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The Consumer Electronics Show
January 7th - January 11th, 2002 - Las Vegas
On our way to the first keynote speech, our cab driver expressed a sigh of relief in generously estimating the attendance of this year's Consumer Electronics Show. He lamented the Las Vegas convention year was a disappointment to his business, as it was to much of the service industry that accommodates the cyclical influx of business travelers. It was easy for him to see that CES 2002 would help establish a much needed recovery. This was the first convention to populate the all new, and quite enormous South Hall of the Las Vegas Convention Center. Combined with existing floor space I did not expect the strolling challenge that I discovered in most of the LVCCs thoroughfares. As I repetitiously attempted to avoid collisions with other conference goers, I had no trouble accepting the cab drivers projection, as well as the 100,000 plus attendance estimate offered by Gary Shapiro, president and CEO of the Consumer Electronics Association.
If one's mission at CES was tailored only toward iTVcentric information, it was difficult to avoid the distraction of the other wonderful technology showcased in the halls of the LVCC. Satellite radio services have hit the ground running, and hosted some of the most popular exhibition space on the floor. Convergence was found between cell phones and PDAs, VCRs and DVD players, DSS set-top boxes with ATSC and NTSC receivers incorporated, and the development of media clusters described later in this report. Continued growth of MP3 players, DVD recorders, and various display technologies were conspicuous. There was enough plasma at CES 2002 to make any blood bank envious. Liquid Crystal Displays joined the enthusiasm with increased dimensions and lower prices, with claims of further cost reductions through the year. Throw in wireless anything, cameras, and games and you have still only discovered a portion of the exciting CES menu.
It was at the first keynote that Home Networking became the official hot topic of the conference. Convergence of the PC and television continued its trend of acceptance, including new perspectives due in part to the increase of display options, the always welcomed effects of Moore's Law on hard drive costs, and the further development of wireless technology. The advance of Wi-Fi has promised to become one of those sought-after component features that actually compels a consumer to purchase. The 802.11 family claimed most of the attention paid to the world of wireless. New enough, however, to force cautious exploration into the potential changes within that group of standards. Does 802.11B have any restrictions because of its frequency? Is the more robust 802.11A able to become affordable for a large-scale deployment? Is 802.11G the ultimate destination of clan 802.11? The plunge in hard drive prices has helped to increase the number of set-top boxes, and/or media centers that have PVR capability, coupled with audio jukebox features. Add a DVD/CD player, a network gateway complete with firewall, a DSS or cable receiver, don't forget to pick up a nice PC Tablet and you won't need to leave your couch for a week! More companies are betting on this cluster of desirables with intended deployment announcements from a few familiar names, and one or two newcomers, including the CES Best-of-Show recipient.
In a conference session on iTV/ETV Portals, the iTV revolution was re-evaluated as the iTV evolution, at least to an executive of one of the larger service providers. The panel, representing many iTV industry leaders didn't seem surprised by that statement. One small, but telling piece of evidence of this evolutionary sluggishness is the reading on the hit-counter indicating how often the obligatory question is asked... "How do you define Interactive Television"? When posed to the rest of the panel by one of the speakers, responses were as tenuous as if trying to describe a spiral staircase without using arms and hands. Bravo to the session moderators that lead discussions away from what has become evasive rhetoric. Although, when dialog is directed toward promising trends and developments, that big pointy-toothed demon of incompatibility materializes out of thin, conditioned air. And when it inevitably arrives it is as welcome as the growing flurry of advertising pop-ups that interrupt one's Internet browsing. Predictably, the frustration barometer is exposed by speculation on the lack of success in the iTV world. "No 'killer app' has yet arrived". One more finger pointed at the standards issue. "MSO's continue to deploy Set Top Boxes that won't accommodate the compelling, elaborate applications". "There is no clear understanding of the consumers wants and needs, at least not one with which revenue can be estimated with confidence". Then the negativity diminishes, and a reflection of recent positives begins.
