On the eve of the 2009 CES show, perhaps it’s time for a few more thoughts on what should prove to be The Big Story at this year’s show: televisions and set-top boxes with internet access baked in, for direct internet video access.

For the last few years, numerous companies in the ‘computer’ business (on either the hardware or software side) have made repeated attempts to market solutions involving the PC as a viable long-form internet video delivery platform - with little to no success. Lately, though, perhaps enough anthropologists and/or behavioral scientists have been hired to finally convince at least a few of these companies that despite all the bells and whistles, a computer might never be a television after all (as they say in the south, “you can put a brick in the oven, but that don’t make it a biscuit”).

So while certain companies might have enjoyed a substantial technological head start in internet video, through a stubborn insistence on leveraging the home computer, the opportunity was missed. But no matter: here comes the CE industry - as of Thursday in Las Vegas, it’s their market now.

Apple undertook a conscious expansion into the CE industry several years ago with the iPod (in fact, dropping ‘Computer’ from their corporate name) - is it too late for other computer-centric companies to make a similar move? 

The recent Intel/Yahoo initiative is a particularly interesting case in point.  Both companies, as Yahoo Connected TV vice president Patrick Barry poetically puts it, “emerged from the ocean of the PC”.

Intel Intel has been especially forward-thinking regarding the convergence of the home computing and consumer electronics industries for some time now, having launched the Intel Digital Home Group several years ago.  The Digital Home Group, active in both processor design and standards development, is particularly close to my heart, as it’s made up of both anthropologists as well as computer scientists.

Yahoo We’ve been pretty hard on Yahoo lately, but they do have some heavy OEM hitters lined up to implement their embedded internet TV ‘widgets’ system: Sony, TiVo, and Samsung. Also worth noting, the Connected TV initiative intends to follow a purely advertising-supported model, and studies routinely show consumers prefer advertising to subscription fees.  Lastly, yet another issue (and one that holds true for all internet video contenders) is the remote: as Netflix CEO Reed Hastings recently noted, a Nintendo Wii-like pointing remote will likely be required as internet-enabled television hardware matures.

At any rate, given their recent setbacks, expect Yahoo to bet the farm on this one.

“You think we need this phone anymore?” I asked my wife.  Although I’d retired ye olde twisted copper line a few years back, going that one step further and losing the VOIP phone - well, that felt a little reckless.  But the fact remained that aside from a weekly call to my wife’s family in Germany, our use usage of that line had dwindled down to getting the occasional cold call for donations from the Police Benevolent Association of New York City (where I hadn’t lived for several years).

Live Simple.  Lean and Mean. (or our pale bourgeois version of it, at least) - to us, it seemed like a good idea at the time.   It turns out we weren’t alone: a recent US government survey claims that 17.5% (or 1 in 6) US households now depend exclusively on cellular networks for telephone service.

Nevertheless, I’ve found these major home network revisions require (ahem) particularly well documented key stakeholder buy-in, so I waited a week or two and asked Anja once again if Skype could be a workable Vonage replacement for her calls home.  Only after getting further assurance did I finally make the ‘Dear John’ call to break it off with Vonage (at one point, to spare the call center operator from having to go through his whole customer retention script with me, I think I might have actually said “it’s not you, it’s me”).

As it happened, though, both Anja and I came to rue that fateful day: my comeuppance coincided with a switch to the iPhone – or should I say to the remarkably dismal (in the NYC metro area at least) AT&T voice network that comes tethered to it like a ball and chain.  For her, it turned out she hated having to either boot up the laptop and run Skype or try to cradle a tiny cell phone on her shoulder during those leisurely Sunday morning calls home to Germany after all…

She’s one resourceful e-shopper, though, and soon came across what I think could be the Next Cool Geek Accessory – the retro cell phone handset. While she uses hers only at home for purely ergonomic reasons, I can imagine these things starting to turn up on the streets of the Williamsburg (and other ghettos of hip) in 2009, just as black horn rim glasses did 10 years ago.  For the rest of us (those of us old enough to remember), making a call with these huge ancient headsets is somehow strangely reassuring.

