The Consumer Electronics Show in Las Vegas will launch tomorrow and one of the themes, for the third year running, is set to be attempts to energize the ‘internet video to the TV’ market with announcements from LG, Netflix, Samsung, Intel, Adobe, Broadcom, Yahoo, Amazon and Roku.
Our first impression is that most of them are Public Relations exercises which count for little, but there is one hint that this time ‘net to TV’ may finally take off.
Like everyone else in 2006, when many online film and TV services were launched at CES, we proclaimed 2006 the year of the video download ‘ it wasn’t. And when streaming video and specialist devices such as Apple TV were launched, we said that this time it was going to work. It really didn’t. Not even at Apple’s second attempt. In 2008 Pause TV was supposed to emerge, TVs with their own in-built Flash Memory based DVRs, but although they may have launched, I don’t know anyone who owns one.
Last year it was also meant to be the turn of UltraWideBand and the ability to send HD TV wirelessly around a home to wall mounted flat TV screens, and although products were launched, that has still yet to happen in a meaningful way. So it won’t surprise us too much if the visions painted at a recession-depressed, underattended, CES in 2009 are slower to take off than the blogs and press hype all suggest.
This year it is likely that more of the ‘market rescue’ products will have the biggest effect. Things like ultra thin LCD TVs, because the more normally fat LCD TVs have stalled through over supply. And things like ultra small Notebook PCs, because the margin has gone out of the Laptop. And ultra cheap Blue-ray players with extra features, because the DVD market is in free fall, with Blu-ray, so far, yet to make serious in-roads.
We have already seen the handset gimmicks ‘ Motorola making a handset from recycled plastic bottles, supposedly eco-friendly and carbon neutral ‘ and the market we are now talking about, that of taking internet content to the TV – is no less gimmicky.
LG Electronics picked up most of the early plaudits this week, not only delivering devices for its already announced partnership with Netflix, but also its first broadband-enabled High Definition TV sets which have Netflix streaming software directly embedded in the TV.
While most people ran the headline, they gave it both very little thought and very little space. It’s almost as if so few people still believe this market is ever going to happen that it warrants neither, just one line stories saying ‘Wow this has happened,’ and then move on.
Mostly streaming HD anywhere doesn’t work, although there are a swathe of players that will tell you it will. Codec companies that say they can squeeze the 9 Mbps or so that IPTV services use, down to 1.5 Mbps streams which are ‘just as good’ and flow over the internet; content delivery networks which have ‘re-architected’ themselves so that streaming HD puts less load on the internet; and Wi-Fi, Broadband over Power line and UWB players who say that they can spray HD services around your home, but never allow the service to be tested for the massive increase in visual artifacts which we all know will flash up on the screen.
We would respectfully suggest that Netflix compatible LG LCD and Plasma TV sets, which will not be out until Spring, will have the same kind of shortfalls. These devices will join the existing LG BD300 Network Blu-ray Disc Player, which already talks to the Netflix on demand service.
Netflix says that these, plus eight further new models of Blu-ray Disc players and home theater systems, will come out in 2009 offering direct access to its streaming services, which has 12,000 movie and TV series video choices.
But the giveaway is in the small print, when LG admits that these devices cost roughly $300 more than the equivalent TV which does NOT have the Ethernet connectivity and the built in Netflix service. That’s something of a disincentive for recession wary consumers and a price tag which we know has scared off many US viewers from the existing Sony Bravia TV sets which have virtually the same capacity as these LG devices, except for the relationship with Netflix.
Back in July Sony tied up instead with the Amazon Video on Demand service which says it has 40,000 pieces of video which can be seen directly on a Sony Bravia TV set, as long as it has a $300 Bravia Internet Video Link added.
At the time there were no details of how the user navigates the service, select a film and initiate and pay for a download, so we assume that even if Sony and Amazon manage this side of the business well, that $300 means that not everyone in your neighborhood will be rushing to the stores for it. It seems perhaps that Sony has made enough of a success of this to force LG to copy the service, but no-one has given out any numbers so far, so think in thousands, not tens of thousands.
The far more significant announcements at CES relate to Intel. That chip we told you about in August, whereby the Intel Media Processor CE 3100 was put together with a widget based software framework from Yahoo, has already re-emerged inside its first major device, a Samsung TV set.
At the very least this means that Samsung, the global market leader in LCD TVs, beating out Sony purely on price (the Sony devices give a far better picture), is once again going down the low price route. Samsung did say at the announcement that it planned to support this chip, and our bet is that LG and Sony will follow Samsung with that support, within months.
This simply means that Samsung can go to market with its Internet@TV – Content Service, with a whole line up of its 2009 flat-panel HDTVs which use the CE 3100, and undercut the market. That’s disruptive and it will trigger copy cats.
We said at the time that Intel had finally understood that after five years of being convinced that the PC would dominate the living room, that what it actually needed was a chip which did the job that the 8086 did for PCs, but for the TV industry ‘ in other words, create a standard video processor which offered internet TV – and this looks like that’s exactly what the CE 3100 is.
We guessed that the CE 3100 would add only a few dollars to the price of TV sets, and Samsung, the value for money leader by a long way, is naturally attracted to this, despite Intel being a chip rival for Samsung.
The Internet@TV Content Service adopts the Yahoo Widget Engine and enables users to access services which traditionally could only be viewed on a PC. Users can access the service by connecting the HDTV to a home network via a built-in Ethernet port or by using an optional Wi-Fi USB dongle, Samsung says.
