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APAR's WORKING WEEKEND: Making Ends Meet

30 Nov, 2001 By: Bruce Apar

Sony is a grand brand. Its compelling technology and clever marketing –- or is it the other way around? – are a hard combination for competitors to match and consumers to resist.

Think about the catchy nomenclature it coins for its products, the best of which assume cultural currency – Walkman, Trinitron, Beta and its latest contribution to silver-tongued technology branding, “Ubiquitous Value Network.” Well, even Sony can have bad hairball days. That's what must've gotten caught in its throat when it came up with that marble-mouthed moniker. You've tuned into UPN – now try UVN.

In the new ‘hood of Hollywood, Sony has been conspicuously absent a network – Disney has ABC, Viacom CBS, AOL The WB, Fox and Vivendi UPN. Now Sony has UVN. Not really. Ubiquitous Value Network – Sony's naming consultants must get paid per letter, like in Scrabble – is what common folk of the future will recognize as an end-to-end electronic entertainment environment.

A company called kpe, which sells strategic planning services to entertainment and media businesses, focuses on four primary components in the content equation: creation, distribution, marketing and monetization.Of those four processes, write kpe's Jane Chen and Matthew Ringel in a paper titled “Entertainment, Technology and the Bottom Line,” “distribution represents the largest capital expenditure when it comes to investing in digital. Lack of certainty around adoption coupled with high startup costs discourage companies from making investments in new distribution technology.”

That might, on the surface, sound like good news to those anxious about thinking outside the walls of the old distribution technology – brick-and-mortar. But the cash-rich players who can afford high startup costs – namely Sony, Microsoft, AOLTW, and all the companies named a few paragraphs earlier – have begun to invest in end-to-end electronic entertainment environments.

Their endgame is not selling devices or copies of their movies, but the myriad services that will become available in a digital pipeline that courses its way over the next generation to a widening range of venues, not just at the desktops or set-tops in our homes. Gives new meaning to revenue stream.Data, sound or imagery will start its journey to your consciousness at one end of an electronic path and continue along its merry way until it arrives at your head-end. If it seems I just described a television signal, that's true. But there are many ends to these new means. Kpe calls it the “velocity of content – the ease and frequency of moving content through the marketplace.”

Video-on-demand is one of the ends. But the VOD we've known – or at least keep hearing about – all these years, is a fairly conventional and unimaginative business model. At least, it's one that has not captured a critical mass of the public's imagination, or pocketbooks, and hasn't been able to siphon off much milk, yet, from the home video cash cow.

But the advent of an end-to-end electronic entertainment environment implies, to use kpe's phrasing, “the ease of moving content.”

Hewlett-Packard during the summer announced a Digital Entertainment Center for December delivery that can “download, store and play compressed music files from the Internet as well as offer limited streaming of music videos to the TV.” In that end-to-end example of an environment, one end is the Internet and the other end is the TV. The ends, then, can be local (both in your house) as well as remote (a broadcast antenna tower, cable head-end, satellite, or computer server).

Sony intends its Ubiquitous Value Network, which it announced in early November at the Comdex computer expo in Las Vegas, to be “a powerful, new hardware platform where both PC and non-PC consumer electronics devices will be seamlessly connected, leading to new forms of consumer enjoyment,” according to remarks delivered by Sony Corp. president and c.o.o. Kunitake Ando.

Already, Palm Pilot ads on television include video playback as one of its functions. Sony's demonstration of UVN at Comdex included a “a technology that allows devices to recognize each other as they come into proximity” (“Hi, how ya doin' today, Chip?” “Oh, I'm feeling pretty chipper.”), and a wristwatch terminal (the span from your wrist to eyes and ears constitutes that e2e-eee).

Another end of the emerging electronic entertainment environment is interactive television, another technological leading edge we've heard about no end, but with still no beginning in sight of the typical TV household.

In the Jack Myers Report of Nov. 13, 2001, a daily e-letter by a leading media analyst, Myers quotes Tim Hanlon, v.p. of emerging contacts at Starcom MediaVest Group: “Let's not call it interactive television any more. We now refer to it as ‘television 2.0.' Consumers will be able to customize their programming in the future.”

And where does DVD and other next-generation packaged media take its place in this emerging end-to-end electronic entertainment environment?

Were I a retailer of home entertainment today, for starters I'd look into blank digital media, especially with DVD-R formats making their move into homes. With all these signals flying through space, consumers will be voracious for ways to capture and collect selected images. The prerecorded generation will be followed by the me-record-it generation.


Comments? Contact Bruce directly at:BApar@Advanstar.com

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