Netflix: Watch Now (and easily)

When you work with bleeding edge technologies, you tend to lose a lot of blood. Who of us hasn't had a frustrating experience with a new device that promised to make our life simpler (albeit via a very complicated path). Well today I wanted to share a good experience.

I spent much of the past two weeks on the road which (predictably) included about 15 hours in flight delays. In my ill-prepared haste, I had left without a book, DVD, iPod or other means of mobile entertainment. As I sat there under the flight info terminals, enlightenment suddenly hit me. I'm a Netflix subscriber and have access to a collection of online movies that I could conceivably watch on my laptop... would it work? I had only used the streaming 'Watch Now' feature once before and was unsure. I turned on my laptop, connected it to a free WiFi hotspot and within minutes was watching a nice Frontline documentary. The quality was good especially considering the fact that I was using an unsecured public WiFi network.

Mildly impressed, the icing on the cake came a few days later when I tried to finish watching the program. I booted up a different computer, in a different city, logged in, and the film started playing right where I had left off. Very nice indeed... I may end up trying one of the new Roku boxes at this rate.

Time Warner Cable Stepping up to Home Networking?

File this under "I'll believe it when I see it." Time Warner Cable's President and Chief Executive Officer Glenn Britt said yeterday at the Sanford C. Berstein & Co. Strategic Decisions Conference that we can expect to see cable operators offering wireless residential gateways (technically, Britt called them "wireless cable modems") that not only enable in the in-home networking features, but also allow for services like Web video to be streamed to TVs. I suppose then it would work very much the Freebox in France, where there's a wireless gateway and a media adapter to link the Web services and content to the TV.

Last July, I wrote about being disappointed in cable's efforts in home networking. Maybe it was just a matter of giving it some time. A couple of years ago, who would have thought that cable and telephone providers would be investing in P2P companies (Comcast investing in GridNetworks after also talking about collaborating with BitTorrent), launching their own broadband video sites (Comcast again), and offering subscription online video services (Verizon with Starz)? Well, we'll see how Time Warner's prediction pans out.

Memo to self - check on this in November 2009.

So Netflix, what do you call this thing?

If you've tried to cover the Internet video space, your head is already swimming with terms like CDN, P2P, publishing, content management, workflow, ad insertion, transcoding, etc., etc. It's hard enough to keep on top of the industry without the players themselves confusing you!

So, Netflix ... what are you actually calling your Internet video service today? This is the feature that gives Netflix subscribers access to about 10,000 catalog movies and TV shows from their PCs or from the new Roku Netflix Player. First, it was called Instant Viewing. Then, it was Watch Now. Now, according to the Netflix Community Blog, the feature is called Instant Queue.

So, which one is it?

Wii Fit-ercise

Advertised to launch on May 19th, the Wii Fit was released across the nation on May 21st. This left some fans upset since only the Nintendo World store in New York debuted the game on the 19th. Designed to be a way to get people off the couch and moving, the Wii Fit tracks your weight, body mass index (BMI), and activity on a calendar with the goal of encouraging frequent exercise. If you don’t return in daily, it very kindly reminds you in a manner reminiscent of my parents that your results will be better if you play on it daily. The only way it could be a better accountability partner is if it poked me when I’m napping on the couch to remind me to get up and exercise.

To use the Wii Fit you stand on the included Wii Balance Board™ and sensors inside detect weight and shifts in balance which is the premise behind the games. It has you create a personal profile where it asks for your height, measures your weight, calculates your BMI and tests your balance - all to give you your Wii Fit Age. I’m not sure how accurate this measurement is since I scored right at my real age and my much more athletic friend was calculated to be about 25 years older than she actually is.

After your initial weigh-in, you use your body as a joystick, shifting your weight in different directions to simulate activities such as shalom skiing, heading a soccer ball, and hula -hooping. For some though, (myself included) it is a challenge to remember that it is the shift in your total weight that the board detects and not if you solely move your head to hit the soccer ball that is flying at it. The games are short but engaging and the more time you spend on the various games the more new games you unlock.

With the goal of drawing non-gamers as the Wii has already targeted, the Wii Fit draws in users with its easy to use interface and enjoyable games. It is even being used as a fitness tool for travelers at Westin Hotels. It won’t replace diet and other aerobic exercise (as it doesn’t have any really length workouts) for real weight loss, but it provides an easy way to sneak exercise into the day disguised as fun. However, much fun it is, though, don’t be fooled - you’ll work up a sweat with the combination of the activities and a competitive nature.

TiVo and Disney Movies

Users of broadband connected TiVos will be able to download Disney movies directly to their PVRs using the CinemaNow service. This will be available later this year, apparently.

Among the major studios, Disney has really led the way with electronic delivery of its movie content. It was the first studio to sign with Apple's iTunes, and CEO Robert Iger reported in March that Disney had sold four million movie movie downloads through iTunes since they started in 2006. By my rough estimate, that's about two million downloads in the last year (the last figure I saw from Disney regarding iTunes was that it had sold two million movies as of May 2007).

HGI PUTS ENERGY SAVING ON THE AGENDA

The Home Gateway Initiative (HGI) has announced that it will be working towards a set of specifications that will outline energy saving solutions for the home gateway. Representatives of the industry body’s worldwide member companies will gather at HGI’s 13th quarterly meeting, in Florence, Italy, where the topic will be high on the agenda.

The HGI will be basing its specifications on the EU Code of Conduct on Energy Consumption of Broadband Equipment, which sets out the basic principles to be followed by all parties involved in broadband equipment, operating in the European Community, in respect of energy efficient equipment. As usual, the HGI will be working closely with Standard Developing Organizations, including ITU-T and ETSI (TISPAN and AT-TM), who are already working on this important item.

The HGI has several objectives that will be addressed during the meeting. Top of the agenda is for the HGI to determine the requirements for an energy efficient home gateway; to establish service modes; mapping the ‘service modes’ into ‘operation modes’ and estimating the actual realistic energy consumption corresponding to these modes; and expanding on the EU Code of Conduct for home gateway specific functions.

The HGI was founded and launched by nine telecom operators (Belgacom, BT, Deutsche Telekom, France Telecom, KPN, TeliaSonera, NTT, Telefonica and Telecom Italia) in 2004, and now has members from five continents, representing the entire spectrum of actors in the broadband home arena. The main tasks of the HGI are to establish home gateway-related technical and interoperability specifications and provide input to standardisation bodies.

Representing HGI at the CONNECTIONS(TM) Conference, Milan Erbes will be speaking on the SOLUTIONS FOR BROADBAND PROVIDERS panel on Thursday, June 26th at 2:15 PM. Other confirmed speakers for this panel include: Yoav Tzruya, CMO, Exent Technologies and David Haadsma, President and CEO, Bsecure Technologies.

Requiem for a Set-top Box?

