Despite the fact that DVD players have finally surpassed VCRs in the U.S., industry players see silver disc sales declining.


Well Dr. Waldman, everyone knows!

People are suddenly going to change over and join the video on demand (VoD) and pay-for-view society. What is even better for the PC/CE industry is the fact that they will build out their home networks so they can watch their content anywhere in the house.

(Photo 1) The home network will be ALIVE! so you can watch the show throughout the house according to a Forrester study. That’s right you’ll be able to go from room to room (photo 1) to watch it in the living room (80% of the time), dining room (17%), kitchen (18%) bedroom (32%), study (6%).

VoD is going to be huge (Figure 1).

Something has to be sacrificed in the name of progress so why not DVDs?

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But why then are DVD player sales up?

Why are NetFlix rentals rising, especially in their Long Tail video areas?

Perhaps it is the fact that the content sucks!

Maybe the video is good enough to watch once (rent) but why add it to the library?

Or perhaps it is because consumers have more options and they are becoming more selective.

Buying and holiday gifting of PC/CE gear rose 32% to nearly $160 billion in ’06 according to Strategy Analytics.

Recognizing the fact that consumers want more play anywhere options and more connectivity, more than 30% of the digital home devices sold in ’07 will be wired/wireless and IP enabled.

To maintain their portion of the entertainment spending, Tellywood and cable folks are rushing their DVR and VoD solutions to market. Problem is only a small portion of the viewers take “advantage” of the products/services.

But media adapters – PCs, AV, audio – are gaining in home penetration (Figure 2) because everyone has heard how easy it is to connect all their entertainment devices together and zip content everywhere in the house…the living room, dining room, kitchen, bedroom, study, kids room, even half-way across the country to your notebook computer.

However, even after three-four remakes of Frankenstein since the 1931 classic, the home network is still a bunch of parts forced together into a single being. It still doesn’t look attractive. It moves rather clumsily. Some of the parts are for decoration only…not functioning!

While a few of us have struggled to build these home networks that tie work, study and entertainment together most people still believe it is better not to mess with the natural order of things such as life/death and mashing TV/entertainment consoles/PCs together.

Or they prefer to have the other guy do it for them.

Good choice.

Home network and home entertainment specialists have made a good living putting the parts together for those who are less adventurous. In fact the demand has attracted the interest of big box stores who now offer to put it all together for you for as little as $15K!

Snapping together the four PCs in our house into a wired/wireless network was perhaps the easiest task. No matter how hard the flash people try to convince us that the HD is dead in the PC, not one of us wanted to give up our 250GB drives.

But like most home network installations, we did have to add a 1GB network server. The way things look we’ll probably have to upgrade to 2GB in ’07 (Figure 3) because we’re accumulating content from…everywhere!

What sucks up the storage capacity? Everything!

According to the Pew Internet & American Life Project ( people are spending more time online getting news, buying products, making travel reservations, doing school research, IMing, banking, playing games, sharing files, downloading music/video, hanging out!

BAM!! there goes the network storage.

Despite the RIAA’s and MPAA’s screaming, hollering and lobbying; most of the content you have on your home system and home network server isn’t theirs.

After you subtract out the bloated Windows OS and MS applications, the stuff that consumes most of the hard drive is yours – your personal pictures, personal videos and documents/data/research downloads for work/school. This is followed by digital music and video clips – sports, music TV and questionable quality online video postings. The other sliver of content on the hard drive is movies/TV shows.

In fact, Tellywood is becoming the loose change of the digital living industry. According to Parks Associates most of the money ($229 B) will be spent on broadband and communications services by 2010. This will be followed by PC/CE platform sales of about $35 B. Digital entertainment will account for a paltry $10 B. Ok it isn’t paltry but in the scope of life???

It is becoming so insignificant that Tellywood should be a non-issue to the industry. But they still wield tremendous clout as they threaten to “withhold” their content unless folks fall in line.

So the PC industry – OK MS & Intel – has delivered the ideal everywhere, anywhere, anytime solution.

With typical loving spin the consumer has an organized and play solution Tellywood can live with.

They challenge the consumer by saying…”Dangerous?…Have you never wanted to do anything that was dangerous? Where should we be if no one tried to find out what lies beyond?…I wouldn’t care if they did think I was crazy.”

So consumer’s have been given a gift…a solution that is ideal (Figure 4).

Oh sure to you it looks like four piles of parts that are somehow supposed to work together and become a breathing part of your home/personal entertainment solution.

But just listen to the doctor: – seamless (managed) electronic distribution throughout the home and to your portable devices – local high definition playback with advanced interactivity that works flawlessly across both our CE and PC devices – remote playback in the home with protected streaming – record to disc capabilities for home distribution with full DRM and CA protection for the consumer

Sort of gives you a warm fuzzy doesn’t it? Something you want to take home to show your spouse? Something you want to introduce to the kids? Something you can’t wait to share with your parents, in-laws, neighbors?

Of course that’s just in the house. That’s not on your portable entertainment device you watch, plug into your ears.

More importantly, that’s not the small task of delivering the content to your house.

Of course you can call the cable guy but for some reason we just don’t think he’s all there since he is so content centric.

The better option – ok the lesser of two evils – is WiMAX (Figure 5).

Oh sure at first glance it looks complicated but a living breathing thing that is supposed to do so much for you has to be a little complicated.

But all the parts are there and they told us this sucker could really fly (photo 2).

At some point you may not quite believe the UPnP spin.

Don’t worry. The integrator (doctor) will make house calls.

It may take him a little time though because… “The neck’s broken. The brain is useless. We must find another brain.”

If that doesn’t work…rent the DVD !