Avid digitalmissive readers know, I have long considered the New York subway my prefered ad-hoc “test tube”, to get a read on the adoption status of the latest available digital devices and services. Turns out, when it comes to eReaders, I am really not seeing much excitement among my fellow straphangers these days.

Apart from the occasional Amazon Kindle, Big Apple subway riders don’t seem overly attracted (yet!) to the burgeoning world of portable electronic book and magazine devices.

How come?

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Yup! Still in Vegas, still big, the annual consumer electronics bonanza we fondly refer to as CES drew to an end yesterday.

First off, although more crowed compared to last year, the popular trade show giant still seemed somewhat off from its previous record attendance. But hey, who’s counting, or not happy about the lack of past years’ never-ending cab and bus lines in front of hotels.

Instead, relative to previous years anyway, CES 2010 seemed much about “quality before quantity”, with some really interesting and innovative nuggets across a still impressive line-up of exhibitors.

So, what are my primary take-aways?

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The 2009  NAB convention ended yesterday in Las Vegas.   With 25% of this year’s attendees coming from outside the US, and with terrestrial/cable /satellite television organizations together only representing 24% of this year’s exhibitors, maybe the name “National Association of Broadcasters” is a bit misleading - but nevertheless, the NAB show remains a major perennial media event.

Like this year’s Consumer Electronics Show (also held in Las Vegas), NAB 2009 saw attendance down about 20% due to the current economic climate - still, almost 84,000 people attended.  On the internet video front, Adobe’s announcement concerning its intention to get its ubiquitous Flash web video platform onto consumer electronics devices such as televisions and set-top boxes seems to be the big story.  In my opinion, though, while these analysts were covering the right company, they were covering the wrong story: by limiting their focus to the frankly old news (already mentioned several times here on digitalmissive) that Adobe had plans to embed Flash onto CE chip sets, they missed the gradual transformation of Adobe into an open source software  company.
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I recently attended an event in New York presented by videonuze (a highly recommended resource for all things internet video, by the way).  The  evening’s panel discussion tended to focus primarily on three issues:

• Monetization
• Content aggregation
• Whether overall video consumption will continue to grow to accomodate increased internet video usage, or will terrestrial television (cable and broadcast) start to lose market share

Listening to the panelists, I found myself increasingly struck by fact that they all appeared to be laboring under the assumption that as a technology, internet video is necessarily a function of the personal computer and the web browser (and perhaps someday the smartphone).   It wasn’t until moderator Will Richmond explicitly addressed the issue in his final question that what I consider to be the elephant in the room was even mentioned: internet video on the television.

That the subject sat so low on the panelists’ collective radar screen was interesting, only because there happens to be such a major CE push underway right now: a slew of network-enabled hardware was just announced at CES, Adobe’s got Flash running a chip, and several noteworthy cross-industry partnerships have been struck between some pretty heavy hitters - I’ve commented previously on a few of them:

• zillion tv
• yahoo connected tv
• tivo search

The question was put to the panelists: “Do you see internet video coming to the television in two years?”  Answers ranged from a clear “no” to a hedged “it’s a ways off” to an interesting prediction (from a cable executive) that users will likely be frustrated attempting to connect such devices themselves without the high level of customer care they’re used to receiving from their cable company.

The consensus?  That ‘killer app’ internet television solution you’ve been waiting for is probably closer to five years away than two.  While I’m of the opinion that it will come sooner than that (and sooner than might be comfortable for many in the industry), the one thing everyone agrees on is that it is coming.  There are not ‘ifs’ in this conversation - only ‘whens’.  Here then is my take on how it will impact the three core issues listed above:

Monetization: Internet video on the television will mean the high-CPM targeted ads of the internet, and (due to the lean-back, social nature of the television viewing experience) an audience finally willing to tolerate a more traditional (i.e. heavier) ad load.  From the perspective of the advertising industry, this long-awaited combination represents the best of both worlds - and so in the long run, I’m optimistic that internet video on the television will more than solve the monetization issues many industry analysts and executives have struggled to address so far.

Content Aggregation: This is a very interesting topic.  The web (and the web browser) are arguably the killer apps of at least the last several decades (happy 20th birthday, btw), but a wide-open browser paradigm (with all the accompanying complexity, security, and instability issues) is not really an appropriate solution for a CE device such as a television or set-top box (nobody wants to have to worry about their television crashing).  In place of all that convenient web standardization, though, there will be some heavy lifting needed to create more appropriate dedicated solutions.  Unlike the web, the system architecture will be closed and centralized: in other words, the hardware will present the viewer with a user interface containing all necessary controls and content meta data, and upstream communication will be limited to a single service-providing host - even if the actual video data streams are then streamed from an assortment of asset-owning partners and their optimized CDNs.  The goal is an elegant and cohesive user experience that still solves the tricky problem of allowing content search, discovery, and delivery across multiple sources and multiple video formats (TiVo, for one, recognizes the challenge and is taking an interesting search-based approach to solving it).

