Entertainment Technology Center @ USC

Loren Nielsen, president and co-founder of Entertainment Technology Consultants, addressed 3D content during HPA’s 3D Super Session.

On genres, she suggested that animation”must be” 3D, and now horror is taking off. “It’s a natural,” she said, “because the box office has been so much bigger for 3D with horror. Maybe this only applies to horror films that are $15 million and above. But some horror films are being made for $5 million. … Foreign distributors are willing to pay more for 3D.”

What has the industry learned from “Avatar?” Nielsen suggested: “If you are going to make a tentpole, you better consider 3D and certainly release in the 3D format. Most of that has to do with box office. If you can get an extra $3-$4 for a ticket, you are going to get an uptick of 15% on your revenues.”

She concluded:

–We have a creative demand that is pushing 3D.

–Deployment of the hardware and content is driven by the premium revenue.

–There will be more 3D, and audiences are willing to paying more for it.

–Expect premium pricing for 3D channels.

As we leave Las Vegas and tie a bow around CES 2010, here are some general observations from the ETC reporting team:

The show had a super-dynamic feel. Last year, people were depressed and the event felt a bit empty.  This year – despite speculation that the confab would suffer from lack of big announcements and the effects of a limping economy – the high level of energy surprised us.  The show was slammed and there was a LOT of optimism in the air… and it was infectious.

As predicted, 3D was everywhere. It was perhaps even a bit more everywhere than people imagined.  Last year’s backroom demos were this year’s front-of-booth highlights.  DirecTV live 3D feeds and actual 3D Blu-ray discs playing on actual Full-HD 3D displays were in almost every major CE booth.  There was also a lot of live 2D-3D conversion around – maybe disruptive or perhaps just a nice parlor trick for 3DTV buyers to show their friends.

Over-the-top Internet-connected devices were everywhere, too. Last year, we saw ethernet jacks in a few TVs from the CE companies and widgets, etc. on some Blu-ray players.  This year, it’s gone mainstream.  The majority of the sets from the major manufacturers have ethernet, EVERYTHING is connected, Skype is now available in HD for HDTVs and PCs, and even Vizio has a strong play with its huge line-up of affordable, easy-to-use, wireless networked TVs.

All of that said, there was no “Pet Rock” at the show – the single must-have gadget. The Best in Show award from CNET’s Best of CES awards went to Panasonic for its VT25 series of 3D-capable HDTVs…and NetShelter’s Last Gadget Standing top winner was the Boxee Box from D-Link that helps you share Internet content with your HDTV.  But as Google and Apple had hoped for, everyone was talking about the Google Nexus One smartphone and the rumored-to-be-coming-later-this-month Apple Tablet, both of which were not at the show.

Tablet PCs, netbooks and e-readers with a wide variety of screen sizes and functionality took on a surprise presence at the show. We were particularly impressed with the enTourage eDGe, the first dualbook e-reader.  This cool device flips open to two screens: the first is an LCD screen with the functionality of a tablet notebook and the second is an e-paper screen for reading, highlighting and annotating documents.  We’ve just scratched the surface of possibilities with these affordable and increasingly popular devices (just think about the Kindle…).

Before we sign off, we’ve included a part 2 to our parting thoughts, a brief list of things to watch for in 2010.  Be sure to check it out.

And it seems only fitting that we include one final video.  Carolyn Giardina, one of our roving show floor reporters, wraps up her video coverage of CES by providing a brief overview of this year’s trends – from 3D everywhere to over-the-top tablet PCs to emerging technologies such as 4G networks.

Thanks for reading the blog for this year’s CES 2010.  A special thank-you to ETC’s sponsors who make our work possible.  We’re Leaving Las Vegas…

KC Blake, Sarah Blake, Carlos Crooks, George Gerba, Carolyn Giardina, Bryan Gonzalez, Frank Irving, Leander Kung, Phil Lelyveld, Edie Meadows, Paula Parisi, Mark Schroeder, Rob Scott, William Sheng, David Wertheimer, Joyce Yi

And our sponsor-contributors/tipsters:

