With the global consumer electronics industry set to top $1 trillion in 2012, new devices are having a major impact on the TV business. And as the consumer electronics community gathered for the Consumer Electronics Show in Las Vegas last week, several big trends in technology emerged. Here are highlights of top issues coming out of CES that the TV industry should track:
1. Make it simple. Consumers still are complaining about the complexities of accessing content on different devices. Will that change in 2012?
With record crowds of more than 140,000 people, exhibits packed with 20,000 new consumer electronics products and taxi lines that can turn a two-mile trip into a two-hour ordeal, nothing is ever simple at CES.
Even so, the drive to simplify the complexities of the digital world was the most notable trend of this year's CES, with CE manufacturers demonstrating how their TVs, smartphones, tablets and other devices could work together to make more content available on more devices.
"In 2012, all of our devices will be able to communicate and interact with each other to improve the consumer experience," crowed Scott Ahn, LG president and chief technologist, at the company's opening press conference.
Meanwhile the integration of motion sensors and voice recognition programs into game consoles, TV sets and other devices is helping to simplify search and navigation. For example, deals between Microsoft, Verizon and Comcast will allow subscribers who own an Xbox to navigate through massive amounts of content using voice and motion commands.
2. Content is still crucial. How are tech trends making content alliances between CE and TV players even more important?
In 2011, some 50 million tablets worldwide were sold according to the Consumer Electronics Association, which is expecting sales of 96 million units in 2012. Yet very few of the 100 new tablets announced last year at CES were hits, in part because they couldn't compete with the wide array of apps and content being offered by the Apple iPad.
Not surprisingly, all the major CE players were touting new content alliances that would make their tablets, TVs and smartphones much more appealing.
During CES, Microsoft announced a major deal with News Corp. that will make Fox shows available on the Xbox platform to authenticated cable subscribers. Panasonic laid out its plans to help broadcasters produce the Olympics in 3D. LG introduced a smartphone with exclusive HD video from ESPN. And Sony brought actor Will Smith out to Vegas to promote both its products and the content available on its Sony Entertainment Network.
3. Mobility clouds the picture. What will the popularity of mobile devices mean for app development and digital content delivery?
If the closer integration of devices and content is working to simplify the digital world, other trends continue to add complexity.
With smartphones now making up 22% of the global CE business, this year's CES saw the launch of a slew of new smartphones with a number of notable innovations in screen technologies, voice interfaces and other areas that will make them increasingly important for the distribution of digital video.
But measurement of mobile video usage is still in its infancy, the mobile ad market is still tiny, and many of these devices are incompatible, which will make app development even more expensive and complicated than it has been.
4. The battle of the ecosystems. How will the battle between Apple, Google, Microsoft, Amazon and Sony begin to shake out in 2012?
In the short run, another roadblock to simplifying digital delivery of content is the fact that many big companies are trying to solve the problem by creating their own tightly integrated ecosystems of devices and content.
Several major companies are already far down the road of creating compelling combinations of hardware, technology and contentâ€”notably Apple, Sony, Microsoft, Amazon and Googleâ€”and the war between these various ecosystems will be particularly explosive in 2012.
That will make this year a particularly important one for Microsoft. As it continues to expand the content available on its Xbox Live gaming platform, Microsoft will also launch the new Windows 8 operating system that will integrate content from Xbox Live, roll out more mobile phones, and migrate its operating system to tablets.
"2012 will be their coming-out party, to show that yes, they have an ecosystem similar to what Apple, Google and now Amazon are putting together where you can get all your different types of media on all your different devices," notes Brian Cooley, editor at large at CNET.
5. More than just a game. A major example of the escalating eco-system wars between the big CE players is the ongoing battle between the gaming platforms of Microsoft and Sony, both of which are trying to build a much larger digital content eco-system on top of their consoles and other connected devices.
Sony recently completed its acquisition of the mobile phone maker Sony Ericson, which has been renamed Sony Mobile. During CES it announced that it would more tightly integrate its smartphones with the PlayStation platform and other Sony devices and would begin certifying its new smart phones as PlayStation compliant, making them the first phones able to play PlayStation games.
Sony is also building up a large catalog of music, games, e-books, movies and TV programming at Sony Entertainment Network that can be accessed through its various connected devices. Besides the popular internet connected PS3 consoles, Sony executives also noted that about 100 million of their TVs in the market that are connected to the internet.
Sony chairman, CEO and president Howard Stringer forecast that Sony will have 300 million new network connected devices in consumer hands within the next three years and argued that this gives the company a powerful combination of technology and content.
"Sony is unique in having a stake in every part" of the business from content creation to technology, he explained during the Sony press conference.
Meanwhile, Microsoft has been aggressively adding content to its Xbox Live plat form and now has over 40 content partners, with more to come. ESPN and EPIX are already streaming on Xbox and in upcoming months it will add HBO, Fox and Fox News content.
