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MP3, PMP Usage

1/07/2008 02:00:00 AM Eastern

TWICE: What will drive demand for, or use of, video playback on MP3 players and PMPs?

Andy Mintz, Philips: We anticipate that video players will continue to be embraced for years to come. Accessibility to content continues to drive demand for many products, and this is true for MP3 video players and PMPs as well.

Larry Smith, Archos: Content is driving usage and demand and will continue to do so until a consumer can watch whatever they want — TV, movies, online video, photos, personal video, streams, etc. — wherever they go. This is the Archos strategy, as we deliver those options: TV recording, wireless movie downloads, online videos and photos on the PMP or streamed out to the TV. Without video content, the PMP is simply an MP3 player circa 1999.

The type and length of content depends in large part on the size of the screen. With a 2.5-inch screen found in many players today, you're not going to be too comfortable watching a full-length film, but that's acceptable for personal or music videos of just a few minutes in length. Archos players are designed for movies — full-length, high-quality films. With screens 4 to 7 inches, you're getting an exceptional portable entertainment experience.

The quality and availability of the content is another critical factor. This is really the first year consumers have had easy access to new-release films, and with Archos devices, can download movies wirelessly [via Wi-Fi] directly to the device. Now we expect others to follow in our footsteps because it's the obvious transition for making anytime, anywhere entertainment a reality. It has been done with music, but you need a fast Wi-Fi connection and significant capacity to make movie downloads an everyday activity.

Ross Rubin, The NPD Group: Microsoft, which has launched on-demand video purchasing for Xbox Live Marketplace, didn't do the same for the Zune in its second round. The online video space is in a state of flux right now with many different outposts and daily shifting of business models. In any case, TV shows are probably viable for portable viewing. The key is how to get them there. The best paths are side-loading from the DVR, which is emerging as the home video library, or sending it wirelessly, whether streamed from the home using something like the Slingbox or some kind of video-on-demand version of MediaFLO. Both could coexist, but cable companies aren't being very aggressive in pursuing DVR side-loading. EchoStar has done some early work with Archos here, and it's moving past the point of consumption in the living room and should accelerate with its acquisition of Sling Media.

TWICE: Have MP3 players and PMPs emerged as important sources in home entertainment?

Smith: It's interesting to see how the portable device has transitioned to something almost essential to the home entertainment experience. Consumers are still looking at PMPs for their portability, but Archos is designing all of its players to integrate into the home entertainment system and pull content from the cable/satellite box or PC out to the device. The TV is still the primary source of entertainment for consumers, so it's a natural step for the PMP to converge with the TV and share content between the two.

With home Wi-Fi networks, videos and music stored on the home PC, hundreds of hours of video on the portable player and a giant widescreen TV in the living room, it's crazy to keep the PMP and TV separated. Archos considers the TV to be an important display component to all of the digital media you have on the device, around your home and out on the Web. The PMP becomes the conduit or bridge to moving that content wherever you want to watch it, but if you are in the home, the TV is where you really want to watch it, and the PMP is capable of bridging the gap between digital content and the primary viewing vehicle [TV] in the home.

Rob Williams, RealNetworks: Broadband-connected PCs introduced consumers to the concept of unlimited access to vast catalogs of digital music and video content in their homes. Just about anything they could think of is there instantly at their fingertips. We're seeing a whole new generation of both personal media players from companies like Haier and traditional home audio components such as Denon with feature sets that are extending that 'net-connected PC experience to throughout the home and beyond.

It's really less about the portable experience informing in-home device design and feature sets and more about both PMPs and home audio components beginning to take advantage of the wealth of content provided by services like Rhapsody across multiple touch points.

Rubin: In general, the home A/V market hasn't been as impacted by portable music players as much as, say, the in-vehicle market has, with lots of approaches for playing those devices in the vehicle. We've seen a number of receivers that can connect with iPod docks and a few products such as the DLO HomeDock, which can turn an iPod into a kind of miniature media center.

TWICE: Will video-playing MP3 players and PMPs always remain PC-centric?

Mintz: The majority of PMPs will make use of PC downloads, although directly recording from TV and/or set-top box will be preferred by some customers. We strive to accommodate the needs of all our customers and offer support for various technologies.

Smith: No way! What on earth does the PC have to do with entertainment? Entertainment starts in the living room. Entertainment content comes from the movie and music studios. I don't know too many people who consider their home office relevant at all to their entertainment lifestyle.

Consumer electronics manufacturers absolutely must free their customers from the PC. We did this in 2003 when we made TV recording onto the PMP a reality. Today, it's so easy to pick your favorite shows using the program guide on the device and record content just as you do onto any DVR. No PC in sight. We give consumers four ways to get movies and music on the device, and the PC is the last one of those ways. PMPs have to go where the content is, and that is on the TV from multiple video sources that include cable, satellite, personal devices. A PC is not required to interact with any of these sources.

Rubin: We're starting to see more networks like NBC experiment with direct downloads, although they are still protected by rights management and thus restricted from operating on all players. Cable DVR side-loading is in the hands of the service providers but, for example, you haven't seen TiVo do a direct side-loading link, and it has experimented broadly with many services and capabilities on its boxes. Higher-speed wireless seems like a convenient way to circumvent a lot of this hassle. Video does not have the replay value of music; it has to be kept fresh, particularly for content like television shows. Archos is preparing a DVR that is essentially its portable video player without a screen.

Side-loading — whether from the PC or television — has been a kludge around today's slow wireless networks, fractured standards and tenuous business models for delivering video directly to portable devices. If consumers had to download all their TV programming from a PC in the home office and connect the television to it in order to enjoy it in the living room, the TV would be a niche product.

MP3/Video Player Features

as % of players sold at retail

Jan.-Sept. 2006 Jan.-Sept. 2007
With MPEG/Video 31% 39%
Without MPEG/Video 69% 61%
Flash Memory Players 69% 75%
Hard Disc Drive Players 31% 25%
Source: The NPD Group © TWICE 2008
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