Jason Dunn
09-20-2005, 05:00 PM
<i>The following article is written by an industry insider, anonymously referred to here as Steve Sanders.</i><br /><br /><i>"The day I made that statement, about inventing the Internet, I was tired because I'd been up all night inventing the Camcorder"</i> - Al Gore<br /><br />Al Gore was quick to admit he slightly overstated his role in developing the Internet. But in joking at his own expense, he probably didn't realize how prophetic his statement would be by linking video with the Internet. All of the professional level products - hardware and software - at this year's IFA and IBC conferences focused on producing and delivering high definition content - movies, television, music. Now that Gore's Current TV is a growing cable network he's probably watching the rapidly developing IPTV arena and keeping his Internet options open. <br /><br />Thanks largely to government regulations, HDTV content development and delivery have moved fairly rapidly in the U.S. since 1994. Europe on the other hand chose to let the market set the pace for conversion and there was only one channel delivering digital content in Europe in 2004. Service expansion has been painfully slow so the need for HD TV sets has been mired in high cost and lack of interest. England's BBC has been one of the early adopters so European broadcasters are watching their progress before they jump in with breathtaking content.<!> <br /><br />High Def TV set sales are experiencing considerable growth in the Pacific Basin but for a change sales in the area lag behind those in the U.S. Europeans are certainly interested in high def big screen viewing and the set manufacturers and European retailers are convinced that the soccer World Cup will be the key decision point for many households. Then European consumers will face the same challenge U.S. buyers face - a dizzying array of sets and techie points that will totally blow your mind.<br /><br /><i>"Television enables you to be entertained in your home by people you wouldn't have in your home"</i> - David Frost<br /><br />Even though our rear projection "HDTV-ready" set isn't that old we decided it was time to replace the huge piece of family room furniture with one of the sleek flat panel sets you see "everywhere." Trouble is what self-respecting American family sits down and watches TV together anymore? So multiple idiot screens meant we could: move the big set into one of the kids rooms which would mean they couldn't have anything else in the room (like a bed) buy a flat panel set for each of them (like that ain't gonna happen) upgrade them to an option.<br /><br />That was an easy decision because they already have powerful InstantON entertainment notebooks. Kids were raised by TV and they entertain themselves with their computers, the Internet and cellphones. When we were growing up and happened to say we were bored the old man solved the problem he sent us outside to work and you did…or else. But in today's civilized Wi-Fi homes, kids fill their time watching videos and movies on their systems in their rooms, by the pool and probably even in class. In addition, our kids have ADS Tech TV tuner cards to prerecord shows when they left their systems at home and attached to our media center PC. <br /><br />According to In-Stat they are in the majority since the sale of entertainment-ready notebooks has surpassed the sale of "plain old" PCs. So simply by adding 21-inch LCD monitors they had everything they needed for IMing, web research, streaming video/audio, email, digital surround music and oh yes…schoolwork. That was easy and the picture looked better than large screen set in the family room …and they had room for furniture! <br /><br /><i>"Television has proved that people will look at anything rather than each other."</i> - Ann Landers<br /><br />Picking a new flat screen HDTV sounds easy enough…look at the picture, ask the price, take delivery…yeah right! First you have to decide if you are going to go with plasma or LCD flat screens. Worldwide LCD sets outsell plasma systems three to one, but we were going to keep an open mind. Until recently the flat panel displays have been extremely pricey. But with everyone entering the market including Dell and HP prices are plummeting. By mid-next year when several Asian plasma and LCD plants come on line prices will get brutal. <br /><br />But when your wife wants to remodel the room and have the FCC's version of HDTV to watch HGTV you do what is required. While that's part of the population makes the decision most of the purchases are made because of intellectually-stimulating HD programming like Nascar, football, golf, tennis, baseball, boxing and soccer. Next you have to decide if you are going to buy on-line, from a storefront or a home theater provider. If you don't know enough to be dangerous, on-line is a tough road. If you like the idea of a home theater solution you realize you are abandoning your room to something terribly expensive and unless you are really serious about TV it will be used as much as a formal dining room. The home theater room may be cool but most of the movies you watch over the next year or two will be … plain old DVDs!<br /><br />Going to a storefront - Best Buy, CompUSA, Good Guys, Target, Costco, Wal-Mart, Fryes (oh heck anywhere!) is not a task for the faint of heart. It's worse than buying a used car. At least those folks know they are lying! While prices are in free fall for large flat screens (anything over 40-in is considered large), they definitely aren't an impulse buy. What sold for $25,000 a couple of years ago now sells for $2K so they are low and getting lower…fast! When the multi-billion dollar LCD facilities come on line pricing competition between plasma and LCD will be brutal. Price erosion is something you learn to live with. <br /><br />All you have to do is make a few choices: technology, size, aspect ratio, resolution, brand, channel, tuner, and so forth. With all of your content going digital the set isn't just a boob tube anymore. It's a part of your total entertainment experience.<PAGEBREAK><br /><br /><i>"I'm beginning to believe that it won't be terribly long before it will be quite commonplace for people to use the Internet to pull up real-time video, or video-on-demand."</i> - Vinton Cerf<br /><br />The TV set in a growing number of homes is not just for couch potatoes. It's part of the pretty complete, pretty good and pretty challenging home network and entertainment solution. According to the Diffusion Group (Figure 5) more than 17 percent of the U.S. households have home networks followed by Japan and the U.K. respectively. As UPnP connectivity becomes reality rather than wishful thinking that number will increase dramatically. It's no wonder that home entertainment PCs and notebook sales are increasingly so significantly this year since people are connecting everything to their systems and networks.<br /><br /><i>"The Internet is so big, so powerful and pointless that for some people it is a complete substitute for life."</i> - Andrew Brown<br /><br />With the growing availability and use of broadband (Figure 7) households seem to be expanding their multitasking. According to Forrester Research we are using DVRs to control how and when we watch TV. As long as you can avoid Macrovision and content management solutions you'll be able to not only extend that viewing time and even archive the shows. The rest of the time people are on-line doing almost everything web surfing, listening to digital music, banking, shopping and streaming video.<br /><br />In fact, with video over IP gaining so rapidly most of the Telcos are looking closely at Korea's IPTV model which is extremely successful. The interest and support for IPTV by Microsoft hasn't gone unnoticed by the cable and satellite companies. Or for that matter your local electrical utility that also has a pipe into your home.<br /><br />We didn't have any say in the court's decision to bust up Ma Bell years ago in the name of "competition." The idea of one phone company and one bill was easy to understand, easy to manage. So the revolutionary concept of one service provider, one bill has been reborn but this time with competitors. We'll give you a hint as to our leaning. We never did like Jim Carrey in The Cable Guy. Granted we did cheer when George Seigel and Jane Fonda took on the phone company in Fun With Dick and Jane. But given a choice between dealing with the cable company or phone company…we'll vote for the good old days!<br /><br />But the fight for our voice, music, TV, video on demand, phone and internet connectivity is going to be aggressive over the next few years. Suddenly we'll have competitive offerings. Then all we'll have to figure out is how to get around the digital rights management solutions that Hollywood and the networks want in place before they release their super stimulating content and expand our NAS storage system.<br /> <br />By the time that is worked out we'll be trying to store and enjoy our High Def video content. Either the Xbox or PS3 game playing systems will be in use to entice Hollywood to share their content with us on disc. Or maybe the question may just be moot and we'll be downloading our movies when we want, where we want.<br /> <br />Then you'll be able to remember how rough you used to have it when you were growing up…having to run to the store to return the movie on time or waiting for the postal person to arrive with your new selection!