Prior to CES, Microsoft had also inked some landmark partnerships with AT&T's U-verse, Verizon FiOS, and Comcast to make content available to authenticated subscribers.
Other authenticated deals with programmers are likely. In addition to the previously authenticated deal for HBO Go, Microsoft announced at CES announced that News Corp.'s Fox and Fox News will launch authenticated offerings on Xbox Live in 2012.
As a result of these efforts, Microsoft notes that video consumption on Xbox live has increased 140 percent year over year and that 60% of the Xbox Live Gold members were spending at least an hour a day with entertainment.
6. Google returns. Google TVs flopped last year, with Logitech's CEO calling the product's introduction a "mistake of implementation of a gigantic nature."
At this year's CES, however, Google convinced a number of manufacturers-including LG, Samsung, Sony and Vizio-to launch Google TV products.
These featured an improved interface, remote and other features that are likely to improve their prospects.
For example, the expanded Sony line of Google TVs features a smaller controller and voice search, which improves navigation, and closer linkage with new Sony tablets.
That may improve the platforms prospects with consumers shopping for a connected TV, but doesn't solve Google's streaming video content problem. While the platform has signed up a number of programmers, including Turner, to supply streaming apps, U.S. broadcast networks refused last year to make their online content available on Google TVs.
Since then, more broadcasters, notably Fox and ABC have been exploring the idea of making their online content available as part of larger TV Everywhere deals, which may make them even more reluctant to supply free streaming shows the day after they air on broadcast.
Like all TVs, network content would be available on Google TVs via the traditional cable or over-the-air connections. A big question over the next year will be how Google approaches the issue of getting streaming online network content.
If it is willing to work within the confines of these larger cable, satellite and telco deals-as Microsoft has done with Fox--then it may have a better chance of getting broadcasters on board.
Meanwhile Google is also revamping its YouTube offering with the launch of nearly 100 new channels that will make the world's most popular destination for video a little more like a TV service.
Here, business models do seem to be coming together. Young Hollywood CEO RJ Williams notes that they've lined up a major sponsor for their Young Hollywood Network YouTube channel launching January 16 and that the first ads will appear in February.
Williams also sees a strong future for high quality professional talent on the web if companies can learn to produce it on tight budgets. Their programming is shot with four HD Panasonic cameras, which has allowed them to build up a valuable library of 2,000 hours of content.
As people increasingly connect their TVs to the internet, "we believe the content has to be of the highest quality."
7. New ad networks for new devices. CES also highlighted a number of developments in the business models for digital content, both for ad supported offerings and models tied to subscription or electronic sell-through.
As more devices get connected into larger eco-systems of content, that is opening up new opportunities for new types of ad networks.
Google is obviously betting heavily that its Android operating system will allow it to tap into the TV ad business and help grow the nascent mobile ad business and others, such as Microsoft and Apple, are eyeing similar plays.
Meanwhile adRise is reporting rapid growth in advertising on connected TV. The company has integrated its ad solution into more than 150 apps on 11 connected TV platforms and has partnered with all of the top five video ad networks, reports Fahrad Massoudi, the company's CEO.
Such efforts are in their infancy but could become an increasingly important way of monetizing content as more connected TVs are sold. The CEA is predicting a 56% bounce in connected TV sales in 2012.
During CES, progress some progress was also made in the still tiny digital sell-through market, which studios hope will help replace some of the recent declines seen in DVD revenue.
Several major announcements were made during CES by the DECE consortium backing the UltraViolet effort to allow consumers to set up a digital locker in the cloud that would allow them to access copies of movies and TV programs they've purchased on other devices.
Most notably, Amazon has joined the UltraViolet camp, announcing that it had inked a deal with a major unnamed studio to offer UltraViolet rights. It was the group's first deal with a major retailer.
DECE also announced that it would be working with the Digital Entertainment Group to promote UltraViolet with a major advertising campaign in a multimillion dollar campaign in 2012.
Making digital and online streaming rights available as part of larger TV Everywhere deals between programmers and operators was also a major topic.
During a CES Keynote Conversation at the Variety Entertainment Summit, Jonathan Miller, chairman and CEO of News Digital Media and chief digital officer of News Corp noted that TV Everywhere authenticated deals are playing a much larger role in the company's digital content strategy.
With the Xbox deal, Miller noted that they will make content from the Fox broadcast network and Fox News available as part of TV Everywhere deals with operators. Those deals with give subscribers to those operators-none of which have been announced-access the next day to broadcast content streamed to their Xbox Live.
In contrast, the video content from the gaming site IGN and the Wall Street Journal that will also launch on Xbox would not be authenticated.
This was designed, he explained to "both support an existing model [with the authenticated deals for Fox and Fox News] and to create new distribution channels" for some of their other "emerging" video properties.
8. Crunch time for mobile DTV. About 120 stations around the country have now launched mobile digital TV signals. While that is remarkable progress for a relatively new medium, the technology faces some potentially crippling competition this year from the rapidly expanding rollout of 4G cellular services, which the major telcos hope to use to deliver more video.