The Size of the Pie: The prospect of a disruptively successful lean-back internet video experience eating into terrestrial broadcast and cable viewership (and the resulting impact on traditional advertising and cable/satellite subscription revenue models) is on a lot of people’s minds these days.  For example,  note how quickly (and how thoroughly) joint owners Fox and NBCU recently forced hulu to shut down access from the boxee application after it became clear the small startup had plans to release a set-top hardware device (and that people were already installing boxee on their Apple TVs).  To insulate the incumbents from such zero-sum viewership concerns, several recently-announced initiatives (Time Warner’s TV Everywhere and Zillion TV) have announced they plan to require customers maintain at least one concurrent cable or satellite television service contract.  Of course, there’s no technical reason for this policy - it’s just there to prevent viewers from canceling their cable subscription and going “over the top” with only their broadband internet connection.  Long term, such an arbitrary restriction will prove unsustainable in the marketplace, but in the short term it’s a smart move: in a nascent market such as internet-enabled CE, first-mover advantage is huge, and any insurgent internet television solution that makes the cable companies feel at least a little less threatened (even if only for the time being) is going to have an advantage gaining traction quickly.

All in all, aside from the realtively short shrift given to the CE industry’s recent discovery of the internet by the panelists, it was an excellent discussion - and once again, if you’re at all curious about the future of internet video, I highly recommend videonuze.

Back from CES - the annual Consumer Electronics love fest in Las Vegas,  (OK, I am a bit late posting this) - I am actually pretty psyched about what’s coming down the consumer electronics pike this year.

As CE devices get faster, smarter, and increasingly untethered, the “on-your-terms” digital lifestyle proposition pitched to us for all these years seems a considerable step closer to its “anywhere, anytime” goal.

Yet, despite years of impressive CES innovation hoopla, I continue grappling with a personal observation I lovingly coined the “Star Trek bottleneck”:

CE designers’ propensity for innovation seems directly proportional to their lifetime exposure to, yup, you guessed it - the popular Starship Enterprise television series.

OK, I am kidding. But as with any good joke, there’s some truth to it.

To stick with the Star Trek analogy - short of time travel and “beam me up Scotty” - is there anything in CE land that Captain Kirk and his crew didn’t have that’s not readily available to us in stores today?

There’s the wireless video monitor and the wrist-band smart phone, plus the super-smart refrigerator, remote home security, and a growing number of cute gadgets.

All set in slick form factor, of course, all with build-in intelligence processing more information ever faster. Good ol’ Gene would have been proud.

In other words, it’s as if this past-century icon of sci-fi television continues to haunt our 21st century CE designers to this day.

Of course, I have no empirical data, no scientific studies. Just a pretty good hunch, mixed in with a healthy dose of cynicism, about why today’s CE industry seems unable to think more innovatively about, well about innovation itself.

Maybe it needs a new and decidedly young(er) generation of CE designers to get us beyond my “Star Trek bottleneck” dilemma? One void of stylized sci-fi TV exposure and implicit 60ies and 70ies ideas of what innovation should be.

But than again, no matter what any new group of CE designer may come up with, it still needs to stay sufficiently functional and attractive to consumers, right, or it simply won’t sell?

So, maybe it’s not just about passing the CE design torch on to the next generation, but also about our own limitation as consumers to desire (and then use) something entirely different from what we collectively perceive as “innovative” today? 

So where might we be heading next?

My guess on this, next-gen CE devices will focus on software rather than hardware, and regard bolstering quality-of-life as a key goal.

That next evolutionary step in consumer electronics might then have less to do with form factor (that’s largely covered ;-), and much more with adding previously unavailable intelligence inside and outside existing hardware concepts.

The key driver - and blocker at the same time? Our collective ability to imagine beyond the obvious.

Any of this probably not for CES 2010. But hey, let’s see what CES 2020 will bring.

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 viable long-form internet video delivery platforms - 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 interdisciplinary Digital Home Group, active in both processor design and standards development, is particularly close to my heart, as it’s made up of social scientists 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, this could be Yahoo’s last best shot at redemption - so look for them to bet the farm (or “throw the long ball”, for you American football fans) on this one.