241817-CES
Author
Joel Espelien
Date
January 8, 2013

Ready for another year of CES? Neither am I. The mother-of-all-trade-shows is a rite of passage for PR flacks and industry pundits, with “new” announcements and press releases coming in waves; device after device topping each other in an endless game of technological leapfrog.

At the same time, the video entertainment industry ends up barely affected by all these “new” announcements. Cord cutting? Not so much. Brave new world of a la carte TV programming? Check back next year.

The contrast between the furious innovation of the consumer electronics industry and the Groundhog Day-sameness of the entertainment industry becomes more and more peculiar each year. So what gives? Herein I offer an explanation, based on the notion that not all technological innovations are alike, with pace and relevance being top of the list.

The importance of display technologies, for example, tend to be highly overrated (especially at CES), in general and in terms of their relevance to the CE ecosystem. Whether the improvement is in number of pixels, brightness, size of display, thinness, etc., at the end of the day a screen is a screen. If all it does is connect to a set-top box and show traditional television channels, the fact that the display is as wide as a billboard and as thin as a supermodel does not really change anything for the average consumer. Plain old TV is still plain old TV.

By contrast, software innovations tend to draw yawns at shows like CES. Their show floor appeal is limited, every demo much looks like the rest. The importance of these same software platforms to the average consumer, however, could be enormous. Five years ago Android was a science project with nary a single device on the market. Today, it is the most important software platform on the planet, with well north of one million activations a day and an unbelievable 90% share of the smartphone market in China and more than 50% in the US.

Contrary to US “wisdom,” Android is gaining serious traction among the most important TV manufacturers. TCL, Hisense, and Haier all have Android TVs shipping in China. Hisense and Asus have both announced exports of separate plug-in boxes (similar to the Vizio Co-Star device already in market) based on Android for the US market. LG seems to be the first of the old-guard CE manufacturer to understand the market’s potential, announcing a full line-up of smart TVs based on Android this week in Las Vegas.

The mainstream tech press continues to underestimate (and therefore misunderstand) this phenomenon, falsely focused on US Google TV, which is less important but much easier to write about (Google vs. Microsoft vs. Apple vs. Hollywood: Wrestlemania, tech-style).

Even harder to grasp amid the hubbub and the bright lights of Vegas are changing consumer behaviors with respect to existing net-connected devices. Second-screen behavior — the use of secondary screens like a smartphone or tablet while simultaneously viewing programming on a television – is blowing up. Though the TV has coexisted with these devices for several years, only recently have consumers figured out how to use the strengths of each to complement the other.

First, consumers have figured out that finding content on a tablet is a lot easier than tapping out a search on one of those ridiculous on-screen virtual keyboards we all love to hate. As a result, key navigation tasks are migrating (quickly) from the TV screen to the second screen, where they are more easily and efficiently performed.

Second, screen-sharing technologies like AirPlay, DLNA, WiFi Direct, Miracast now make it possible to easily move video from the small screen to that fancy new living room television without any other hardware whatsoever.

And last, but certainly not least, app stores have become ubiquitous for smartphones and tablets, with smart TVs soon to follow. They are the ultimate case of a boring software collection with truly gigantic implications for the TV ecosystem. Consumers are now empowered to download whatever apps they want. No bundles here. A la carte content, here we come.

So don’t lose heart when you see 57 announcements from CES 2013 about the number of pixels per square inch they can fit onto that new tablet (or was it on the head of pin). Change is coming to the living room. And for those who are already convinced this year’s CES is just more of the same, think of it another way: As the calm before a coming storm.

Joel Espelien is a TDG consultant and lives near Seattle, WA.

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