After years of discussion, the consumer electronics industry and the cable industry seem to have reached a meeting of the minds. Sony and six major cable companies (Comcast Corp., Time Warner Cable Inc., Cox Communications Inc., Charter Communications Inc., Cablevision Systems Corp. and Bright House Networks) have come to terms about how to incorporate cable cards and cable’s technology into televisions, making set top boxes a thing of the past.

Previously cable cards provided only the ability to unscramble and view basic cable, but no two-way services like video on demand or DVR use. With the new arrangement, the television will still need the cable card for access, but all features will be available to the viewer, while still allowing them to connect other devices such as TiVo.

The National Cable and Telecommunications Association hopes that more consumer electronics companies will follow Sony’s lead. For that matter, consumers probably have the same hope since one less box and one less remote makes home entertainment that much easier and more enjoyable.

This can certainly be positive news for both consumers (allowing greater choice of how they receive premium cable services) and for cable companies, who are anxious to get the ball rolling on alternatives to the set-top box and reduce their expenditures. But unlike many of the news headlines that have emerged from this announcement, we’re not likely to be writing Requiem for a Set-top Box just yet. As we’ve written in previous blogs, there are still plenty of hurdles to overcome in getting CableCARD- and tru2way-enabled products onto store shelves and into homes. We’ll take a wait-and-see attitude on this most recent announcement to see what develops.

A Significant Smart Meter Announcement

Yesterday, Landis+Gyr announced a four-year advanced metering contract with Texas utility Oncor. Under the agreement, Oncor will deploy a next generation Landis+Gyr advanced meter system (AMS) to three million homes and small businesses in Texas. Landis+Gyr indicates that this will be the largest deployment of smart meters in Texas, and one of the largest in the country. I did some digging and found some other examples of smart meter deployments in the U.S.:

• PGE looks to be doing one of the largest smart meter deployments in California, as they expect to deploy 9.3 million among their electric and gas customers.
• A company called Itron Inc. is supplying advanced metering infrastructure (AMI) solutions to utilities such as Southern California Edison (Edison plans to automate 5.3 million meters from 2009 through 2012) and Texas-based CenterPoint Energy (up to 250,000 meters installed beginning in the second half of 2009, and an option to install up to two million meters total). Itron recently announced that its OpenWay CENTRON® solid-state electricity meter and OpenWay Gas Module are now ZigBee certified products.
• Georgia Power expects to have 400,000 smart meters deployed by the end of 2008.
• Florida Power & Light successfully tested 50,000 test meters, and is now installing another 50,000 in Broward County.

According to The Dallas Morning News, Oncor Electric Delivery plans to file for regulatory permission today to replace all of its meters with the smart meters. The meters would provide automatic meter readings every 15 minutes, and allow the company to anticipate grid problems before outages occur. To pay for the meters, Oncor will propose charging around $2.35 per household, each month, for the next 11 years. Oncor officials say that homeowners will make up this rental cost through energy savings. They indicate that homeowners may reduce energy usage by up to 5%.

As we wrote back in February, Texas has some the highest electricity rates in the country. This may go quite a ways in helping reduce consumption and overall costs.

Verizon has Gone Vongo

And news today that Verizon will be offering a subscription Internet video service from Starz. The company plans to offer a video download service from Starz Entertainment that provides on-demand access to first-run movies, independent films and other original programming for a monthly subscription fee of $5.99.The Starz Play service offers a limited catalog of about 1,000 movies -- including "Spider-Man 3," "Pirates of the Caribbean: At World's End" and "National Treasure: Book of Secrets" - and 2,500 other types of video, such as anime, extreme sports and concerts. It also includes a live, streamed version of its premium Starz TV cable channel.

As a FiOS TV customer, my advice is to worry less about this kind of service and figure out how you can emulate the Cox Communications MyPrimetime service. Verizon's lineup of primetime programming via on-demand is pretty weak. The CBS lineup is pretty solid (all the CSI one can eat), but the NBC lineup is only two programs.

Cox Communications Ramps up Primetime Programming in ON DEMAND

We've written previously about the double-edged sword that the DVR presents to television operators. They are table-stakes offerings to allow customers to time-shift their programming, but they're having a detrimental effect on how consumers choose to (not) watch advertising. One answer to this conundrum is to move more primetime television programming to the cable operators' on-demand systems, and to make the ads non-skippable. Hey, if it's working for the broadcast networks to offer their content over the Internet, why not in an on-demand world?

On May 20th, Cox Communications announced MyPrimetime to its ON DEMAND Library. Episodes of top ABC and NBC primetime series' will be offered free of charge to Cox Digital Cable customers in the MyPrimetime section of On DEMAND starting the day after they air on the network. In addition, Cox has entered into an agreement with Fox to offer some of its top rated shows in the MyPrimetime category later this summer, beginning with a trial in the company's Orange County operation.

Cool stuff. Look, viewers are already voting on how they want programming delivered to them with the phenomenal success of the sites like ABC.com or Hulu. We don't mind watching a few ads in exchange for the ability to catch up on the latest primetime television programming. Now, if the cable operators can figure out how to build up their on-demand ad inventories and ad insertion tools, they will be in a better position to monetize this content.

The Internet Video Market Loses Akimbo Systems

The news today wasn't good from Akimbo Systems. The company has laid off all employees save one executive and is looking for a buyer. Akimbo began as an ill-fated effort to marry a stand-alone set-top box with an aggregated Internet video experience. When we last talked to Akimbo in September of last year, they indicated that their new strategy was not to go the stand-alone set-top box route, but to work with multiple hardware partners to provide a rich video experience. It wasn't a bad strategy, and one key win for the company was its supplying of about half of the on-demand content for the AT&T Homezone hybrid satellite and Internet video service.

However, the big problem with Akimbo in my analysis was its lack of really premium video content. Marrying content to hardware makes sense if you're Netflix and can at least offer some older movie content to a device like the Roku player or a connected DVD player. Akimbo's content, however, included an overwhelming amount of specialized content that was only going to appeal to very small consumer segments. I just couldn't see them gaining widespread traction with a lot of Anime content.

I'm sure some company is going to snatch up Akimbo's intellectual property for use in video encoding or publishing. The company certainly has years of experience in the space that could benefit some company.

Google Will See You Now

After a trial run with Cleveland Clinic, Google Health is now open for business. Designed as a free full personal health record (PHR), Google Health allows individuals to create their own profile complete with records of conditions, medications, allergies, procedures, test results, and immunizations. Intended to be a one-stop shop for people to store all medical information from the numerous institutes they visit, control is given to the individual. (It is important to note, however, that Google Health is not covered under the HIPAA privacy code.)

