4K to the Rescue?

Monday June 25, 2012 – Greg Scoblete

Like all technology, television needs a "next best thing" - something, anything, to make current technology appear woefully inadequate and drive consumers back into retail to part with more of their hard-earned cash.

Yet after the boost delivered by HDTV and flat panels, the TV industry has struggled to find what that next "thing" could be. Hopes had been pinned on 3D, but despite a well-financed marketing boost from the likes of Sony and Samsung, 3DTV just hasn't taken off (the transparent cynicism of the 3D effort surely hurt: there was no consumer groundswell for the technology, but there was a desire on the part of TV makers to spur another round of upgrades). Sure, millions of 3D TVs are selling, but mostly because manufacturers have made it an impossible feature to avoid if you're buying a TV at a certain price.

Internet-connected "Smart" TVs have been slowly gaining traction, but usage of the full panoply of "smart" features remains modest and isn't a reason consumers make a purchase. And according to DTC research, Smart TV as a feature hasn't been enough to move the shipment needle. In North America, DTC expects TV shipment growth to flat-line through 2014.

Enter 4K. Where 3D failed to excite, 4K is sure to wow. At least, that's the theory. Where high definition delivered 1920 x 1080 pixels to your screen, 4K promises to double that, to 4096 x 2160. The result, if the prototypes I've seen at the Consumer Electronics Show are any indication, is an almost unbelievably crisp image. It actually looks three dimensional - without the clumsy glasses and nauseating sense of warped perspective.

Though 4K is still in its infancy, excitement is building. At the Consumer Electronics Show, LG and Sharp displayed working demos of a 4K TV. Several high-end video cameras from Canon and Red now record in 4K which means 4K movies won't be too far behind.

So is 4K a revolution? The next big thing? Maybe, but don't hold your breath waiting for it to arrive. It will be years, if not a decade or more, before you'll be kicking your flat panel to the curb for its 4K successor.

At the National Association of Broadcasters show, many encoder manufacturers said they saw little demand on the horizon for 4K. The biggest reason is bandwidth. Many were doubtful that that the MPEG-4 compression codec could handle 4K - meaning that the development of a next-generation compression standard would have to arrive to drive 4K adoption. Considering that there are still many broadcasters using MPEG-2 even as MPEG-4 gains traction, the time horizon on 4K-in-the-home and a next-gen codec will be long indeed.

Then there's the viewing experience. As Geoffrey Morrison has painstakingly documented, the human eye cannot even resolve the pixels in a 4K screen unless you're sitting uncomfortably close to the TV or you opt for a set that's over 77-inches large. Suffice it to say that neither option is all that appealing.

4K makes sense in a movie theater, in other words, but not so much in the average home. So with 4K ruled out for the near term, we're left waiting for the next best thing to juice the TV market. Your move, Apple.

Game Consoles May Finally Have a Worthy Competitor

Monday June 18, 2012 – Shelby Cunningham

I frequently hear people talk about how mobile gaming will be the ultimate video game console killer. I never bought into that theory because the type of gaming that occurs on one platform is so different from the other. Big blockbuster console games just do not translate well on the mobile platform, and a lot of console gamers prefer the TV to the PC, so PC gaming isn’t in the position to win the war either.

At E3 I realized we finally have a potential console-killer on the table, and that killer is cloud gaming. Cloud gaming is simply games being streamed through the cloud using real-time encoding straight to your TV (or tablet or phone or numerous other devices).

My first introduction to cloud gaming came from Gaikai, the company that is finally bringing gamers what they’ve always wanted: the ability to try the actual game for free (at home!) before deciding whether or not to purchase it. The free trial lets gamers play the actual game with nothing hampering the experience except a built in time limit, finally introducing sampling to the game market. Gaikai streams trial games on a number of retailer websites now including Best Buy and Walmart. They don’t handle the sales of the games, the retailers have to do that, but they provide the important service of getting a consumer’s hand on the actual game.

