Sunday, September 21, 2008

MPEG4 and the TV end-game

About a decade ago, digital TV came out of the research labs into product development sites. It brought forth promises of better picture quality, modern TV applications and improved bandwidth usage. Over the years, it expanded to offer living-room consumption all forms of modern media - from digital cameras, to home PCs to the internet. Where do we go from here ?

Digital TV is all about "Content" - which, in this context, means "audio-visual, or related" content. Content quality, content presentation, content protection, content storage, content consumption, content rating, content revenues, content related sundries (like ads, recommenders, ..) ..all this jargon filled up mind-space. And gave birth to technology and products and revenues.

Just a decade ago, the state-of-the-art TVs were huge and bulky (CRT) behemoths, they managed to receive analog signals and at best, tried to iron out the jerks of transmission systems. They offered little in terms of non audio-visual information (teletext, with it's limited presence, has been an atavistic, if, at times, useful, application).

Today's TVs are slim, hang on a wall like a picture, diligently decode digitized audio-visual information, splash accurate EPGs, show pictures from cameras, playback MP3s from PCs and run youtube from the internet, all this while being fully compliant to a complex set of myriad DRM systems and subtle regional differences in standards.

The last decade has seen a slew of new technologies and features being introduced. From basic "standard definition" to Full HD, from jerky, poor contrast LCDs to smooth, rich LCDs, from power hungry panels to power efficient panels, from blotchy graphics to rich, smooth animations, from low performance wired connectivity to high performance wireless connectivity ...the list of innovations is impressive and long. The big question however is "What next" ?

MPEG4 decode, Flash playback, DRM systems, Internet connectivity will all become mainstream TV features in 2009/2010.

Is the end-game for TV around the corner? Or, is it the end of the big innovation wave?

Let's presume it is the latter ...Yes, there will be innovations in neighbouring spaces (and these will push their way in) - web 2.0 and 3.0 will spread, game consoles will evolve - both performance machines like PS3 and "human" machines like Wii, new display technologies will happen (OLED, e-ink, ..), new broadcast and consumption methods will happen (mobile, broadband)..all these represent a "horizontal expansion" in the Tv space - there are few reasons, if any, to beleive that we will see a "vertical expansion" (or a fundamental shift) of any significant size in the coming 5 years.

Innovation has been the magic mantra preventing commoditisation taking over the industry. As the innovation wave settles down the path of the "long tail", commoditisation will take over. Vertically integrated operations will thrive from economies of scale. This could include, apart from the traditional vertical intergration of set-makers and key-component makers, the intergration between set-makers and service providers. The world of mobile phones has proven that service integration overcomes the need for single handed brand-building while increasing market share and revenues, and decreasing prices with amazing speed and regularity.

So, is it merely the end of the big innovation wave - or the begining of the end-game ?

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