Connections/Digital Living Showcase – Boxee, a disrupter, FiOS, a tease

04Jun09

Picture this, you walk through shimmery streamers and thousands of colorful balloons drop. Enticing expo booths beckon you to spin the wheel of wonder to win a flying monkey and purple light stick, and there is coconut shrimp galore.  That was Tu 6/2 the opening night of Connections: The Digital Living Showcase and Conference which wrapped today.  This mini-CES produced by Parks Associates and the CEA, staged in the plush Santa Clara Convention Center, drew an international crowd of about 550.  Most in the industry were represented except ZillionTV, Roku and Sezmi, and the only elements that would have made the event more alive would have been an announced Twitter hashtag (I’m the only one that seemed to know about #con09), and sofa lounges showing off connected TVs featuring Y! widgets, Boxee apps, integrated XBox/Wii/PS, motion control remotes, and T-commerce programming.  Oh well, perhaps next year.  Everyone seemed to be having a good time, and after five attempts at the wheel, PlumChoice gave me the monkey prize.  

The sessions were rich with riffs like “Why YouTube XL and not YouTube TV”, and “ATT, with 47% of sales from iPhone, tell us how much you really, really love Apple.”  Lots of suits laughing.  The most surprising nuggets came from:

FiOS – What a tease!
Joe Ambeault of Verizon could sell air, he’s that good.  He took us back to 1983 with MASH‘s 60.2 rating/77 share, through the Who Shot JR Dallas days, onto 1989 with Roseanne’s 25.7 rating/38 share as a tipping point, to 1999 with Millionaire‘s 29 share, to today where  Idol stands alone with its 30mm viewers and the rest of the best pull in a 9.1 rating/24 share. “IP disrupts everything in its path, now the genie is out of the bottle and the consumer is the key driver.  On-demand now accounts for 20% of the viewing and is expected to rise to 45% by 2013” he went on:  “Over 90% of what the post office moves is junk mail. We can supplant the direct mail spend and make the $50-60B TV ad market that much bigger.”  He exclaimed, “Content is portable.  Media buys need to move from time slot to consumer, we need to license to the consumer not device, CPMs will go up with geo and demo targeting, and there will be a shift in focus from Clios to ROI.”  Finally he dazzled the audience with the fantastic discovery features of FiOS:  “Its not a matter of getting to 100,000 titles, its a matter of getting it all.  If we don’t have it all, then we don’t have enough!”  Hand after hand shot up asking how can I get FiOS in my market.  He answered bluntly, “you can’t and I’m not going there (alluding perhaps to MSO monopolization), but consider this, Dallas has FiOS and is a nice place to live.”  

Boxee and Mark Cuban:  Thumbfight
Boxee in the house to shake things up.  What started out as a mild-mannered workshop with Paramount, ActiveVideo, Cisco and Boxee turned into a riotous call to action.  Cisco was at the podium presenting a ppt deck comparing the installed bases of iPhone, 10mm, Broadband, 19mm, Wii, 35mm, iPod 163mm, Cisco, 168mm.  Making the point that not only is Cisco ubiquitous @home, but with Flip, Cisco is even hip.  No longer just a wallflower enterprise brand, its Cisco at the Disco in the consumer space making it possible to monetize both sides of the B2B2C chain.  ActiveVideo then spoke about the B2B2B2C chain, and Avner Ronen of Boxee burst out laughing: “How many Bs??  The more Bs in the chain, the less innovation we’re going to see.”  Then Avner was asked about the blog battles with Mark Cuban, he replied  “We get inspiration from Mark Cuban and he makes great points.  But he is wrong about subscription and this is why.  If you want to look at what the future holds for television, look at what the technology enables and what the user wants, not what companies dictate.”  Then Avner extended an invite to Mark Cuban to join him onstage. (Hopefully, we’ll have something soon on the Fall slate for the Commonwealth Club).  In the meantime, you can enjoy Avner and gang at the Boxee developers challenge on Tu 6/23 6-9pm at Mezzanine, 444 Jessie, 4-5th/Mission-Market in San Francisco, just down the block from the Social Gaming Summit at the Hotel Nikko.  

AppsWorld:  Ho Ho Ho
It certainly seems like a good time to launch AppsWorld, a cross-platform developers cookbook/camp/lovefest to launch the economies around the emerging platforms:  iPhone, Facebook, Android, Ovi, Blackberry, Y!, Boxee, MySpace, XBLA..  The creative economy is resurrecting commerce around these marketplaces, and now its all about apps.  But O’Reilly wasn’t at Connections and I just made up AppsWorld.  So far there are only cookbooks for iPhone and Facebook app development, but likely there is one in the works for Y! too. Yahoo! Connected TV with its widget channel presents a whole new world of monetization for indie coders. So check out the SDK is at http://connectedtv.yahoo.com/developer.  With all the Connected TVs coming to market this fall, the more apps, the better.  Its going to be happier holidays than last year for sure.  I asked the panel to tell us about the brands, the models about to splash onto the scene, and Vizio announced that its Y! Connected TV will debuts at Best Buy 9/9/09 with sub-$500s to follow. 

AdMob:  Got Numbers
As a fan of the Twitterfon iPhone app who has clicked to download apps advertised via AdMob, I find AdMob’s contextual advertising right on, so I had to ask GM, Jason Spero about CPMs and CTRs, and was blown away by the numbers.  CTR 1.5%-2%, 100x higher than web, $11-$12 CPMs, varies for test buys, CPCs at $.13.   The other panelists remained quiet because noone ever gives out numbers eventhough privately rate cards are readily available.  What’s to hide except the fact that everything is negotiable.  Kudos to AdMob’s transparency which was audibly appreciated by the audience.

