I Want My iTV

I Want My iTV


By Cliff Edwards
Nov. 12, 2007

But I won’t be getting it soon. While the technology is mostly in place, the players—from cable companies to film studios—can’t agree on how to make it happen

It
all started when my TiVo let me down. For years this little device has
been like an old friend. It sat next to my big-screen TV to record
shows and movies when I wanted, without a lot of questions, and with no
judgments on what I wanted to see. But on a lazy late summer day, I
came to view TiVo in a whole new light.

There’s a collision,
you see, between the boob tube and the Internet. TV is all about
instant gratification. The Net is about me having control. Put the two
together, and the result should be personalized TV, or iTV, which lets
me watch what I want, when I want it. That sounds a lot like TiVo. The
recorders, which the company claims deliver "television your way," also
allow you to connect to the Net and do things like check freeway
traffic before your daily commute, buy movie tickets from your couch,
and listen to Web radio, all on your TV. In July, TiVo even became the
first device that lets you search easily for programs from cable
outfits along with movies and other content delivered off the Web from
Amazon’s (AMZN
) Unbox video service.

So when my editors asked me to explain how TV and the Internet were
intersecting, my first thought was to grab TiVo’s peanut-shaped remote
control. I had a hankering to see 1949’s White Heat,
the Jimmy Cagney flick where he plays gangster Cody Jarrett. Cornered
by cops on top of a burning oil tank, he laughs maniacally and shouts:
"Made it, Ma! Top of the world!" just before being obliterated. Calling
up a neat bit of TiVo search software, I typed in the movie’s name.

No luck. It offered me White Men Can’t Jump on cable, or Single White Female off the Web. I tried typing in "gangster" to let TiVo troll program descriptions that might fit. There was the Gangsta Girls documentary or 1944’s Gangsters of the Frontier to rent at Amazon. No… White… Heat.

IN SEARCH OF TV NIRVANA
Experiences like this just
make it painfully clear how far we still are from having truly personal
TV. All the technology to do this is basically in place: fast broadband
connections, personal media recorders, instant Web-searching software,
high-definition sets. So why can’t I press a button or two and see
whether the tribe has spoken, root for the next top chef, pull up a
YouTube (GOOG
) clip of Ellen DeGeneres breaking down in tears over a dog—or even
watch Cagney rise from small-time hood to the top of the world? I want
to listen to music, have a box pop up on my screen telling me who’s
phoning my home, or watch a vacation-themed slide show before
forwarding it on to bore my friends on Facebook—all while sitting in
front of the set in my living room. No one has yet put this wish list
together in one nice, easy-to-use package.

To find out why so many have tried and failed to deliver my TV nirvana,
I got up off the couch and hit the road to talk to technology wizards
and top industry executives. I discovered that Hollywood, cable,
satellite, phone, and consumer-electronics companies are all screaming
"Go! Go! Go!" as they lay out ambitious plans to conquer the market.

But what’s holding up the transition from network TV to networked TV is
that any company with a little piece of control in the way things work
today is unwilling to jeopardize its power and revenues until it
becomes clear how the new model will pay. Every time you hear about
some product that sounds great but just has one strange limitation,
follow the money to understand why. Hollywood worries digital downloads
could lead consumers to stop buying $24 billion of DVDs annually, and
broadcasters are nervous about the fate of the $185 billion-per-year TV
advertising kitty. So studios and networks alike limit how long
programs are available on Web sites or restrict the shows that play on
various devices.

Cable and satellite providers worry that they will lose customer
loyalty to the Web, so they impose tight controls on what content you
see and have moved painfully slowly to offer advanced TV services. The
people who make electronics gear fret that if they don’t lock up
agreements for exclusive music or videos, consumers won’t pay top
price. "You’ve got device manufacturers, content providers, service
providers, networks, software makers, security providers all trying to
sort out how big their piece of the pie should be," says former Comcast
(CMCSA
) executive Kip Compton. He is now senior director and general manager of video and content networking at Cisco Systems (CSCO
), which is trying to merge TV and the Web.

Granted, I’m far more obsessed with this topic than the average couch
potato. I’ve been testing electronics gear for nearly 10 years and have
enough boxes and wires in my place to open a store. Comcast cables
connect one room, Dish Network’s wires snake through another, and
DirecTV’s are in two more. There are six digital videorecorders, four
stereo receivers, an HD DVD player, a Blu-ray player, a half-dozen PCs
and just as many Macs. So many high-definition TVs arrive during the
peak holiday testing period that at one point a few years ago I had to
shove one under a bed.