Wendy Aylsworth, Bryan Ellenburg, Bob Kisor, Bob Lambert, Theron Trowbridge

Read the team’s thoughts on trends to watch in 2010

As we hightail it out of Vegas with the desert dust settling behind us, the ETC reporting team would like to recommend a few things worth keeping your eyes open for in the upcoming year, based on our observations of CES 2010:

A revitalized industry-wide commitment to 3D. Fresh on the heels of theatrical successes (congratulations, Jim Cameron…) and the gradual adoption of other 3D screenings involving sports, stage performances, live music, etc. – the CE industry and content providers are tackling 3D for the home with renewed vigor:

– Watch for a slew of new 3D devices promised by nearly every major CE manufacturer, including (but certainly not limited to) 3D HDTVs, 3D Blu-ray players, and 3D-capable gaming systems.

– We’re looking forward to the first wave of 3D Blu-ray titles, especially “Disney’s A Christmas Carol,” Sony Pictures Animation’s “Cloudy with a Chance of Meatballs” and DreamWorks’ “Monsters vs. Aliens.”

– Attendees at this year’s show were excited to hear announcements of planned 3D broadcasts and new 3D cable channels.  Watch for ESPN3D to begin airing in June… and watch for the first 24/7 exclusively 3D channel to debut from Discovery, Sony and IMAX.  Also, look for DirecTV live 3D like we saw on the show floor at Panasonic, LG and Samsung.

– In addition to the ongoing efforts we’ll be coordinating at ETC, we were thrilled to hear about new 3D testing facility commitments from the likes of CableLabs in Colorado and Testronic Labs in Burbank.  Additionally, CBS is expanding its Television City consumer research facility located at the MGM Grand in Las Vegas.  CBS and Nielsen are partnering to add 3,000 square feet onto the existing facility, and Sony has promised to provide the initial 3D equipment.  We should also mention that the MPEG Industry Forum has created a new 3DTV Working Group, that held its first meeting during CES.

Touch screens, netbooks and tablet PCs were rampant at this year’s show, with speculation and promise of a slew of new products in development. Not surprising, it seems that portability, cost, functionality and connectivity are at the forefront.  And with an increasing demographic growing reliant on the touch screens so popular with iPhones and similar devices, we should expect to see an impact on nearly all CE products.

Will time prove that Google and Apple were wise not to debut the Nexus One and Apple Tablet (whatever it will be called) at CES? Google’s new Android smartphone marks the company’s first foray into hardware and could wind up protecting the company’s dominance in online advertising.  But will its self-proclaimed “superphone” with speech recognition take on Apple’s iPhone over time and help expand Google’s reach from the PC to the mobile world?  And what impact will the Apple Tablet have, if any, on the array of tablet PCs showcased at CES?  We’ll be watching this race carefully this year.

Over-the-top connected services will take on a new dynamic. When this theme emerged at last year’s show it was little more than a conversation, but by CES 2010 things had really taken flight with Net-connected TVs and widgets from the likes of Vizio and LG, among others.  By next year’s CES, we expect it will be difficult to find a TV or device that doesn’t connect to the Internet via ethernet or wireless.  And the number and types of over-the-top products and services that begin to crop up in 2010 should be really interesting to watch.

Gestural interfaces still had a presence at this year’s show and may integrate with a new direction in CE devices. Last year, we saw the first gestural interfaces from pioneering companies such as PrimeSense.  During 2009, we saw Microsoft announce and demo to universal acclaim “Project Natal”, based on PrimeSense’s chipset.  And if the Wii has revolutionized and democratized games by providing two points of information (from the IR controllers), gestural interfaces potentially bring millions of points of information into the equation without asking people to have a remote control.  Watch this trend… It’s going to be big.

Keep thinking about LTE and 4G. Even though they didn’t have an enormous presence at the show, these are technologies that should start to play out in the next 12 months.  For example, ZyXEL showed its fixed LTE router for the home.  The router will enable operators to offer high-speed Internet service to the home via cellular networks with data rates up to 50Mbps throughput.  There were several other LTE/4G products on the floor including products from LG and Samsung.  In addition, Sprint, Verizon and AT&T have all announced network upgrades to support these systems.  This is a big trend to watch for 2010 and you can bet that next year at the show LTE/4G will be a hot topic.