DECE:  Not a Four Letter Word
DECE sounds scary like RIAA, the site is cloaked in black and members meet monthly, always in different locations to work on DRM interoperability.  So to lighten things up Mitch Singer, Sony CTO and DECE President is hitting the road to introduce DECE, the standards body for the Digital Entertainment Content Ecosystem, and its mission of making EST of film, tv and other digital content as ubiquitous and compatible as DVD. Members include Alcatel-Lucent, Best Buy, Cisco, Comcast, Fox, HP, Intel, Lionsgate, Microsoft, NBCU, Viacom/Paramount, Philips, Sony, Toshiba, VeriSign, WB, .. pretty much all of the studios, big box retailers, service providers and CE players except Apple, Amazon, and Nintendo.  The goal is to end the fragmented mess that has frustrated the consumer and stifled the growth of commerce, even the playing field to foster innovation, and create a buy once, use anywhere world of content.  Here are some highlights of what Mitch said: 

Home entertainment a $50B business.  The industry has seen record-breaking box office numbers ending 2008 with $28B.  Growth of HDTV can have a profound effect on Home Entertainment, currently at 65.7mm US households, and 78.6mm Western European households.  DVD sales might have fallen last year ($2.26B units 2008), but Blu-ray shows promising growth (37.4mm units 2008).  “Disruption must be viewed as an opportunity rather than a threat.  Viewing disruptive innovation as a threat forces the incumbent to attack it and go against the flow rather than seek out market opportunities …. Good companies don’t fail because of radical new technologies, they fail because of the companies reactions to those new ideas.”  – Clayton Christensen’s The Innovator’s Dilemma (available on Kindle for iPhone). 

Millennials – b0rn 1977 – 1996 or something like that.  The Next Greatest Generation (per their parents).  Confident in their ability to succeed. Smarter than previous generations according to their aptitude scores.(Gen X had declining SATs year after year, Gen Y increasing SATs year after year.) Collaborative team players who think in groups.  They like their parents. They’re optimistic about their place in the world.  They aren’t rebellious and tend to follow authority.  They are social networkers who are eager to share news with friends.  The Adult Millennial Value Pyramid:  Cell Phones, Laptops, Desktops already surpass TV, devices they can’t live without:  cell phones, laptops/desktops, then TV, game console, smartphone, then digital music player, DVR and digital video player, then satellite radio and handheld gaming device.  They are a plurality today at 59mm, a majority by 2010, and 18-49 domination by 2014 at 86mm.  Important to consider how Millennials consume content when designing products.

Entertainment 2.0 is about ubiquitous content availability through cloud services, more ways to acquire and use content, seamless integration between digital and physical media.  DECE was formed to define new industry standard to enable a new consume experience for digital media with enhanced digital flexibility and content accessibility, establish a framework and deploy a back-end service that facilitates compatibility across multiple digital distribution services and devices.  The problem with EST today is that silo services limit consumers into a single device platform and a single retailer for purchasing content, every additional silo further fragments the market, its another format war but with online services, content delivered from a single network service to a single device platform lowers the consumer’s perceived value of the ecosystem.  Key attributes of DECE – domain usage model, rights locker, multi-format support, remote access, sharing within a family, export to DVD.  A new standard for digital distribution will enable consumer choice resulting in a mass market for digital content, devices and services.  

Most memorable question was one about ATMs serving as content kiosks. Most memorable answer was Mitch responding “I don’t know what’s going to happen in the next 6 months, let alone the next three years.”  No video from the keynote but Ken Pyle of Viodi has an interview with Mitch below:

http://www.viodi.tv/2009/06/05/hope-for-a-digital-media-distribution-standard/ 

http://www.viodi.tv/2009/06/05/network-video-and-more-on-the-same-cable-hdmi-14/ 

http://www.viodi.tv/2009/06/05/a-new-twist-on-wireless-home-networking/

http://www.viodi.tv/2009/06/05/plumchoice-at-connections-2009/

Several other events taking place this week include NARIP tonight at Pyramind in San Francisco and over the weekend PGA’s Produced By conference with James Cameron, Norman Lear, Roger Corman…at Sony Studios in LA.  That event just sold out.  Of course Monday kicks off another exciting week with WWDC leading the way.  Phil Schiller delivers the keynote at 10am and the only promise made is SnowLeopard.  If Steve Jobs and/or a new iPhone make an appearance, even if there is a video capture software upgrade, Apple will return to $168 and better. Its pennies away from $145, and it was just at $80 weeks ago.  So hang on to your hats and enjoy the ride. We’ll be covering all of it as it breaks.

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Tags: AdMob, Alcatel-Lucent, AOL, Apple, Atari, ATT, Best Buy, Boxee, CEA, Cisco, Comcast, Connections, DECE, FiOS, Fox, HP, Intel, iPhone, Lionsgate, Mark Cuban, Microsoft, NARIP, NBCU, Nolan Bushnell, Paramount, Parks Associates, Philips, PlumChoice, Roku, Sezmi, Sony, TiVo, Toshiba, VeriSign, Viacom/Paramount, Vizio, WB, WWDC, Yahoo! Widget Channel, YouTube, ZillionTV