Partners with Google provide services to Google Health users that compliment their PHR experience. For a fee and with permission to access your account, several companies will collect an individual’s medical records from various sources and convert them to electronic format where they can be stored on disk or uploaded to the PHR. Added to these vendors are assorted other partners who create easy access for communicating with physicians, keep tabs on medicines or diabetes monitoring, provide health calculators, and search the web for information related to the individual’s personal needs.

Google Health has also partnered with several pharmacies and clinics such as Walgreens and the CVS subsidiary Minute Clinic to allow medical records to be imported into the PHR. Once in the system, the drug interactions tab is marked with a red dot for immediate attention if it detects use of medicines that have negative interactions with each other or are one to which the person is allergic. A yellow triangle flags marks concerns that should be discussed soon with the doctor.

Need a doctor? Click the link to search providers by specialty. View doctors in the area, see others’ reviews of the doctor, and map a way to the office. Need information about a specific condition? Use the search tool to find what you need. With no claims to file and no copays, Google is free to both individuals and the healthcare providers that partner with Google.

Don't Mess with the Local Access Channels!

You know, those local access channels carried on television systems are not the most stimulating things in the world. City council or school board meetings lack the punch of Emeril on The Food Network or the latest NBA highlights on SportsCenter. But woe to the television operator who doesn't do a good job of monitoring the basic quality of the local access channel!

Ironic that suburban Chicago - the location of Wayne's World from Saturday Night Live fame - is front and center again about local access services. An article in Daily Herald notes that residents are up in arms about local channel 99 on AT&T's U-verse service. Among their complaints?

• U-verse takes too long to load local content;
• It has a lower image resolution compared to commercial channels;
• It doesn't offer broadcast-quality audio;
• It doesn't support closed captioning; and
• It cannot be digitally recorded with AT&T's built-in digital video recorder.

Meanwhile, Comcast is taking the opportunity to tout the quality of its local access channels. In an age of HDTV, DVRs, and on-demand, who woulda thought that local access channels could be a key differentiator?

Actually, we got a taste of the importance of the local access channels in some research we conducted in a community that was about to have an IPTV service available as a choice. Amid all of the unique features that were tested, it was interesting to have the respondents zero in on local attributes of the service, such as school and community-based programming and responsive customer service. It's a good reminder not to get so focused on the bells and whistles of advanced television service that you lose sight of the more basic elements of delivering a quality television experience.

HomePlug Powerline Alliance Update

The HomePlug Powerline Alliance provided an update today during a phone briefing. Here are some of the highlights:

• There have been 18 million HomePlug semiconductor shipments (cumulative). More than one-half of sales are outside of the U.S. This is consistent with the calculations that we compiled earlier not to long ago that gives powerline networking solutions about 8% of all home networking nodes in U.S. households.
• Consistent, with our findings, Europe dominates for HomePlug product shipments, accounting for 60% of HomePlug sales. In late 2007, we wrote that Europe will be the decisive market for powerline networking (in a white paper titled Consumer Technology: Key Trends and Outlook for 2008).
• KT (formerly known as Korea Telecom) is using HomePlug adapters as part of its Mega TV IPTV service.

HomePlug continues to report progress on the IEEE's P1901 Working Group. A merged proposal from CEPCA, HomePlug, and SiConnect received the most votes at the March meeting. However, this proposal will need 75% of the votes to confirm it, something which has yet to occur.

In the meantime, the ITU is working on its G.hn standard, to which the HomeGrid Forum will be a companion. It'll be interesting to see what eventually emerges from both the IEEE and the ITU. I'm wondering if we'll finally have some resolution to the multiple powerline approaches, or if we'll just see two large international standards bodies chose incompatible specs.

The PlayStation Network - Going the Direction of the Xbox LIVE Marketplace?

I was organizing some notes, and ran across this news from mid-April regarding Sony's plans to launch a premium video service through its PlayStation Network service (very much like the Xbox LIVE service for Xbox 360 users). Peter Dille, Senior Vice President for Marketing & PlayStation Network, writes in an April 15 blog entry on the PlayStation Blog where he confirmed that Sony would offer a video service through the Network. While short on specifics, Dille writes that "[u]ltimately the goal of the PlayStation Network service will be to break through the overwhelming clutter of digital media to give you the TV, movies and gaming content you want."

My thought on this is what has taken Sony so long to implement this? The Xbox LIVE Marketplace appears to be doing pretty well, and we're about to confirm the role of video within the Marketplace when we receive some data back from our survey Electronic Gaming in the Digital Home II. In their January 24 earnings call, Microsoft officials noted that Xbox LIVE customers were at ten million. The Xbox LIVE Marketplace includes 3,500 hours of premium entertainment content from more than 35 studios and networks, and our preliminary data from the Electronic Gaming in the Digital Home II study indicates that use of the Marketplace for video streams and downloads is significant.

One data point from the Electronic Gaming in the Digital Home II survey that is awfully interesting is the extremely high percentage of Xbox 360 and PlayStation 3 consoles that are connected to the Internet. Our survey found that 69% and 61% of Xbox 360 and PlayStation 3 owners, respectively, have their consoles connected to the Internet.

Shopping & the Internet

A recent report issued as part of the Pew Internet & American Life Project found the Internet was, "just one among a variety of sources people use and usually not the key factor in final purchasing decisions." This conclusion is generally consistent with research conducted by Parks Associates (including our study The Changing Consumer Electronics Purchase Process, conducted in late 2007), but I wanted to point out a few interesting details our own studies have uncovered.

The importance of the Internet as a source of information varies by product category. For those purchasing a gaming device, for example, online sources are relatively unimportant, presumably because the differences between devices are substantial. (Few gamers would confuse a Wii and an XBox.) Similarly, online sources are relatively unimportant for commoditized products (like cordless phones, DVD players) or products that nearly demand a first hand inspection (flat panel TVs).



At the same time, online sources are an important source when buying other kinds of products. Over 40% of recent digital video camera buyers, for example, said online sources were the number one source of information; over 35% recent DVD recorder buyers said so.

The importance of online information sources also varies by the kind of consumer doing the buying. Those spending more than $2,000 per year of CE products, for example, are more likely to use online shopping comparison sites. (See the recent Parks Associates white paper Super Buyers for more on this.)

Retail stores remain the dominant information source for shoppers but the Internet does play a notable role all the same.

Microsoft Mediaroom Touts Third-party Developer Tools

I got a press release from the Microsoft Mediaroom team this week, and it looks as thought they're making it easier for third-party developers to build services and features on top of their IPTV framework. A beta version of the Microsoft Mediaroom Presentation Framework was released to selected companies this week.

The Presentation Framework Beta was released to nearly 150 companies globally including content providers, application developers and its service provider customers such as AT&T and BT.

Service providers can repurpose and leverage content already available on the Web, which can save all parties involved time and money. Applications could include a personal media portal on the TV, real time social and communication capabilities, or news/sports applications featuring multiple camera views.

