iTV

Human's brains are predominantly visual. This is the reason why visual presentation of information has much greater impact than either audio or visually abstract, that is writing, presentations. This is also the basic reason why such media as movies and TV have had a revolutionary impact on society during the 20th century.

The internet (iNet) was initially limited primarily to text, that is writing. This limitation was mostly dictated by the limited bandwidth of 2nd half of 20th century telephone lines. A typical page of single space typewritten material requires about 2,000 bytes (2KB) of information. By contrast typical sound tracks require about 1 million bytes (1MB) per minute. TV signals, before the advent of the most recent compression techniques, required 50 MB per minute of transmission.

The very rapid speed improvement of computer chips has resulted in the adoption of very powerful compression algorithms which require only about 3 MB per minute of TV. This, in turn, has caused the iNet to go video in a massive way. In this note we'll call the modern internet based TV iTV. We'll also describe how the different actors & their products and services are evolving. This evolution, as is usually the case when majow enabling factors undergo a significant shift or change, is extremely rapid. Therefore, the material presented below will be subject to a high rate of obsolescence. We will attempt to keep it current.

This note will document the following:

Why & Why Now

The answer to the first question, namely "why internet based TV", is given succinctly & clearly by the first Google video. Which makes the simple point that PCs, smartphones, tablets machines have a very powerful way to access & search the Web, but have a very small screen to interface with people. On the other hand TVs have large and now very large screens, but so far, have not implemented powerful & flexible approaches to search and find video content on the web. Ideally if one could produce a package capable of searching and storing information on par or better than present day computer devices, AND display it on a large TV screen coupled with the best Dolby sound one could offer a truly overwhelming user experience.

The answer to the second question, namely why now. Is simply that only in the last few years chip technology has achieved computational speeds high enough to support very advanced compression algorithms. This, in turn, reduces video bandwidth to reasonable levels thus, making video streaming possible.

The Early Products & Services

At present (Dec 2010 - Mar 2011) these enabling factors have just fallen in place. Therefore a major gold rush is under way with a number of actors striving to occupy & dominate the emerging new opportunity niches. The initial product & services offering have all missed one or more important user requirements. We will, then, begin by listing what are the necessary requirements for both products & platforms (services).

User Interface Devices

The minimal necessary requirements for UI devices are:

Set Top Boxes

Recently a number of "set top boxes" have appeared in the market. These are small electronic devices which are capable to simultaneously connect wirelessly to the internet, and via a variety of wired connections, to a flat screen TV set and, in some cases, to a Dolby or stereo sound system. These boxes can, usually, access several web sites offering a variety of video sources. The web sites being accessed can either be predefined or partly predefined and partly user defined. The web sites so selected are usually referred to as apps (applications). Some of the most recent flat screen TVs come with a built-in "box" of this type.

At present (end of 2010 - beginning 2011) there are at least five such boxes as well as quite a few blue disk players which can also act as wireless iTV boxes. The major iTV boxes are: Logitech's Review, Apple iTV, Boxee Box, Roku, and a number of blue ray driver such as: LG BD570.

As it is typical of early market development, none of these meet all the necessary requirements adequately. Let us look at each of these to highlight how requirements were met. This exercise should suggest an ideal set of critical requirements.

The Ideal iTV Integration Box

The above are typical examples of what exists in this burgeoning new iTV market in early 2011. We fully expect that new versions of such products will come fast & furious. It is interesting, thus, to speculate about the ideal characteristics of an iTV set top box. To begin with it is best, a least for a while (a few years) to consider only set top boxes and NOT electronics integrated with a flat panel TV. In fact, an integrated solution, most likely, will require a relatively short term upgrade via a set top box to stay current with the rapid product evolution that can be expected:

In our opinion the key requirements of an iTV box are:

Business Models(s)

Business models capture the manner that the iTV services are charged for. Business model characteristics are, therefore, important aspects of users' evaluation of iTV boxes and services provided by them. The basic business models are:

It is very likely that the new media of iTV will evolve a similar stratification of business models, as what we have seen in the print media, music, TV & movie industries. Namely, high value content being marketed as PPW. Value being the combination of freshness or timeliness or high artistic or knowledge interest. Most other content being marketed as either FPAYCE or FREE. While it is impossible to precisely predict how such a new market will evolve, It is easy to predict that iTV, as all iNet based industries, will SCALE, that is, it will scale up to dimensions unheard of in traditional content production and distribution industries. On that basis it is easy to predict that those businesses which favor early adoption of FPAYCE & FREE business models will be the big winners of this media revolution. In fact, the inherent scalability of Internet based business allows them to distribute their fixed costs over a much larger volume than traditional businesses, this in turn, allows iNet based businesses to offer a much better value proposition to their customer and thus to gain a major competitive edge over traditional ones.

On the other hand, businesses who will rely on the PPW model, and legalistic defenses, will fail. In particular we expect that ten years from now, or sooner, the landscape of the traditional media companies will be totally changed, with many gone and the remaining ones totally transformed. This will include Apple, unless its management drops its ferocious enforcement of the PPW business model.

Copyright Ugo O. Gagliardi 2010-11