Sunday, December 04, 2005

4GM: Perception Wars


Ooohhhh, Waid .... gaze upon this and despair.

This spiffy device currently on sale converts everything ... everything you have that flies, swims or crawls like entertainment into MPEG-4's, then either lets you dump those files onto the media of your choice or plays the goodies back itself like a VCR. (as usual, via BoingBoing)

Its top resolution is 640x480, which won't fly on your HD but will muddle through okay on your analog tube, and certainly look spiffy on your laptop or other portable.

Why do I like this stuff? Well, it's part of my 4th Generation Media Theory -- the profitability of future shows will not only depend on mob-dissemination of the products; there will be a direct relationship between the availability of good-but-not-great copies of those shows -- which can therefore be traded more much easily -- and the said profits. The faster we mainstream port-ability, we mainstream in the perception of trade-ability.

Now, this part of the theory will evolve as the nature of "where I download stuff" and "where I watch stuff" converges. The tactics used in that next phase are beginning to reveal themselves -- hmm, let's actually pick this apart for a moment.

There are two pieces of news which show some promise for the evolution of 4GM. First, the FCC has come out in favor of a la carte cable services. This won't change the mechanics of TV distribution all that much, but again moves audience perception along a very important curve for 4GM -- it changes the perception of TV/entertainment from something shoved down a pipline to them into something they choose. And as soon as they begin choosing the material , if only in the broad "what channels do I choose" sense, the nature of their relationship with the media changes. To be blunt, I think that most people won't bother to parse through the basic cable package channel list, but it's another chink in the wall.

The other bit of news is more a rumor(leading us into the tactics discussion mentioned above): the buzz is Apple will make some heavy-duty announcements about moving into the home entertainment business and expanding its downloadable media deals to include other companies than Disney/Touchstone. CBS and NBC are possibilities. Now CBS and NBC already have deals in place with Comcast and DirectTV, respectively, so why the dabbling with Apple? I've written previously that I believe the delivery-systems will be the ultimate winners in the downloadable entertainment wars, but as I mentioned in the same post, Apple basically used (think total pwnage, please) the ABC deal to bootstrap itself into first place in the Perception Wars. If they wield that early advantage ruthlessly ... It'll be a race now, between Apple locking down the "source of all your media" spot in the consumer's mind, and cable's "we are the source, the box is meaningless" destiny.

The wild card here, of course, is the ubiquitousness of gaming platforms among the 18-25 year-olds. For many young men in particular, the XBox is their media hub. I haven't had a chance to play with the media options on the XBox 360 yet (any Penny Arcade-style geniuses, feel free to enlighten us in the comments) but if it's anything like the Windows Media Center software ... ugh. As we all know, Microsoft loses money on every XBox 360 sold. Most industry folk see this as a calculated risk to recoup money on the insanely profitable game software side. However, in the conversations I've had with some evil Microsoft zerglings, the idea that they're trying to get an entire generation to back into Microsoft as their set-top box has been floated as a fairly convincing rationale. We'll see if Microsoft manages to conquer its love of DRM thoroughly enough to become a useful player in the Perception Wars.

23 comments:

Amandarama said...

I really like the idea of the Neuros MPEG4 Recorder, but I wish it had a hard drive instead of needing the cards.

Anonymous said...

The 360, to my understanding, doesn't really have any built in media hub functionality beyond being able to act as a Media Centre Extender out of the box, which was an option on the original Xbox.

IE: if you also have a Windows MCE machine, you can stream content to the 360 over your home network for output to the TV it's attached to.

Otherwise, there doesn't appear to be any means to directly dump video or record TV onto the machine itself yet so, if you're already not big on Windows MCE or unlikely to buy a new computer to run alongside your console, until someone starts hacking it up the 360 doesn't currently bring much new to the table.

Anonymous said...

The neuros looks good to me but I'm unfamiliar with these memory card things. Is this a flash drive or something else?

If I can hook this up to my dvd burner, or my MAC, this will THE xmas gift for me this year.

WOW.

econoclast said...

I'm not sure exactly what you mean when you say "delivery-systems will be the ultimate winners in the downloadable entertainment wars", but it sounds as if you think the prize will go to the hardware rather than the content? I think history shows the opposite to be true. Through all the introductions of new technology, from the LP to the cassette tape to the VCR, CD and DVD, the content producers (albeit shooting themselves in their collective feet every step of the way) have ultimately turned out to be the biggest beneficiaries.

Steve Jobs, of course, should know better than anyone the perils of trying to make money (over the long term) by trying to keep everything proprietary. Apple may be the hero of the day now, but... Apple was the hero in 1979, too, and then look what happened.