Yep. I like this thing - both for the sheer comfort and clunkiness of it, as well as for the juxtaposition of vintage design and current technology - there are even Bluetooth and USB versions available.

Who knows, if my AT&T voice coverage ever improves enough to make it worthwhile, I might just get a Bluetooth handset for my iPhone…

The groundswell of interest in finally getting internet video over to the television in such a way that avoids the clunky computer-centric workarounds we’ve seen to date is picking up steam - just in time for next month’s CES show.

While this is much as we expected, a more surprising (and related) development is the resilient strength in game console sales:

• As of October, the video game industry is up 18% year-over-year, and remains on track for a record year.
• Microsoft reports November was its biggest xBox month ever in Europe, with sales up 124% over last November.
• According to a recent Pew Internet & American Life Project survey, more than half of American adults play video games, and 20% play every day.  More importantly (because after all, this is the future we’re talking about here), a full 81% of respondents between the ages of 18 and 29 are home video gamers.  And the gender gap is less than one would think: while 55% of adult males play, surprisingly, 50%of adult females report playing as well.

Needless to say, given the current economic climate, numbers like these are quite impressive – and suggest the game console could be a much more viable solution to that pesky internet video ‘last yard’ problem than previously thought.  With that, a brief overview of the three competing platforms:

Sony Due to an ongoing price war, Sony now loses money on each PS3 it sells, according to Macquarie Securities analyst David Gibson.  However, the company is firmly committed to the PS3 as an integral part of their long-term internet video strategy, and just rolled out a newly revamped Playstation Network direct video download service for the PS3.  What’s unique about the PS3?  Sony is able to leverage its unique position as both a CE manufacturer and a major film studio, and recently made Sony Pictures’ summer Will Smith vehicle ‘Hancock’ available via download prior to the DVD release.

Microsoft The complex and expensive prospect of upgrading the home PC to Vista Premium or Ultimate just to get internet video to the television has unsurprisingly proven less than compelling to most consumers.  In contrast, over the recent Thanksgiving weekend Microsoft reports a 25 percent increase over last year’s already robust sales of 310,000 xBox units - in short, it’s clear where the growth is.  Like Sony, Microsoft has a direct video download service for their game console (and like the Playstation Network, the xBox Live Marketplace offers a large number of titles in HD).  What’s unique about the xBox 360?  The Microsoft download library is larger than the recently launched Sony service’s, and in addition, the xBox can now also stream content from your Netflix ‘Watch Instantly’ queue (in other words, but an xBox, get Roku functionality for free).  While (like Roku) titles must be added to the queue from the Netflix website, the ability to both stream and download (and the better selection for both) gives the xBox an edge over the PS3 in terms of internet video functionality.

Nintendo Here we have a bit of a wild card.  Thanks to their groundbreaking motion-sensing remote control (and a unique selection of games made possible by it), the Nintendo Wii is the market leading game console in the US, selling 34.6 million units for 2008 Q3 (compared to 16.8 million for the PS3 and 22.5 for the xBox).  The company has been remarkably circumspect regarding its plans for internet video, though – so look for some kind of announcement shortly, perhaps at CES in January.  What’s unique about the Wii?  With no hard drive, any internet video solution would be streaming-based – which is just as well, since the Wii has only 480p (DVD) resolution anyway (although it’s worth noting that real-world demand for HD video has proven surprisingly low).   But perhaps the most interesting aspect of the Wii is the motion sensing remote – as user interfaces get more advanced to support direct internet video access from the TV, we expect this point-and-click technology to replace the cluttered button-filled remotes of today.

Who knows, Apple TV and Vudu have certainly gotten a lot of things right, but neither has yet made a meaningful impact on the market – perhaps the Trojan Horse of online mutli-player video gaming will be just the added value proposition needed to make for a compelling ‘Last Yard’ solution.

