April 28, 2005
One of TivoBlog.com's bloggers laments the need to delete his favorite shows because he's running out of space and asks for a way out? From the comments to the post, most suggest hacking the Tivo in one fashion or another since there is no standard way of backing up shows unless you have a model with DVD Recording capablity (or purchase Sonic's MyDVD which can burn DVD's of Tivo2Go files). There should be an easier way.
One of my many frustrations with Tivo2go is that it is uni-directional. Uploading files back to the Tivo isn't exactly rocket science as Tivo hackers can attest, and by having the Tivo verify the Tivo2go encryption before uploading, Tivo can ensure that people aren't uploading pirated files. That certainly would help TivoBlog solve his problem.
If that doesn't float Tivo's boat, why not offer an external USB hard drive as an upgrade while coincidentally, create an additional revenue opportunity for Tivo? Those USB ports are just sitting there waiting for something to be plugged into them (besides a network card), and with a few hardware tweaks, they could create a proprietary standard preventing users from using a standard external USB drive.
April 26, 2005
2M MCE Units Shipped
First Impressions: Sonic MyDVD (TivoBlog)
If you use Tivo2Go to download your shows on to a PC and want them burned on to a DVD, Sonic's MyDVD is the only solution that has been licensed to do so. Sonic has a 15 day trial that can be freely downloaded. That's a smart move by Sonic to get people hooked on the functionality.
TivoBlog has some early impressions and a minor misstep during install, but plans to do a full review in the upcoming days. We'll be doing a review as soon as we've cleared our plate of of other "in progress" reviews that have been building up at our TVHarmony underground testing facilities.
April 23, 2005
Back in business
It looks like we've managed to move the website and recover all our old data. If you run into any problems or find the site slower than before, please send us an email so we can correct the problem.
We still have some work to do on the product tracker but we're completely revamping it to support xml and other goodies, so for the time being it has been removed from the site. It should go back up in the near future when we have time to complete the changes.
Thanks again for your continued patience and support.
April 07, 2005
Giving MCE Away Continued
Thomas Hawk has some insightful criticism of my post yesterday where I suggested Microsoft should give MCE away as a free download. It's well worth reading all of Thomas Hawk's comments, but his main contention is that Microsoft would balk at giving it away. Here's the gist:
With regards to giving the software away, although this would be quite exciting, I don't think that Microsoft would go for it. Microsoft LOVES XP and Office. These are cash cows at the company. Despite what they may say, they HATE IE and WMP. IE and WMP were built out of desperation. These were defensive products primarily designed to help lock down the cash cows that are XP and Office. LOVES and HATE are too harsh of words of course but I'm using them here for sensationalistic effect to make a point.
Gates sees the tv thing as really really big. He's put a lot of his own time and energy into pushing it. If you give it away today you set a precedent where MCE cannot really be a cash cow of the future. If you gave away the application that is MCE people would just load it on to their existing XP operating system PCs. Microsoft doesn't want that. They want to sell you an entire second operating system and get the dough that comes along with that. And if MCE is as big as it is in Gate's head (and this is much bigger than the folks at Jupiter would guess) then giving away the software doesn't make sense to him.
I would not disagree that these insights reflect the mood at Microsoft, but let me defend my suggestion that it would be a sound business move by Microsoft and my reasoning behind it. Let's look at the costs and benefits.
To start, let's look at the opportunity cost of giving it away for free. I can almost guarantee that PC vendors pay a premium for bundling MCE 2005 instead of Windows XP, so if MCE were freely downloadable, MS loses that incremental revenue. Second, assuming that it is used as an enticement for users to upgrade to a future version of the OS which contains the features of MCE, there would be a loss of incremental sales of those users who wouldn't upgrade except for the desire to gain those features.
I concede that there is some loss of revenue, but how much is a real question. I'd say that the large percentage of PC vendors who now bundle MCE 2005 would continue to bundle Windows XP, so we're talking about the incremental difference. As far as the potential loss of people unwilling to upgrade to a new OS because "Windows XP plus MCE" is good enough may add up for early upgraders, but over time, I think these sales would be recouped.
If anything, I can see the argument that more users who wouldn't have upgraded to "New OS with MCE" would be more likely to upgrade to "New OS" since they got hooked on the free MCE. The old meme, supported by the Jupiter Research is that you don't really "get" the value of a DVR until you've actually used one. These users would in effect upgrade their system because they like MCE and want increased performance, better compatibility or stability, or additional MCE features that "New OS" required.
