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The January 24, 2005 Issue Provided by System Dynamics Inc.
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CES 2005--The Next Big Thing: Video-on-the-Go ("Vidi-Go")

New things start small. Some are a "flash in the pan"-- these are the "hula hoops" and "pet rocks" of our culture. Others seem to have fundamental human appeal, which gets communicated from one person or group to the next and eventually take on a life of their own. PVRs are clearly part of the latter group.

The idea of personal video recorders (PVRs) took some time to spread and catch on. The user value proposition is "the video you want WHEN you want it". There are additional ways of doing this, notably through video on demand. Put PVRs and VOD together and the user has an arsenal of tools for being able to watch "the video you want WHEN you want it". With PVRs large amounts of storage and some forethought are required, while VOD comes to the viewer when she requests it, without need for previous action or purchasing extra equipment; the two are complementary.

This year what was big at CES were products offering another dimension of freedom for the user. This dimension offers the user "what you want, WHERE you want it" -- for video. We've termed it "video on the go"--"Vidi-Go" for short. We believe it is at the early stages of something that will be as big as PVRs and VOD.

The emergence of Vidi-Go shouldn't be a surprise. After all, "audio on the go" is what portable radios, satellite radio from Sirius or XM, and MP3 players are all about. And if audio entertainment has value when users are at the beach, riding the subway or being driven to the airport, it's likely that video entertainment has value there too.

Let's look at some examples from CES. We'll separate these video applications into three groups: "anywhere the person happens to be"; "in the car"; and "anywhere in your home". Of course those things which are in the "anywhere in the world" category are also, by definition, part of those "anywhere in your home".

Vidi-Go Anywhere

Here are some of the products and services that were introduced for video anywhere in the world.

  • Archos PMA 400 Portable Media Assistant --> Click for larger pictureArchos Pocket Media Assistant PMA 400: This is a Linux-based portable-entertainment/Internet device with a 30 GB hard disk drive. It can be used to record directly from TV, and playback video, browse the Internet, record and listen to music, play games, store and view photos, manage your agenda, contacts, tasks list and read PDF files. It comes with Wi-Fi and Ethernet LAN connections, a touch screen, supports Windows Media DRM protected files and synchronizes with Microsoft applications. Archos touts this as their fourth-generation portable video player (PVP) and the refinements of multiple iterations really show up. ( )
  • Orb Networks: This company offers a service which "takes the home out of home entertainment." Their promise is "access your media anywhere". Orb provides access to digital media on your home PC through a simple web interface and streams your content to virtually any internet-connected device. It offers multiple levels of security including user authentication, advanced encryption and does not require any firewall changes. The limitations? Orb software currently runs on PCs with Windows XP Media Center 2004 or 2005, and is currently available in the U.S only. Pricing is $9.99/month or $79.99/year. ( )
  • TiVoToGo™: This is a TiVo service enhancement, available as a software update to standalone TiVo® Series2™ boxes, at no extra charge as part of the TiVo service. It allows subscribers to transfer programs from their TiVo box to a laptop to enjoy their favorite shows anywhere, anytime. The TiVoToGo service enhancement securely encrypts programming during the transfer to the laptop; once transferred, subscribers enter a password they created during software installation to allow decryption of the file and playback. The limitations? Programs protected with Macrovision copy protection (including PPV, VOD and commercial DVDs) are not transferable to a laptop. Transferring a show to a desktop or laptop over a home network can be slow -- with some networks it could take as much time as it does to view the show. This is clearly not something you can do just before you run to the airport. ( )
  • TV2Me: This company has captured the Vidi-Go concept in a memorable way. They talk about "Space Shifting™", their ability to move the entire media environment of any one place to any other place. It is to location what "time shifting" (when TV viewers record programs for later viewing) is to time. The TV2Me unit consists of a proprietary video processor/server that sends television from your home to anywhere in the world. The server must be located in the city or country whose content you wish to view. The video is sent over a broadband connection. They use the following analogy to convey how it works: "TV2Me acts as a long extension cord between your cable box at home and your PC or TV display device" which can be located anywhere else you happen to be (as long as you have a broadband connection there). The limitations? One big one is the price -- it costs US $4,750. At that rate you REALLY have to want this. Also it requires an Internet connection with an upstream speed of 384 kb/s or higher and a static IP address. ( )
  • Sling Media: The Slingbox™ Personal Broadcaster works by redirecting, or "placeshifting," the TV signal from any cable box, satellite receiver, or personal video recorder (PVR) to a viewer's location and device of choice, whether in is in another room in the house or anywhere in the world with a high-speed Internet connection. The product is due to ship in the first half of 2005 and will retail for $249 with no additional monthly service fees. The Slingbox is powered by a high-performance DSP from Texas Instruments and the live TV streaming system uses Microsoft's Windows Media technologies. The company has implemented a proprietary stream optimization technology (code-named "Lebowski") which detects the quality and throughput of your connection and the size of your screen and sends a compressed, digital stream optimized for the available network and user device. Founder Blake Krikorian describes it as working "like a long-distance remote control". The company plans to provide downloadable software for PDAs and smart cellphones once faster wireless networks become available for these. ( )
  • Bill Gates' onstage dialogue with TV host Conan O'Brien --> Click for larger pictureMicrosoft: Microsoft made several announcements about increasing the flow of digital video to Windows Mobile-based devices, such as Portable Media Centers, Smartphones and Pocket PCs. These included a collaboration with TiVo to deliver recorded television to Portable Media Centers and Smartphones and Pocket PCs equipped with Windows Media® Player 10 Mobile; an alliance with MTV Networks to deliver digital programming; and the unveiling of MSN® Video Downloads--a portable TV service that will make TV shows and video clips available to Windows Mobile-based portable devices from sources including FOX Sports, CNBC, MSNBC and Food Network. ( )
  • VCAST: Verizon Wireless announced a new service called VCAST that delivers entertainment, music and 3-D games to broadband-enabled phones using 3G EV-DO technology. The service will be available February 1, 2005 in 32 cities and will cost $15/month for the basic service in addition to the price of existing voice plans. It also requires a new EV-DO phone or an EV-DO PC Card. Content will include a variety of video clips: news from CNN and NBC, weather from AccuWeather, and entertainment from channels including VH1 and Comedy Central. Fox will produce exclusive serials for the VCAST video service, including one based on the TV show "24". Verizon Wireless has indicated that about 300 video clips per day will be available, averaging 2-5 minutes in length. Premium content like music downloads, 3D games, NBA, NASCAR and some exclusive video content will cost extra. ( )