Microsoft took a lot of pounding about this time last year from many of its middleware and systems integrators competitors. One of the common themes was the monolithic and closed nature of the Mediaroom IPTV solution. Microsoft's move to open up to the third-party developers is certainly important, as the next wave of TV applications are going to need to be rolled out quickly and cost-effectively. Giving more companies opportunity to develop applications to the core IPTV solution gives service providers lower risk in seeking out the applications that may turn out to be game-changers. It'll be interesting to see where the Google or YouTube of the IPTV space is going to originate now.

Roku Netflix Player - Powered by NXP, too

The folks at NXP Semiconductors saw my blog from the other day and wanted to make sure that I was aware that they were powering the streaming functionality of the set-top box. The company has a reference design called the Nexperia Network Media Player.

By the way, I found some awesome Flickr photos of some cakes that were created for the launch celebration for the Roku player. Talk about some great industrial design!

“Super Buying” Segment of U.S. Consumers Responsible for 80% of CE Purchases

New U.S. consumer research has identified a “super buying” segment of broadband households responsible for the overwhelming majority of dollars spent on consumer electronics products.














The Changing Consumer Electronics Purchase Process, a survey of 2,500 broadband households, found roughly 25% of broadband households spent $2,000 or more on CE products in the past 12 months. This amounts to 80% of all expenditure on CE products made by broadband households. This “Super Buyer” segment has similar demographic characteristics as the average broadband household but is distinguished by attitudinal differences.

The Super Buyers divide almost evenly between men and women, and 50% earn less than $75,000 per year. Attitudinally, Super Buyers like CE products, look forward to purchasing devices as soon as they are available, and are more likely than the average broadband household to personalize their devices.

The Changing Consumer Electronics Purchase Process offers analysis from a survey of 2,500 U.S. broadband households. The study tracks the purchase process of 27 CE categories for the past year.

More information, as well as the free white paper “Super Buyers: The Key Broadband Segment Buying CE Products,” is available at http://www.parksassociates.com/superbuyers.

Cable and Satellite Customer Satisfaction Ratings

5 a.m. is awfully early, but my ears perked up during National Public Radio’s newscast this morning. The American Customer Satisfaction Index has come out with its latest customer satisfaction survey, and it’s a bit of good news/bad news for the cable and satellite television companies.

The American Customer Satisfaction Index (ACSI) goes to 100 and is based on the degree to which the customer is satisfied with his or her service. This year’s study finds that satellite providers such as DirecTV and DISH Network are well ahead of their cable competitors. Although the satisfaction index for the cable industry as a whole rose to 64, this was mainly due to smaller cable operators, since Comcast and Charter suffered significant declines. Here are the specific breakouts for the operators:

• DirecTV: Up 2% to 68


• DISH Network: Down 3% to 65


• Cox: Unchanged at 63


• Time Warner Cable: Up 1.7% to 59


• Comcast: Down 4% to 54


• Charter: Down 2% to 54

We decided to take a look at our own satisfaction numbers from a couple of our studies to see if they were reflecting the general increases in customer satisfaction among digital cable and satelllite television customers. Indeed, the numbers did increase between 2004 and 2007. These companies better continue to watch customer service and customer satisfaction closely, however. Companies like AT&T and Verizon are licking their chops at the prospects of huge numbers of dissatisfied customers looking for an alternative television provider. Comcast and Charter in particular could be threatened if U-verse and FiOS TV services become more prevalent in their particular markets.

Netflix and Roku - The Kick in the Pants the Media Adapter Market Needed

In late March, there was a rumor going around that Netflix was working with Microsoft to enable the Watch Now streaming video feature through the Xbox 360. Although that still remains a rumor, Netflix did make another public announcement today that continues its push to place broadband video at the TV.

Today, Roku introduced the Netflix Player by Roku, a device that enables Netflix subscribers to instantly stream a growing library of movies and TV episodes from Netflix directly to the TV. And, it's only $100. Not too shabby. Of course, Atheros couldn't resist getting its own press release out, noting that its Wi-Fi technology is included in the Roku player.

The media adapter market has been in sore need of this kind of premium content service. We just haven't been all that impressed with media adapters that only offer features such as streaming music stored from a PC to a stereo or playing photo slideshows at the TV. There's definitely consumer demand for these sort of applications, but not overwhelming enough for most consumers to consider dropping a couple of hundred bucks on another black box for the living room. Now, with the introduction of products like the Roku player, media adapters have (yet another) new lease on life. With 8.2 million subscribers to which to tap, Roku can tap a Netflix subscriber group that is likely full of the type of early adopters who can seed the market with (hopefully) positive reviews about how the player extends the value of their Netflix subscriptions by offering value-added streaming video content direct to their televisions. The linkage between media adapters and premium broadband video services definitely solves one of the key growth barriers to the media adapter market, as we wrote in our recently-released report Digital Lifestyles: 2008 Outlook:

"The problem with media adapters is that they are still home networking nodes with all of their complexity, and many lack a truly premium content experience. In other words, users are stuck watching some niche online video service, where they really want a premium offering that puts higher-quality video at the television set.:

Awww.. Mom... Do I have to?

Growing up I remember dreading house cleaning day. I would get my list of assigned chores and drag my feet. (I'm sure that I was not the only one doing this.) As an adult, it is not only the household chores that can get us down, but the new digital chores that have crept into our lives as well. We have to make sure our firewall, spyware blocker, antivirus software, etc. is all up-to-date. In order to ensure we have up-to-date security, most programs automatically take care of this for us, ensuring we don't forget or (even worse) ignore it. We have to check that we occasionally clean out all the garbage that collects in our temporary files and we even have to "empty the recycle bin" every-so-often. We're probably pretty good about that because it takes little time and effort on our part.

However, along with these other chores, we must also remember to back up our files to protect them. This can be a tedious process, but we talked with a company this week that hopes to have found a solution for our wanting to sneak away from this chore. ClickFree has a portable hard drive device that when plugged into a USB port automatically detects and copies all files to itself without the user doing anything. For an even lower tech model, they have DVDs specifically for photo and video files, data files, and music files that when placed in the DVD-R drive automatically detect that specific type file and copy it to the DVD. We kept looking for the part where this technology became hard to use, but didn't discover it. Hopefully with this we'll get better about following through on our digital chores without the whining.

Opportunities for Wireless & Powerline Controls Webcast

Home controls have largely remained confined to the upper strata of new home construction for decades. However, new approaches incorporating wireless and powerline technologies, a migration of traditional suppliers to IP-based systems and, perhaps most importantly, the entry of key market movers are driving change.

Bill Ablondi, Director of Home Systems Research, Parks Associates will present new research, forecasts and analysis during a webcast on Thursday, May 22, 2008 at 1:00 p.m. Central. The Opportunities for Wireless and Powerline Controls presentation will examine the state of the market, technology alternatives and an overview of the competition.

