CONNECTIONS™ 2003 Media Information

May 9, 2003 — Converge! News Digest
Return rates for some home networking products are over 30%, a level that retailers will not continue to support, according to panel members at last week’s CONNECTIONS™: The Digital Home Conference and Showcase in San Jose. Market experience proves that if networked consumer electronic devices are not “rock solid,” consumers will return them. Consumers want distributed entertainment in the home, but they demand simplicity, no interruptions and no reboots. It may require a shift in the industry’s mentality before “networking” really extends into home entertainment.

Dave Kummer, Senior Vice President Of Engineering and Systems at EchoStar, said that the reliability and ease-of-use hurdle for home networking gear is even higher for service providers who have an ongoing relationship with their customers than it is for retailers and system companies making a one-time sale. EchoStar’s goal is to provide more services throughout the house to achieve higher revenues and have a “stickier” customer. Networked set-top boxes will fully enable house-wide video on demand (VOD) and personal video recorder (PVR) services. EchoStar is looking for long-term networking solutions that can have a lengthy technological and reliability life in the home once installed.

Steve Craddock, Sr. Vice President at Comcast, shares the objective of offering more services. Comcast believes that the key is to help consumers manage complexity and make their home entertainment experiences simpler. Comcast is seeking home networking solutions that are much more intelligent than the typical Internet-sharing networks on the market today.

A media storage server must exist in the home, according to Vincent Izzo, Director of Advanced Home Services over Broadband at Motorola. Some say that device will be a PC, but Motorola believes that a broadband-enabled set-top box is a better solution. No matter what the system is, Izzo argues that the technology must be completely transparent to the user. The network cannot require any new wiring. Wireless will play a key role for handheld and remote devices, but the “heavy lifting” of video and audio media will be done by coaxial wiring that is already installed where TVs are in most homes.

Ladd Wardani, Vice President of Business Development at Entropic strongly supported the view that coaxial wiring provides the best solution for distribution of digital media in the home. He said that speeds of this network must be high. Current video streams can have peak rates of 15Mbps and HDTV will be far higher. To accommodate multiple simultaneous streams in the home, Entropic is developing 200 Mbps home networking solutions.

On the subject of digital rights management (DRM), the panelists felt that there are currently so many technologies and proposals on the table that it will take a long time before they settle down and there is a clear solution. In the mean time, home networks that share digital media will be rolled out anyway. Craddock hopes to see a rights system in which each home is a “trusted domain” in which media can move about between devices freely. Restrictions should come in only outside of that home domain.

Educating consumers is also a major challenge. These products and services require a shift in thinking and behavior, which will take time and effort. Trials by Comcast and EchoStar indicate that creative ways of introducing the concepts and opportunities for free trials and experimentation are needed before people will embrace these new digital entertainment possibilities in the home.

From Volume 10, Issue 88 of the Converge! News Digest

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