Better Organization, Search and Discovery. The myriad over-the-top services cropping up at the show this year creates a double-edged sword for consumers.  So many ways to get content (now on your TV), so few ways to easily find it.  The explosion of over-the-top and new access-enabling options (e.g. DECE and KeyChest) will highlight a void and an opportunity for companies to make super-simple search, discovery, and access to all your digital content.  This should begin to be a major theme in 2010.

And finally, keep a close watch on multifunction AV data cabling. Probably not the sexiest theme at the show, but one that will be paramount to a new generation of connected devices.  Intel garnered a lot of attention when it touted its Light Peak high-speed optical cable technology that can achieve data rates of 10GB per second.  And if you thought HDMI made connections simpler, wait until you see HDBaseT… The demo we saw from an Israeli company called Valens was of a single Cat-5 ethernet cable carrying power, uncompressed 1080p video, ethernet, and control data.  Very impressive.

We’re sure there will be a few surprises in store for us in 2010, but these are the technologies and trends this year’s show has us excited about as we start the new year.

Thanks for reading the blog for this year’s CES 2010.  A special thank-you to ETC’s sponsors who make our work possible.  We’re Leaving Las Vegas…

KC Blake, Sarah Blake, Carlos Crooks, George Gerba, Carolyn Giardina, Bryan Gonzalez, Frank Irving, Leander Kung, Phil Lelyveld, Edie Meadows, Paula Parisi, Mark Schroeder, Rob Scott, William Sheng, David Wertheimer, Joyce Yi

And our sponsor-contributors/tipsters:

Wendy Aylsworth, Bryan Ellenburg, Bob Kisor, Bob Lambert, Theron Trowbridge

iVoiceNetwork announced the completion of its alpha development phase.  This is an interesting new platform for interactive story construction in a social media way.

The idea is to redefine traditional broadcast entertainment by taking the concepts behind social media and making the content more compelling and entertaining.

According to the company, the system is based on a model called Multi-Character, Non-Linear Scenario Driven Narrative.  The platform is “genre, content and language agnostic, enabling massive scale and character-story connectivity.”

According to Guy Morris, company founder and CEO: “iVoiceNetwork has developed the first platform that fully captures the interactive nature of the Internet, allowing fans to become part of the show by creating unique user characters, connecting through role-based social groups and directing and starring in their own stories.”

They are looking for content partners with studios and production companies for a late 2010 launch.  You can check out a slideshow on the iVoiceNetwork site to learn more about how the concept works.

Sony emphasized the fusion of content and technology during CES, during which the company positioned itself to lead the 3D home movement.

“We intend to take the lead in 3D,” said Sony chief Sir Howard Stringer. “We are the only company fully immersed in every part of the 3D value chain.”

Its annual press conference opened with Taylor Swift, who performed her hit “Love Story” while providing a hint at potential future content. Introduced by Sir Howard, Swift confirmed that her upcoming concert tour will be documented in 3D.  Sony execs declined to provide further details.  Sir Howard also restated plans to deliver live performances in 3D, including an upcoming Kenny Chesney concert.

Sony product announcements included:

– PS3s, which will be firmware upgradeable for 3D in 2010.

– Sony 3D BRAVIAs, with the first sets launching this summer.  They will come in screen sizes up to 60-inches, bundled with two pairs of active glasses.

– A prototype 3D OLED TV.

– 17 new models of camcorders, including a new Handycam that shoots full HD progressive.

– A Vaio eco-edition, made in part of recycled material.  The case is also made of recycled materials and there is no printed manual.

What you should know about ‘Gear for Geezers’…

If you think focusing on seniors means making phones with oversized keypads and “I’ve-fallen-and-I-can’t-get-up” alarms, think again.

The exhibitors at CES’s Silvers Summit spoke with us about advice for the entertainment industry, based on their experience designing and marketing products for an aging population.

“They are the best customers in the world, but nobody has figured out how to do it right for them,” said Aaron Pollack of cell phone provider Jitterbug.

Boomers pay bills on time, give conscientious customer feedback, and are extremely loyal (witness Jitterbug’s churn rate of 1.5%).  While they may be beginning to have issues with hearing, vision, and manual dexterity, they also have the interest, the income, and the time to enjoy great technology and entertainment.