Vidi-Go In The Car

Rear-seat video sales for cars have been growing in the US. In 2004 1.66 million (9.9%) new cars came equipped with video. In 2005 that is estimated by the Telematics Research Group to grow to 13% and in 2010 to 24%. Today three quarters of the units are DVD-based and one quarter are based on hard disk drives. ( )

There are a number of other potential ways of getting video to cars. Here are a few announced at CES; the first two are not available yet.

  • Delphi and Comcast have formed a partnership to develop Wi-Fi networking and hard disk drive hardware that lets enabled cars connect and wirelessly upload Comcast-provided entertainment media to the car from the home. Engineers were quoted as saying that it will take between six and 18 months to complete the system development. ( ) ( )
  • Sirius Satellite Radio announced a partnership with Microsoft for mobile video content. This service will be dedicated to children's programming, using Microsoft Windows Media Video 9 to display the programs. The service is slated for the second half of 2006. ( ) ( )
  • KVH A5 automotive satellite TV antenna --> Click for larger pictureDIRECTV introduced its new TOTAL CHOICE(R) Mobile programming package. This is DIRECTV's first subscription package developed specifically for use in passenger vehicles equipped with in-vehicle video screens; the package provides access to over 125 channels of digital-quality video and commercial-free audio programming for customers using the TracVision A5 automotive satellite TV antenna from KVH Industries, Inc. (which costs about $2000). The company also announced it will offer the STARZ premium movie channel package for the automotive marketplace. The Mobile package will be available to existing DIRECTV residential customers for $4.99 per month; the monthly price is $39.99 for customers subscribing only to the mobile programming package. ( ) ( )

Vidi-Go Around the House

Many of the devices mentioned in the Vidi-Go Anywhere section are equally at home in your home (pun intended). But the big news for getting video anywhere in your home is all the flavors of home networking targeting AV content. We've talked about many of these in the past, such as HomePlug AV, Entropic's cable networking technology, and emerging wireless technologies with higher speed and QoS for video. There's lots more about networking technologies in the following article on chips at CES.

  • VIXS provides some of the underlying technologies we've mentioned in the past. This year ViXS has made it into innovative video products from Sony and Japanese maker Funai, in a design for wireless TVs. ViXS's specialty is the ability to send video over wired and wireless networks by quickly encoding and decoding video files and moving them around efficiently. The ViXS Xcode II chip manages multiple video streams dynamically, examining the current network bandwidth and constantly adjusting how each frame is sent over the network based on that bandwidth. It can provide a level of wireless video quality that is virtually indistinguishable from hardwired TVs. ( )

What's Under the Covers?

It is not a coincidence that so many portable/mobile video products and services are becoming available. We see it as a confluence between two factors: the recognition of a latent (not previously recognized) user need and the availability of enabling technologies.

We've talked about many of these technologies in the past, but let's zip through a quick review of some of them. They include:

  • Higher capacity, low priced storage mechanisms
  • Compression technologies that get more video quality into fewer bits
  • More affordable and available broadband transmission, including wireless broadband, MIMO, UWB, etc.
  • Affordable screen technologies for laptops and cell phones
  • New chip technologies that get ever more capability into a smaller footprint
  • Battery technologies with a longer life
  • And the software that drives it all.

Since we're at the beginning of something new, we don't expect to see mobile video take off overnight. But it will be interesting to come to CES a year from now and see where this trend has taken us.

In the interim, one of the things we always do is try out some of these systems and see for ourselves how well they work. We already have TiVo Series 2 so it should be easy to try TiVoToGo. Hopefully we'll get the opportunity to try some of the others as well.

Meanwhile, if any of you already have used some of these products/services, drop us a note (to ) and tell us what you think.