It was almost two years ago now that Apple dropped the ‘Computer’ from its corporate name, reflecting the company’s growing presence in the consumer electronics space.  We believe the next iPod-like disruptive CE devices will be an completely new generation of network-enabled TV and set-top hardware offering direct and simple access to internet video ‘baked-in’ - and we believe some compelling implementations are right around the corner.

Meanwhile, consider an exchange from a panel at last week’s ‘Future of Television East‘ conference in NY: asked whether the emergence of such hardware would have much impact on the (currently computer-centric) internet video space, a panel member representing a major software firm essentially reduced the issue to that of merely a difference in user interface ergonomics  - keyboard/mouse vs. remote.  To paraphrase the panel member, “the user will get to the content whatever way the user gets to the content” - but yet minutes later, this same panel member was admitting that user uptake of their internet video TV technology was “not happening as quickly as we’d all like to see”.

Why is that?  Well, if a company’s solution to the problem of getting video from the internet to the TV involves putting a personal computer between the television and the internet and administering it all from the desktop rather than from the couch, they are just not going to see much uptake from Joe the Plumber – instead, the average user will wait for a ‘lean back’ solution to become available, saving him or her from having to get up and touch the computer at all.  Although this is precisely the point at which we currently find ourselves, we don’t see the situation lasting very much longer - again, we believe internet–enabled TV hardware will be the big story of 2009 (one of the issues that’s kept this from happening so far is the development of a useable motion/pointer remote, but that’s on its way too - more on that here).

Clearly, there are major ease-of-use differences between the personal computer/media server internet TV model and the (as yet unavailable) embedded hardware internet TV model - in terms of set-up, user experience, and maintenance.  But while the various software incumbents might have a stake in downplaying these differences, they fail to recognize the inevitability of standalone internet video devices at their own peril – because this new generation of hardware will also require a new generation of lightweight system software and highly efficient video codecs/players (a potentially substantial new market).  Furthermore, to the extent internet-enabled TV and set-top hardware is successful in the broader mass market, a new user application market could also emerge for these ‘quasi-computers’ (Apple’s App Store is a good example of an appropriately simple and elegant approach to distribution and administration for such an entirely new software model).

Amazon has an industry-leading online retail business to support its ‘Video on Demand’ internet video initiative. Netflix has an industry-leading DVD rental business to support its ‘Watch Instantly’ internet video initiative.  The iTunes video service?  Apple is, well, Apple.   And Movielink is owned (and supported) by Blockbuster.  Alone among the major video services, relative old-timer CinemaNow was out there by itself in the still very nascent long-form premium content internet video space.

Until yesterday.

As Sonic Solutions’ Chief Technologist Jim Taylor was sitting on a Future of Television East panel here in New York yesterday, his company was announcing the acquisition of CinemaNow.   Known for the Roxio DVD authoring software, Sonic had recently chosen CinemaNow as the storefront service partner for their Qflix DVD-burning system (CinemaNow’s other main partner to date is HP, which offers direct access to CinemaNow from their MediaSmart line of HD TVs and Connect set-top box - in fact, both ship with $20 CinemaNow coupons).

Since we believe the next phase of internet video will be about long-form premium content accessed directly from dedicated  network-enabled CE hardware, we were particularly interested to read Sonic Solutions’ CEO David Cook’s take on the move:  “With broadband-connected consumer electronics hitting the market in ever greater numbers, there is a growing need for a service that gives consumers one-click access to premium entertainment on any device in the digital home.  The combination of CinemaNow’s content and embedded device strategy with Sonic’s technical prowess and broad PC and CE distribution promises to fulfill CinemaNow’s original mission.”

A smart move for Sonic Solutions…  unlike the current Qflix system (which requires a PC), look for a combined Sonic/CinemaNow to offer Qflix-enabled hardware with embedded access to CinemaNow - no computer needed.   Such a device could compare very favorably to an AppleTV or Amazon/TiVo solution.

