The State of the Connected Living Room 2011
“Our biggest challenge is still content,” says Andrew Kippen, Boxee’s VP of marketing. “We are always trying to make sure that Boxee offers as much content as possible, in order to make our product as attractive to consumers as possible.” Boxee currently offers content from Netflix, VUDU (now owned by Walmart), Major League Baseball (MLB), the National Hockey League (NHL), and Pandora. In order to make its platform as absolutely accessible as possible, Boxee allows consumers to download its system software directly from www.boxee.tv for free.
“While streaming has gained in popularity in 2010, it’s still very much in the early stages of adoption as consumers begin looking for ways to watch HD video on their TV over a broadband Internet connection,” says Brian Jaquet, Roku’s director of corporate communications. “This is why we are putting our efforts into winning
content supporters who offer services that consumers understand. We go to those providers and say, ‘We're the ones who can help you optimize your content most effectively and generate more eyeballs for your content in front of the TV.’ This approach of letting content providers such as Netflix and Hulu Plus drive our sales by promoting their services, plus the fact that our stand-alone devices start at $60, makes us a clear choice in today's ever-growing, but still young market.” Roku’s content partners also include Amazon Video on Demand, Flixster, MLB, the NHL, and Pandora.
Are Stand-Alone Streaming Media Devices Really Necessary?
There is little doubt that streaming media is gaining ground. According to the very latest research from comScore, Inc., more than 36.5 billion videos were streamed online globally during October 2010. “The percentage of Internet users who watch video online has been stable at 85% for some time,” says Dan Piech, comScore’s senior product management analyst. “However, the number of hours being watched overall has gone through the roof in the last three years.”
The big question is where are they watching this video? The answer is still primarily on their computers, Rayburn replies. “If television is the big brother of video consumption, computers are the middle brother, and streaming media devices [are] very much the baby,” he says.
The market argument behind streaming media devices—as with internet radios—is that consumers need technology to bring the internet onto more familiar platforms such as radio-style receivers and HDTVs. The question, however, is whether this is really the case.
Again, history offers some clues. In the late 1990s, Microsoft attempted to bridge the gap between TV and the internet by acquiring and marketing WebTV. It was a thin-client system that used the consumer’s TV as a monitor—controlled by a wireless keyboard—and provided internet access and browsing via dial-up or cable TV.
Unfortunately, WebTV never managed to compete against internet-connected personal computers, and the product failed to take hold in the marketplace, even after being rebranded as MSN TV by Microsoft. Today, you can still find an MSN TV support website at www.msntv.com/pc. But forget about buying MSN TV equipment for your home TV. “MSN TV hardware is no longer available for purchase from Microsoft,” says the site. “Microsoft continues to support the subscription service for existing WebTV and MSN TV customers.”
There is no doubt that internet-based video of sufficient resolution can look good on an HDTV. There also seems to be a case for using the internet for delivering content such as Netflix. But in this instance, the internet is serving as a distribution backbone; sort of a “super cable TV.” As for whether people want to surf the internet on their HDTV, when a 42" screen at a 6' distance doesn’t provide the same ease of reading as a 15" laptop monitor? It seems unlikely—or as my ex-father-in-law used to say, “Pigs might fly, but they’d make damned silly birds.”
For streaming media device manufacturers, the usefulness of the internet as an alternative delivery backbone for Netflix and other content would seem to assure their future. However, past consumer technology experience suggests that this will only hold true if streaming media devices are easy to set up and use and as open to accepting all forms of content as a radio or TV.
“Consumers don’t understand, nor do they want to understand, why one brand of streaming media device can see Netflix and Flixster but can’t see everything else,” says Rayburn. “They are going to be very annoyed to discover that the Google TV platform cannot stream programs from the big three networks, while their wireless laptop can in the same room. They don’t want these limits and they don’t want these issues.”
The moral to this tale: If streaming media devices are to realize their true market potential, the days of proprietary, incompatible, and limited access units must end—and end quickly. Otherwise, this very cool technology could indeed suffer the fate of AM stereo.
This article originally appeared in the 2011 Streaming Media Sourcebook under the title "Shades of AM Stereo: The State of the Connected Living Room."
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