Some advice from the pros for reaching this valuable demographic:

Stick With Sexy Design
Just because they’re aging doesn’t mean they’re square, exhibitors said. Reaching the key baby boomer demographic means creating products that don’t make them feel like they’re getting old.

“My number one advice is to make it sexy.  In their minds, they’re young and cool, and they’re not ready for the old folks home,” said Curt Stone of the Quality of Life Foundry at Carnegie Mellon University.  “You don’t have to dumb it down for them.  Make tech that is universally appealing but also adaptive to special needs, and you’ll have a winner.”

Simplify, Simplify
While the CES floor is crowded with complicated devices and expanding choices, this population wants it simpler and streamlined.  They’re overwhelmed and turned off by remote controls or set-top boxes with too many or unclearly-labeled buttons.

Swedish company Doro has taken it to the ultimate extreme, with a six-button universal remote control (on/off, volume up/down, and channel up/down) that won’t overwhelm anybody.  That may be going farther than most of the 55+ crowd needs, but the key feature of all exhibitors in Silvers Summit was that they cut out extraneous content and features, rather than adding more.

Focus on Making & Strengthening Connections
This population uses their tech to stay in touch with people they care about, exhibitors said.  Companies that support those goals will succeed.

“People stay connected by watching TV together or talking on the phone, and when they lose their hearing and stop sharing those things with their families their connections unravel,” said Michelle Maher of ClearSounds.  “Use technology to appeal to the emotional side of those family connections, and you’ll reach this group.”

Provide “High-touch” Customer Service
That means no labyrinthine automated telephone directories, no overseas customer service, and extremely patient and flexible reps.

“The relationship that develops is more like a family relationship,” said Chuck Lalonde of MyGait, which offers computer systems for elderly customers with custom hardware, software, and support.  He said people call or email with questions like, “How do I find a good Chinese restaurant in Vegas?” and their reps just roll with it, emailing back links to a Google map with directions.

“It definitely costs more to run a call center out of America than India,” said Pollack of Jitterbug.  “But it is absolutely what these customers want.”

Think Differently About Billing & Privacy
As mobile entertainment takes off, mobile purchasing and billing issues will become more complicated, and many aging customers simply aren’t comfortable with paying for things on the fly.  Reaching them may require some creativity and a range of payment options.

Jitterbug found that many users were afraid of contracts and worried about sharing social security, credit card, or bank account numbers over the phone or the Internet.  So they let them pay the old-fashioned way, month-to-month and through the mail.

“We mail them a bill and they pay on time,” said Pollack.  “We have far fewer problems than you might expect.”  Jitterbug also offers automatic online billing for those who are interested.

We’re just in the “first inning” of a new game of digital content delivery, said panelists on the ETC’s Thursday afternoon session on connected devices.  And 2010 will be a year of experimentation, surprises, and gathering data.

“By next year, connected TV will be something people expect,” said Russ Schafer, senior director of product marketing at Yahoo! Connected TV and Desktop.  “By early next year more manufacturers will promote connectivity as part of the experience, and that will drive innovation as expectations go up.”

“This year is about experimentation,” said Matt McRae, VP of products for Vizio.  “Next year we’ll have a lot more data about sales rates, price points that trigger mass adoption, and consumer preferences.  I think you’ll see about 20 million connected units deployed this year, and because they’re connected, the TV you buy in January will be different in December because of updates through the Internet.  For the first time we can layer services on top of content.  How that works will dictate what the second inning looks like.”

The executives from Channels.com, NBC Universal, Vizio, Warner Bros., and Yahoo! Connected TV each shared their thoughts on the challenges and opportunities of connected devices.

“To us, it’s more about personalization, additional services, and multi-screen activity than it is about ‘over-the-top’ services,” said JB Perrette, president of digital and alliance distribution and content distribution strategy at NBC Universal.  “There’s no reason it has to be competitive to cable or satellite, there’s no reason why players in that space can’t also be players in personalized, connected services delivered to devices across multiple screens and with services that don’t exist today.”