Next came my visit with NVIDIA and their GeForce GRID technology, which is being used to power Gaikai’s service. It is also using real-time encoding to push games through to any device that has the ability to stream video. Samsung was the first to announce a service to bring cloud gaming straight to your TV with their appropriately named Samsung Smart TV Cloud Gaming app. If you have a Samsung Smart TV you can play games right from the app on your TV menu, and Samsung will send you a free controller during Beta testing. Samsung indicated the apps will start appearing on TVs soon, no action necessary. Curious TV owners will probably click on the gaming app just to see what it’s all about and end up trying out some free games.

OnLive has also announced that its games will be available for instant streaming over LG Smart TVs and Android tablets, but I wasn’t able to try that out at E3. OnLive has been around for a couple of years streaming games to PCs and TVs (with the help of its own game console), so it already has a user base that should easily follow them into this streamlined generation of cloud gaming that promises smoother gameplay with easier access.

But why do I think these new services have a chance to eventually dethrone game consoles? Because they seem to work! The games I played on TVs and tablets at E3 were smooth as can be without any detectable lag. It felt just like I was playing on a console. And with cloud gaming, you never have to buy the next generation of hardware because the graphics upgrades occur in the server warehouses. And there are server warehouses spread around the world so that you can connect to the nearest one for the best possible experience.

But there are always cons, and there are a couple of big ones here. Internet provider data caps and throttling have been in the news a lot lately as people stream more video and use significantly more data. Also, rural areas don’t receive the speed of bandwidth required to provide a good cloud gaming experience. These services can stream across mobile airspace as well, but those providers are having the same issue with bandwidth use and throttling heavy users.

Another con, I have discovered from talking to gamers, is that it will take a while to pry the physical discs from some hands. Also important to these consumers is the ability to sell a game once they’re finished with it, something that cannot be done with a game living in the cloud. The lack of a resale option could be tempered by lower game pricing from the start since physical media would no longer be in the picture. As far as the desire to own a physical disc, we just have to hope that people get used to their media living in the cloud rather than in their living room.  But if gamers become comfortable with this new world, cloud gaming may have a chance to take over the home gaming industry. That is, of course, if internet and mobile providers can work out bandwidth solutions and play nice with their customers. That’s a whole other blog post. 

A New Digital Camera Market Segment With No Name

Tuesday June 12, 2012 – Stewart Wolpin

What do you call digital cameras that aren't point-and-shoot, but aren't D-SLRs – yet feature interchangeable lenses?

Some folks call these digicam tweeners Compact System Cameras (CSC). Some group them under the more specific yet simpler rubric of "mirrorless." Other want something a bit more jargon-y so combine these two sobriquets into Mirrorless System Camera (MSC). Highlighting their lack of fixed lenses informs the sobriquets Compact Interchangeable Lens Camera (CILC) and Digital Interchangeable Lens Camera (DILC).

Perhaps the most clever but quizzical acronym offered is Electronic Viewfinder Interchangeable Lens (EVIL).

Based on initial market impact, however, whatever-you-call-them seem the opposite of malevolent.

But what is a mirrorless interchangeable lens camera – MILC? Hey, another category name nominee! Since no one acronym has been officially adopted by the industry, I'll use mine.

MILCs consist mainly of two types: Micro Four Thirds (mainly Panasonic, Olympus and Pentax) and APS-C (mainly Fuji and Samsung). Nikon's 1 MILCs use a proprietary CX-format sensor.

But next month, Sony will start selling what it calls a "premium compact," the DSC-RX100, a fixed lens camera but with a larger-than-point-and-shoot/smaller sensor and lots of manual controls.

With a 1-inch CMOS sensor the same size as each of the two MILC Nikon 1 models, the RX100 isn't exactly a point-and-shoot digicam. But at $650, it isn't what we typically think of as a point-and-shoot digicam, either. Yet, it is a mirrorless camera but with a fixed lens, which makes it a point-and-shoot camera.

I think.

One gets the feeling MILCs will come in a lot more blurry flavors going forward.

Got MILC?

According to most digicam industry know-it-alls, D-SLRs represent around 15 percent of the total market. The now catch-all interchangeable lens camera (ILC) category – which encompasses both D-SLRs and MILCs – is expected to rise 2-3 percent this year on the strength of growing MILC sales.

