I’ve picked up some more from James Dyson on TechCruch. This time he seems to have fewer anger issues but in the video clip it’s a bit hard to hear him at times. I did make out that he is worried by the mismatch in engineering graduates in the West vs. the East. He said there are now 600,000 new engineering graduates in China and 400,000 in India per year. Both these figures are on the increase while there are only 70,000 new engineering graduates in the US and the number is going down. James reckons we need engineers if we are going to stand any chance of increasing prosperity and solving some of the big issues we face such as global warming and energy shortages.

James was also interviewed about the iPhone and the Blackberry. He loved the look of the iPhone but disliked the screen functions and he hated the Blackberry look but loved it’s function. If you could somehow combine the two devices you might have a really good product.

I recently picked up an article on the knowledge at Wharton website about the topic of bridging the chasm between the computer and TV. There are a number of players targeting this transition and what is clear is that all three elements of the “sweet spot” strategy are being explored, business, market and technology. Companies such as Netfix and Amazon.com are looking at their current businesses and have realised that the need to start looking to the next generation of media format. They both see potential for increased revenues and profits through the switch from DVD rental by mail to digital media direct to consumers homes. Other players, such as HP, are looking at the opportunity from the hardware and technology side. On June 10th Hewlett-Packard unveiled a $349 digital receiver that brings video and audio content from the PC or Internet to any high-definition television set.

 

In May Netflix unveiled a $99 set-top box that directs movies and TV shows from the Internet to its subscribers’ TVs. Meanwhile, Apple has been building out the services connected to its Apple TV product, signing a deal with HBO in May to bring shows like “The Sopranos” from its iTunes store to widescreen televisions. Companies such as Netflix, Disney, Amazon.com and Apple are expanding the digital distribution of media.

Right now there is some serious debate going on about the likelihood of convergence of the compute, on-lin digital media and the TV. David Hsu, a management professor at Wharton, says “Theoretically, it should be the case that there’s a lot of convergence between the PC and TV and content evolution. But on the demand side, it’s unclear what consumers want.” Hsu thinks the solution is to try many different business models. Wharton marketing professor Peter Fader says the digital living room analogy is off-base in many respects. “The whole digital living room idea misses the point. A nice analogy is, ‘What am I going to do for dinner tonight?’ I can go to a fancy restaurant. Or just get a burrito. It’s all about convenience and control. The microwave burrito is watching video on your PC. The fancy restaurant is the big screen in your living room and the immersive experience. You’ll do both.” There seems to be evidence of some serious techno-push as well. “Everyone is too beholden to their boxes,” Fader notes. “Companies are a little more fixated on the technology and gadgets than the services when they should instead be focusing on making it easier to consume content on any device.” At the moment a lot of the services being offered are closed, that is you buy the box and you only get one specific content. People seem to be following the Apple iPod/iTunes model. One reason these digital living room technologies are closed to each other is because companies are trying to reproduce Apple’s so-called “halo effect,” where one device or service stokes demand for other products from the same company. There is still a lot of experimentation going on in the area as the different companies focus on find the “sweet spot”.

“The value for companies will emerge when they come up with something that cannot be replicated by Comcasts in the world. Netflix has made some strides here by allowing subscribers to manage their movie queue online. But I would say it has to go beyond that,” says Hsu.

For now, however, companies targeting the digital living room are more often than not emulating what the cable companies already do. The more successful models are subscription based or pay-per-view and involve a set-top box. “The rationale for all these set-top boxes is that consumers want to interact with devices in a way they already know,” Hsu notes.

Indeed, one of the biggest hurdles for these new entertainment delivery business models is consumer behavior, he adds. Consumers are not used to combining the functions of a TV and PC and sharing content between them. Hsu expects more innovation and experimentation to come. “Technology is getting sophisticated and there will be some meld of the PC, TV and Internet. But what’s going to get people to switch over to interacting with these appliances and machines? There will have to be something that’s fundamentally different than what’s on TV.”

Of course there are other issues facing these innovators, on top of potential proliferation of set top boxes, the thorny issue of bandwidth rears it’s head. “Most of these set-top boxes use cable broadband as a separate distribution channel, but it’s not quite as separate as it seems because it’s all coming over a cable modem,” Faulhaber says. “This could become an issue if Internet TV really takes off. If streaming video over broadband networks becomes popular, there may be limitations placed on it because the networks may not be able to carry it all. Some accommodation will have to be made because there will be 20 pounds of content in a three-pound bag. When we start pushing TV down the broadband channel, there will be issues.”

Interesting article, demonstrating the struggle companies often have when a logical emerging technology theme (in this case very much in line with the TRIZ evolution law of transition to the super-system, following the mon-bi-poly line) is not sufficeintly rooted in business model of market value.

Personally I think it will come. In the UK we already have something called BBC iPlayer. This new free service provides on-line access to BBC programs from the last 7 days. It has been phenomenally successful, with more that 1 million downloads per day, so much so that the UK internet providers have started to restrict iPlayer bandwidth at certain times of the day. Although downloading can be a real pain, I’ll put up with it because I can get great content for free. The only remaining problem I have is that I have to watch it on the PC, when I’d really like to watch it on the TV. So the demand is already there. If the process could be made faster and easier I reckon it could even start to make a lot of money for the right company. In the UK, Sky television make an absolute fortune out of their Sky+ system already and while that is good, a decent PC based system with context sensitive background information, could provide a far more involving multi-media service.   

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