In the digital living room, there’s something in the air

No sooner had Microsoft reportedly edged out Apple and Google this week to acquire id8 R2 Studios and its patents for displaying digital media on TV screens then Google-owned YouTube said it is bringing its own technology for displaying digital media content on TV screens to more devices. In a blog post Thursday, YouTube announced it is adding its Apple AirPlay-like remote-playback functionality originally developed for Google TV to new devices slated to be announced next week at CES by Bang & Olufsen, Panasonic, LG, and Sony. Devices from Philips, Samsung, Sharp, Toshiba, Vizio, Western Digital and other CE makers are slated to get the new capability later this year.

The close timing of the two moves is probably not a coincidence, and together they herald a coming Air war over the role of mobile devices in the digital living room.

Up to now, mobile devices have largely been relegated to the role of second screen when used in conjunction with a television. Their main function has been to display content that is supplemental to or otherwise derivative of the primary content being viewed on the big screen, or to act as a program guide and remote control device for navigating content on the first screen.

The next phase in the evolution of two-screen video, however, is likely to focus on inverting the current relationship between the big screen and the little one. That is, tablets and smartphones increasingly will be used to acquire and playback content directly, from the internet, while relegating the TV to the subsidiary role of display device.

The shift will be driven by two main factors. First, tablets and smartphones are generally much more capable devices than the set-top boxes or smart TVs currently available for acquiring content from the internet for display on the TV. They typically have more processing power, are touch-driven, making navigation easier, can be upgraded via over-the-air software and firmware updates and consumers are used to adding functionality to them through simple app downloads. There are also already tens of millions of them in U.S. consumers’ hands and their numbers are growing rapidly.

Game consoles have even more processing power, of course, as well as a large installed base, but mobile devices have much faster cement cycles, meaning consumers are constantly upgrading.

If you’re going to mount a serious over-the-top assault on the current pay-TV business, targeting mobile devices as the main point of content acquisition makes far more sense than targeting set-top boxes or smart TVs.

The second main factor that will drive the shift to using mobile devices as the first screen is programming. While the major studios and networks still dominate the production of high-quality, professional TV content (and will continue to for some time still) online distributors like Netflix, YouTube and Hulu are starting to pour serious money into producing their own content and increasingly they’re attracting A-level creative talent. While most of the big online distributors have embedded apps available on connected set-top devices and smart TVs, making them accessible without resort to a second-screen device, their programming is still dependent for success on consumer-driven discovery and on-demand access. And mobile devices, because of their greater capabilities and flexible functionality, are simply better for those actions than any set-top is likely to be.

As on-demand and web-original programming consumes more viewing hours, then, mobile devices increasingly will take on the role of the primary device for finding and accessing TV content.

The trick in both cases, of course, is to get the content from the mobile device to the TV easily and without requiring additional major investment by the consumer. That’s where this week’s announcements come in.

Right now, Apple has the most advanced capability for beaming content wirelessly from a mobile device to the TV with its AirPlay technology. Typically for Apple, however, it’s a closed platform, limited to those who use Apple iDevices and have an Apple TV set-top box.

Also typically, Google has been working to develop an open version of AirPlay that other manufacturers could adopt to provide the same functionality. Originally Google’s wireless streaming technology was to be part of Google TV. But with Google TV still struggling to get off the ground Google is now rolling out its streaming capability under the YouTube banner — a clear indication of the urgency it sees in establishing an alternative to AirPlay.

Microsoft, meanwhile, has pursued a sort of hybrid strategy toward mobile devices in the living room. It’s SmartGlass technology enables any mobile device, regardless of operating system, to communicate with an Xbox console. That is, it’s platform is open as far as content owners and developers are concered — anyone can build a SmartGlass-enabled app — but it works only in conjunction with an Xbox.

So far, Microsoft has positioned SmartGlass largely as a second-screen platform for syncing supplemental material with TV (or game) content. With the acquisition of R2 Studios, however, Microsoft is clearly thinking about enabling content to move the other way as well — from the smartphone or tablet to the TV.

Whether Microsoft plans to keep R2′s technology within the Xbox ecosystem or open it to other CE companies remains to be seen. But it clearly didn’t want what is likely to be a critical capability for the next stage in the evolution of the digital living room falling into a competitor’s hands.

 

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Paul Sweeting

Principal Concurrent Media Strategies

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