Daily Archive for October 22nd, 2007

SanDisk’s Video Salvo

If your home is like mine, then you have a multi-megabit broadband connection, one or more HD capable TV sets, a wired or wireless home network and one or more PCs (ok mine aren’t all PCs–6 of them are Macs, and one PC running FreeBSD).

While having 7 computers, takes my home out of the norm (is it the number of computers or the fact that 6 of them are Macs?), my home suffers the same dilemma as the average consumer’s home. There is a gaping digital chasm between the personal computer and the television set.

There are several ways to watch downloaded programs and movies on the living room TV. Methods typically involve the transfer of video files over a home network from a computer to some gadget (I have an Apple TV, does that count as another computer?) connected to the TV. But few of them are easy, trust me I have tried them all.

The maker of the Sansa, a distant No. 2 to the iPod, has a new way to view downloaded content on a TV. It could turn up the heat on Apple.

SanDisk CEO Eli Harari says launching Fanfare has less to do with attacking Apple in a potentially tender spot than about establishing a toehold in an incipient market. “The video market right now is just embryonic,” he says. “Media companies have spent a great deal of money creating their content and they don’t want anyone to tell them how to sell it. And we agree with them.”

For David Poltrack, president of CBS Vision, the TV broadcaster’s research division, it’s a matter of getting the networks’ programming in places that consumers will use it. “When we tested the SanDisk product it clearly resonated with consumers,” Poltrack says. “There are other ways to do this with more sophisticated products, but because of cost and complexity they’re not as attractive. This is going to be selling at Wal-Mart (WMT).”

Combining the TakeTV device with the Fanfare service creates the means of tracking ads, he says. “When you plug in that device to the computer and sign in to the service it knows who you are,” he says. “Having people say these are the categories of ads they’re interested in—that opens up a lot of ways for advertisers to use this medium creatively.”

Taking a low-tech approach on PC-to-TV transfers could make a big difference to consumers weary of technical complexity, says Jupiter Research analyst Michael Gartenberg. “We know consumers want to watch downloaded video on their TVs. But the biggest weakness is the complexity of the home network,” he says. “This takes the maddening complexity of the home network out of the equation.”

Sounds like a hit to me.

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Imagine PS3 as a digital media center

As Brier Dudley from the Seattle Times points out in his latest article,

A lot of people who bought fancy TVs over the past year or two have been looking for ways to get more digital content on their screens. They’ve been waiting for high-def player prices to fall, and for a resolution to the format war between the Sony-backed Blu-ray and the Microsoft-backed HD-DVD.

I have been thinking about this a lot lately. My repsonse: You bet they do, but not just from Blu-ray or HD-DVD discs, more and more they want to get content online. Blu-ray is great and I enjoy watching HD movies on my PS3. But more and more, I would really like to be able to access online content.

Dudley continues,

That’s where Sony is releasing an add-on TV tuner that turns the PS3 into a TiVo-like video recorder. It’s also where Sony is talking up plans for an online video and music store, similar to the ones operated here by Microsoft and Amazon.

Cool, I can watch and record TV and even download videos and music directly from Sony. Sounds great, doesn’t it? What about my iTunes library, YouTube, Flickr and all the other content available online? Will I be able listen/view that content? What about online content like Hulu? Will Sony make all that available and stream it to my PS3? Well, it’s too early to say for sure, to my knowledge Sony hasn’t been specific about online content for its PS3 platform, but based on the past behavior let’s say–I doubt it.

Dudley asks the pivotal question,

Will we keep using PCs to download and store this stuff, or will some computerish consumer-electronics gadget emerge as the new home-entertainment hub?

With game consoles in over 40% of US households and with most of the consoles in broadband connected households, the PS3, XBox 360 and Nintendo Wii, could play a pivotal roles as an entertainment hubs. The problem is each of these companies has a vested interest in building an ecosystem around their platform and only their platform. Call it an “insular ecosystem”. So when Sony builds their online content service, it will serve PS3s and only PS3s. Microsoft will counter with an expanded 360 content platform serving only 360s. And lest one forget, the PS3 (and the 360) as game platforms first and foremost. While both Sony and Microsoft have become more comfortable with the “give away the razor, sell the blades” economics of game consoles (I am sure they would both vehemently state their hardware businesses are profitable–sure they are, because they can dump much of the costs into another category on the P&L), content and services will be rolled almost exclusively as a platform differentiator. In other words, they will view online content and services as a marketing expense to sell more hardware to sell more games.

As long as Sony, Microsoft and Nintendo create insular ecosystems, the game console as a digital hub will never take off.

For now, it is great to see the online connectivity options enhanced on the PS3. I am certain there will be more to this story.

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