Tuesday, 13 December 2011

Project: Home entertainment and communication convergence

Home entertainment and communication convergence
Discussion: Possibilities and Benefits

Scope: This writing is mostly for markets in North America. More than 90% of evidences were collected inside Canada-Ontario and the rest from U.S.

  • This document was prepared by Nhung Nguyen under the guidance of Tony Carter, Centennial College School of Business.
  • The case study was developed to get a full perspective of home entertainments now and next few years. We do independent studies without any sponsor from the mentioned companies. All the theories we pointed out are not from recognized data statistics. They’re showing our own analysis and opinions instead.
  • Nhung is a graduate of the Universities of Natural Sciences, Ho Chi Minh City , Vietnam and has worked in Canada as a software developer and product manager.
  •  You’re not allowed to re-post the content anywhere without the acknowledgement of Tony Carter and Nhung Nguyen.
  • Any questions about the post, please kindly leave comments.

Life is changing a lot and technologies play the most important roles for every single human civilization move. Nowadays, people may own different devices and buy different services for entertainments and communications. For the living room, people may need
-       a TV, set-top box, CD/DVD player and TV cable service
-       a laptop or PC to work or for fun on internet
-       a land line (why people still need a land line)
-       a cell phone or a smart phone to do both communications and entertainments
-       a tablet or reader
-       an Internet access plan (coaxial cable, fiber, wireless, satellite)
-       game consoles/wii
-       radio or mp3 player
-       books, newspapers and magazines
-       musical instruments
Out of house entertainments, people may need:
-       admission tickets to visit places (cinema/theatre, attractions, concert, stadium, etc.)
One person doesn’t need to pay for all of them at a time. However, it’s more and more common that one household at least has to pay for 3 or 4 of them monthly. And also the fact is it’s not easy for everyone to understand the real benefits from what they’re paying for.
Here are some simple concerns which one family at least hit into once in life:
Case 1: A household is looking for a computer to work and a cell phone to keep contact with friends, family or business partners. Usually, (s)he will consider:

  • Does my job require using full computer power or just to surf internet and read reports?
  • Should I buy only a {smart phone} or {tablet} to replace {cell phone, laptop and reader}?
  • Should I buy {a laptop and a regular cell phone} instead of {smart phone} or {tablet}?
  • Which company is giving me the best phone and data plan? What is the policy of the company for customer support and warranty?
  • Should I buy a LCD TV to use as a TV and a computer monitor at a time to save space and cost?
  • Should I buy cable for internet and TV as one package or separate?
  • Should I pay Video-on-demand or CD/DVD player or both?
  • Should I maintain land line (pay extra household expense)?
  • Can I connect my smart phone/tablet/laptop to home devices for a smarter living room by using software to control everything?
  • How easy to connect devices from different suppliers to each other for more benefits?
  • etc.
Because there are too many questions and each question will come up with different answers from different suppliers, consumers usually get confused and sometimes pay for something they don’t need or even worse, something they can have freely. In addition, it’s not easy for normal consumers to digest all different applications of new technologies from different suppliers. Usually, whenever any trouble happens with home devices or services, consumers have to deal with many suppliers with completely different policies. This procedure can frustrate consumers at the very first step and at the end they’re usually people have to pay more for less.
Case 2: Your kids want to watch a live hockey game far away from your home location (e.g: You’re in Toronto and the game is in Vancouver), which solution should you pick between bringing them to a stadium and sitting home watching the game over internet? If you don’t have internet, you don’t know how to use internet, the hockey game isn’t available over internet or the weather is too bad, is it very nice if your television cable company could broadcast live hokey game at home without extra fee? 
Here is the present scenario:
Diagram 1 Current scenario of home entertainments and communications
(Click on the image to view full size)
In this diagram, to use entertainments and communications services, consumers:

  • contact to different suppliers, pay for different service plans, require different tech support depts. and warranty policies
  • hardly find a compatible solution to connect products between different suppliers to each other because of protocol and technology difference
  • deal with bills at different days with different suppliers monthly
  • can’t benefit fully loyal customer program or all-in-one package promotions from particular suppliers
At suppliers’ side:

  • always have to deal with patent infringements which cost a lot of money and time
  • have to keep secrets with other suppliers to get the first access key to consuming market
  • cannot propose a full solution to connect all benefits of entertainments and communications to consumers at one shot
  • not strong enough to apply main technologies into all aspects of entertainments/communications
  • always chase after customers to sign in contracts for not switching to alternatives.
Human civilization

  •  technologies are applied unequally into different areas of entertainments and communications which can’t maximize the social development for all aspects at once (e.g: computer is smarter and more convenient while television hasn’t obtained much changes in recent years. That means the new technologies were not applied equally on both computer and television industries.)

