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Content Delivery Still Clouded Pending Pan-Industry Platform


Are we any farther along
in sorting out a digital content delivery

Michael Vitelli, Best Buy:

terms of electronic movies, electronic
books and what has been
happening with
3D, think of everything
has happened
in this industry.
It’s so obvious.
When the industry said this is a
CD, and it played on any product
that was a CD player, the category
went through the roof. Same with
a DVD — it plays on everything that
plays DVDs. It was not unique to a
manufacturer — it was not unique to
where you were sitting. They played

Now those two physical mediums
have been changed to a file, but it
has to have the same outcome. It
has to be able to play on anything. If
it gets down to “It will only play if you
buy this product that relates to this
file,” it will never happen because
consumers will not tolerate that.

They have tolerated it in the Apple
world because it’s so simple. “I will
live with the fact that I can only do
it on Apple products because, one,
they are good products and, second,
it satisfies that need for simplicity,
I don’t have to think about it.”
So simplicity and ubiquity of use,
those are the things to go after.

Rick Souder,

was limited to
techies until
Apple came
out with its product and there was
no worry of where it was coming
from. It could be stored in one place.
I don’t understand the ins and outs
of business models that are making
that difficult to pull together for
video content, but it seems like if
anybody can accomplish that, they
will be the next Apple.

Dave Workman, PRO Group:

The success of Apple speaks volumes
about the customer’s desire
for predictability of experience, and
they deliver on that better than anyone.
Manufacturers could learn a
great lesson from Apple, not just the
fact that so much of their development
is software-centric, but in the
predictability of experience. People want the technology, but they also don’t want to have
to take three or four days out of their world to learn
how to use everything.

The idea of predictability and simplicity has a premium
attached to it across all the product categories
in which Apple competes. They
have continued to plow along
being the hot hand commanding
a 40 percent premium against
products that are slugging it out
against them.

It would be nice if we would see more vendors
get that experience or at least collaborate more
towards that direction vs. constantly fighting over
their little piece of turf on a new technology, and
creating confusion and making the customer experience
less desirable.

Ross Rubin, The NPD Group:

It has to be supported
by the content. Rovi’s acquisition of Sonic
Solutions, for example, will hopefully bring together
some of the cable and broadband world.


What has Best Buy’s experience been
with Sonic’s CinemaNow service?


It’s in the early stages — you have to get
it built into the set. If it were an app that was easily
loaded, it could be available on every television set,
but it’s not. The problem is the consumer has to buy
a new TV to use the application.

Ultimately, this does not seem a rational way to do
business. If you told me that I could buy a TV that has
an open platform on it that I could add applications
to as they come alive, then that becomes a totally
different experience. I can’t buy a new TV every time
there’s a new application.

Paul Ryder,

Retailers feel the
need to provide the solution with CinemaNow or other
programs, but then there is the risk of proliferating the

When Mike gets a Dynex TV, he definitely wants to
have CinemaNow, but he can’t ignore Netflix. I want
Amazon Video On Demand on Dynex, Samsung and
every other TV. We want customers
to have that kind of choice.
But we need to make sure that
we’re not accelerating the problem
with manufacturers.

Streaming movies is where it
really gets interesting for consumers. They would
buy a movie and it would be in a cloud, and it could
be consumed on the TV or on multiple TVs depending
on the box. The whole idea was cool conceptually
because “Avatar” 2D could be purchased now
and played in multiple places.

What consumers didn’t realize was it may not be
formatted to play on an LG TV or Apple TV but possibly
on a Panasonic TV or Google TV. The question
is how to make this simple for the customers. If I’m
an Amazon Video On Demand customer or a Netflix
customer, I want to be sure that the device I buy
will provide access to the movie. Which products do
what is not currently clear, and we have to help customers
figure that out.


Is there any critical mass forming behind
one platform over another?


The bottom line is access. A lot of manufacturers
will try. History is riddled with manufacturers
trying to force their experience or force their
service onto the consumer when the focus was on
hardware and not necessarily on the software, content,
and delivery. That’s where we will continue to
see things shake out, and that is what is fascinating
about being in this industry, how dynamic it is. It’s
still a bit of the Wild West in terms of digital books,
digital music, digital movies and digital gaming. It’s
out there, and there are many paths to take.

Karen Austin, Sears Holdings:

It could become
very concentrated very quickly.

Dan Schwab, D&H Distributing:

The TV guys
will get there — it will just take them a while. It’s taking
them longer than the industry expects.

What happens in the interim is that other products
increase in desirability, such as tablets and smartphones.
Retailers could be safe for the front half of
2011, if not the full year, with those products far outpacing
TVs because it’s still too kludgy of a solution.
It’s way too complicated for the user, and they will
continue to wait on the sidelines and not drive that
upgrade cycle until it is ubiquitous.

These other [mobile] products are so much more
seamless in ease of use that you will see a lot more
hype about them. You’re still going to sell a lot of TVs
this year, but the tablets, the e-books and the smartphones
are really driving consumer interest right now.