Technology for Dummies

With no breakout toy, keeping things simple for consumers is among the top trends for the coming year 1/16/2012 12:01:00 AM Eastern

With the global consumer electronics
industry set to top $1 trillion in 2012, new
devices are having a major impact on the
TV business. And as the consumer electronics community
gathered for the Consumer Electronics Show
in Las Vegas last week, several big trends in technology
emerged. Here are highlights of top issues coming out
of CES that the TV industry should track:

1. Make it simple. Consumers still are
complaining about the complexities of
accessing content on different devices.
Will that change
in 2012?

With record crowds
of more than 140,000
people, exhibits
packed with 20,000
new consumer electronics
products and
taxi lines that can turn
a two-mile trip into
a two-hour ordeal,
nothing is ever simple
at CES.

Even so, the drive
to simplify the complexities
of the digital
world was the most
notable trend of this
year's CES, with CE
manufacturers demonstrating
how their
TVs, smartphones,
tablets and other devices
could work together
to make more
content available on
more devices.

"In 2012, all of our devices will be able to communicate
and interact with each other to improve the consumer
experience," crowed Scott Ahn, LG president and chief
technologist, at the company's opening press conference.

Meanwhile the integration of motion sensors and
voice recognition programs into game consoles, TV
sets and other devices is helping to simplify search and
navigation. For example, deals between Microsoft, Verizon
and Comcast will allow subscribers who own an
Xbox to navigate through massive amounts of content
using voice and motion commands.

2. Content is still crucial. How are tech
trends making content alliances between
CE and TV players even more important?

In 2011, some 50 million tablets worldwide were sold
according to the Consumer Electronics Association, which
is expecting sales of 96 million units in 2012. Yet very few
of the 100 new tablets announced last year at CES were
hits, in part because they couldn't compete with the wide
array of apps and content being offered by the Apple iPad.

Not surprisingly, all the major CE players were touting
new content alliances that would make their tablets,
TVs and smartphones much more appealing.

During CES, Microsoft announced a major deal with
News Corp. that will make Fox shows available on the
Xbox platform to authenticated cable subscribers. Panasonic
laid out its plans to help broadcasters produce the
Olympics in 3D. LG introduced a smartphone with exclusive
HD video from ESPN. And Sony brought actor
Will Smith out to Vegas to promote both its products and
the content available on its Sony Entertainment Network.

3. Mobility clouds the picture. What will
the popularity of mobile devices mean for app
development and digital content delivery?

If the closer integration of devices and content is
working to simplify the digital world, other trends continue
to add complexity.

With smartphones now making up 22% of the global
CE business, this year's CES saw the launch of a slew
of new smartphones with a number of notable innovations
in screen technologies, voice interfaces and other
areas that will make them increasingly important for
the distribution of digital video.

But measurement of mobile video usage is still in its
infancy, the mobile ad market is still tiny, and many of
these devices are incompatible, which will make app
development even more expensive and complicated
than it has been.

4. The battle of the ecosystems. How will
the battle between Apple, Google, Microsoft,
Amazon and Sony begin to shake out in

In the short run, another roadblock to simplifying digital
delivery of content is the fact that many big companies
are trying to solve the problem by creating their own
tightly integrated ecosystems of devices and content.

Several major companies are already far down the road
of creating compelling combinations of hardware, technology
and content—notably Apple, Sony, Microsoft,
Amazon and Google—and the war between these various
ecosystems will be particularly explosive in 2012.

That will make this year a particularly important one
for Microsoft. As it continues to expand the content available
on its Xbox Live gaming platform, Microsoft will also
launch the new Windows 8 operating system that will
integrate content from Xbox Live, roll out more mobile
phones, and migrate its operating system to tablets.

"2012 will be their coming-out party, to show that
yes, they have an ecosystem similar to what Apple,
Google and now Amazon are putting together where
you can get all your different types of media on all your
different devices," notes Brian Cooley, editor at large
at CNET.

More than just a game.
A major
example of the escalating eco-system wars between the big CE players is the
ongoing battle between the gaming platforms of Microsoft and Sony, both of
which are trying to build a much larger digital content eco-system on top of
their consoles and other connected devices.

recently completed its acquisition of the mobile phone maker Sony Ericson, which
has been renamed Sony Mobile. During CES it announced that it would more
tightly integrate its smartphones with the PlayStation platform and other Sony
devices and would begin certifying its new smart phones as PlayStation
compliant, making them the first phones able to play PlayStation games.

is also building up a large catalog of music, games, e-books, movies and TV
programming at Sony Entertainment Network that can be accessed through its
various connected devices. Besides the popular internet connected PS3 consoles,
Sony executives also noted that about 100 million of their TVs in the market
that are connected to the internet.

chairman, CEO and president Howard Stringer forecast that Sony will have 300
million new network connected devices in consumer hands within the next three
years and argued that this gives the company a powerful combination of
technology and content.

is unique in having a stake in every part" of the business from content creation
to technology, he explained during the Sony press conference.