Of course there are other costs associated with MCE like the Programming Guide service that MS is likely licensing from a third party. I honestly don't have a feel for how much this costs MS, but I want to throw it into the mix. There are certainly ways to offset this, including the Tivo/DirecTV approach of limiting the Basic free service of only 3 days advanced programming vs a small monthly or single lifetime fee for premium guide data. As unit volumes go up, I would assume that this licensing fee would go down at least by driving more competition into the market to vy for the MS business.
To understand the benefits of giving away the MCE technology, I think you have to look at the value of owning a significant marketshare of the DVR usage. After you get past the basic features of the DVR such as pausing live television and automatic recording of "Desperate Housewives", what you find is that the DVR is really the user interface for your television, and the value for a company to have some limited control over that is very large. In some ways, the DVR is both web browser and web portal combined for home entertainment. As Google and Yahoo found out that there is money to be made in advertising by giving services away for free, scaling up to a large active customer base opens up many doors.
Thomas points out that Windows Media Player has been downloaded by 90 million users and that many at Microsoft give it short shrift compared to Office. That may or may not be appropriate for WMP which has a limited ability to catch advertising revenue, but MCE has the potential of being the Yahoo or Google of the television experience.
Ignoring the Orwellian features that could be implemented in DVR technology that would be of high value to advertisers, there are plenty of advertising and partnership opportunities. Tivo has had a tough time making money from advertisers but undoubtedly it would be significantly easier for it or others to do as the customer base grows. I have to believe Microsoft, with a large installed DVR base, would be more adept and have more marketing power to effectively sell advertising, particularly if it didn't care about future partnerships with MSOs.
I'm not the only one that believes DVR technology can be given away as a profitable business. Look at the MSOs which will give you both the hardware and software with only a small monthy stipend. I doubt the $5 a month rate MSOs like Comcast charge are covering the costs involved, and yet I doubt they are doing it simply for the benefit of mankind. In the MSO case, there are other factors involved such as retaining existing customers and attracting new ones, but I don't think that tells the whole story. I believe they too want to own the television experience.
I don't doubt Thomas Hawk's overall conclusion that it is an unlikely approach for Microsoft to take. Even if they were amenable to the idea, the anti-trust litigation fatigue may be enough to sink the idea. I would continue to argue however, if you want to change the "MSO wins the DVR war" equation, giving away MCE has the best chance of success for Microsoft.
April 06, 2005
Jupiter Research and Microsoft MCE
A few weeks ago, Michael Gartenberg of Jupiter Research created a "blog with us" program allowing a few bloggers access to a Jupiter Research report and asked them to post their feedback. Along with Thomas Hawk (his take on the report here), I asked to take a look at an intriguing report entitled "PC and Standalone Digital Video Recorders, Strategies to cope with an Uncertain Market". After reading the report, I understand why Jupiter Research is a household name to marketers and why their reports are so popular. I'm very thankful to have the opportunity to read this report in particular.
The bottom line of the report, after slicing and dicing the demographics and industry trends of the DVR market, is that there will be significant growth in the DVR market primarily coming from cable and satellite operators who have significant advantages in the marketplace. It's hard to argue against their logic and data, but I have a feeling one company would undoubtedly like to make them look wrong.
By 2009, the report reckons that 80% of DVRs will come from MSOs (cable and satellite operators), 7% from standalone DVRs like Tivo, and 13% from PC-based DVRs like Snapstream's BeyondTV and Microsoft MCE. The question I would ask if I were Bill Gates would be: how many MS executive heads will need to roll before I find a manager who can get me more than 13% of the market?
There is no doubt that as the home becomes more digital, the guys in Redmond cannot be satisfied being a bit player in that market. The DVR is not the only component of the digital home, but it is certainly one of high value. People spend a lot of time in front of their televisions and while how they use the television may change, I don't see any trends that significantly change the amount of time they spend in front of the tube. Many companies have a stake in controlling that viewing experience and the big advertising dollars behind it, so it won't be decided without a fight.
Microsoft already has a multi-pronged approach to become part of the DVR equation. They are working with Comcast and others to provide a platform for set-top boxes. MCE continues to evolve as part of home OS strategy. They invest heavily in DRM technologies as well as other technologies to help move media between devices. Still, I doubt the MSOs will greet Microsoft with open arms and skip merrily down the path together as partners. No company likes a single supplier, particularly one with the muscle of Microsoft.
If you aren't satisfied with the status quo, and 13% isn't very satisfying, what would you do to change the dynamics? Here's what I'd consider:
- Continue to increase the stability MCE 2005 is definitely more stable than its predecessor but it still falls short compared to Tivo. Unlike Tivo which is a closed platform and control the hardware specs, MCE rests on top of Windows and is dependent on the quality of every other installed software and hardware component.
