The Home Entertainment Revolution
Consumers have more entertainment choices and sources than ever before – cable, satellite, DVDs, PVRs, game consoles, home servers, PCs, cameras, etc…, but few, if any, of these devices are connected to more than a single TV set. In a networked home, consumers can access and share these interconnected devices and their content from all the TVs in the home.
The home entertainment networking is an emerging market that will experience tremendous growth in the next few years. Significant changes in the entertainment industry are driving this rapid growth. The introduction of digital technologies and the need for entertainment throughout the house are the key factors leading the way.
What has not changed significantly is how homeowners consume their entertainment. While there are many new ways (sources) in which entertainment is brought to the home, the television is the center of entertainment for most families, both today and for the foreseeable future. Consider these facts:
* There are 400 million TVs in the US today.
* Greater than 50% of US homes have three or more TVs.
* The average home has three rooms wired with coax.
* Direct Broadcast Satellite (DBS) achieved one million installations in the first nine months and has exploded to reach an installed base of over 15 million in the US today.
* DVD player adoption is the fastest in consumer electronic product history.
* Personal Video Recorders (PVRs) have fundamentally changed consumer’s viewing behavior by providing the consumer with control. PVRs have flipped traditional TV programming models “upside down”.
Service providers are competing fiercely for the homeowners’ discretionary entertainment dollars:
* Cable TV providers are expanding their service offerings to include analog and digital video programming, pay-per-view movies, interactive TV, music-on-demand, and broadband Internet access.
* DBS service providers are expanding their offerings to include PVR capabilities, bi-directional broadband Internet, free set-top boxes (with service bundles), and free device installation.
* Other media companies are bringing entertainment directly to the home using PCs, Internet ready devices, and streaming audio/video via home servers or residential gateways.
* Many service providers are including PVR capabilities in their set-top boxes (STBs) to digitally store entertainment for later viewing.
The business models of yesterday are collapsing under the weight (expense) of these new technologies. Consider the current situation:
* Consumers have been conditioned for many years to expect their entertainment equipment to be partly or completely subsidized by the service provider.
* New services and capabilities are digital. TVs are predominantly analog. Hence, these TVs eventually will need a STB to view the new services.
* New STBs are essentially multimedia computers; they include expensive MPEG codecs, PVR disk drives, and microprocessors for control.
Service providers are beginning to see the value of multi-room offerings; however, the economics of multiple STBs are painful for both the service provider and the customer. While service providers are forced to raise their service fees for multiple STBs, these fees do not cover the added expense of secondary STBs. These higher fees provide homeowners a reason to shop around and potentially switch service providers. Home entertainment networking technologies enable the rollout of these services in a way that is both valuable to the consumer and offer the service provider lower deployment cost and potential reduction in churn of the subscriber base.
The American Home
Entertainment services in homes are delivered in one direction, down coax cabling to a television or set top box. As new digital video devices are introduced into the home, they are generally connected to a single TV via coax cable or audio video jacks.
In this scenario, the homeowner can view premium channels and services only on the main entertainment center TV; the other TVs receive only the analog cable TV channels (see Figure 1). To get the premium services on the other TVs, the homeowner must purchase and pay monthly fees for additional receivers. Likewise, if the user wishes to enjoy the benefits of the newer devices like Tivo or Ultimate TV, they must again purchase and pay monthly fees. These additional costs for “duplicated devices” are simply unacceptable for consumers, creating an increased demand for the primary TV and frustration with the limitations of the secondary TVs.
Figure 1. Premium Content on One TV
Figure 2. Premium Content on All TVs
With a low cost home entertainment network, these multiple fees are unnecessary. In this scenario, the STB becomes an entertainment resource for the entire house, much like a networked printer or server provides a resource for an entire office. The services provided by the STB can be enjoyed on every TV in the home (see Figure 2), and importantly, service providers can begin to develop new services for the more “targeted” devices within the home.
For the homeowner this means:
* Entertainment services can be enjoyed at every TV.
* The incremental rental fees for extra STBs are reduced or eliminated.
