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Second Hand Smoke - Kung Fu, Vodka, And The Joy Of Streaming |
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Introduction
I had originally planned to make my way down to Long Beach, California, about a two and a half hour drive from the office, to catch some panels at the Digital Entertainment Box (DEB) Forum, organized by Jon Peddie Associates. But, I also ended up paying a visit to Streaming Media West 2001, which was being held at the same time at the Long Beach Convention Center. The DEB Forum was interesting to me because, it included lots of nice market data charts, and industry luminaries from the PC multimedia, and console worlds. Before I get to that, I have to get something off my chest. Streaming Media West bills itself as, and I quote, "The World's Largest Internet Audio and Video Event." Hmmm. No problem parking. No problem getting a cup of coffee or lunch. No long lines. No packed crowds. I know I am in the right place because, there's signs all over the place saying it's the Streaming Media West conference and expo. Hmmm. So, I was left to ponder the significance of the event, and it came down to streaming content seeming to be a nice place to setup a pitched battle between Twiddle Big Bad Boy, and Twiddle Big Bad Wannabe. Yes, I am talking about Microsoft and Real Networks. As far as I can understand, Microsoft and Real are fighting tooth and nail to shape the "standards" for streaming media on the PC platform. No news there. Granted, both companies probably feel that they go beyond the PC, but let's be honest, when Microsoft gets aggressive, as it is doing with the WMA file format, it's only at the service of Windows, and nothing else (Microsoft is giving away the license to create WMA content, and pushing WMA server technology on Windows 2000 and XP). As for "standards": hah! Streaming video and audio formats from either company work real good together. Right? Introduction, Continued
As for Real Networks, I have a bias - can't stand the player, can't stand the quality of the playback, and don't really trust the company to have my best interests at heart. At least Microsoft gives it away for free - no questions asked. Every download of a RealPlayer feels like a violation. Frankly, the battle between Microsoft and Real isn't too dissimilar to the battle that Microsoft undertook against Netscape. This time, Microsoft is giving media playback away for free, and Real likes to think it can charge you. Of course, Real is also trying to control the distribution of content through its player by providing channels of audio and video, and in RealArcade hoping to distribute game software. There's a lot of similarities, but no one really cares much about crappy streaming video playback, whereas browsers used to be cool.
But, that isn't my real gripe, the upshot of all this competition is that in their battle to win over content providers to their formats and technologies, Microsoft and Real are going to build even more annoying copy protection and distribution features into their formats. You and me are not the real customer here - it's the media companies. What that means is multiple formats of video on a Web site, multiple players, and all those different versions of each player, too. And each will be hoping to convince the guys who own the content that they can tighten the screws on "freeloading" consumers. Streaming media is not fun in the main, or easy, or satisfying. It's also going to become about as friendly as a tour of duty with the KGB. Anyhow, I suppose we should be all grateful that streaming media isn't the all encompassing, television and cable company beating technology the computer industry hoped it would be. I'd hate to think what would happen if either Microsoft or Real controlled the airwaves, or cable and satellite lines. I suggest we take a solemn moment, and shudder at the thought. Digital Entertainment Box Forum The DEB Forum was held at the Hyatt Regency Hotel, adjoining the Long Beach Convention Center. It was a small, informal event, but this was why I drove here for two and a half hours, through Los Angeles freeway traffic. I said, I know, but I am emhasizing the amount of effort that went into this article. It's not like we put a Joule meter at the end. I think you have a right to know this stuff. Back to DEB. While I continue to believe that the PC can still outperform any other media platform, there's a lot of interest in other gadgets. Consoles always spark the imagination of consumer electronics companies. Handhelds are kind of hot right now. Cell phones are a few steps from being full handheld computers, if that's what customers end up wanting. Then, there's good old digital cable and television piping broadband bit streams into the home - imagine all the things you can do with that from digital video recording like TiVO to turning your HDTV into a Web surfer.
Jon Peddie Associates (JPA) Senior Analyst, Kathleen Maher, delivered an interesting keynote speech on the state of the digital entertainment box, and tried to keep things in perspective. One of the main points of contention Ms. Maher raised was that there are too many boxes that do too many things. There has been a longstanding debate, fueled for many years by Microsoft's insistance that the PC could be all things to all people, that consumers are looking for a single black box that would do everything for them - connect online, play digital audio and video, let you play interactive games etc. Microsoft and Intel - before their estrangement - used to say that this box was the PC. Now, Sony says it could be a PS2, and even Larry Ellison thinks he has a shot with the NIC. Hmmm. Ms. Maher pointed out some of the fallacies that persist when it comes to the idea of an all encompassing digital entertainment box:
All we can safely say is that digital media has made content richer: the quality of digital content can be higher and more permanent than analog media, delivery is greatly enhanced, there's more we can do with digital content, including building in indexing, interactivity, and mixing of medium such as audio and video. Digital Entertainment Box Forum, Continued However, digital media is very complex. There are numerous companies competing for a piece of the digital set-top box (STB) market: Wink, Liberate, OpenTV, Media Highway, MicrosoftTV. When it comes to displaying content we have HDTV, SDTV, 1080i, 780p, ATSC, DVB, ARIB, etc. etc.
