Parks Associates Blog

Tuesday, January 15, 2008

TVs at the Heart of Connected CE Strategies

There is no question that marriages between consumer electronics devices and broadband content will be a key trend in 2008. Prior to the Consumer Electronics Show last week, we have seen several major announcements and developments made in this space:
  • Take the January 3 announcement that Netflix and LG Electronics would work together to develop a set-top box to allow consumers to stream video and other content directly to their HDTVs. This would be ideal for the Netflix Instant Watching feature that comes as a standard feature with the DVD rental service. My only question about this is why develop a separate set-top box for this? I think we're quickly heading toward "black box overload" in the living room. Apple and VUDU are both pursuing this separate set-top route, but why not include the connectivity in something like a DVD player? If I'm a Netflix subscriber, I'm still going to rely on it to play those DVD rentals. Then, it could give me access to the 5,000 or so titles available electronically without the muss and fuss of that extra box.
  • HP's MediaSmart TV provides access to CinemaNow content.
  • Microsoft's Xbox LIVE Marketplace offers more than 3,500 hours of premium content, including high-definition video, from 35 studios and networks. On January 6, Microsoft announced that ABC (Disney) and MGM would be joining the lineup of content available throught the service.
  • Sony's BRAVIA Internet Video Link service provides content from Yahoo!, AOL, Sports Illustrated,, CondéNet’s,, Epicurious and channels, and Sony Pictures’ Crackle, The Minisode Network and Inside Sony Pictures channels. At the 2008 CES, it was announced that CBS content would be available.

Although the emphasis for CE vendors has been on developing alternative video-on-demand strategies, it was interesting to hear about non-video services that are coming to networked televisions. Here are some of the announcements from last week:

  • Panasonic announced products leveraging tru2way™ technology (formerly known as OCAP). The VIERA® HDTVs will be able to access interactive digital cable video services, including video on demand and interactive program guides without a set-top-box. The company also introduced true2way set-top and portable DVR. In addition, VIERA PZ850 televisions with VIERA CAST will allow access to Picasa Web Albums and YouTube video from Google.
  • Sharp introduced AQUOS® Net that brings Internet content and remote diagnostics to the television set. AQUOS Net includes powerline networking, so it looks like it's bringing content from a PC to the television set instead of an Internet-based service, at least as of now. The remote diagnostics capability is intriguing. I've been saying for sometime that consumer electronics companies are facing a challenge in helping to provide support to their ever more complex devices, and that remote support with features such as automated diagnostics and troubleshooting will be critical (see my March 2007 blog titled A New Trend in Digital Home Customer Care: Enhanced “User Diagnostics”. Now, Sharp is bringing this capability to some its televisions. It'll be interesting to see if other manufacturers follow suit.
  • Samsung demonstrated its InfoLink™ RSS service with applications from USA Today that include access to customized news, weather, and other information.

The marriage of content, services, and CE devices such as TVs and DVD players is in its formative stage, and it's a very fluid market right now. We certainly see the manufacturers taking an interest in the ability to sell services and applications above and beyond the set-top box, but it's unclear as of now as to how these services will be monetized. For online content services, we keep hearing about how ad-supported content will be the ticket, but nobody has really been specific in this area. We can certainly point to areas in which enhanced customer support (remote management, diagnostics, and troubleshooting, for example) can not only save on customer support costs, but also be a revenue generator in their own right. We would fully expect Sharp's lead to be followed by others. We'll be turning our attention to this space in several research reports in 2008, and we'll look forward to reporting some of the findings later in the year.


Post a Comment

<< Home