Personal Video Recorders have been described as the best thing to come along since drywall screws. While a great many might not understand that comparison, after being informed that the advent of drywall screws is a good thing, the majority of those polled might agree in principle. Indeed, the PVR is one of the positives included in a typical evaluation of current iTV trends. A conference session on STB's comprised of representatives from leaders of their respective technologies, more resembled the cheerleading squad at PVR High School. Regarded by one panel member as a genuine "sticky product", he added that the PVRs fundamental value should not be understated, and if there is any consumer learning curve, it's worth the wait. Seemingly the year that cab driver wisdom is finally heeded in Las Vegas, another speaker polled his driver about the PVR. The man enthusiastically replied that he couldn't live without it, though at the time he bought it he wasn't sure what it did. This comment led to the topic of educating the consumer about new technology. It was agreed by this panel that retailers will likely bear most of that burden. The good news continued… An officer from one of the DSS giants happily reported that early returns indicate the deployment of Personal Video Recorders with their service has cut their subscriber churn in half compared to subscribers without the PVR. Another vendor touted the "Distance User Interface", (any internet communications device), for remotely programming one's favorite shows. There was no fear among this group in projecting that most future set-top boxes will contain a hard drive.
The subject of telewebbing was explored in another session on two-screen interactive experiences. It was common sentiment that this style of iTV is important for establishing a foundation for enhanced television. Others, not satisfied with a mere Miss Congeniality award for their choice in interactive delivery, reminded session attendees that the model has enjoyed modest, but widely deployed success. Adding, that the ability to use a wireless second screen will significantly enrich the concept of telewebbing for users and developers. Advertisers are getting better information from a two-screen scenario, making it easier for them to define their all-important numbers. It was estimated that 50% of PCs are in a room with a television it, and to take advantage of that unofficial statistic, some panelists felt that programmers should increase promotion of two-screen interactive opportunities. The mild bout of piety was interrupted by the arguable reminder that current two-screen popularity is afforded simply because there is not yet a significant one-screen opportunity, and when those do come along the applications will be inherently different.
While other conventions and conferences may have paid more attention to the nagging problem of component and software incompatibility, the issue was frequently recognized. There was limited celebration that the OpenCable Application Platform's recent adoption of the Multimedia Home Platform middleware may help to erode the logjam. A degree of credibility came from a panelist representing a company that has enjoyed successful widespread iTV deployment in Europe. With a small sense of relief, he stated that the adoption of MHP shows a serious attempt at standardization in the American market. Serious, or not, there was at least one major software executive that was not prepared to travel down a Java based road in search of success. Part of the deployment roadblock continues to be the existence of attractively priced "thin" set-top boxes whose limited performance restricts the amount of compelling applications available to the user. Cost is important not only to MSO management, but as STB's become more available in the consumer markets, it's believed that the majority of those that would buy a box don't understand the differences well enough to go with the high-end model, helping to perpetuate the content developer's bad dream. Regardless, panelists did see STB's on the American retail market in the near term. This was echoed by a representative of one of the major STB manufacturers who currently offer boxes to retailers in Canada.
One of the speakers at the iTV Programming conference session asked the audience if back in the 1960s, "did you ever said to your spouse, 'Hey Honey, let's go watch Color TV'", hoping some day we would all find the phrase Interactive TV just as unnatural. None of the panelists from any of the sessions I attended were ready to make that claim. Compared to other recent conferences I have attended, fewer panelists were prepared to make iTV projections for the coming years. Those who did agreed with common sentiment from last November's Western Cable Show. More Video on Demand, continued growth in gaming, an increase in PC and network based services, digital set-top boxes will become the majority over analog, PVRs will continue to advance, and a projection that cable providers will enjoy a huge increase in the bundled "triple play", digital cable television, high-speed net access, and digital telephony. Not so many predictions about iTV programming. The desired level of clarity in the industry is not here, and the frustration remains. One of the most impressive conference sessions offered was the iTV Programming conference. Impressive due to the diversity among the panelists, including representatives from set-top box manufacturers, competing software developers, middleware developers, end-to-end content providers, and hardware manufacturers. One of the first comments made by a speaker was, "if we could get everyone from this panel on the same page we would have a dynamite year with explosive growth"! There were a few smiles, but many of them felt that goal is still attainable.
