D-Link to support living room access to YouTube and other TV-web channels

Active-TV Ecosystem Developers,

The Issue: D-Link improves support for internet video access via its Apple-TV-like alternative.

Background: D-Link is adding active-TV technology to their DSM-520 networked media player. This will enable universal TV access to TV-web formatted internet distributed video.

Behind the scene: Access over the internet to materials specifically formatted for TV viewing should be as unrestricted as access to internet materials formatted for the PC browser. D-Link now makes this possible at a new low price via their innovation and market leadership.

D-Link is well known as a major supplier of networking technology. They also make a range of Digital Media Adapter (DMA) appliances which connect the living room TV into the home network. With broadband service to the home, the DMA gives any TV access to video over the internet. To be sure, this is similar to the operation provided by Apple TV – Apple’s DMA. An announcement on Tuesday at iTV Con, the Internet TV Technology Conference in San Jose, indicates that D-Link will add active-TV technology to their DSM-520 MediaLounge media player. With active-TV support, the DSM-520 will have access to a wide range of TV-web formatted video channels, and have an advantaged position when competition with Apple TV.




This is because adding active-TV technology means the DSM-520 is not limited to the TV User Interface (UI) incorporated into the box’s firmware. The TV UI is transmitted over the internet in TV-web format, just like a PC’s browser page-layout is provided in PC-web format. There is increasing use of TV-web formatting for internet video channel distribution. With a DSM-520 firmware upgrade, there will now be TV access to YouTube and other video sources such as Veoh, Vmix, BBC, Comedy Central and much more.


The DSM-520 is based on the EM8620 TV System-On-Chip (SOC) from Sigma designs. As with Apple TV and the latest generation of media players, there is support for High Definition (HD) video connections. Yet, unlike Apple TV, there is also support for older Standard Definition TV connections such as S-video and composite. There is also a USB port connection for access to photo, music or video materials retrieved from a USB-connected storage device. The EM8620 has support for the latest advanced video CODECs such as MPEG-4 and WMV.


We can anticipate active-TV technology will likely appear in other appliances in the existing D-Link product range. The iTV Con announcement indicated that D-Link will provide an active-TV technology firmware upgrade to existing DSM-520 owners. The Circuit City website currently shows the DSM-520 for sale at $179, which is currently only 60% of the base Apple TV price.

It is not unusual to see new appliances supporting access to internet video, tied back to a particular portal service; Such as the BT Vision Set-Top Box (STB) or the initial release of Apple TV. This may be driven by business interests. The plan could be to use the appliance to drive a revenue stream from the video accessed from the portal. The reasoning behind the plan may be an attempt to replicate a business model similar to that used by US cable TV industry. However, this business strategy is not applicable to a retailer of TVs or boxes such as the DSM-520.

I suspect the portal strategy is sometimes hidden behind a claim to “maintain UI standards”. That is the appliance supplier can’t guarantee the quality of operation from some user-chosen portal. Internet video consumers will eventually see thought this. For example, a Dell PC buyer does not expect the PC’s browser to only access Dell web sites, on the grounds that Dell.com can guarantee the quality of the web site. I am sure Dell does make its best efforts to build the best web site, but it can’t expect PC buyers to be restrained in such a way.

Similarly, TV retailers don’t try and sell TVs which can only access public broadcast channels because of their decision that, say, FOX channels are not adequate in quality, and hence should not be accessible.

In short, the same is true with TV-web access. For example, Apple TV can try assuring the standard of its own portal, but it can’t take responsibility for other developers TV-web material. Users likely don’t expect Apple to take on this responsibility, and equally they will expect Apple TV to ultimately support access to other TV-web internet addresses.

The D-Link DSM-520 with active-TV technology could be the platform that everyone wants because it enables universal access to TV-web. Using active-TV technology makes this possible. The DSM-520 will offer more choice than Apple TV and at a lower price. This is likely to remain the case until BroadQ introduce support for TV-web channels on the Sony Playstation 2. Naturally, this will cause further downward pressure on DMA pricing.

Internet video distributors can make use of TV-web formatting and the DSM-520 to offer video to the living room TV. This seems ideal for a retail product such as the DSM-520. I suggest for significant success as a retail product, there should be unrestricted access to any web-channel that may come along. Each video supplier, be it Veoh, Vmix or other, will work to ensure the quality of its video service. TV users, like PC users, understand these issues. There is always another HTML/Flash developer that thinks he or she can build a better UI layout. TV user would rather decide for themselves what internet video channels they want to watch; they will naturally avoid the bad and the ugly.

Feedback, corrections and comments welcome. Contact me for more information or support with active-TV technology development.
Daniel Mann

Apple TV next steps ?

Active-TV Ecosystem Developers,

The Issue: What might be next for Apple TV in terms of new platform features, services or collaborations?

Background: Apple TV is off to an interesting start. It has overcome obstacles in: cost, noise, features, ease-of-use and simplicity in terms of maintenance – all of which have defeated many previous attempts to bring internet to the living room TV.

Behind the scene: The competition to deliver Internet video to the living room location is fierce. Unlike PC-web development, the market has no widely accepted delivery platform; it lacks the equivalent of a universal PC with a web browser. Competitors are thus forced to respond to steadily emerging low-price options by combining internet video access with other appreciated features or service. This downward pricing trend may also force collaboration among those trying to gain a leading position.