Most regular people still haven’t viewed their first TV clip on a
computer screen. But a survey by the Conference Board-TNS shows that
16% of American households with Web access now watch full TV broadcasts
online, double the number from a year ago. And visitors to parts of
Europe and Asia can see how far behind we are in personalizing our TV
experience. Speedy, reliable broadband access in those regions can
deliver richer video service, and because providers face real
competition, they have to add Webby services to television as a selling
point. Today, some 60% of all households in Hong Kong watch programming
delivered over the Internet to the TV, says researcher Parks
Associates. From a hotel in Seoul, I can click to do my banking on TV.
A couple of friends I know live on the frozen tundra of Canada; even
there, I can play games or get onscreen score alerts of favorite sports
teams.

The electronics industry has churned out dozens of clever workarounds
to bridge the Web-TV divide: A device called Slingbox lets you take
recorded or live TV shows off a box at home and "sling" them miles away
on a laptop, smartphone, or other mobile devices. Apple TV indirectly
feeds (we’ll come back to this) a show you bought on the iTunes Web
store into your TV. Kids are rigging their Xbox video game consoles to
do a similar trick. Or, you can schlep the shows by hand with TakeTV, a
pocket-sized memory stick from SanDisk. (SNDK
)

Each of these solves one or two pieces of the puzzle, while never quite
completing the picture. It’s like we’re at that junction in the early
20th century when you had your pick of electric, steam, or
gasoline-powered cars, and the steering wheel might be on the right or
left side.

PATRON SAINT OF GEARHEADS
The first stop on my
journey was just a short drive down the road from my San Francisco home
to the offices of SRI International, the former Stanford University
tech shop that helped create the precursor to Wi-Fi networks and
high-definition TV. There, CEO Curt Carlson, the co-author of Innovation: The Five Disciplines for Creating What Customers Want,
assured me that the trick for companies facing tough choices in this
period of transition is to look beyond the customer they have today and
anticipate the needs of an even larger audience a few years down the
road. In short, focus on what’s truly important to people and be the
first to deliver that. Simple in concept, but extremely difficult if
you’re constantly thinking of short-term profits, he says. "I’m a big
fan of [Apple CEO] Steve Jobs," Carlson says. "The people who connect
needs and ideas the best and fastest win, and that’s where he stands
out."

Ah, Steve Jobs, the patron saint of gearheads. He is
everyone’s first (and often only) example of someone who’s managed to
make sense of a fractious market like this and turn it into a money
machine. Jobs and Apple reinvigorated consumer interest in music with
the elegant combination of a device (the iPod) and experience (the
iTunes Web store). He put the pieces together so that you don’t have to.

But Jobs is also the bogeyman that has forced fearful media bosses to
change their approach to Webified TV. In music, Apple turned the
traditional model upside down by charging a premium for gear while
setting a flat, low price of 99 cents per song download. Now Apple has
amassed a cash horde of $15.4 billion, while the music industry is
awash in red ink. No wonder Hollywood studios and broadcasters are
hell-bent not to hand similar power to anyone else—and particularly not
Jobs. "We know that Apple has destroyed the music business, in terms of
pricing, and if we don’t take control they’ll do the same thing on the
video side," NBC Universal (GE
) chief Jeff Zucker told an audience at Syracuse University’s S.I. Newhouse School of Public Communications on Oct. 29.

Jobs actually did try the same thing with Apple TV. Amid all the hoopla
over Apple’s iPod, iPhone, and Mac, Apple TV is the one product that
even Jobs concedes isn’t a smash hit. It’s a neat idea, a box that lets
you buy videos off the Web and play them on a TV. But the business
model is flawed: You can only buy what’s on iTunes, 1,050 titles in
all, vs. the 85,000 offered by Netflix. My whizzy $299 white, gray, and
silver Apple TV box sits largely unused next to a big-screen television
in my bedroom. The process is like running a Rube Goldberg contraption.
Start with a Mac, where you download videos; wait for them to be
transferred by wire or Wi-Fi to the somewhat limited storage on the
Apple TV box. By then, you might as well have just watched the stuff on
the computer screen.

