Video leads parade at Consumer Electronics Show
A year ago, CBS President Leslie Moonves came to the Consumer Electronics Show to trumpet CBS’ new video alliance with Google.
Now, the network giant has similar deals with Yahoo, Amazon, Apple and Comcast - all of them letting consumers watch reruns of hit TV shows whenever they want and where they want.
And Moonves is back in Las Vegas to address attendees at this year’s CES, in a major speech touting the happy meeting of old media and new technology.
“We used to think of CES as this cool place with all this technology,” says Moonves. “Little did we realize that much of our future is based on this technology. So much has changed.”
About 140,000 people crowd the cavernous showrooms here to make deals and check out the latest in consumer electronics, one of tech’s most lucrative and fastest-growing sectors. Holiday electronics sales jumped 6.5% in 2006 from 2005, says researcher NPD. The Consumer Electronics Association, the trade group behind CES, on Saturday said it expects wholesale sales to hit a record $155 billion in 2007, up about 7% from 2006.
And the industry is expected to continue to grow, thanks to innovative devices that can communicate with each other. Among products showcased this week, there will be an MP3 player that connects wirelessly to headphones. DVD recorders that can play both competing formats of next-generation DVD discs. And most of all: TVs that show video from the Internet.
“Call it the Consumer Entertainment Show,” says Mike Fasulo, Sony Electronics’ chief marketing officer.
Sony, Hewlett-Packard, Yahoo, DirecTV, cable box manufacturer Digeo and Apple (at its own Macworld in San Francisco) will all be showing off ways to watch Internet content on big-screen TVs.
Verizon is riding the video wave on the tiniest of screens: It announced on Sunday a major plan to bring multichannel, broadcast-quality TV to cellphones, beginning in the next few months.
Competitors Sprint and Cingular currently offer television viewing for cellphones, but mostly news and sports. Verizon has prime-time hits from CBS, NBC and Fox. “This is unlike anything anyone’s ever seen on a phone,” says John Harrobin, Verizon’s vice president of digital media and marketing.
What’s clear: Video is leading the parade.
“The days of old media and new media are over,” says Moonves, who will be addressing CES attendees Tuesday. “Now, it’s just media.”
Hopping among devices
Connectivity - long the holy grail of the electronics industry - liberates movies, music and other content. No longer must a movie be watched only on a TV set, or a song played on a stereo. Now, programming can easily hop from device to device to be enjoyed in countless new ways.
For electronics makers, that’s a huge opportunity to sell new products and revitalize old brands. Industry luminaries such as Dell Chairman Michael Dell and Motorola CEO Ed Zander are giving keynote speeches at the show.
It’s also an opportunity for content makers, who have new markets to sell programming. For the first time, Walt Disney CEO Robert Iger and CBS’ Moonves (who made a brief appearance at the 2006 show) will also take the podium.
“It’s a stampede,” says Josh Bernoff, an analyst at Forrester Research. “I’ve never seen so many companies chasing an idea. This is the story of CES.”
In many ways, the stampede began with the blockbuster success of video-sharing site YouTube - a year ago just a Silicon Valley dream run by three former PayPal employees in offices above a pizzeria. By fall, so many millions had fallen in love with watching video online that Google bought the company for $1.7 billion.
“You sell a company for over $1 billion, and folks tend to take notice,” says independent analyst Rob Enderle. “They realized there was a real market here, and maybe it was much bigger than they initially thought.” Here’s evidence of the trend:
Watching Internet on TV presents a series of challenges. Video must be viewed in small windows, due to the general substandard picture quality, and connections often drop off. But industry analysts expect that to change quickly.
Microsoft co-founder Paul Allen, whose Digeo makes state-of-the-art set-top boxes for cable TV customers, vows to ride the TV-Internet revolution by going direct to the entire country.
Digeo’s Moxi box - nominated for TV’s Emmy Award three times in the technology and engineering category - is a TiVo-like digital video recorder that connects with PCs and the Internet to bring all home media under one box.
Moxi is offered by eight cable companies. But Digeo hopes to expand, since the Federal Communications Commission passed a law that goes into effect on July 1 allowing consumers to choose their cable box.
Bernoff says Digeo has challenges trying to catch up to TiVo. He says companies with the best chance of success are those with devices already in millions of homes, such as DirecTV and Microsoft’s Xbox video game system. (Microsoft in 2006 began selling downloads of movies and TV shows for the Xbox.)
The networked car
Other types of electronics are hooking up, too.
Microsoft on Sunday was set to introduce Sync - networked-car technology - through an alliance with Ford Motor. Sync will use Bluetooth wireless to ensure that all in-car devices - such as navigation systems, entertainment centers and wireless phones - work effortlessly. Ford will begin to roll it out in new models later this year.
And consider the SwizzleStik, a little gadget making its debut at the show. The portable storage device from Silicon Valley’s Spark Technology plugs into both PCs and cellphones. It’s used for tasks such as transferring a digital song to a phone to use as a ring tone.
But innovative products are creating problems. Movie, music and other entertainment companies are worried that electronics that connect to one another and to the Internet make it too easy to pirate content.
For example, SwizzleStik’s designers didn’t worry much about whether songs and other content their customers would be transferring were obtained legally. “It was in the back of our minds, but (we focused on) what the customer needed first and foremost,” says Randy Lee, a vice president at Spark Technology.
Trade groups representing record and movie companies want to change this. They’re filing lawsuits and pushing for laws that would put limits on unfettered connectivity to protect content.
Consumer electronics “are great devices. We love them as much as everybody else. But it’s in everybody’s best interest to figure out how to pay creators,” says Cary Sherman, president of the Recording Industry Association of America.
Electronics makers such as Spark don’t disagree but say they’re unwilling to implement safeguards that sacrifice usability. Many anti-piracy protections rob consumers of the right to legitimately use entertainment they’ve paid for, says Fred von Lohmann, an attorney at the Electronic Frontier Foundation, an advocacy group.
For example, it’s illegal to make a digital copy of a copy-protected DVD, even if it’s just for backup, he says. And TV companies don’t want consumers to be able to record a copy of a TV show on a DVR, then transfer it to another DVR or a portable device without paying a fee, he says.
Some companies are taking steps toward a compromise. At CES, software maker Sonic Solutions will show off Qflix, a program that allows consumers to burn copy-protected DVDs from downloads. Sonic, maker of the popular Roxio CD-burning software, has signed up studio Warner Bros. and says it will announce more studios shortly.
Such steps will help, but confusion will likely continue for years as legal parameters are hashed out in courts and Congress, von Lohmann says.
Some in the industry are optimistic that a compromise will happen before long. If secure, easy-to-use copy-protection software hits the market, it will be embraced rather quickly, says Eric Kim, Intel’s head of digital home.
Regardless, the uneasy partnership between entertainment and electronics companies is expected to continue, says electronics analyst Ross Rubin at researcher NPD. After all, the two industries need each other to thrive, he says. Electronic gadgets aren’t much fun if there’s nothing to play on them, and entertainment is no good if nobody’s watching, he says.
By Jefferson Graham and Michelle Kessler, USA TODAY
Tags: Video