I’ve long been of the opinion that longer-form (professionally produced) internet video will happen on a truly widespread scale only when the problem of getting that content over to the television is solved – and that current discussion of internet video (and how to how to best monetize it) is often based on two false premises:

1. The personal computer will continue to be the primary internet video delivery device.
2. Internet video is about short- and mid-form content.

Such discussions often completely fail to adequately recognize how profoundly game-changing direct access to the internet from the next generation of TVs and set-top boxes will be.  In other words, while short form internet video (user-generated or otherwise) will always be a workplace diversion, the main event has not happened yet - we’re still in merely a transitional, evolutionary phase of the process - a process which will end at the couch, not the desk.

Where are we now?   Several major CE manufacturers are currently offering their first generation of standalone internet-enabled devices (each partnered with one or more internet video services):

Hardware:                                Service:

• Sony Bravia, PS3               Sony Playstation Network, Amazon on Demand
• Roku                                   Netflix, more to come…
• LG                                      Netflix, more to come…
• AppleTV                             iTunes
• TiVo                                   Amazon, Netflix
• HP MediaSmart                  CinemaNow, including others
• Microsoft xBox360            xBox Live Marketplace, Netflix

The problem with the above scenario is that no computer means no web browser, which means no Flash – so each OEM wishing to offer multiple services directly via their network interface-enabled hardware (TV, DVD, PCR or set-top box) has had to implement the interface to each service partner individually – a tremendously inefficient reinventing of the wheel.

Therefore, I’ve long felt that what’s needed is a standardized technical protocol for CE hardware to interface with these multiple video services.  Last week, Reed Hastings of Neflix expressed a similar view, noting that in the absence of standardization, “Everyone’s going to have to do customer interfaces for each device”, and further, that it’s “slowing down the market tremendously.”

While the web standards we now take for granted were developed in the shelter of academic and government agency environments, there’s a huge amount of money (and an equal amount of competing agendas) at stake in the internet video space – so the development of a new standard from the ground up at this point seems highly unlikely.  Instead, an embedded web browser running Flash (and/or Microsoft’s Silverlight) sounds like the better idea (Sony has already moved in this direction, embedding the highly-regarded Opera browser into its Bravia line of network-enabled TVs).

Admittedly, though, web on the TV leaves a bad taste in the mouth – previous attempts suffered from three major issues:

• Bandwidth
• Screen resolution
• User interface

Of these three, two are already solved: most broadband connections are now capable of streaming at least SD video, and increased resolution of HD TV makes web text quite readable. The third issue alone remains: the user interface.  Recognizing this, Hastings predicts a new generation of Nintendo Wii-like pointer/motion remotes to replace the primitive up/down/left/right arrows (and four dozen other never-used buttons) on today’s remotes (interestingly, Apple has recently filed for a patent on some technology for just such a device).

Look for this to be the big story at the CES show this January…

When talk turns to video distribution over the internet, I’m always amazed that the issue of physically bridging that last yard or two from the home internet connection behind the computer to the television in front of the coffee table isn’t discussed more.

At last week’s Digital Hollywood show in LA, the majority of panels were about how to better monetize the video currently being streamed to the web browser (understandable, given the current economic climate).  The basic problem is that while the CPM rates that web video publishers can charge advertisers run several times higher than what traditional broadcasters can get away with charging, online viewers will tolerate only a small fraction of the amount of advertising that traditional broadcast and cable television viewers will put up with (imagine how well a traditional two minute commercial break would work on Hulu…).

To me, the issue is fairly clear –

• Only longer-form programming (lasting a half-hour or more) will support higher advertising density and attract more mainstream brands.
• Ales’ Theorem: The willingness of the viewer to sit alone at a desk or in front of a laptop is inversely proportional to the length of the programming.
• Therefore, a truly sustainable internet video business model relies on solving the physical problem of getting that content onto the television.

In other words, to paraphrase Gil Scott Heron: The Revolution Will Be Televised

…look for some big announcements at CES in January.