Have you ever asked how dramatically life changes when computers have appeared and developed? Why the smartness of computer is still out of your living room? How ease of life we can benefit if living room is as smart as computer or even smarter? That’s all about how to apply new technologies equally on different industries (entertainments and communications). Coincidently, it’s also one of possibilities to approaching the following diagram on the base of the one above.
Diagram 2 Future of home entertainments and communications
(Click on the image to view full size)
This diagram proposes consumers as the first people getting huge benefits. Consumers now just need to deal with only one input which gives them the ease of access. All the difficulties of dealing with multiple suppliers seem to be void. This diagram supposes the key of access is network/internet connection which is more and more practical now.
On the other hand, to achieve the success of this diagram, suppliers now have to be much stronger than they were the first diagram above. They now can supply for all aspects of home entertainments and communications as one package. They are powerful enough to apply new technologies equally into different areas of entertainment and communications; as well as giving full solution to connect everything together. They will not have to deal too much with hassle in the previous diagram. If suppliers are powerful enough globally, they will shed the light for technology blooming on all aspects of entertainments and communications equally and globally.
It’s not impossible to build diagram 2 from diagram 1 to achieve the benefits. We’ve been easily able to see some moves on the market recent years. Many suppliers pay the huge effort to purport the convergence of home entertainments and communications. Among of them, some are recognized such as Rogers Communication Inc., Apple Inc. and Samsung.
Rogers reaches the arm into all areas of the telecommunications sector including wireless, television, land line phone and Internet. Whatever you need for your living room, Rogers can give you now. Beside the living room, Rogers also owns their investments on home monitoring, hockey, football, shopping and news channels. Seem like they still want to reach as far as possible into entertainment industries. They’re looking for a better success in all-at-once service. (Source: Rogers communication Inc. 2011 by Richard Ivey School of Business Foundation). Their release of a universal remote control for living room in 2009 was a big step which Sony recently has been recognizing and announcing their tablet supporting the same function. How nice it is to use 1 remote instead of 5 or 10 to control set-top box, TV, CD/DVD player, game console, VCR/PVR, audio amplifier, video on demand, etc. from your seat.
Of course Rogers isn’t the only player in this game. Apple and Samsung should be able to see the same vision. They came after but their solution wasn’t less important. While Rogers is expecting to gather and support all living room facilities themselves, Apple and Samsung, on the other hand, are planning to build a smarter living room. They are dreaming about turning TV to be a hub for demanding music, media, movie from their stores in sky (similar with their current iTunes or apps store) and more (applications, education, social network, etc.). Here are the demo and idea for convergence of Apple products and services:

(Demo for Apple Smart TV and universal control: http://www.griffintechnology.com/beacon)
Diagram 3 A smart TV may soon be listed in this Apple cloud*

Similarly, here comes Samsung:

(Demo for SamSung smart TV: http://www.youtube.com/watch?v=h7DiJQettVY*)
If Apple and Samsung deploy smart TV solution, we can think about a new entertainment ecosystem in a day not too far from now. Simply saying, you may be able to tweet (Tweeter) or like (Facebook) directly from your TV as well as you’re doing with iPhone and iPad. Whatever you can do with a laptop, a smart phone, a tablet, you will be also able soon to do with your TV.

