Technology firms are pushing a futuristic vision of home entertainment not because consumers are desperate for it but because they themselves are.
Recently, at one of the fast-proliferating conferences devoted to the “digital home”, John Burke, an executive at Motorola, a maker of mobile phones and digital gadgets, showed a video that presented his company’s version of this vision. In the clip, a youngish man wakes up to a rock video that automatically starts playing on a screen next to his bed. He gets up to have breakfast and the rock video follows him to a screen in the kitchen. He moves into the living room and up pops the rock video on yet another screen. When he leaves his flat and gets into his car, the video starts playing on a screen in the steering wheel.
To ordinary humans this sort of thing must seem like silly—or downright frightening—marketing claptrap. In fact, even Mr Burke’s audience of self-selected technophiles seemed sceptical. “Did you notice that the guy was a bachelor,” said Tim Dowling, the boss of Pure Networks, a software firm in Seattle that helps users to set up and troubleshoot home-computer networks. “That alone tells you that they’re out of touch. I thought: How dumb.” Real people do not want to be hounded through their home and their life by some video stream, he argues; they just want help with basic headaches, such as getting the kids’ laptop, mom’s Apple Macintosh and dad’s Windows machine to share the family’s printer.
Whether or not computer, software, consumer-electronics, telecoms, cable and internet companies are in fact out of touch with consumers may be the biggest question facing these industries today. That is because the “digital home”, a concept and category hugely hyped in executive circles but still rarely heard in discussions among consumers, represents their greatest hope for revenue growth. Demand from corporate buyers of technology has barely recovered from the dotcom bust and is widely expected to be unimpressive for years. By contrast, the homes of consumers appear to technology vendors as a barely tamed analogue wilderness. Darcy Travlos, an analyst at CreditSights, a research firm, estimates the market opportunity of the digital home at $250 billion in America alone and $1 trillion worldwide in three to seven years.
“We view the digital home as critically important,” says Craig Mundie, one of three chief technology officers at Microsoft, the world’s largest software company. “The home is much more exciting than the workplace.” Computers have already led to small revolutions in boosting productivity in the office and helping people to communicate and to be creative, he says, so “we’re pretty confident” that computers will have a similar effect on the way people consume entertainment. Intel, the world’s largest semiconductor maker, recently reorganised itself into new business divisions including, prominently, one called “digital home”. Last week it formally launched Viiv, a bundle of chips intended for use in digital-home PCs. Consumer-electronics firms such as Sony, computer-makers such as Hewlett-Packard (HP) and Apple, telecoms giants such as Verizon or SBC, cable companies such as Comcast, internet firms such as Yahoo!, networking-equipment companies such as Cisco—all agree that the digital home is where the action will be and are investing furiously to make sure they have a good chance of playing a leading role.
Their first challenge in stimulating any sort of consumer interest is the difficulty of merely explaining what the digital home is supposed to be. You might think, for instance, that the term refers to the long-established trend away from analogue and towards digital media. In music, most people have completed their migration from vinyl records and tapes to digital CDs. In films, the trend from videotapes to DVDs is not far behind. In photography, traditional film is fast being replaced by digital cameras and pictures. TV and radio broadcasters are also shifting to digital transmissions, with Britain leading the way.
Confusingly, however, that is not what vendors mean when they talk about the digital home. Instead, they invariably mean a home in which all sorts of electronic devices—from the personal computer (PC) to the TV set-top box, the stereo, the game console and, in some versions, even the garage door and refrigerator—are connected, both to one another and to the internet. Hence the Motorola marketing video that Mr Burke was showing. Its purpose was to illustrate what Motorola, like Microsoft, calls “seamlessness”, as digital content hops automatically between various devices and screens. The excitement, therefore, is not so much about content being digital, but about its delivery switching from physical things (such as CDs) to photons (such as wireless downloads or streaming), because this requires consumers to buy new gadgets.
Believers in this future point to encouraging statistics. Parks Associates, a research firm in Texas that specialises in the digital home (and which organised the conference at which Mr Burke gave his keynote address) surveyed a group of internet users and found that 84% of them use their PCs to store digital photos, 59% to store music, 36% for video clips and 26% for personal videos. If one includes devices other than PCs—such as TiVo, a popular digital video recorder—17% also store movies and TV shows. In theory, these people could soon avail themselves of new wireless-networking technologies, such as an emerging standard called “ultrawideband”, to pipe all this content from their collections to electronic picture frames, screens and portable devices.