At the upcoming CONNECTIONS Conference, Bill will also be moderating the panel, HOME SYSTEMS: From Controls to Entertainment & Security – Trends and Opportunities. Confirmed Speakers for this panel include: Doug Fikse, President, On-Q/Legrand; Kevin Meagher, CEO, Intamac Systems; Michael Peveler, VP, Corporate Development, AMX; Tony Shakib, CEO & President, Zensys; and Will West, CEO, Control4.

An Analysis on the Demise of Muni-wireless Projects

May 2008 is definitely a dark month for the muni-wireless advocates. After EarthLink pulled the plug on its Philadelphia municipal WiFi network last week, MetroFi also indicated a sale signaling an end of its muni-WiFi initiatives in nine cities, including many Silicon Valley towns. By now, almost all major city muni-WiFi projects have died. You may wonder that when broadband activities are more embedded in our lives than ever before and Wi-Fi networks are gaining widespread adoption both at home and in the office, why did these good-willed muni-wireless projects go sour? Well, we believe there are many factors contributed to the demise of these initiatives. First, many projects in major cities went over budget and solution providers such as EarthLink were unable to finance it. As a result, deployments in Houston, Philadelphia, Cincinnati, and a few other cities were either delayed or shelved. Second, the business model of muni-wireless was difficult and contradictory. The commitment from the municipal governments, who wished to leverage the projects to bridge the digital divide, attract business visitors, and increase the productivity of public workers, was shaky to say the least. Many could not reach agreement with the providers, and the use of public funds has become a debatable political issue. For instance, Pennsylvania pushed through laws restricting municipal-backed broadband services in December 2004, with Philadelphia being the only exemption. Further, competition has become stronger. DSL providers are deploying super-fast fiber networks and affordable mobile broadband services. In addition, a nation-wide WiMAX network is imminent. So, whether or not it is worthwhile financing the network or to just use some third-party service providers such as Verizon or AT&T became a big question for the city governments.

However, as we discussed in our recent report North American Broadband Market Update, on this subject, “there have been success stories in smaller cities such as Corpus Christi, TX, and St. Cloud, FL, where it is less costly and complex to build a network. But these small deployments are largely dependent on specific cities’ needs and situations and will not have material impact on the overall broadband market.”

U.S. Internet Population now 220m

The results of Parks Associates National Technology Scan 2008 show that there are now 220m Internet users in the United States including ~30m that only access the Internet outside the home (at work, school, libraries, etc.). The 80m Americans that do not use the Internet are largely split between the very old and the very young. Nearly 20m of the non-users, for example, are children under the age of 9 that live in homes with Internet access. These individuals will presumably start using the Internet as they grow older. At the same time, nearly 40% of all children age 9 and under regularly do use the Internet at home. Interesting results indeed.

CBS Snatched CNET

CBS announced this morning that it would acquire CNET for $1.8 billion. CNET.com is a technology news and information portal but the company also owns several other endemic websites. CBS’ acquisition appears to be synergistic, as CNET’s assets do not overlap substantially with CBS’ media properties. But CNET’s growth has been stagnant at best in recent years and its influence over “technophiles” is waning. So paying a 45% premium for CNET appears a bit “extravagant” for CBS.

Perhaps the deal reflects the urgency of growing bigger and scaling up in the online space on the CBS side. Hot properties like Facebook and Linked-In might be too expensive for CBS, therefore it settled with CNET, hoping to revive the company’s business with new management and strategies. The Internet landscape is changing fast. Just yesterday, ComScore announced that Google has become the most visited website in April for the first time based on the number of unique visitors. Google accomplished this through both innovative new products as well as acquisitions, most notably YouTube. We are going to see more these types of deals in the near future, driven by competitive forces and heavily influenced by Internet advertisers’ media buying patterns.

One in Five U.S. Households Has Never Used E-mail

New Survey Finds Substantial Number of Households Not Crossed the Digital Divide

Roughly one-fifth of all U.S. heads-of-household have never used e-mail, according to National Technology Scan, a forthcoming study by Parks Associates. This annual phone survey of U.S. households found 20 million households are without Internet access, approximately 18% of all U.S. households.

Age and education are factors in this divide. One-half of those who have never used e-mail are over 65, and 56 percent had no schooling beyond high school.

National Technology Scan found just seven percent of the 20 million “disconnected” homes plan to subscribe to an Internet service within the next 12 months. Still, the study reports a steady decline in the number of disconnected households when comparing findings with previous years. National Technology Scan reported at year-end 2006 that 29 percent of all U.S. households (31 million homes) did not have Internet access, citing low perceived value of the Internet.

National Technology Scan provides an accurate picture of current adoption levels, demand, and the total available market for technology products and services in the U.S. The study provides comparative analysis with past adoption levels and overall trending patterns for strategic planning and forecasts of sales and revenues for product lines and services.

Network-hosted Storage Gets a New Entry - HP's Upline

It was interesting that the same week that Parks Associates announced findings from a new report titled Enabling Solutions for a Rich Broadband Experience that we got an update from HP and learned about their Upline network-hosted storage announcement from April 7. Our analysts Michael Cai and James Kuai had written in their report that network-hosted storage solutions from broadband service providers - where consumers can upload content such as digital photos, music, video, and their data files to service provider-hosted storage - would start to generate significant value-added services revenues. Their forecast indicates that these storage services would generate $188 million in annual revenues among U.S. broadband subscribers by year-end 2012.

We were briefed by HP's Managed Home team on Friday, as we are covering products such as the Media Vault and the MediaSmart Server for some upcoming research. We've also gotten some interesting updates from the Microsoft Windows Home Server team and companies such as Axentra, Fujitsu-Siemens, Hammer Storage, and others.

HP's Upline service is available to both consumers and small businesses. They offer three levels of subscriptions:

• Home & Home Office – Designed for a home with up to three PCs to manage their access using a single log-in and password. Available for $59 per year.
• Family – Designed for families that want up to three independent subscriptions to allow for file privacy between family account log-ins. Available for $149 per year.
• Professional – Designed for small businesses with up to 100 PCs. Also includes a multi-user administrative dashboard, advanced technical support and a lifeline number for emergency file recovery. Available for $299 per year.

HP includes Upline as part of its HP Total Care Portfolio, which includes extended break-fix, support, PC performance optimization, and even in-home repair services. This service really does reflect a new approach to customer support that extends the support lifecycle well beyond just break-fix or ad-hoc services and creates more proactive and longer-term support services that can wrap around some of the more basic troubleshooting services that are commonly offered today. I expect that we'll hear a lot more about extended the customer support lifecycle at our upcoming CONNECTIONS conference.