Mobile DTV proponents note, quite correctly, that mobile DTV broadcast signals offer many technological advantages over 4G and that their one-to-many architecture is much better suited to handling popular video than the one-to-one cellular systems that frequently crash with heavy usage.
This is quite true, but the best technology doesn't always win. If consumers widely adopt 4G service this year, there is the danger that they could simply get used to its limitations, which will likely include usage caps, and mobile DTV could get left behind as an also-ran or niche technology.
The broadcasters backing mobile DTV dispute those worries but they understand the urgency and were out in force at this year's CES to show the progress they were making.
Shortly before the market, the Mobile Content Venture, which is backed by major broadcast groups and networks, signed their first deal with a cellular carrier, MetroPCS, and announced that Samsung would provide the first mobile DTV enabled smartphone. Also during the market MVC was demonstrating some impressing new technology form Belkin that would allow existing Apple iPhone and iPad users to receive mobile DTV signals.
Meanwhile, the Mobile500 Alliance was demonstrating a complete solution for delivering and monetizing mobile DTV signals that it plans to Beta-test in Seattle by the end of the first quarter.
This technology included a Mobile500 application for Apple iOS devices that supports audience measurement, ESG data, channel logos, interstitial ads, banner ads and DVR functionality that would allow users to record content noted Mark Aikin, vice president of advanced technology at Sinclair Television Group, which is a member of the Mobile500 Alliance.
The Sinclair station KVMY-TV in Las Vegas was supplying mobile DTV signals during CES.
Very interestingly the beta test in Seattle will include both live and VOD content.
Fisher's KOMO will be participating in the test and the group plans to announce other stations and content providers closer to launch.
The platform, Aikin notes, would also enable a number of different business models, free, paid or subscription to help create new revenue streams for the participating stations.
The Mobile500 platform uses Expway's mobile DTV middleware and audience measurement solution. At the local TV station, Expway's electronic service guide delivery server powers the mobile DTV head end.
As part of the platform the group is also working with Elgato, which is supplying adapters and dongles for iPads that will run on a TV app supplied by Elgato.
In addition, Siano is supplying a mobile DTV chip.
For the VOD content, the group is working with Opanga Networks and its NetRover Mobile content distribution platforms, which utilizes the customer's 3G, 4G, or Wi-Fi connection to pre-deliver movie and TV content to the memory of the mobile device memory.
9. Beyond HD. CES also saw a number of advances in screen and camera technologies.
On the mobile front, screens with true HD quality are beginning to appear, which will put new pressure on programmers and carriers to improve the quality of video delivery.
During the market, LG announced its first smart phone with a HD display that is capable of showing 720p video.
Improvements in processing power and screen technology encouraged the launch of some new 4K cameras, 4K TV sets and OLED screens.
Drawing on the improved processing power of new chips and better sensors, JVC launched what it is billing as the first handheld 4K camera, the GY-HM150 ProHD camcorder, which is priced at only $4,995, with first product deliveries in March of 2012.
LG also announced what it is billing as the world's largest OLED screen with a new 55 inch set.
This is important because OLED will have a number of applications in broadcast operations as these very high quality screens become larger and less expensive.
Higher resolution screens could also be important for the future of 3D. As 4K TVs, which offer four times the revolution of HD 1080p sets become more available and begin to drop in price, they could also be used to offer glasses free 3D, which requires more pixels than current HD sets are able to deliver.
10. 3D TV. After all the hype around 3D at CES 2010, set sales have been disappointing, which has caused some to write off 3D as at best a niche product.
But set sales were also surprisingly strong in the fourth quarter of 2011, the CEA reports, with 8.9 million units sold worldwide. Based on the recently improving sales climate the association is predicting a 122% jump in sales in 2012.
In announcing its new 3D products, Sony executives stressed that 3D films continue to do extremely well at the box office, racking up $6 billion worldwide in 2011 and that producers are rapidly expanding the range of available 3D content.
Working with their joint venture partners Discovery and IMAX in the 3net network, Sony executives also noted that they were working to expand the range of content and have already build up what they are billing as "the world's largest library of original 3D programming."
Other programmers have also be ramping up their 3D production, including ESPN, which broadcasting the BSC Championship game in 3D to CES attendees in Las Vegas.
Also at CES, Panasonic, NBC and Olympic Broadcasting Services announced they would work together to offer 3D coverage of the Olympics to U.S. pay TV providers.
Overall more than 200 hours of 3D telecasts would be produced, making the London 2012 Olympics the first games to get the 3D treatment.
Whether that will spark significant consumer interest remains to be seen. A November 2011 survey from Leichtman Research Group found that less than 3% of all US households had an HDTV set that is 3D-capable and many of those who do have a 3D set were not using it. About 45% of 3D set owners do not watch any content in 3D.
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