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WITI TECHNOLOGY
The Consumer Electronics Industry Opened Pandora's Box but the Contents are Sure Being Stubborn
For as long as I can remember, the CES mantra has been "smaller, cheaper, faster". Handheld computers, cell phones, digital entertainment devices, personal video recorders, car entertainment systems, HDTVs, they're all proof points (though smaller doesn't apply to HDTV). But here's the catch. The best device in the world isn't worth the chips it runs on unless the content is there. And that lesson has not been lost on the hardware manufacturers. Look at movies. Originally you went to see them in theatres, next you got to rent videotapes and DVDs. In each case, the hardware was specific to the playback and the content was controlled. As you walked the floors of CES this year you saw hundreds of different devices that all let you watch movies. But because the movies are now in a digital format, you can stream them over the Internet, download them onto your hardrive, and store them on your personal digital video recorder. You can watch a movie on your cell phone, your wrist watch, or at some cybercafé. You can carry them on a fingernail sized SD card, a flash memory keychain or a burned DVD. The movie studios are losing control of the content/hardware marriage. Revenues are slipping as customers feel entitled to watch movies how they want to, where they want to, and when they want to. HDTV, the new high definition television, is available now and grows more affordable each day. The government even legislated a date of 2006 for TV broadcasters to "go digital" and put analog to rest. Yet most analysts agree this deadline is not anywhere near reality. And it's not because the hardware is lagging. The holdup is in the content and delivery systems. It's hard to justify buying a $3,000 TV set when you then have to pay a HDTV provider and even then, there's not much HDTV content you can watch. But don't shed tears for the hardware manufacturers; they brought their problems on themselves. Hardware has always been about new ways to distribute content. VCRs made it possible to see movies at home. Cassette players made it possible to leave the vinyl behind. Today, DVD burners, MP3 players, personal video recorders, and personal multimedia players are doing the same thing - letting us view content in new ways. The big difference is that the movie industry and the music industry clearly had a new revenue stream with VCRs and cassette players. It's not quite as clear with the new digital consumer devices. At the same time, our lives have changed remarkably as we control our media viewing. TiVO owners told TV broadcasters that they'd just say no to commercials. Peer to peer networks and an MP3 player sent a message to the recording industry that music was meant to be copied and shared freely. Apple's slogan "rip, mix, burn" which promoted making your own content CDs was an open invitation to take what you want and leave the rest. The hardware industry opened Pandora's box by creating the tools to "rip" the content industry. If content providers were the "gatekeepers" then the hardware industry was the gatecrasher. And like most gatecrashers, I suspect there wasn't much thought about the long term effect. The effects have already been seen, though, in a generation who freely share their digital content and haven't spent much time thinking about ownership and intellectual property. What would you do if you were a content provider? Well, you might sue people as the MPAA and RIAA have. Or you might hold back on embracing the digital world of content because you knew you'd lose your shirt. What would you do if you were a content distributor? The cable companies, broadcast networks, the cellular providers, satellite transmitters, and the radio stations are all scrambling to figure out how to make a buck by providing access to your favorite content from your hardware. To give consumers what they want in a digital world is going to involve a conversation between four different worlds: hardware manufacturers, content providers, distribution platforms and legislators. They're all going to need to relinquish a bit of control and, at the same time, create a system of digital rights management that is not an impediment to their customers. Pandora's box is open. The new generation of consumer electronics devices that we saw at CES this past January opened the box. Now, if they really want consumers to start using these devices, it's time to let the content out so that we can fully enjoy.
What is your point of view? Please post your thoughts on the discussion board.
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Every January, in what's become a New Year's ritual, hundreds of thousands of visitors from all over the world converge on Las Vegas to see the latest gadgets at the Consumer Electronics Show (CES) in Las Vegas. But this year was different. It was the year that it became clear that innovation would come to a standstill unless content providers, distribution platforms and policy-makers were all willing to play ball, too.