Excerpts from a keynote address at the Digital Living Room Conference, March, 2008
The term “living room” means many things. It represents the social center of the
home, a multi-purpose space where many family activities come together. One of the
most important of these activities is watching television, and you can trace the
evolution of the living room by examining the history of the TV.
Think back to the old analog television, the clunky brown console in the corner.
That was the analog era, which we call Consumer Electronics 1.0. Over time, other
analog devices such as VCRs were added to make the TV more useful, but the basic
TV experience was analog.
Over about the last 10 years, we have made a major shift to digital television and
a wide range of digital consumer electronics. During this time sound also went digital,
rattling the windows with surround sound and other audio effects. The range of devices
attached to the TV also became digital, providing us with more control over the
TV experience, such as time-shifting with a digital video recorder. We call this
era Consumer Electronics 2.0.
We are now poised to evolve the experience once again. The emerging era of Consumer
Electronics 3.0 will by driven by blending new media choices from the Internet with
traditional TV in the living room, and it will extend the range of content enjoyed
on the TV to an extent we have never seen before.
The emergence of Consumer Electronics 3.0 offers us a new opportunity to think about
the living room as an entertainment hub that serves other rooms in a networked home.
Certain functions such as digital video recording might extend to other rooms. At
the same time, personal content from digital cameras, MP3 players and other devices
around the house can be enjoyed on the big screen TV in the living room.
It is also easy to envision how Consumer Electronics 3.0 can extend the range of
services delivered to viewers in the living room. We can enhance familiar aspects
of TV, such as electronic program guides and video on demand. We can also conceive
of new services coming to the living room, ranging from online gaming and karaoke
to e-learning and social networking.
Consumer Electronics 3.0 also promises to blend value-added Internet usage models
with the TV experience. Imagine a search window that allows you to retrieve additional
information about a program, how you could use built-in communications applications,
such as instant messaging and video chat, while you watch your favorite TV show.
Consumer Electronics 3.0 promises all these capabilities and more, but all of it
needs to fit within the living room, a space which conveys great social and cultural
meaning all over the world. At Intel, we believe that to effectively work on the
promise of Consumer Electronics 3.0, we must understand the living room and the
TV experience.
Studying the TV experience
Intel has studied the consumer TV experience for nearly a decade, employing social
scientists who have lived in more than 600 households in 20 countries. They look
closely at the role of the TV and other consumer electronics and PC devices in the
home, examining the variety of entertainment experiences people enjoy in the living
room, as well as the other ways people entertain themselves. Our social scientists
also look at the types of services that might be offered by a service provider,
including opportunities ranging from educational services to home security and cross-platform
integration.
We have discovered that consumers have complex relationships with their TVs. One
of the important lessons from these cultural studies is that you can tell how important
something is in a culture by the number of different words people have for it. Eskimos
have a huge number of words that mean “snow” for instance, and the same logic applies
to the TV.
Whether viewers describe TV as a technology, an experience or a companion, the emotional value they place on television is deep-seated, powerful and highly imaginative.
People describe TV as an object, a technology, a language, a relationship, an addiction,
an experience, a companion, a time-killer, a necessity, an educator, a child-minder,
a stress-fighter, a lullaby, and a low-maintenance friend. Clearly, this wide range
of words implies a variety of emotional relationships, and they are indicators the
of TV’s importance.
During our research we have also found that the social and cultural practice of
“watching TV” is far more consistent than the underlying technology. The TV experience
is entrenched and cannot just change overnight. It must evolve with the people themselves.
We have also found that around the world users enjoy the passive nature of the experience.
The TV doesn’t demand much from them. A couple clicks of the remote and viewers
can be entertained for hours.
We can reduce our findings to three essential qualities: TV is simple, flexible
and social in nature. This is a very different relationship than what people experience
with their PCs.
The same research shows that people really love the Internet experience. They love
the choice, customization and sheer breadth of content that the Internet brings
them. Sports fans like the combination of Internet and TV, which can help them follow
their favorite teams. Other viewers want more choice of what to watch, and still
others want to have access to more information to enhance their TV viewing experience.
Statistics show that the amount of video content viewed on the Internet has increased
dramatically in the past year. In August of 2007, The Wall Street Journal reported
that US consumers viewed more than 9 billion online videos in a single month, a
jump of 26 percent in a seven month period [source: Comscore Inc. as reported in
The Wall Street Journal, December 11, 2007]. About 25 percent of these videos were
from YouTube alone.
The video content now being watched on the Web includes a growing amount of professionally-produced
entertainment, as over the past two years, broadcasters have plugged into the Internet
video phenomenon. Today almost all popular shows are available, with advertising,
on network websites. NBC reports that it streamed 50 million shows from its site
in October 2007 alone [source: NBC, Oct 2007].
In what has become a communal event for much of the world, 43 percent of 2008 Super
Bowl* viewers said they planned to used their notebook computers or cell phones
to surf the Web [source: CEA and Sports Video Group]. In a recent study, 51 percent
of U.S. teens reported that they are online “usually” or “sometimes” while watching
TV. (Source: Forrester, North American Technographics* Consumer Technology and
Media Youth Online Survey, Q1 2007).
The importance of this phenomenon is more than just re-purposing content from one
medium to another. The momentum for a new TV experience is coming from content producers.
And they are catching up with what consumers already want.
Consumers are demanding the Internet on more than just their PC in the den. In fact,
61 percent of consumers worldwide say want the Internet on their TVs [source: iSuppli
Market Research report 2007].