I always considered those 3rd party rubberized iPhone protector/sheaths too bulky and ugly: an almost complete negation of the sleek Apple design (something like the pocket protector for the 21st century).   Then I discovered that although you have some leeway dropping your new iPhone onto a linoleum or wood floor (having thoroughly tested out both scenarios within just the first few weeks of ownership), if dropped even one or two feet onto a completely non-yielding surface such as a sidewalk or tiled airline terminal floor, that glass screen is gone, son: a spider web of cracks.

The real cost of the iPhone is heavily subsidized by the service plan contract, so it’s easy to forget just how expensive these things are (check out the price of an ‘unlocked’ iPhone 3G on eBay).  Just repairing the glass alone is a $250 trip to the Apple store, but I was resolved to repair it as inexpensively as possible.  Not surprisingly, there’s a healthy online iPhone 3G parts market out there already, and several days later I had my new glass panel/digitizer and was searching for directions as to how to open the thing up and do the repair.

A few things: on a hardware level, the iPhone turns out to be very conscientiously designed, well-machined, and solidly built – if you’ve ever opened up a computer or two, physically it’s more like a Sony in there than a Dell (which is gratifying, given the price).  Secondly, the replacement process is a considerably more involved than the parts sellers would have you believe: at one point you’ll be holding your wife’s hair dryer on the broken glass/digitizer, trying to melt some very tenacious adhesive just enough to be able to pry it off its fragile plastic bracket.

That moment with the hair dryer was the low point, when I was convinced I’d end up at the Apple store with a handful of iPhone parts in a bag, prepared for the full scorn of the Geniuses in return for a rescue.   But I pressed on, and after some mistakes on my part involving the placement of some impossible tiny and fragile ribbon cables and a bit of poor “glue-control”, I finally just about had the thing back together.  As I put the last microscopic screw in, I calculated there were at least five ways in which I might have irrevocably broken something, but lo and behold… my iPhone came right back to life!

That the phone worked perfectly when I was done with it wasn’t the strangest thing, though: earlier on, with the glass and LCD screen removed and everything in pieces spread out on the dinning room table, I happened to get a call, and the phone rang!  It was a little creepy, actually - like a chicken with its head cut off, or maybe something out of a Stephen King story: “The Smartphone That Would Not Die”.

In an action aimed directly at the iPhone (which now accounts for almost 39% of Apple profits vs. only 30% for all Macs), the EU is now considering requiring that all mobile devices allow easy user battery replacement, but expect Apple to fight the major hardware redesign that would entail.  In the meantime, while it’s gratifying that it worked and it’s nice to know the device is so solidly constructed, I would *not* recommend opening up your iPhone.

Unless you’re the type that builds ship models inside bottles in your spare time, that is…

The New York Times has discovered (or rediscovered) thin computing: a small simple device (or ‘terminal’) with just enough under the hood to send mouse & keyboard clicks to a server doing absolutely everything else.  Initially hyped as a challenge to Microsoft’s domination of the workplace desktop, the concept had its 15 minutes as The Next Big Thing a few years back, only to fall from favor due to network performance issues (while it’s acceptable if an application’s a teensy bit slower over the network, sluggish mouse and key response is a non-starter for most users).

But look at the advantages, though: rather than a $1000 workstation with Windows and Office installed, we’re talking about a simple paperback-sized box and monitor for $400, all in.  Granted, MS Terminal Server (and especially Citrix) licenses do cost, but on the other hand consider that there’s no fan noise, no hard drive failures, no long boot-up time, no virus susceptibility, no user-installed malware, space savings, power consumption savings – the list goes on and on.

And I speak from experience – several years ago, as the network administrator for a small business with half a dozen retail and office locations spread across  the country, I moved a good portion of my remote users to these devices.  This not only solved my problem of how to install and maintain remote these workstations, my client (who was growing quickly at the time) loved the immediate savings compared to the workstations they had been buying (even taking the cost of terminal server licenses into account).  I was a hero; life was good (in a keep-the-trains-running job like network administration, you tend to savor those win-win moments). 