Nevertheless, the cable companies continue to experiment with delivering a richer experience through their broadband pipes. It's still primarily Video-on-demand (VOD), Pay-per-view (PPV), and transaction processing (shopping) that drives the trials being undertaken by companies like AT&T, TCI, and Cox Cable, and unfortunately, these are the same things that were tried back in the early 90s by companies like Time Warner Cable, but everyone is trying to figure out what consumers are willing to pay for. Apparently, we like the flat monthly fees, and we don't want to spend more than a few dollars on VOD, or PPV content, unless it is even driven, but even then, the audience for these services tends to be a small fraction of the total television watching population. DVD has helped to change our perception of digital media, and more importantly, digital audio, such as MP3.
It's interesting to note that for Christmas 2000, consumers top 5 consumer electronics purchases were, in order, DVD player, CD recorders, digital cameras, mass storage device, cell phone (MP3 players were number 8 on the list). Digital Entertainment Box Forum, Continued Ms. Maher's presentation nicely dovetailed into the main panel of the day, Let the Games Begin: Can Game Consoles Survive in the Everything Box Era? Sony, a consumer electronic giant, wasn't a game company before it launched the PlayStation. Now, you could argue that the whole future strategy, and position, of the company rests on the success of PS2 because, it defines where Sony wants to take consumers next. Consumer, in turn, will define whether all of Sony's products can revolve around the brigh sun of a Sony gaming console.
Clearly, from the discussions of the panelists, Japanese influences on the digital entertainment box are enormous, although Mr. Lau-Kee of Criterion did point out that when it comes to content only 10% of home grown Japanese games make it into other markets. Yet, Japan leads the way in pushing gaming beyond consoles, and pushing consoles beyond games. There are 23 million iMode subscribers in Japan, and 56% of all downloads are games, but as David Collier pointed out, they look surprisingly similar to GameBoy titles. DoCoMo of Japan is forking out $40 million a month to game companies, a sizeable chunk of that to Sega, to get games onto its cell phones. Apparently, there is a fishing game in Japan, priced at about $3 a month, where you bait your line, and sling your hook, and wait for your phone to ring to tell you that you have hooked a fish. If you don't answer within a certain time, you might lose the catch. Okay, so that is a good argument for Japan not exporting its handheld games, but it also points out the good and the bad of what the entertainment industry is trying to do with digital content. On the one hand, there are some novel games you can play on a cell phone - particularly if they are based on communications. On the other hand, as Mr. Lau-Kee kept asking, "Is there money in it?" The issues weigh heavily on the minds of the PC industry as well. It is PC technology that will migrate to handheld devices, whether in the shape of interactive content, or components. Hence, Xbox's strategic positioning by Microsoft. The panelists believed that Sony would remain the dominant console platform, and even went far as to say that Sony's determined efforts to create something more out of PS2 then just a gaming device, will also put pressure on Microsoft and Nintendo. Even Nintendo, the only pure gaming company of the big three, was showing a product at E3 that was designed in combination with Matsushita to play both DVD discs, and GameCube games. It looked like a more bulky DVD player, but obviously, even Nintendo is not discounting the opportunities to go beyond gaming. Digital Entertainment Box Forum, Continued It is going to be much simpler for game consoles to extend their capabilities, by adding features and add-ons for relatively low cost, as compared to STBs being upgraded to be all singing, all dancing interactive machines. Game consoles have the horsepower, but STBs don't. Charles Bellfield also pointed out some interesting facts about the Sega Channel, which may hint at the opportunities for broadband gaming for the next generation consoles: between 1993 and 1995 Sega Channel had over 500,000 subscribers and was profitable for Sega. What killed it for Sega was an inability to move forward on the platform technology. People migrated to the PlayStation. In order to evolve in the console business, a vendor has to have deep, deep pockets because there is a constant state of hardware evolution. I think this is a very interesting aspect of the problems facing Microsoft. The company has so hyped, and build up expectation for Xbox that is going to have a hard time matching expectations, even if it is successful. I mean, nothing short of beating Sony to the number one slot is going to be a certified success for Xbox. On the other hand, Sony has invested heavily in its hardware, and has a longer term technology roadmap and strategy. Deep, deep pockets on both ends, but Microsoft's future doesn't rely on Xbox; Sony's does so, it might end up being a multi-billion dollar game of chicken as the two fight for supremacy. Last man spending wins? On the other hand, handheld gaming devices are going to increase to about 200 million units worldwide by 2006, according to JPA figures, but as Mr. Lau-Kee pointed out, half of those are probably going to be GameBoy Advances. Yes, I love the GBA. The handheld gaming device holds a lot more promise for me. As my generation, which grew up with arcade games and consoles, ages, we don't have the time to spend hours playing games online so, we want to nibble at the pleasure. A few stolen minutes on a long plane ride, at work, etc. Mr. Bellfield pointed out that in Japan you can't use a cell phone on a train, and people have average commutes of two and half hours so, playing a handheld gaming device, whether it is a GBA or cell phone is, obviously, a compelling option for consumers. At the end of the panel, it was obvious that companies like Criterion and Sega believe that the business of games requires a level of expertise that is hard to come by in the general entertainment industry so, to be successful with mainstream games the consoles are ideally positioned to dominate. As for delivering parlor games, or puzzle games through STBs, and other devices, the question of what revenue models are going to work remains unanswered so, who is going to invest in the content? Reasons To Stream - Kung Fu, and Vodka I have to give you a heads up on two heart warming streaming media participants who actually didn't have much streaming going on, but made the show bearable for me. The first one is from a company called 8legged.