Tax Rebates Help, but U.S. Economic Situation Has Mixed Effect on Consumer Spending

Tax rebates will have an immediate impact on sales of high-definition TVs and personal computers this year, but economic concerns among consumers will limit the growth to more modest levels, according to Parks Associates’ Consumer Electronics Purchases: Quarterly Monitor.

According to the new study, 40% of consumers in U.S. Internet households will use the tax rebate to purchase consumer electronics products – with high-definition televisions and personal computers topping the list – but 42% cite concerns about the country’s economic conditions as a factor in their decision not to purchase consumer electronics products this year. Still, consumers indicate that they will limit spending in other areas before cutting home communication and entertainment services.

As a result, companies like Apple are in a good position to withstand an economic downturn. According to the study, purchase of portable music players will be the least impacted by economic concerns out of all major CE categories.

Consumer Electronics Purchases: Quarterly Monitor is a survey of U.S. Internet households conducted in April 2008. It examines likely consumer electronics purchase intentions, including those planned because of the tax rebate. It also provides data on the impact of the current U.S. economic situation on planned consumer electronic purchases.

Online Storage and Backup Add Value to Broadband Service Provider Offerings

How can broadband service providers keep customers and make money? Online storage and back-up services!

"Enabling Solutions for a Rich Broadband Experience" examines the global broadband market and analyzes the drivers, demand, deployments, and critical enabling technologies for broadband value-added services. According to the report, providers will see $188 million in subscription revenue by 2012 if they provide these value-added services.

Online storage and backup services will spur revenue generation and customer retention over the next five years for U.S. service providers, bringing in more than 1.5 million subscribers, according to Parks Associates’ Enabling Solutions for a Rich Broadband Experience.

“Online storage and backup services are great customer retention tools and upgrade incentives,” said Yuanzhe (Michael) Cai, Director, Broadband and Gaming, Parks Associates. “They fit with broadband service providers’ strategic advantages, complementing existing trust and billing relationships, network ownership, and guaranteed quality of service.”

The report recommends that as broadband service providers reposition themselves as experience providers, they should introduce a variety of value-added services to strengthen customer relationships, increase ARPU, and showcase the benefits of high speed. Such value-added services include broadband entertainment, management and support, and control and monitoring services.

“Service providers need to offer a portfolio of new offerings to create meaningful revenue growth,” said James Kuai, Research Analyst, Parks Associates. “BSPs need to experiment with different services and white-label solution providers.”

Michael Cai will discuss broadband service strategies in the session Solutions for Broadband Providers: Carriers as “Experience Providers at the CONNECTIONS™ conference, June 24-26.

Real Networks Sets Free Its Gaming Business

Along with releasing results of a great first quarter for its gaming division ($32 million in revenue, up 33% YOY), Real Networks just announced its plans to spin off its expanding casual gaming business division. According to the announcement, the company "intends to separate its global casual games business into an independent company and distribute shares of the newly created games company to its shareholders. RealNetworks may precede the spin off with an initial public offering and sale of up to 20% of the shares of the new games company."

Regarding the rationale behind this move, the company cited a couple of reasons:
"The company anticipates that spinning off its casual games business will result in two more flexible and focused companies. In addition, the separation will provide the games business an industry-specific currency for future acquisitions and enhance its ability to attract and retain the best talent in the industry."

"For investors, RealNetworks anticipates that the spin-off will create a pure-play casual games business with increased transparency, and that it will result in lower complexity in understanding and tracking RealNetworks' performance. We also think that the new structure will provide current and potential shareholders with two attractive investment options that are more closely aligned with their various investment objectives."

Real Networks apparently believes its gaming business, which has a much faster growth rate than all its other divisions, is undervalued. I guess this also means that the gaming people at RealNetworks won't have to explain gaming to top management who may not fully understand the potential of the business. The division did experience some retention issues of key executives lately.

An interesting side-effect of this spin off is that a pure play gaming company spun off Real Networks will provide the financial community good benchmarks for evaluating casual gaming companies. Who's next to go IPO? I-Play (formerly known as Oberon Media)? Bigfish Games? Wild Tangent? Popcap? It's about time.

It Finally Happened

The rumors surrounding Clearwire and Sprint over the past several months have made Hollywood Paparazzis jealous. It finally happened. Mr. McCaw, the master of big deals strikes again. After many rounds of negotiation, Sprint, Clearwire, and their partners ironed out all the details in a highly complex deal. Clearwire will merge with Sprint's Xohm division to form a $14.5 billion WiMAX venture, which will blanket the country with high speed WiMAX networks. Investing partners include Intel, Google, Comcast, Time Warner, and Bright House. Sprint will own about 51 percent of the new company and Craig McCaw will own about 27 percent. Comcast, Time Warner Cable, Intel, Google and Bright House will get a combined 22 percent. Ben Wolff will act as CEO and Barry West President.

The new Clearwire will leverage the combined 2.5GHz spectrum asset of the two companies and Sprint's existing towers. It plans to retail WiMAX triple play services and also wholesale wireless HSD to Sprint and cable MSOs. As we have predicted, WiMAX will become a contender in the U.S. Involved parties have too much to lose if the technology doesn't take off. The venture, now with strong financing, needs to immediately focus on integration and operational tasks. It cannot afford the mistakes of Sprint's Pivot experiment.

Yahoo and Microsoft Now Part Away, So What?

Now it’s official. Microsoft withdrew its bid for Yahoo after a sweetened deal fell apart over the weekend. This morning, Yahoo’s share price tanked as expected. Is it game over?

No. This is just the end of the first episode of the four-way judo I mentioned in my blog about three month ago. Already analysts and tech pundits are updating their scorecards of this game and debating whether Jerry Yang has made his biggest mistake of his life.

So what? After three months of gasping, waiting, wondering and venting, we are back to square one. Was it a better ending to have a deal consummated during the weekend? Not really. Sure, Yahoo’s shareholders will immediately incurred a 20% or more loss in their holdings, but the fiduciary duty of Yahoo’s management is for the long-term investors, not opportunistic market speculators. If a shareholder didn’t sell his shares when Yahoo’s price dropped to below $18 back in Jan 2008, and again didn’t cash out when Microsoft’s bid drove Yahoo’s share to above $30, he should not cry foul for the lost fortune. It goes back to whether he still has the trust in Yahoo’s management. In a stock market for short-term investors, the unfolding of the events of the last ninety days were all the risks and rewards of a fair game.

But longer-term, for Yahoo to prove its ability and the true value of the company to its long-term investors, it needs hard thinking and swift actions. How to revitalize its underperforming assets, revive employees’ morale, refocus the management attention to day-to-day business, and re-direct the company’s resources to exciting new growth areas like video, mobile, viral networks, virtual world, and international growth opportunities, is now a high order. Give Jerry a bit of time to prove himself that the company is worth $37 or more before making any judgments. After all, Rome is not built in a day.