Already Samsung TVs will show Yahoo TV widgets for Flickr, Yahoo News, Yahoo Weather and Yahoo Finance as well as third-party content brands, such as USA Today, YouTube, eBay and Showtime Networks. We expect this list to grow and grow, and for the same channels, plus some, to emerge on similar devices from Sony at least, once it realizes that it is no longer a semiconductor company and embraces the Intel Yahoo combination ‘ we think soon. The Samsung devices will be on the shelves ahead of the LG product line, in the Spring.
Samsung will also provide TV hardware for developers almost straight away so they can deploy Yahoo TV widgets for Samsung HDTVs. Also this is not purely a US release, and Samsung HDTVs with the Yahoo! Widget Engine will be available in thirteen countries in 2009 including the US, Canada, Mexico, UK, Germany, France, Italy, Spain, The Netherlands, Denmark, Norway, Sweden and Finland.
This is Intel going after a market place of some 200 million devices ‘ the TV replacement market – a year, which will eventually be substantial.
The CE 3100 is based on the Intel Architecture, has a high-performance processor core, integrated graphics, hardware codec support, I/O and other units on a single chip. This is nothing like a PC chip architecture even if the instruction set of the core is the same (a 800MHz+ Intel Pentium M processor built in 90 nm) and is a completely new direction for Intel.
Intel said at the launch that it can handle two concurrent HD streams and will decode Microsoft’s VC1 video, H.264, MPEG2 but until this week it had no support for DiVX or Adobe Flash Video.
But at the show Intel announced that Adobe Flash Video is now being ported to the chip in time for the Summer. Once again most blogs and CES reports gave this one line, but it is worth spelling out that this is yet another alignment of power bases in internet video, which will underline the CE 3100 as the cheap and de facto standard way to get video to a TV set. Adobe should find that the port is simple because it’s a familiar instruction set, so there are few dangers of it not hitting that deadline.
Adobe Flash remains the leader in internet video, with more than half of all internet video streams running in Adobe Flash.
William Leszinske Jr., general manager of Intel’s Digital Home Group, said: ‘The Intel Media Processor CE 3100 provides a flexible technology foundation that will bring to life the high-definition capabilities of Adobe Flash. Our effort with Adobe is poised to accelerate a rich internet experience on the TV that will provide consumers with access to a growing number of Flash based applications that will ultimately be enjoyed across a number of screens seamlessly, from the laptop to a MID and now the TV.’
He could have just as easily said ‘roll up, roll up, cheap internet video on your TV.’ Intel and Yahoo said in August they are already working with Blockbuster, CBS Interactive, CinemaNow, Cinequest, Comcast, Disney-ABC, eBay, GE, Group M, Joost, MTV, Samsung, Schematic, Showtime, Toshiba and Twitter, so expect widgets for each of these to be available in no time at all.
But in August, at announcement, the CE manufacturing world wasn’t quite sure and only Tru2way specialist Alticast; Denmark’s DVR marker Futarque; Videon Central, a Blu-ray middleware specialist; VividLogic, another cable Tru2way software house and hardware manufacturers Giga-Byte, Tatung and Unihan from Taiwan, signed up as supporters. Now that Samsung has led the way, the others cannot afford NOT to follow.
Another announcement at the show was Roku, the start up which has already announced a deal for its digital video player to connect to the Netflix on demand service, saying that it can now also play video from Amazon.
This means that Amazon Video on Demand now reaches the PC, Apple MAC, the Sony Bravia Internet Video Link, TiVo and now Roku and Amazon seems to be making a bid to become the iTunes of internet to TV content.
Our view is that this is not about one service, but more likely about multiple services and a single technology. Sure Amazon is positioned well to have a good market share of the internet to TV traffic, but it needs the kind of navigational capabilities that the Yahoo Widget technology gives, so it should perhaps sign up for that, as well as hitching a ride on all of the Intel based devices, which we think may flood the market during 2009.
Not that this will all happen in 2009. A trickle in the Summer, will perhaps lead to a steady flow by next Christmas, will lead to more start ups, and innovation through 2010, and a fully fledged market perhaps a year after that.
The Roku Digital Video Player will have the Amazon content in early 2009, and Roku itself is no slouch in the easy-to-use interface department, which is what we assume has attracted Netflix and Amazon to it. The Amazon services will detect best quality file playing on the Roku at 300, 600, 900 or 1200 kbps, but at 300 kbps it will be very poor quality and if you run that across your home in Wi-Fi as well, the reception on a TV is going to be awful, if not to say pointless.
The Roku device is the invention of serial entrepreneur Anthony Wood, who bills himself as the inventor of the DVR, because along with TiVo, one of his earlier companies Replay TV, did contribute enormously to the DVR concept.
Broadcom clearly feels the need to try to keep pace with Intel here and has also said it will add Adobe Flash Video to its BCM3549, BCM3556, BCM7400 and BCM7405 SoC TV systems. These chips are the basis of its video products, and will make it possible to use Broadcom chips in cable TV set tops and DVD players, which work in a similar way to the Intel CE 3100. The Flash support is expected in the first half of 2009, same as Intel, so at least someone plans to put up a fight to Intel’s potential dominance of video to internet technology. Knowing Broadcom’s ability to retrofit this kind of capability onto existing core designs, we wouldn’t put Broadcom out of the race, and anyway the Intel chip only handles internet video and transcoding, so there will continue to be a huge market for the core designs of video chips on set tops and TVs.