As I visited technology workshops in Germany and Silicon Valley, I was
struck by how many of these program-shifting products suffer from a
simple but fatal flaw: set-top box fatigue. No one wants to take a
science test in their living room, crawling into tight spaces behind
the media center to run wires and spending hours on the phone with tech
support pressing "1 for new customers, 2 for current customers." That’s
why cable and satellite companies typically roll a truck to the curb
for installations, despite a cost estimated at $50 to $100 a home.
Small companies have no such luxury. Many device makers are forced to
partner with cable and satellite providers, incorporating their
technology into the boxes those companies already have in customers’
homes.

Box fatigue basically led Sling Media to sell out to satellite company EchoStar (DISH
) in September. The plan is eventually to build Sling’s technology into
Echostar’s Dish Network boxes. The Slingbox has gained modest traction
with professionals who are constantly on the go, for whom there’s a
certain attraction to a device that forwards TV programs to their
laptop or smartphone via the Web. But here again you have that extra
box to worry about, and one that’s devilishly complex to set up—at one
point you have to deal with opening ports on a wireless router to let
the shows travel out. Company founder Blake Krikorian acknowledges most
folks may be confused by the concept of shifting the time and place of
media consumption. "People didn’t understand where we were going when
we started out as a standalone company. I’m doubly sure they have no
idea where we’re going to go with Echostar," he says.

Similar concerns led TiVo to explore how it can embed its features on
Comcast and other cable boxes. My best guess is this fate awaits many
products that offer halfway solutions—and this could be a turning point
in resolving the TV-Web stalemate. Because cable companies are wired
into nearly every home, they have a good chance over the next couple of
years to incorporate innovative Webby technologies in their equipment,
speed up broadband connections, and set standards that force others to
line up behind them. They’ll need to sign content deal with various
partners and overcome a reluctance to spend more money to upgrade
equipment. And they’ll have to cede some control to the TiVos of the
world.

OLD MEDIA GAMBLE
That leaves the challenge of getting media companies comfortable about setting programming free. Google’s (GOOG
) YouTube terrified them by showing how an independent site could usurp
their gatekeeper role and siphon ad revenues. But it’s possible that as
Google methodically extends its Web-search expertise to all manner of
screens—computer, TV, phones—it could help media companies adjust to
the new world.

The media giants recently took a step in that direction with Hulu, a Web site launched by NBC Universal and News Corp. (NWS
) Hulu is the networks’ attempt to monetize their shows on the
Internet. It offers TV shows and movies for free, with commercials
online. The companies get their money, and I, the consumer, get
control, or some of it. Much of Hulu’s programs ultimately will wind up
on sites such as Yahoo! (YHOO
) and MySpace. But to protect their DVD income, the networks have
placed a big limitation on the service: You can’t watch it on TV, only
a computer.And you can’t record the shows. They are streamed off Hulu
servers each time you watch and can’t be stripped of ads unless you buy
a copy. Prime-time hits disappear from that season’s selection after
five weeks.

Will it work? I completed my journey fittingly, testing Hulu on my home
computer screen. I was skeptical. Techies like me assume that anything
put together by a committee of desperate Old Media dinosaurs is doomed
(Hulu is derided on tech blogs as "Clown Co."). I’ll admit, though,
that after spending some time on the beta site I was impressed. The
morning after the latest episode of The Office
was broadcast on NBC TV, it was on Hulu, with a quarter of the ads. The
site offers the biggest collection of premium content on the Web so far
and is adding older titles daily. You can e-mail a clip to a friend or
upload it to a Facebook or MySpace page. After watching one Office
episode from a previous season, I clicked on a link that took me to
Amazon to buy it for $1.99—a download that I could even send to my TiVo
to watch on the big screen. "What works for consumers is that which
removes the most friction," says Hulu CEO Jason Kilar. "The technology
needs to be so good that it blends into the background, and nobody
notices it."

All well and good, but let’s cut to the chase: Can I get White Heat?
Alas, there is no happy ending. Only few movies are available on Hulu,
and you probably can guess why: The Cagney flick is distributed by
Warner Bros., one of the studios that has not struck a content deal
with Hulu. Of course, even if it did, I would have to watch Jimmy’s big
exit on my laptop.

Foiled again. Looks like my search for iTV continues.

>BackTrack

Leave a Reply