We need to pay attention to the fact that consumers don’t want PC-style Internet
on their TVs – they want a unique Internet experience. They want the freedom of
choice the Internet can provide and not a PC user interface or a keyboard on their
sofas.
The combination of the TV and the Internet is already happening in meaningful ways,
and consumers are doing it themselves. The usage model might be a notebook on a
viewer’s lap during the Super Bowl. Or it might be a makeshift connection from the
notebook to the TV to watch favorite photos from their private libraries.
Adding to the TV experience
The key question for the consumer electronics industry is not how to connect the
TV to the Internet. That technology already exists. The challenge is how to combine
the two experiences without compromising them. As a starting point, we need to think
in terms of adding familiar Internet capabilities and applications to the TV experience.
Some Internet activities might be added to the TV for added convenience while watching
your favorite shows. For example you might think of monitoring eBay* bids or news
and sports sites. You want this experience to be as flexible as possible, and it
all has to be operated from the remote control in your hand. Your TV user interface
has to accommodate the TV programming you want to see, concurrently with Internet
applications, with simple push-button control.
That is the environment we are working in. Consumer demand is high. And that means
there is a large opportunity to make money from Internet services delivered to the
TV in the living room.
The trend is already underway. The number of CE devices incorporating the Internet
in some way reached 64 million units in 2007 [source: Information Week, Jan. 30,
2007], which represents a 73 percent growth rate over 2006.
Blending these experiences is about more than simply putting components together.
Consumers already have expectations about what a quality TV or Internet experience
feels like, and we cannot compromise either one. This implies several things from
an architectural standpoint. The audio/video subsystem must deliver all the “wow”
factor people expect in the living room, and the Internet applications need to run
just as well as people expect. To do this you need more performance than a TV typically
provides.
Because of the importance of aesthetic considerations in the living room, adding
the Internet to the TV experience must not change the form factor and other physical
attributes of familiar consumer electronics devices. Blending the TV and Internet
experiences is really about striking the right balance of capability, form factor,
and cost.
Intel’s SoC for Internet TV
Intel has been working on this balancing act. We are developing a product code-named
“Canmore,” a system-on-a-chip (SoC) that combines a consumer electronics system
and an Intel® architecture processor core on the same chip. Basically, it’s a way
of selectively integrating various complex functions into
one component, keeping
costs and form factor under control.
We started with a high-performance audio/visual subsystem including hardware decoders
that deliver 1080p high-definition video and 7.1 surround sound. Alongside those
decoders, we placed a high performance Intel architecture core. Intel architecture
is the same processor technology that runs the Internet. All the Internet applications
people love have been painstakingly optimized over many years to run on this architecture.
We expect Canmore to provide the performance to increase the functionality of the
set top box, the TV or any other CE device it powers.
Consumers are ready for this converged experience. The technology is ready. We can
build the devices. The remaining piece is to develop the right business models.
We have all seen some of these new models:
- Joost* offers 20,000 TV shows and more than 400 channels, all of it packaged with
Internet social networking applications such as instant messaging and chat. This
is a free service supported by advertising.
- Hulu* Networks offers TV shows and movies, both old and new. Viewers can share their
favorite clips or embed them on personal websites. Hulu users also have access to
their content through other Web vendors including Yahoo!*, AOL*, Comcast* and others.
None of us know which models will ultimately succeed, but each experiment produces
key insights. New uses for TV screen space, new user interfaces and sources of content
will all contribute to the evolution of advertising models.
Interactivity and advertising
The collection of click-through data can support new advertising models, and the
concept of ad telescoping is gaining popularity. Advertisers can make money as viewers
guide themselves through the process of investigating products. E-commerce sites
can follow the click stream all the way through to purchase decisions.
New TV user interfaces will further enhance interactivity needed for advertising
models. Some user interfaces will include separate content and advertising panes,
the same way the cable-programming guides work today. When a certain product pops
up in a TV show, the ad pane could highlight the product and provide quick and easy
ways to get more information or make a purchase. Like TV programs, ads can be time-shifted
and saved for later viewing.
Software applications and high-performance set top boxes can manage all this interactivity.
Software can manage record keeping so that tiered ad rates can be established. Ad
placements that spark greater consumer interest, as measured by click-through metrics,
may command a higher rate.
All of this experimentation is simply catching up with consumer interest. The Harris/Ensequence
Group recently reported that consumers are quite positive about these interactive
advertising concepts. More than 70 percent of the people surveyed wanted to interact
with sports or reality programming, and 66 percent said they want to interact with
sample commercial advertising.
As we look forward to Internet media and services on TV, we should remember that
we are talking about the living room, the center of the home. Bringing the TV into
the Internet era is not so much a technical challenge as a cultural one.
We will only succeed by enhancing what happens in the living room, not by changing
it. The living room is a social, communal site with overlapping uses. We should
pay close attention to those realities.
Our goal should be to blend the best of the TV experience with the best of the Internet
experience. Our job is to make the TV an even better and richer part of the living
room experience, not replace it.
Kids growing up in the world of Consumer Electronics 3.0 will still kickback on
the sofa, and they will continue to spill popcorn on the floor, just like we once
did. But their TV entertainment experiences will be almost unlimited. We have the
opportunity to create these experiences. All the interests are aligned. Let’s go
build the future together.
All products, dates and programs are based on current expectations and subject to
change without notice.