For Microsoft, it is wise to walk away from the biggest integration risk potentially brought by the deal. It is an even wiser decision not to pursue a hostile takeover as a forced marriage is no good marriage. The main motivation for Microsoft’s Yahoo bid is to catch up with Google in search advertising. Yes, search is the crown jewel for Internet advertising, but not the only area that is growing fast. And search is not the only vulnerability that Microsoft has. It’s time that Microsoft have a balanced offensive and defensive strategy to counter against Google’s influence. Let aQuantive people crank up the ad business and Windows team focus on software development and deployment. The Internet war has just started and the final episode of the war is not written on the wall any time soon.

Grand Theft Auto IV: Discuss

Depending on the news source, Grand Theft Auto IV is either the greatest thing to ever happen to gaming, or the surest sign yet that the world is already doomed. The reality is something in between: GTA is entertainment software that provides a lot of enjoyable gameplay and will hopefully make players think about the world we all live in. It will also help move a lot of game consoles for Microsoft and Sony; for a long time to come.


First of all, GTA is a game for people who already understand that it is not acceptable to drive 115 MPH down the wrong side of the street in Manhattan with a machine gun hanging out the window, finger firmly on trigger. The Grand Theft Auto series has always danced on a razor’s edge and helps illustrate how carefully constructed modern life is and how most of the population automatically obeys the really important rules. The latest installment of the franchise is fun, insightful, sickening, violent, thoughtful, clever, frustrating, and just a little scary. It should be a little unsettling that anyone with a gun or vehicle can unfurl the fabric of modern society. It should raise the hair on your neck that anyone with a little willpower or the right acquaintance can obtain the tools of wanton destruction. Welcome to western society, please obey the rules.

Second of all, the boring stuff. Grand Theft Auto IV, with a rumored budget of $100 million and a team of more than 150 developers is the largest video game project to-date. More than 6 million copies were pre-ordered across the PS3 and Xbox 360. Estimates from various sources place initial weekly sales at 6-8 million copies and year end 2008 sales above 11 million. It is already the fastest selling game in the UK, and the franchise has sold in excess of 70 million copies worldwide since its initial 1997 release. The game also helped publisher, Take2 Interactive, resist a hostile takeover bid valued at over $2 billion from rival Electronic Arts.

Third of all, the controversy. Does GTA beget homicidal maniacs? Does the game celebrate ultra-violence or deride it? Does the fact that you have to press buttons and waggle little sticks make game interactions more violent that the latest horror film gore fest or crime spree movie where the body counts include everyone in the credits? Should the developers have included better controls for drive-by shooting? All good questions and all will remain contested. The developer, Rockstar North, certainly thrives on controversy and is known for outspoken commentary and perhaps clueless management. Regardless, they make popular games and know how to stoke a fire to boost sales and ensure their products remain in the spotlight.

There is one sure thing however: GTA is now a part of popular culture. As has gone on for centuries now, stories and media stay with us and are constantly consumed, re-imagined, and passed on: Beowulf, Shakespeare, Hitchcock, The Godfather, Les Liaisons Dangereuses, Superman, Gone With the Wind, Playboy, James Bond, Halo, etc, etc, etc. Grand Theft Auto is a permanent fixture of society now. The more is cried out over the game, the more popular it will become. The more players push it up as the ‘best game ever’, the more it will be torn down and criticized. Besides, history repeats itself and the tired cliché is still correct: from Comic Books to Elvis, from Doom back to theater with the first female actresses; there will always be something terrible to stand up for or protest. Accept it, everything will be ok.

Dallas BPL already dead?

A nice poster left an anonymous comment on our blog post from April 21st, DirecTV Moving Ahead with Broadband-Over-Powerline..., saying "Dallas Morning News today says, "Broadband over power lines plan is dead in Dallas." Could Parks Associates be any more WRONG about BPL?" The link to the article is here.

We appreciate the comment and critique, but we don't believe our conclusion about BPL is wrong. Although we were encouraged by the DirecTV/Current/Oncor experiment, we always believed that BPL is a niche technology and it won't be a significant competitor to cable, DSL, and fiber broadband. In the post, we mentioned that we forecasted 0.5% of U.S. broadband households will be using BPL technology by 2012 (and this forecast included the potential subscribers DirecTV might have signed up if the deal had gone through). The current count is only about 10,000 U.S. households. BPL will continue to face challenges and Oncor abandoning their original plan will definitely add salt to injury.

To confirm that the deal is indeed dead, I emailed the reporter at DMN, Andrew Smith. He said Oncor confirmed it's dead and when he approached DirecTV, they referred him to Oncor. I guess it means it's dead then.

Home Theater Systems are Recession-proof?

Here is an interesting data cut from our recently-released study Consumer Electronics Purchases: Quarterly Monitor. In this survey, we asked respondents in 1,090 U.S. Internet households to tell us which consumer electronics products were most-likely to be purchased in 2008. We then followed up with questions related to their concern about the country's economic situation and whether that would impact their specific purchase intentions.

When you look at the percentage of likely buyers remaining after stripping out those lost because of economic concerns, MP3 players, digital cameras, and personal computers top the list. These are logical findings, as these products tend to have high replacement rates and are commonly gifted. As the MP3 players and digital cameras continue to fall in price, the impact on the consumer's wallet is less severe.

One interesting finding was how home theater purchases are high on the list in terms of more recession-proof. One theory I have (based on qualitative work that we did several years ago) is that consumers view home entertainment as a cost-saver! We talked to consumers who had purchased higher-end home theater systems, and I was really surprised at the people who indicated that they were motivated by cost-savings – spending less money out at the movie theater by bringing the entertainment experience in home. I think that the notion of cocooning also resonates well in hard times. We certainly saw this after 9/11 and the economic slide after the Internet bubble burst. People want to come home, relax, and forget about their troubles!

On the converse, high-definition televisions and high-definition DVD players are less recession-proof. I can certainly understand the consumer mentality. Despite the major decrease in high-definition television prices the past few years, these are still bigger-ticket purchase items. And, although the high-definition DVD format battle has been settled (and we're expecting sales of stand-alone players to grow about three times of what they were in 2007), consumers may view these as optional, particulalry with average price points north of $500, and with lower-cost upconverting DVD players available. The good news for the CE industry is that the tax rebate checks are out there, and we expect them to spur at least some consumer spending. So, the rebates may perform exactly as intended - to offset concerns about the economy and encourage consumers to spend more freely. The Scherfs got their rebate deposited today, and if the e-mail back from my wife is any indication, that check is all but spent already!

Apple Does Day and Date

I guess the movie studios aren't quite as ticked off at Apple as everyone thought. Apple announced today that new movie releases from major film studios and premier independent studios are available for purchase on the iTunes Store on the same day as their DVD release. It'll be interesting to see the results of these day-and-date efforts. It reasons that the studios are going to get a lot more traction from their catalogue content (most of which will be available for $9.99 from iTunes) in particular. Instead of stamping more DVDs and hoping that they sell instead of gathering dust, electronic distribution through the well-known iTunes portal can be a cost-effective way to generate some revenues from the older content.