As for the reasons game boxes win over PCs. Doesn't that really have more to do with their superior performance than with players' preferences over where/how they play their games?

Anonymous said...

I think this thing is amazing, but then again I'm a big fan of flash memory and have plenty of devices that use them.

Don't forget Sony in this equation John, as they're the stealth version of Apple.

The PSP took a 1% market share of all movies sold in ?September? ?October? with thier UMD (universal mini-disk) format which blows my mind. This is JUST legal movies not to mention anything you might have ripped into a memory card and loaded into your PSP. Because I'm quite certain a rip of Global Frequency wouldn't be about 700 mb formatted to fit widescreen on a PSP which would mean the 1 gig card I keep in it wouldn't possibly have that on there so I can watch it on the bus to work.

As for other things check out the press release on location free John.
http://news.sel.sony.com/pressrelease/4816

A quick wrapup for those who don't want to read Sony jargon. Plug it into your cable/sattelite, plug that into your tv and it sends out to your wireless router so you can log on and watch your TV from the web broser on your PSP, your computer, or your laptop when your on the road, thus elliminateing the box compleatly from the equation.

Lets add on the Playstation 3 coming out next year and kick x-box out for a minute. Built in hub w/ 2 ports to incorporate it into your wireless router, 802.11g wireless, usb, bluetooth built in, and a High Definition DVD player useing Sony's Blue-Ray. If thier smart they'll sell it at a loss as well to try to quickly end the war their having right now with Toshiba Blue-Ray Vs. HD-DVD.

Then in Japan they've already opened downloadable content for the psp (ie per episode) for set amounts of Yen.

If you've been looking at microsoft for answers check out Japan, they're trying to break things wide open for you John.

-Ben

Anonymous said...

Silicon Valley Geek perspective incoming:

dave: so, if you're already not big on Windows MCE or unlikely to buy a new computer to run alongside your console, until someone starts hacking it up the 360 doesn't currently bring much new to the table.

The other half of this story is that the forthcoming (someday, in some form) Windows Vista is supposed to have all the media features of the current MCE integrated into the mainstream operating system.

Trying to use MCE to leverage sales of preconfigured systems from partnered vendors was a miserable strategy, particularly for the type of geek who'd presently be interested in a home media system. I know I don't let an HP or a Dell pick what components go into my box. Hence MCE is not even a consideration at present.

Having Media Center functionality in the baseline OS will mean more boots on the ground, so to speak. Where few people would buy a specialized PC for media upfront, and hence would have no need for an "extender," many more should be willing to try out an inexpensive extender that hangs off features wrapped into the OS they already have, as well as to buy upgrades that make their existing PC more media-friendly once they have the extender.

All this doesn't really matter, though, for three reasons:

First, Microsoft can't design consumer products worth squat. Apple will be first to market with a media center box that regular people want to use, specifically one that doesn't "feel" like a computer trying to live on your TV, and Microsoft will spend a couple of years and a small fortune trying to catch up while claiming to "innovate," having already lost crucial mindshare.

Second, the XBox 360 extender won't find much traction outside approximately the geek subset of Gen Y, because no matter how you dress it up, it's still a game console. The only force more powerful than 18-25 year old male disposable income in this scenario is the wrath of the non-geek girlfriend who has to figure out how to fiddle with the XBox or the computer or, worse, the XBox connected to the computer (both are still seen as "the competition" in some relationships) in order to watch a movie. This counterforce will prevent the XBox-centric media center from becoming much more successful than, say, MythTV, which is pretty fabulous, but in no way destined for mainstream greatness. (obPC disclaimer: Of course, I know plenty of geek women who'd be every bit as into this as the males, but demographics are what they are.)

Third, most troublingly, and in answer to Rogers' implicit final question, the problem with Windows Vista is that Microsoft practically let the MPAA and RIAA design their OS for them. It's a media box, all right, but the 4GM revolution will certainly not be televised via Windows Media. I already avoid Windows Media like the plague, because it's flaky even on its native platform, much less on my Powerbook, and Microsoft's "PlaysForSure" brand for digital music sounds suspiciously similar to such descriptive labels as "Clean Air Act" and "No Child Left Behind." Actually, I plan not to upgrade to Vista on my desktop PC because I like to maintain the illusion that the computer I paid for works for me. If the media and tech industries want my PC to operate like my cable box, solely at their sufferance, then they can rent it to me for $5/mo like my cable company does.

Unknown said...

ounds as if you think the prize will go to the hardware rather than the content? I think history shows the opposite to be true.

Let me clarify, as I do believe content is king in the long run. My subpoint here is that all the networks used to be was a collection of broadcasters -- hence "network" actually, something we rarely stop to think about nowadays. They were the content delivery system: they owned the antennae.