Microsoft has been aggressively adding content to its Xbox Live plat form and
now has over 40 content partners, with more to come. ESPN and EPIX are already
streaming on Xbox and in upcoming months it will add HBO, Fox and Fox News

to CES, Microsoft had also inked some landmark partnerships with AT&T's
U-verse, Verizon FiOS, and Comcast to make content available to authenticated

authenticated deals with programmers are likely. In addition to the previously
authenticated deal for HBO Go, Microsoft announced at CES announced that News
Corp.'s Fox and Fox News will launch authenticated offerings on Xbox Live in

a result of these efforts, Microsoft notes that video consumption on Xbox live
has increased 140 percent year over year and that 60% of the Xbox Live Gold
members were spending at least an hour a day with entertainment.

Google returns.
Google TVs flopped
last year, with Logitech's CEO calling the product's introduction a
"mistake of implementation of a gigantic nature."

this year's CES, however, Google convinced a number of manufacturers-including
LG, Samsung, Sony and Vizio-to launch Google TV products.

featured an improved interface, remote and other features that are likely to
improve their prospects.

example, the expanded Sony line of Google TVs features a smaller controller and
voice search, which improves navigation, and closer linkage with new Sony

may improve the platforms prospects with consumers shopping for a connected TV,
but doesn't solve Google's streaming video content problem. While the platform
has signed up a number of programmers, including Turner, to supply streaming
apps, U.S. broadcast networks refused last year to make their online content
available on Google TVs.

then, more broadcasters, notably Fox and ABC have been exploring the idea of
making their online content available as part of larger TV Everywhere deals,
which may make them even more reluctant to supply free streaming shows the day
after they air on broadcast.

all TVs, network content would be available on Google TVs via the traditional
cable or over-the-air connections. A big question over the next year will be
how Google approaches the issue of getting streaming online network content.

it is willing to work within the confines of these larger cable, satellite and
telco deals-as Microsoft has done with Fox--then it may have a better chance of
getting broadcasters on board.

Google is also revamping its YouTube offering with the launch of nearly 100 new
channels that will make the world's most popular destination for video a little
more like a TV service.

Here, business models do seem to be coming together. Young Hollywood CEO RJ Williams notes that they've lined up a major sponsor for their Young Hollywood Network YouTube channel launching January 16 and that the first ads will appear in February.

also sees a strong future for high quality professional talent on the web if
companies can learn to produce it on tight budgets. Their programming is shot
with four HD Panasonic cameras, which has allowed them to build up a valuable
library of 2,000 hours of content.

people increasingly connect their TVs to the internet, "we believe the content
has to be of the highest quality."

New ad networks for new devices.
also highlighted a number of developments in the business models for digital
content, both for ad supported offerings and models tied to subscription or
electronic sell-through.

more devices get connected into larger eco-systems of content, that is opening
up new opportunities for new types of ad networks.

is obviously betting heavily that its Android operating system will allow it to
tap into the TV ad business and help grow the nascent mobile ad business and
others, such as Microsoft and Apple, are eyeing similar plays.

adRise is reporting rapid growth in advertising on connected TV. The company
has integrated its ad solution into more than 150 apps on 11 connected TV
platforms and has partnered with all of the top five video ad networks, reports
Fahrad Massoudi, the company's CEO.

efforts are in their infancy but could become an increasingly important way of
monetizing content as more connected TVs are sold. The CEA is predicting a 56%
bounce in connected TV sales in 2012.

CES, progress some progress was also made in the still tiny digital
sell-through market, which studios hope will help replace some of the recent
declines seen in DVD revenue.

major announcements were made during CES by the DECE consortium backing the UltraViolet
effort to allow consumers to set up a digital locker in the cloud that would
allow them to access copies of movies and TV programs they've purchased on
other devices.

notably, Amazon has joined the UltraViolet camp, announcing that it had inked a
deal with a major unnamed studio to offer UltraViolet rights. It was the group's
first deal with a major retailer.

also announced that it would be working with the Digital Entertainment Group to
promote UltraViolet with a major advertising campaign in a multimillion dollar
campaign in 2012.

digital and online streaming rights available as part of larger TV Everywhere
deals between programmers and operators was also a major topic.

a CES Keynote Conversation at the Variety Entertainment Summit, Jonathan
Miller, chairman and CEO of News Digital Media and chief digital officer of
News Corp noted that TV Everywhere authenticated deals are playing a much
larger role in the company's digital content strategy.

the Xbox deal, Miller noted that they will make content from the Fox broadcast
network and Fox News available as part of TV Everywhere deals with operators.
Those deals with give subscribers to those operators-none of which have been
announced-access the next day to broadcast content streamed to their Xbox Live.

contrast, the video content from the gaming site IGN and the Wall Street
Journal that will also launch on Xbox would not be authenticated.

was designed, he explained to "both support an existing model [with the
authenticated deals for Fox and Fox News] and to create new distribution
channels" for some of their other "emerging" video properties.