Recent Medicare Legislation and A New IOM Report

Led by House Representative Anna Eshoo (D-CA), eight Congressmen/women sponsored a new bi-partisan bill to support Medicare coverage of remote health monitoring technologies. The H.R. 5765, also called the Medicare Remote Monitoring Access Act of 2008, was introduced to the Committee on Energy and Commerce and the Committee on Ways and Means in April 2008. Specifically, it would require Medicare to evaluate remote health monitoring technology through a dedicated demonstration project and call on Medicare to develop reimbursement standards and procedures to cover remote health monitoring services for patients with defined chronic health conditions no later than two years after the enact of this proposed legislation.

Separately, the Institute of Medicine (IOM), a non-profit organization under the National Academy of Sciences and an influential voice on national health policies, released a report in April 2008 entitled Retooling for an Aging America: Building the Health Care Work Force. In this report, the IOM recommends, among many other advices, that as a nation, we should redesign our models of care by bringing in more innovative and evidence-based care models. One of them, the report argues, is the use of Assisted Daily Living (ADL) technologies remote monitoring technologies.

We view both events as encouraging signs that the reimbursement barriers for remote health monitoring technology can be taken down through legislative efforts, although the timing remains extremely difficult to predict. The new Medicare bill is a continuation of the momentum from Senator Coleman’s S. 631 (The Remote Monitoring Access Act) and Senator Thune’s S.321 (Fostering Independence through Technology Act) from last year. The fact that the remote health monitoring technology now has legislative sponsors in both chambers of the Congress is an assuring sign that healthcare issues might be something that both democratic and republican legislators could potentially find common grounds with in this election year. The IOM’s report enlisted another endorser on the remote health monitoring technology, and could potential influence the government’s policy orientation in the future.

Overall, we are cautiously optimistic about the prospect that the Medicare takes a more proactive role in the adoption of remote health monitoring technology in the next few years. The chance is likely to increase more dramatically after 2010.

Hulu on the TV? The ZvBox and "Localcasting"

What the folks at ZeeVee announced today in unveiling their ZvBox isn't necessarily a new concept. My colleague Steve Harvey reminds me that one of the early premises of the connected home was the whole idea of allowing thin clients to access applications and features hosted on a server. Now, media adapters and connected entertainment devices haven't necessarily set the world on fire with high sales volumes over the past couple of years, and we can safely argue that extending the Internet experience to the television in its present format isn't a scenario that the vast majority of consumers are going to embrace. When it comes down to it, accessing spreadsheets and e-mail on that beautiful high-definition TV in the living room is no reason to have a home network!

It's interesting how the notion of the home server has shifted in both subtle and dramatic ways over the past few years. I think that one of the key trends that we're witnessing today is a renewed emphasis on the notion of network-hosted applications driving connected home devices and applications more than localized storage elements doing so. This isn't to say that locally-hosted content and applications aren't going to be significant - in fact, devices such as DVRs are now evolving into set-top box media servers with the introduction of multi-room DVR capabilities. Further, there is a renewed emphasis now on networked-attached storage (NAS) devices that will provide for not only backup and safekeeping of content, but also more ways to easily share content with friends and family without necessarily uploading it to a photo-sharing site or figuring out how to create FTP downloads!

I think that the really exciting activity taking place today revolves around how to bring network-hosted applications and content - such as streaming premium video - direct to the television. This starts to answer one of the more common questions I'm hearing at industry tradeshows: "When am I going to get Hulu on my TV?" There are a few ways to do this already, but each has its own challenges.

If you're one of the lucky 1.5 million households that's figured out a way to connect their PC to their TV (either via a media adapter or more likely through S-video or some other traditional connection), access to Hulu or the content from Veoh Networks can be obtained. This, of course, relies having the aesthetic sense to not mind a cord running along your living room floor! And media adapters are now starting to address connectivity applications beyond the ability to view a photo slideshow on the TV or play music or have access to some limited Web video content. The D-Link DPG 1200 does provide access to the Internet TV programming from Veoh. But, right now, these examples are few and far between. And, when it comes down to it, media adapters are still home networking devices with some configuration and operability quirks.

I'm intrigued by the ZvBox for its ability to take PC and Internet-hosted applications and services and basically establish network-connected (via coax) HDTVs as secondary monitors. This is a feature that ZeeVee has coined "localcasting." If you look at the projected growth of premium online content (and we're forecasting streams and downloads of TV shows and movies to grow to 18 billion by 2012. So, the potential for network-hosted applications moving to the TV appears to be quite significant.

Open ... Sezmi!

I haven't decided yet if Sezmi is a better name than Building B, but in any case, the service launch is now official with today's press release. The funny thing is that Europe is actually way ahead of the U.S. in these type of hybrid terrestrial + broadband video television offerings - many European telcos offer this type of service (albeit not to this level of sophistication) as they have sought ways to keep customers locked into a landline broadband and phone offering.

The Sezmi development team really has covered a lot of key components of the whole "TV 2.0" experience - high-definition offerings, video-on-demand, access to "over-the-top" content, greater personalization and customization of the video search and discovery process, and social networking aspects (sharing playlists). What has been evident from the early AT&T and Verizon rollouts of their deep fiber-based video services (U-verse and FiOS TV, respectively) is that many consumers are switching to these services simply because they offer an alternative to cable. Sezmi says that they can deliver a high-quality television experience at half the cost of cable. So, it could be a compelling offering.

For Sezmi to be truly successful, I'll be looking for the following things:

• How quickly will it sign cable channels such as CNN, Fox News, ESPN, and others? News and sports remain critical linear channels to have in a lineup.
• Will local broadcast affiliates be asking for special arrangements in exchange for carriage rights? I'm wondering if Sezmi will want/need to create some special advertising/promotional slots to allow the local stations to either sell local advertising or use their news Websites to drive traffic to stories and additional video. That could actually be really interesting for Sezmi to allow viewers access to local content or news and enhance the television experience.
• Will it be able to create deals with broadband service providers who will want to offer a hybrid terrestrial and broadband video service? My initial hunch is that Sezmi may find some success with smaller Tier 2 or Tier 3 DSL providers who are not quite ready to dip their toes into the IPTV market but are looking for a video offering to provide a triple- or quad-play bundle.
• I think that video-on-demand services (and particularly time-shifted network television programming a la Time Warner Cable's Start Over feature or Cox Communication's deal with Disney/ABC/ESPN) are really going to start to define how service providers deliver a much more personalized video experience to their subscribers (and still tie advertising to that programming). Will Sezmi be able to strike its own deals in this regard?