become more available or if traditional cable content is eventually distributed via apps across app-enabled TVs such that users can access different feeds of content seamlessly across app platforms then these isolated services (and thus fragmentation) will gain steam.

 

 

BBY, Connected TVs, and the Innovator’s Dilemma in Action 0

BestBuy recently announced they would launch a connected TV under the Insignia brand using the Tivo user interface.  This is a great example of the Innovator’s Dilemma in action.

The Insignia brand is one of Best Buy’s house brands.  It (like other private label brands) is frequently used as the opening price point for devices.  House brands tend to do this best for maturing categories – where consumers have become comfortable with how they use their devices and are largely looking for replacement devices.  It also works for late adopters who are looking for their first purchase in a given category (and might be more price sensitive).  In both cases, these consumer segments are looking for low-priced options.

The Insignia brand has grown to represent some 10 percent of the television market.  Moving into the Connected TV space is an interesting move for the Insignia brand.  It is certaintly a growing segment of the declining TV market. In the first half of 2010 they represented about 8 percent of total shipments. Just a year later the share of connected TVs had grown to about 20 percent of total TV shipments.  While they’re grown significantly in terms of shipment share, they still represent a relatively low share of the installed base.

The move will allow the Insignia models to enter a growing segment of the TV market.

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