Crunch time for mobile DTV.
120 stations around the country have now launched mobile digital TV signals.
While that is remarkable progress for a relatively new medium, the technology
faces some potentially crippling competition this year from the rapidly
expanding rollout of 4G cellular services, which the major telcos hope to use
to deliver more video.

DTV proponents note, quite correctly, that mobile DTV broadcast signals offer
many technological advantages over 4G and that their one-to-many architecture
is much better suited to handling popular video than the one-to-one cellular
systems that frequently crash with heavy usage.

is quite true, but the best technology doesn't always win. If consumers widely
adopt 4G service this year, there is the danger that they could simply get used
to its limitations, which will likely include usage caps, and mobile DTV could
get left behind as an also-ran or niche technology.

broadcasters backing mobile DTV dispute those worries but they understand the
urgency and were out in force at this year's CES to show the progress they were

before the market, the Mobile Content Venture, which is backed by major
broadcast groups and networks, signed their first deal with a cellular carrier,
MetroPCS, and announced that Samsung would provide the first mobile DTV enabled
smartphone. Also during the market MVC was demonstrating some impressing new
technology form Belkin that would allow existing Apple iPhone and iPad users to
receive mobile DTV signals.

the Mobile500 Alliance was demonstrating a complete solution for delivering and
monetizing mobile DTV signals that it plans to Beta-test in Seattle by the end
of the first quarter.

technology included a Mobile500 application for Apple iOS devices that supports
audience measurement, ESG data, channel logos, interstitial ads, banner ads and
DVR functionality that would allow users to record content noted Mark Aikin,
vice president of advanced technology at Sinclair Television Group, which is a
member of the Mobile500 Alliance.

Sinclair station KVMY-TV in Las Vegas was supplying mobile DTV signals during

interestingly the beta test in Seattle will include both live and VOD content.

KOMO will be participating in the test and the group plans to announce other
stations and content providers closer to launch.

platform, Aikin notes, would also enable a number of different business models,
free, paid or subscription to help create new revenue streams for the
participating stations.

Mobile500 platform uses Expway's mobile DTV middleware and audience measurement
solution. At the local TV station, Expway's electronic service guide delivery
server powers the mobile DTV head end.

part of the platform the group is also working with Elgato, which is supplying
adapters and dongles for iPads that will run on a TV app supplied by Elgato.

addition, Siano is supplying a mobile DTV chip.

the VOD content, the group is working with Opanga Networks and its NetRover
Mobile content distribution platforms, which utilizes the customer's 3G, 4G, or
Wi-Fi connection to pre-deliver movie and TV content to the memory of the
mobile device memory.

Beyond HD.
CES also saw a number of
advances in screen and camera technologies.

the mobile front, screens with true HD quality are beginning to appear, which
will put new pressure on programmers and carriers to improve the quality of
video delivery.

the market, LG announced its first smart phone with a HD display that is
capable of showing 720p video.

in processing power and screen technology encouraged the launch of some new 4K
cameras, 4K TV sets and OLED screens.

on the improved processing power of new chips and better sensors, JVC launched
what it is billing as the first handheld 4K camera, the GY-HM150 ProHD
camcorder, which is priced at only $4,995, with first product deliveries in
March of 2012.

also announced what it is billing as the world's largest OLED screen with a new
55 inch set.

is important because OLED will have a number of applications in broadcast
operations as these very high quality screens become larger and less expensive.

resolution screens could also be important for the future of 3D. As 4K TVs,
which offer four times the revolution of HD 1080p sets become more available
and begin to drop in price, they could also be used to offer glasses free 3D,
which requires more pixels than current HD sets are able to deliver.

3D TV.
After all the hype around 3D
at CES 2010, set sales have been disappointing, which has caused some to write
off 3D as at best a niche product.

set sales were also surprisingly strong in the fourth quarter of 2011, the CEA
reports, with 8.9 million units sold worldwide. Based on the recently improving
sales climate the association is predicting a 122% jump in sales in 2012.

announcing its new 3D products, Sony executives stressed that 3D films continue
to do extremely well at the box office, racking up $6 billion worldwide in 2011
and that producers are rapidly expanding the range of available 3D content.

with their joint venture partners Discovery and IMAX in the 3net network, Sony
executives also noted that they were working to expand the range of content and
have already build up what they are billing as "the world's largest library of
original 3D programming."

programmers have also be ramping up their 3D production, including ESPN, which broadcasting
the BSC Championship game in 3D to CES attendees in Las Vegas.

at CES, Panasonic, NBC and Olympic Broadcasting Services announced they would
work together to offer 3D coverage of the Olympics to U.S. pay TV providers.

more than 200 hours of 3D telecasts would be produced, making the London 2012
Olympics the first games to get the 3D treatment.

that will spark significant consumer interest remains to be seen. A November
2011 survey from Leichtman Research Group found that less than 3% of all US
households had an HDTV set that is 3D-capable and many of those who do have a
3D set were not using it. About 45% of 3D set owners do not watch any content
in 3D.

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