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Bridging the Digital Delivery Gap

19 Jan, 2005 By: Gary Arlen

Akimbo and DAVE-TV are two of many bridge system contenders.

“Any show. Anywhere. Anytime,” says the full-page ad describing Archos Inc.'s AV400 Pocket Video Recorder.

“Play. Anything. Anywhere.” touts Orb Networks in describing its streaming software system.

“Unlimited worldwide content on demand with personalized broadband delivery,” extols the literature for DAVE-TV (an acronym for Distributed Audio Video Entertainment).

“Enjoy live television anywhere, anytime on Pocket PC, Mobile PDA and Smartphones,” promises Smart Video Technologies.Dozens of companies are accelerating their efforts to deliver digital video content into the home through nontraditional devices and service bundles.

Through innovative technologies that sometimes bypass — and sometimes piggyback onto — conventional video systems, these entrepreneurs are devising and exploiting new distribution schemes. Even TiVo's “Tahiti” project features a “broadcast or broadband” component, aimed at packaging Internet content along with Netflix and traditional TV programming for subscriber viewing.

Bridge Technologies
Collectively, these evolving systems and services may be characterized as a “bridge” to the on-demand future — a collection of transitional products and content packages that are paving the way for a complete home delivery infrastructure.

“Viewers will get what they want when they want it,” said Richard Titus, president of Schematic, a technology design firm that has worked with Sony, Apple, Panasonic, Disney, Discovery Networks and dozens of content companies.

Titus, in remarks during a “Networked Home” panel at this month's Consumer Electronics Show, emphasized, “The consumer could care less about how he gets movies or where they come from … whether it's something they tag on a DVR or download from a VOD system or get it over the Internet.”

Acknowledging that remarks like this may make him persona non grata at his clients' offices, he insisted that, “Studios and content owners have a big challenge: how to restructure their businesses” for the new delivery systems.

Thanks to these transitional or bridge home media devices, content owners are getting field experience on how Americans consume home media. Some suppliers — such as Orb Networks and Archos — are expecting total mobility, with viewers watching programs on portable media players (PMPs), a fast-growing market segment. Orb is starting with a $10 monthly subscription package for a relatively limited line-up of non-theatrical content, bundled from the Web.

Vidiator, a mobile-phone video service, says it has recruited the legendary Stan Lee (creator of Spider-Man), to develop new content for its subscribers. President Connie Wong envisions more original material, priced on an á l? carte or subscription basis.

Akimbo Arrives
Steve Shannon, founder and executive VP of Akimbo Systems, acknowledges that right now the market is too small for studios to license content to these bridge devices. The Akimbo Internet access player, which was unveiled at the 2004 CES but just went on sale for about $200 late last year, is among a small roster of set-top boxes aimed solely at Internet content.

Shannon emphasizes that the “studios haven't rejected” his approach, there has been no “pushback.”

“In 10 years, the Internet may be the most important distribution medium,” he predicts. For now, Akimbo is relying and thousands of hours of streamed programming, much of it licensed from Time Warner subsidiaries such as Cartoon Network, Turner Classic Movies and CNN, as well as independent content from iFilm, FilmClix and Granada TV (U.K.). The company just added content from National Geographic TV.

Akimbo's revenue model includes users fees plus premium charges.

DAVE-TV, and its affiliated DAVE Network (with 70,000 hours of Web content), are going after a similar market. The $199 DAVE set-top box or the stand-alone DAVE Media Center software (which can be installed on existing computers) also invites independent producers to bring their content to the system.

“The key to our IPTV solution is this self-publishing model,” says DAVE-TV Founder/CEO Ken Lipscomb. “The ability for our network to be self-perpetuating depends on it.”

Skepticism Abounds
Others, however, contend that these Internet-centric “bridge” systems are indeed transitory, offering dollops of entertainment and information to early adopters. Skeptics say that the dedicated receiver boxes and on-demand content bundlers are likely to be a short-lived phenomenon.

The resulting indecision paves the way for set-top box and software developers who are creating PC media center capabilities that can access streaming Internet content as well as conventional broadcast, cable and satellite feeds. So far, the market remains small – so limited that vendors decline to discuss their customer bases or usage levels.

Additional questions loom over this new growing array of devices, some of which compete with more established services such as TiVo. At CES, TiVo CEO Michael Ramsey fleshed out the company's new initiative to create a “Personal Entertainment Network,” which will add broadband content to TiVo's existing broadcast capabilities.

“We're forging ahead with new products,” Ramsay said, citing three features of TiVo's new “Tahiti” project: portability, integration with broadcast and broadband systems, and High Definition Digital Video Recording service through Digital-Cable-Ready (DCR) equipment.

Among the broadband factors will be extending viewers' “wishlists” through a new “Season Pass.” The downloading capability — including TiVo's alliance with Netflix, is a fundamental “component or our strategy for VOD,” Ramsey insisted, hinting that “other third parties are interested” in using this technology to reach “a massive, massive untapped market.”

Again, pricing details were sketchy — or unavailable.

For now, the onslaught of media centers and other PC-based access devices — some with TV tuners, others aimed at the Internet video market — is likely to confuse mass market viewers.

For example, SnapStream Media sells its “Beyond TV” and “Beyond Media” software packages that let customers convert existing PCs into Media Centers. Meanwhile manufacturers such as Frey Technologies, which builds the “SageTV Media Center,” are going after unknown audiences with PCs that look like set-top boxes.

The proliferation of such devices and services may even scare away potential users, says Van Baker, VP and research director at Gartner G2, an industry analysis firm.

“Consumers have learned from the PC industry and various fiascoes in the consumer electronics industry that if there are too many competing standards out there, then the best thing to do is leave your wallet in your pocket,” Baker said.

“What the consumer is faced with right now is a wide range of products with varying degrees of functionality,” he added. “But none [has] the full set of functionality that they would really like to see.”

His comments further underscore the dilemma of today's “bridge” devices – a temporary phenomenon or the gateway to full-capacity media centers and set-top boxes of tomorrow.

Gary Arlen is president of Arlen & Communications, Inc. a Bethesda, Md.-based research firm.

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