Now, the guys at 8legged tried to convince me that Tom's Hardware Guide readers are probably going to be anti-Flash, which is their tool of choice for creating content. I had to tell them that once people see their tutorial on mixing the perfect Vodka Martini delivered to an iPaq they would appreciate how useful it is to have multimedia content on a handheld. In a pinch, no one needs to get access to CNN, or the latest episode of Sex and the City, but flip this baby open at a party, and download an animated cocktail recipe, and you will be revered. On the other hand, there's Ford Minton (Producer), and Todd Roy (Director), who run Kwoon.tv. It was started in a warehouse in Sunnyvale, California by 3 Kung Fu students. Basically, they have 3 episodes of Kung Fu action in the can on the site, and well, I like Kung Fu flicks, and heck, everyone should have a site like this, otherwise what is the point of digital encoding of video anyways. I almost felt like I was back in the age of innocence, when people did stuff on the Web because, they liked doing it. Yup, I didn't quite understand what these two expected out of life or their site, but I'm willing to bet that they'll be at the Sundance Film Festival sometime soon.
Panoram Technologies Wraparound Display On the show floor I caught site of this monitor from Panoram Technologies of Sun Valley, California.
Looks cool, eh? Well, I thought so. It's a segmented TFT/LCD display. 324 square inches of display area and 2.4 Megapixels of screen real-estate. It has input for three of each of the following: DVI, HD15, RCA composite, S-Video. In this set-up, two graphics cards were running the two left hand screens, and there was an S-Video feed into the right hand screen. It was setup as part of a Media 100 workstation for post-production work on digital video. These types of segmented wraparound screens have generally been used integrated ito high end simulators or control panels. This is one for the "professional consumer" which basically means that the manufacturer thinks it isn't priced so high that only the government and military would be willing to pay for it. I'll have to let our bank manager know that I think I can improve my productivity by 300% with one of these beauties. Of course, I am not sure that my productivity, even with a threefold increase, is worth the $10,000 price tag, but surely, I'm worth something close? Hmmm. Sigma Designs - Graphics Nostalgia Blast from the past. Sigma Designs - the first company to come out with MPEG1 boards back in the early 1990s. They were, for a while there, a graphics company when the world was overdosing on Windows acceleration (Windows 3.1 that is), and MPEG seemed like the next technology leap for the industry. So, when I caught sight of their booth it brought it all back - the RealMagic board, the negotiations with Sigma on pricing for OEM distribution, the pain, the horror, and finally, the end as Intel decided to do everything it could to use up processor cycles. After that, we entered that brief period in the mid-90s when everyone and his dog was at Fry's stores scooping up either a Creative CD-ROM upgrade kit, or, now this is one for the ages, a Media Vision CD-ROM upgrade kit.
Apparently, these days Sigma has been profiting from PC DVD. 42% of its revenues comes from chipsets, 22% from PC DVD, 25% from streaming video, and the rest from other sources. It's actually nice to see that this is one old time graphics company that hasn't completely disappeared, or been lost in the world of corporate mergers. Maybe it's a sign. You know, these guys once had a really good shot at owning the digital video business on PCs. I mean, they were ahead of the game with RealMagic. They could have had it all, but I say that about so many graphics companies. But, it's true. It's always one little slip here, or one little burst of CPU power there, and dreams are turned into dust. Hmmm.
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