- Give it away for free There is no better deal for a consumer than free, and when competing with cheap cable DVRs, there isn't much room to navigate anyway. In many ways, the DVR is the web browser of the digital home and the interface you use to navigate through your media. Why would Microsoft give away Internet Explorer and Windows Media Player, but hold on tight to MCE? A free download of MCE, if given the right marketing position, would stimulate sales and technology advances for capture cards, perhaps to the point where they would be regularly integrated right into the motherboard of new computers.
- Sub $100 MCE Extenders While I'm sure some people love the purr of a home computer fan, the best solution is to keep your computer out of your living room and have a silent device connected to each of your televisions to communicate with it over a network. With a free MCE download and a $79-$99 MCE extender, you've got a compelling cost effective solution to compete with the MSOs.
- Expand MCE certified devices Installing a PCI video capture card isn't very difficult but USB devices like the Plextor ConvertX are even easier for consumers. A crucial step for transforming MCE from an OEM-only technology into a free download is making it easy to add capture devices, and adding USB driven devices into the mix definitely makes it easier. On the other end of the spectrum, expanding the "PlaysForSure" certification to new devices like the PSP would continue to give Microsoft a leg up on the competition.
The Jupiter Research report was amazingly thorough except for one aspect which I believe will grow over over time. I suspect that my own experience is not unique that as soon as you see the value of a DVR, you want to expand that functionality throughout the house. The Tivo model assumes you'll put a Tivo in each room, something which is great for Tivo but not all that useful for the average household. Multiple MSO set-top boxes also increase cost and complexity for the very same reason.
A better model is to have a single centralized system where everything is recorded and stored and have multiple thin clients connected to each television. My viewing habits don't change when I go from one television to the next, and I don't want to have to look through several DVR boxes to find the programming I want to watch. The MCE / MCE Extender technology is much more in tune with my own needs, and given the extendability of the modern PC where I can throw an additional 200Gig disk or capture card at a reasonable cost, it can expand as my needs increase. While not dramatically changing the dynamics of the market, this multiple DVR scenario changes the cost/benefit calculus over time.
For Microsoft to "own" the digital living room, it needs to have its techology integrated into the DVR. I would assume it would be happy licensing its technology to MSOs or companies like Scientific Atlanta that provide such technologies, but to make the decision easier, it will have try hard to get the adoption rate up and become the de facto standard. Like it's strategy to win on the internet by giving away the browser (albeit with some litigation costs involved), it would have an easier time giving away the MCE technology to anyone willing to use it. It's current OEM strategy doesn't get it there, and while bundling or integrating it into a future version of the OS like Longhorn would be a good reason to upgrade from XP, only God and Bill Gates knows when that will happen. In the meantime, a free download builds momentum, helps get complementary products into the market, and moves MS into the digital home more quickly. Or you could be satisfied with 13%, having Linux the standard for the living room, and be late to the party.
In the next couple days, I'll look at the Gartenberg report from Tivo's perspective, which at the predicted standalone DVR predicted to be 7% of the market, isn't any prettier.
April 05, 2005
Comcast on the PSP
Comcast CEO Brian Roberts quote on the PSP:
"There's going to be a very huge proportion of viewers that isn't watching [TV programming] live, and the industry is going to have to work together to find ways to deal with that."
(Hat Tip: TVPredictions.com)
Sony building iTunes for Movies
"We want to set business models, pricing models, distribution models like (Apple Computer CEO Steve) Jobs did for music, but for the film industry."
Further in the news article:
To that end, Arrieta said, his group plans to digitize Sony Pictures' top 500 films and make them available for the first time in various digital environments within the next year. He said the distribution for films like "Spider-Man 2" will go beyond just Movielink, the video-on-demand joint venture of Sony Pictures and several other major studios, which to date has hosted a limited library of Sony's movies.
For example, Sony plans to sell and make films available in flash memory for mobile phones in the next year, Arrieta said. It also will further develop its digital stores for downloading and owning films on the PC, he said in an interview.
While not specifically mentioned in the article, it also certainly means support for the PSP, which in my mind, is no brainer service for young professionals that travel for business. Software like PSP Video 9 are certainly handy for PSP users, but I'll trade the hassles of converting a DVD to a usable file format and the hours it takes to transcode it for an inexpensive download of a video file that must be watched within a few days.
New Digs at BYOPVR
Build Your Own PVR has created some new digs for their user forum. If you've never checked out the BYOPVR user forums, it's a really great resource for people trying to build their on DVR solution. It's a good community with a lot of friendly and knowledgeable people, and an excellent option for people trying to get their questions answered.