Everything does not stop there. Sooner or later, more and more companies will jump into this market[1]. Google and Bell are the good runners in the list. At the end, they all will aim to the same destinations of highest convergence for home entertainments and communications: easier and smarter.  
Beside companies, there are also some other tactics from consumers themselves. Consumers always want to obtain crossed-connectivity possibilities[2] and reduce the cost even though the full-supported solutions (from suppliers) haven’t yet come. The result is, somewhere here and there,
  • we can find a way to receive TV channels without paying for monthly cable fee (http://freetoronto.tv/).
  • Or instead of paying higher fee for video-on-demand to watch on TV, they can sign up with Netflix and watch on computers.
  • Or buy a LCD TV to use as a TV and a monitor alternatively

As talking about the convergence in entertainments, especially for television, with network/internet connection as the key, it’s also good to mention about involving of regulations to protect consumers.  Particularly in Canada, CRTC (Canadian Radio-television and Telecommunications commission) is in this charge. Currently, CRTC seems like still not deploy any regulation on Internet services yet (http://www.crtc.gc.ca/eng/faqs.htm). To catch up with the convergence, CRTC should build up new regulations to ensuring the confidentiality of customer information and ensuring that consumers are treated fairly in the convergence. Ruling but still keeping reasonable price is also a big challenge[3]. As much as television industry develops, as the same contributions from CRTC are required. CRTC may help speed up the converging process or hold it back depending on how fast it is in upgrading the regulations. Moreover, CRTC is also playing the role for consumer orientation. If CRTC implements well this leading role, they should help the convergence happen more safely and smoothly.
The convergence may not succeed at the end without a lot of challenges, tries and fails. There are a lot of barriers; and the most worthy factors to mention here should be customer hesitancy, technology limitation and commercial rivalry
Sometimes, the perfect business plan only can’t make a hit on market just because it’s not the correct time yet or the consumers are not ready. The loss of Logitech[4] on selling Google TV recently tells that story. When consumers don’t really get the point to pay too much for a new entertainment system, the products may be still on the shelves very long. Consumers may still wait to see the join from more suppliers or just simply wait for more reasonable price. To get over consumer hesitancy, suppliers are forced to find better ways such as reduce the cost or make more impressive products. The best example for this case should be HP when they did very well to let know their products on the last discount for touch pads[5]
As pointed out above, the power of suppliers also decides how feasible for applying new technologies equally on all aspects of entertainments and communications. If comparing with the consumer hesitancy, this obstacle is even much more challenge. It can be a little easier to cut the cost than widen the company scale and still maintain the revenue grows. To overcome this issue, suppliers may need to shake hands or connect to each other gradually. However, it’s like another page of the book, last but not least. With the high competitive market nowadays, it’s also really difficult to collaborate between suppliers and put all of them under the same hood. Difficulties may come from revenue sharing, management, secret of business market, secret of new technologies, etc. Most of obstacles for convergence on the current market are from commercial rivalry[6]. How to remove the barriers and put suppliers together can be the biggest challenges among all of three factors.
Another choice is, if direct handshakes between suppliers may be too hard, a coordinator between them seems to be possible. Suppliers instead of revealing their business secrets, they all now can link to a trust-worthy third party. The rest is they just need to make sure their products are manufactured following that party’s standard. That third party should be responsible to create general standards to ensure the connectivity between all of home devices. Digital Living Network Alliance (DLNA)[7] is currently a kind of this third party. There are a lot of popular suppliers are comprised under DLNA[8] now. If DLNA (or any other similar third parties) are successfully chasing after their vision, the burden of convergence will be surely less.
Observing everything happening now, we may come up to a lot of opening questions:
  • can we expect the easier and smarter living room in a day not too far?
  • Whether that the convergence of home entertainments and communications can make a huge pitfall for market monopolies once just a few companies hold the entire market?
  • Will we pay the same or less to get smarter and easier services? Or just get so overwhelmed by the new "toys" that we sometimes pay a lot of money for something we can get free.
  • Etc.

A lot of leading questions mean a lot of challenges and opportunities ahead. And, we all consumers can expect for a better living room at the end.
Here are some additional posts that people are trying to address those open questions. It’s also the time for us consumers to give the words, why not?
Will Internet TV replace Television?

Watching internet TV and video files from your PC to your TV

A Vision of the Future: Home Entertainment in 2020

The Future of Home Entertainment

The Future of the Internet

Dreaming of the Cloud

1.     Picture on the cover page was collected on Internet and edited by the author. The purpose of editing is to avoid bias on any particular company name. The picture was used in this writing for purpose of general illustration only, no specific meaning toward any companies.
2.     All other references were clearly pointed out inside the writing whenever they’re used. Here is the short list for summary.


[2] crossed-connectivity possibilities: possibilities to connect between products of different suppliers

No comments:

Post a Comment

Thanks for leaving your comments

Related Posts Plugin for WordPress, Blogger...