“This is not just new ways of delivery to the home, but the whole concept of the connected living room,” said Thomas Gewecke president of digital distribution for Warner Bros.  It’s a foundational change in the movie viewing experience, because now we can deliver services around the movie… so when you turn on the TV, your BD player connects, figures out who you are, and begins to inform your viewing experience.  We are spending a lot of time considering this.”

One of the exciting opportunities of connected TVs and devices is the richness of real-time data from the customer.

“A lot of the data we’ll gain in the next year will come straight from our consumers.  We’ll know what they like and what they don’t like, based on what they do and do not use,” said McRae.  “It’s pretty democratic.

Vizio has already gathered valuable consumer use information from their current batch of connected TV customers.

“Right now, over half of over-the-top use for TV is streaming video like Netflix and Hulu, which makes sense – that’s why you buy a TV, and it’s low-hanging fruit… Another 25% of use, which was a surprise, is actually music,” McRae said.  “A lot of people fire up Pandora and walk away and let it play.  The third most common use was interactivity, like Twitter or Facebook while watching sports or a media premiere.”

Panel moderator David Wertheimer asked about the need for standards.

From a manufacturer’s point of view, McRae said standards are crucial. “There are all these different contents, and they’re different on so many levels from DRM onward.  Making them all work is actually quite onerous,” he said.  “Lack of standards drives fragmentation and different rules.  We need to clean it up so we can focus on discovery and personalization.”

Perrette said simplicity is the key concept for connected TVs this year. “Simplicity in standards, in user experience, in UI, and especially simplicity of the message to the consumer,” he said, bringing up another key issue of consumer education.  “If we get too technical, instead of leading with the experience in a simple way, the adoption experience will be a lot flatter than if we keep it simple.”

Schafer said he would sum up the three key concepts as “Personalization, integration, and scalability.  How do you make integration right?  How do you make it scaleable so you can be flexible for the market you’re distributing in?”

The panel discussed the current state of set-top boxes.  Gewecke said he thinks game consoles are the current leading connected TV device.

“That may not be the case a few years from now, but companies that sell game devices are getting more sophisticated and using them as a means to sell other content and services. WB has seen significant growth in video game partners, and there is a very interesting crossover when you get the right environment between gamers and a video audience,” Gewecke said. “Games have been the vanguard and they will continue to be strong.”

Perrette said the consumer experience is still a challenge with most set-top boxes, but things will improve as navigation becomes more visual and simple.

Sean Doherty, CEO of Channels.com, said the new features like Wi-Fi on connected TVs will help these and other devices catch up with game consoles.  “These TVs have great potential, but there are some bumps in the road to be worked on.  However, I think you’ll see the progress and a greater variety of content on all kinds of connected devices,” he said.

Technicolor is serious about 3D.

At CES, the company is demonstrating several innovations to support the consumer electronic industry’s migration to 3D, including new technologies for Blu-ray 3D, broadcast 3D, 3D subtitling, and auto-stereoscopic 3D delivery to mobile handsets.  Demos are taking place in a private room at the Technicolor booth.

Highlights include:

– A preview of DWA’s upcoming 3D Blu-ray release of “Monsters vs. Aliens,” authored by Technicolor.

– A 3D subtitling creation tool that automatically analyzes depth and recommends the best placement of subtitles to minimize disruption to the creative intent of the content.

– A preview of autostereoscopic content delivery on a Hitachi Wooo mobile phone.  The content was encoded by Technicolor and customized to the screen size.

The Walt Disney Company this week announced its plans for “KeyChest” – a new technology developed for consumers to purchase films or TV shows from various distributors (stored on remote servers), and then play them on multiple devices such as TVs, Blu-ray players, computers and cell phones.

The technology is designed to provide ease of access from assorted outlets while addressing issues of compatibility in moving content between devices in addition to the limited storage space of consumers.

KeyChest is not planned as a Disney-only venture.  “The idea is to have all the movies consumers want to buy available in this way,” said Kelly Summers, vice president of digital distribution at Disney.  “If it’s Disney only, there really isn’t much value here.”

Disney representatives explained that negotiations with content distributors, cable companies and telecommunications services have been ongoing, and discussions are going to “step up dramatically” at CES.

Disney expects KeyChest will roll out before the end of 2010.