* Expensive duplicated devices are not required.
* New entertainment devices can be added easily to the network.
For the service provider this means:
* Advanced entertainment services can be deployed to many TVs for minimal cost.
* Incremental services like pay-per-view are available and can be ordered from every TV.
* Installation, support, and other operational costs are reduced through elimination of extra STBs.
* Their infrastructure extends to every TV, potentially making it less likely that consumers will switch service providers.
The Case for the Coaxial Cable
In the home today, coax is used for delivery of antenna and cable signals “down stream” to televisions or STBs. Cable passes 97% of all US households (with the average home having over three coax connections). As mentioned above, any duplication of PVR, DVD, satellite or other non-standard TV functionality requires the purchase of additional devices with accompanying monthly service fees. The lack of a low cost alternative has forced the cable companies and satellite providers to provide additional receivers for the home at a price that decreases their margins while increasing the consumers’ costs – truly a lose-lose situation.
As demand to support multiple TVs from a single device grows, use of coaxial wire represents one of several approaches to distributing entertainment throughout the home. Alternatives include phone lines, power lines, structured wiring, and various wireless solutions. Phone line and power line networks are inferior in transmitting broadcast quality video throughout the home, and structured wiring is expensive and difficult to install in a retrofit environment.
Wireless methods have received considerable attention recently. While wireless is acceptable for data, its ability to support video and offer Quality of Service (QoS) at a reasonable cost is limited. Wireless video devices (digital or analog) use unregulated spectrum. Devices that generate wireless signals, such as wireless phones, wireless cameras, microwaves, vacuum cleaners and electric tools, can and do interfere with wireless data and video distribution. Furthermore, the FCC limits the power radiated by wireless video devices, which prevents these devices from overcoming local interference. The home environment creates additional challenges for the wireless methods. For example, people are natural shunts to wireless signals, so simply walking across a room can interfere with signal transmissions. In addition, homes with metal studs or reinforced concrete floors can prevent signals from propagating throughout the house. A neighbor, using their wireless phone, can disrupt the movie being watched in your home over a wireless network. Using unregulated airwaves simply cannot guarantee a QoS for video.
In contrast, coax is an enclosed spectrum, protected by an outer shield. Unlike alternatives, which may transmit a single video stream, coax is capable of transmitting hundreds of simultaneous video streams – even with today’s cable offering (analog and digital), there are still many unused frequencies available on the cable (to probe further, see the HomeCNA Interview in this month’s Home Toys issue).
High-Tech Startup BroadbandHome Leads Industry
BroadbandHome, a start-up company from Research Triangle Park, NC, is an entertainment networking company developing broadband media communications technologies that uses the coax to distribute and manage media throughout the home.
BroadbandHome offers technology for consumer plug & play adapter products that make it possible to access any consumer electronic video device from any TV. Every video device in the house (DVD, STB, PVR, etcâ€¦) can be assigned an unused TV channel and becomes part of one homewide network. For example, if the DVD or XBox is set to channel 90, the homeowner can select channel 90 from any TV in the home to watch and control the DVD or XBox. Similarly, there is no longer a need for multiple STBs, as any TV in the home can access the main STB.
BroadbandHome’s patented technologies use unlicensed and unused frequencies on existing coax wiring in the home. This allows them to simultaneously carry not only video signals, but many more “networks”, including 1394, Ethernet, infrared, telephony, stereo audio, and home control/automation.
Home Entertainment Networking Market
Many envision the route to market for home entrainment networking products to be similar to the home “data” networking products – adapters initially sold by major OEMs / retailers, and with success in the OEM / retail market leading to embedded chip deployments in consumer electronic devices.
New digital devices with local storage capability and entertainment-on-demand features are rapidly gaining penetration, and consumer behavior is changing favorably to an entertainment-on-demand reality! The emerging trend is that consumers WANT entertainment, WHEN they want it, WHERE they want it!
Bobby Bahram is currently President of The UniVerge Group, Inc.; a Home Networking technology consulting firm.