As the networks morphed into creative (insert dry laugh here) forces and cable and satellite became the way most people physically got their entertainment, we're seeing a shift in the power players in media. My argument (for what it's worth) is simply that as people come to perceive some other player in the way they once perceived the networks, they'll settle on either the cable humans or the set-top humans, depending on which of these develpps the most intuitive relationship with the content and the audience.

It's always bad to bet on proprietary tech -- look at TiVo. No, I think Apple's doing a great job not because of the spiffiness fo their hardware design, but because of their insanely smart mindspace tactics.

Anonymous said...

Agreed. I think the real first shot from Apple was the MacMini as part of a set-top box. All the things you could turn it into (DVR, etc.) you currently have to buy separately, but just watch.

I think a major problem is still distribution. I'm still waiting for the broadband revolution- if you think it's come, you're sadly mistaken.

Robert Burke Richardson said...

The profitability of future shows will not only depend on mob-dissemination of the products; there will be a direct relationship between the availability of good-but-not-great copies of those shows -- which can therefore be traded more much easily -- and the said profits. The faster we mainstream port-ability, we mainstream in the perception of trade-ability.

This certainly fits the sort of intuitive picture I get when thinking on these matters, but I must admit I'm stuck as to what the actual mechanisms associated with this might be (or even what they might generally look like). Is anyone thinking along the lines of built-in advertising such as product placement, etc., or would it be another more-or-less unrelated paradigm altogether?

Anonymous said...

The other half of this story is that the forthcoming (someday, in some form) Windows Vista is supposed to have all the media features of the current MCE integrated into the mainstream operating system.

That depends on which version becomes the consumer "mainstream": Basic (no MCE ~= Home), Premium (MCE), or Ultimate (MCE + additional perks like possible free content and system tuning tools).

That answer probably won't be coming until someone starts tossing edition pricing around and vendors start deciding what they can best push on consumers.

Something I forgot earlier: MS is using the new Live Marketplace to push free content (music videos, trailers, and demos) as well as paid content (downloadable games similar to Valve's Steam), around alongside the usual game addons. If they wanted to, they should be able to expand that to sell whatever they were inclined to distribute directly to the 360. But, adding video content would break the MCE link they're trying to play up.

Anonymous said...

That depends on which version becomes the consumer "mainstream": Basic (no MCE ~= Home), Premium (MCE), or Ultimate (MCE + additional perks like possible free content and system tuning tools).

Oh, yeah, I know they're going to offer an entry-level version, and I've no doubt many people will either choose that or have it chosen for them by system vendors looking to keep costs down, much like XP Home today, but the point I was making was that MCE features will be made available to consumers on a non-OEM basis. The necessity of buying an "approved" system has been a major barrier to adoption of MCE, and Vista will remove that barrier.

I think you'll find most of the people who are inclined to experiment with Media Center features are also likely to spring for a higher trim level anyway. I don't think I know any geeks who choose XP Home, for instance. Several features, particularly network features, are too dumbed down.

Still, I don't think it's the solution to set the world on fire.

adi said...

to xanubis, sony totally blew whatever cred they had with the ill-advised, if not totally malicious rootkit maneuver.

i'm afraid that for the next few years, the 4GM that john speaks of will be plagued with irritants like this, some less serious like rhapsody and ITMS or in the case of vista.. much more so.

WRT the hardware question, the entire world sells region-free DVD players in the open, whereas they are oddly missing in the retailers over here. in fact, a stereo system that i bought last year in india played divx and xvid files along with vcds, mp3s, jpegs and any-region dvds( also DVD+/- R/RW), for less than $250.

only if the RI and MP AA's utter fear of their consumers subsides will 4GM be widely disseminated, at least in the US. and i don't see that happening for at least 5-6 more years

econoclast said...

You guys need to form a consultancy and sell these thoughts to Wall St. I don't know what the hell you're talking about half the time, but it sure sounds good enough to fool your average portfolio manager. All you have to do now is figure out which companies are going to benefit most and which ones are going to crash.

Roger Alford said...

Great interview with Soderbergh in Wired about 4GM (though he doesn't call it that, of course). He's releasing his next film, Bubble in all formats at once (except for download, of course -- though he talks about downloading other stuff). He thinks we'll be at simultaneous release within five years because the market demands it.

http://www.wired.com/wired/archive/13.12/soderbergh.html?tw=wn_tophead_5

Anonymous said...

When Madden's football was released I think it to xbox to the next level. The graphics were better and it outsold any other game in the first week of sales.


Charles E. White
http://www.xboxandxbox360.com

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