Nearly every major camera maker now has a MILC with the exception of the camera industry's 800-pound paparazzi, Canon, which is rumored to be readying one for the fall.

Geographically, the U.S. has been a bit slow on the MILC uptake. But a recent survey conducted by gadget research site Sortable found 22 percent of U.S. consumers are searching for information on MILCs, compared to 36 percent for all other camera types.

But MILCs are being soaked up in Japan like, well, milk. The Japan Economic Newswire reported retail sales of MILCs nearly doubled in March compared to March 2011.

More optimistic forecasts have MILCs surpassing D-SLR unit sales in around four years.

Camera of necessity

MILC development was practically forced on camera makers by makers of smartphones (which must make Samsung schizophrenic). More and more, consumers are eschewing entry-level digital cameras for the 5 or 8 MP imagers in their smartphones.

But smartphones aren't replacing all photo-taking. It's clear that consumers employ smartphones for in-the-moment candids and videos. But when events are planned – vacations, celebrations, et al – we tend to pull out a real camera to make sure we get the best shots.

MILC marketing is based on the premise that consumers want a camera demonstrably more sophisticated than their smartphone to satisfy their event-based photography needs. Even a mid-level point-and-shoot – now smaller than most new smartphones, which all have much larger screens and far more powerful processors than similarly-priced digital cameras – just won't do.

But consumers also are daunted by the complexity of D-SLRs, which also are deemed to bulky to schlep around while site-seeing.

Hence, the appeal of MILCs, nearly as small as a point-and-shoot but offering definitely-not-a-smartphone differentiating interchangeable lenses.

MILCs also make camera makers happy – more expensive cameras make more profitable cameras. Considering overall falling camera sales as a result of the economy, last year's Thailand flooding and other industry bad news (Kodak's bankruptcy, Olympus' accounting issues, everyone's 2011 earnings disappointments and executive changes, etc.), MILCs may seem like a godsend.

But lingering questions persist about optimistic MILC sales forecasts and the new category's long-term success and affect on the camera business.

For instance, how sustainable is a $600-plus camera business given the inexorable improvement in smartphone imagers? And will MILC sales cannibalize the low-end D-SLR business?

Forgive the pun, but we'll wait and see how the MILC business develops.

Dish Dukes It Out

Monday June 4, 2012 – Greg Scoblete

Right after the Consumer Electronics Show, we asked whether Dish could make the set-top box cool again. That was certainly its intention with the new Hopper and Joey - a home gateway system with the ability to automatically vacuum up a week's worth of prime time programming from all the major networks simultaneously on its 2TB hard drive (a feature dubbed PrimeTime Anytime).

While it's still a bit early to render a verdict on the cool-factor, the early returns seem promising. At a minimum, Dish has certainly done a nice job getting the Hopper noticed - by the lawyers. What triggered this not-so-welcome legal attention was a new feature that Dish announced for the Hopper - 'Auto Hop.'

Briefly, Auto Hop works with the Hopper's PrimeTime Anytime system to eliminate all the commercials on the prime time shows captured by the Hopper. This saves the consumer the time they would presumably take fast-forwarding through those commercials when they watch their DVR'd episodes.

Naturally, TV networks went ape.

Fox, CBS and NBC have now taken Dish to court claiming copyright infringement. In a statement, NBC claimed that “Dish simply does not have the authority to tamper with the ads from broadcast replays on a wholesale basis for its own economic and commercial advantage.” CBS claimed that the Auto Hop feature modified existing network content "in a manner that is unauthorized and illegal." For its part, Dish countered by arguing that Auto Hop is simply a more efficient means of doing what remote controls, VCRs and DVRs have always allowed consumers to do - skip commercials. Moreover, Dish reminded the networks that they receive "hundreds of millions" in retransmission fees from Dish for programming they make available for free over terrestrial airwaves.

As the New York Times noted in its reporting on the legal fracas, the precedent here is ominous for Dish. ReplayTV offered a similar commercial-skipping feature only to be "sued out of existence" by the networks. And those networks have every incentive to fight: a Moody's Investors Services note warned that the television industry faced "broad negative credit implications" if the Auto Hop feature is broadly deployed.

Not bad for a little set-top box.