While I chose devices from Wyse, as the NY Times article points out, thin client computing is becoming The Next Big Thing all over again - so there are more and more manufacturers out there.  So many, in fact, that it begs the question:

What about the home market?

What I’m getting at is the return of the web appliance.  Like thin clients, this is another concept from a few years back that never quite took off – the only difference being the addition of an onboard web browser of some sort (maybe the well-received Opera browser, since Sony is already embedding that into its new Internet Video Link hardware).  Because in a world of Hulu, Flickr, and Google Docs (services which, unlike Windows Terminal Server or Citrix, are generally free), a simple little box with a browser and a handful of drivers for peripherals would about do it for a lot of folks, wouldn’t it?

Clearly, cloud computing is The Next Big Thing now – at least Google thinks so, and Microsoft thinks so too.   The potential reliability and privacy issues of cloud computing might be a little easier to take if one also imagines potential upside of being able to radically simplify things for the home user.

So thin computing is back. Who knows, maybe the time is finally becoming right again for the web appliance too; maybe the browser is the new operating system.

Does the world need another blog post on the iPhone?  I’m gonna go with ‘probably not’ – but as in most big cities where a car culture doesn’t hold sway, we’re all about our mobile devices here in New York – it’s something to do on the trains we ride and the streets we walk, so maybe our smartphones matter a little more to us here.  With that in mind, here’s the first of a few posts on some thoughts I’ve had about my “leetle friend”…

1. no adobe flash
And don’t expect it anytime soon.  While I’m sure Adobe would be happy to whip up an iPhone/Safari-optimized Flash Player, it think Apple would rather sit back and see if the iPhone can’t instead help drive more adoption of their QuickTime platform for video streaming .  Although Adobe’s Flash is the ubiquitous video streaming browser plug-in, Apple’s Quicktime does a perfectly credible job of streaming video content in the open MPEG-4 format (witness the Quicktime-based youtube iPhone App).
If that’s Apple’s strategy, it appears to be working - content providers are coming around: hit the NBC.com site from your iPhone, navigate to a show, and you now can stream episodes in MPEG-4/Quicktime - despite NBC (along with Fox/Paramount) happening to also be behind the well-received (and Flash-based) Hulu initiative (on a wifi network, the experience is pretty impressive).

But speaking of streaming…

2. no streaming (or over-the-air 3G sync) of audio podcasts
While there are a few nice iPhone IP radio apps out there (Pandora and Flycast come to mind), what about podcasts?  With this shiny new 3G network we’re paying for, it’s a little disappointing to have to wait until getting back to the mothership (i.e. a computer runnning iTunes) to sync up and get the newest ones.

Streaming and/or syncing podcasts via 3G would be a Cool Thing (I’m never satisfied).

However, as is often the case when a seemingly obvious (and perfectly technically possible) idea remains unimplemented, dig a little deeper and you’ll find a business-side issue:  in this case, it involves AT&T - my guess is we’re just all on the internet with our 3G iPhones a lot more than they had planned on, so they’ve been caught a bit unawares… (take one exceptionally well-designed mobile device, put it on one speedy all-you-can-eat data plan, add water, and stand back…)

But there is at least one alternative:  Podspew, a website that AT&T and Apple can’t be too happy about.  While it won’t sync podcasts onto the iPhone itself, what it wilI do is convert a good selection of popular podcasts to simple MPEG-4 web links that the iPhone can then stream via Safari and Quicktime (totally subverting Apple’s podcast model, come to think of it).  It works well and is worth checking out (until they get that cease-and-desist letter, that is…)

At any rate, it’s probably obvious by now I’m on the internet a lot with my iPod , walking around and taking the subways here in New York City.   Which brings me to the next issue of battery life, but that has to do with chemistry and electrical engineering rather than with 0’s and 1’s (remember Dell’s pickup truck-destroying laptop? - that was at least as much about pushing the physical battery design envelope as it was about any manufacturing defects – but that’s another story).

Did I mention I love my iPhone?