Steve Jobs has indicated that Apple TV is a long-term project. Apple TV enables a living room TV to access the Apple video portal and YouTube shared video. Maybe Apple felt there was not enough video at the Apple portal to drive sufficient demand for the Apple TV box, and hence has added YouTube. Or, Apple may also have felt Apple TV sales were vulnerable against a competitor’s box which supports YouTube access.

Jobs has pointed out that “a lot of people failed” to make a business out of internet delivery of video to the TV. In part, he is likely referring to the Media Center or Home Theater PC. Jobs states they will “work on it [Apple TV] and improve over the next 18 months or two years, we can crack that”. What might he have in store?

With Microsoft Extender technology and Intel ViiV client technology not making much traction in the market, active-TV technology has emerged as the primary PC-assisted competitor to the Apple TV approach. Apple TV also partially follows the PC-assisted or Extended-PC approach. However, the consequence of enabling Apple TV to have some stand-alone capability (a 40 GB hard drive is included), is a much higher cost and more heat than desired emanating from the box. Apple TV technology has also not been integrated into a TV or Set-Top Box (STB) with broadcast TV reception capabilities, thus is in no position to reap the cost savings that would result, and hence is at a disadvantage.

Steve Jobs is reported as saying “our model for Apple TV is we want to be like a DVD player for the Internet”. Now, DVD players can be bought in the US for $30. Unfortunately, the high Bill Of Materials (BOM) for Apple TV results in a current price of $299. Most importantly, it will not prove easy to get the BOM cost down. Apple TV is made from PC components, minus any display; a ‘headless-PC’, if you will. Consequently, it has the BOM cost of a low-end PC rather than high-volume consumer appliance technology. Alluded to earlier but little appreciated is that it also generates the equivalent heat output of a low-power PC.

Concerning TV versus PC material costs, PC companies have already struggled with building a low-cost PC-like box. They were familiar with the problems: of 1) high BOM cost, 2) too much heat and noise, and 3) ensuring the Windows operating system is reliable and low-maintenance. Failure to overcome these difficulties is what led to the PC-assisted or Extended-PC approach using active-TV technology, rather than the rapid adoption of a PC dedicated in the living room. The former approach requires very little work be performed at the TV-end. Instead, the work-load is handled, almost invisibly, on behalf of the TV by a networked laptop or PC located elsewhere in the home.

To its credit, Apple TV has solved the problems of noise and operating system operation which defeated the Home Theater PC (HT-PC). The Apple box may be a bit hot but it is fan-less (thus, noise-less). By way of improvement, Intel is likely working on a lower power next-generation chip which will further relieve the heat problem. As to the software used, Apple TV runs a version of Mac OS X which makes it very easy to build application software, even if there is a slight cost adder. Active-TV technology compares favorably with this approach as it enjoys similar productivity, since TV applications are built to run on a Windows browser. All in all, whereas the cost of media support can be absorbed into the price of a laptop or PC, it is not clear that a living room entertainment device like the Apple TV can absorb this cost, when compared with mass-market video entertainment prices.

In contrast, Active-TV technology platforms use chips from companies like STMicroelectronics, ATI, Sigma Designs and NXP. These are low-cost and low-power TV Systems-On-a-Chip (SOC). It is impossible to build comparably priced TV-like appliances using PC components. So Apple TV is vulnerable from a competitor product which enables access to internet video, such as YouTube, but at a lower TV-appliance rather than PC-appliance cost to the end user.

Given the cost advantage of TV-like appliances, what might such devices look like and how might they influence the future direction of Apple TV?

1) TV manufacturers are rapidly developing networking technology for their next-generation high-end TVs. Adding support for active-TV technology adds very little to the cost or complexity of a networked TV; in fact, most of the extra hardware cost may be for additional memory only. Hence, networked TVs may be the least costly option for anyone joining the TV-web revolution, and stand-alone boxes or Digital Media Adapters (DMA), would have a difficult time competing successfully.

Moreover, combining broadcast reception and internet video processing in the same box enables processing of overlay TV-web in synchronization with broadcast TV. This offers advanced support for new forms of TV advertising and social networking. This is also another way to justify the cost of including a hard drive (HD) as the disc can also be put to work supporting digital video recording (DVR).

Support for broadcast reception also enables a low cost solution for what is often described as “sling box” operation. In this case the TV or Set-Top Box sends the received video over the network to a PC where it can be further processed or distributed by software such as TVersity. The approach avoids running complex software directly at the TV. In fact, any materials stored in the PC, or accessible by the PC over the home network, can be appropriately formatted by TVersity and sent-on to a cell phone, Sony PSP or other ecosystem-connected devices.

Tversity is also well known for its use in distributing PC-stored or network-acquired materials to a networked TV utilizing a local TV UI rather than a TV-web formatted UI produced via PC-assistance.

2) With the world wide shift away from analog to digital broadcast TV, many existing TVs are being equipped with digital reception capabilities. This is particularly true in Europe where there is rapid adoption of free-to-view DVB-t boxes. The TV chips used with DVB-t boxes don’t support the Mac OS. It would add greatly to the cost of Apple TV to combine digital transport stream (TS) processing with the PC-like innards of an Apple TV box. Maybe Intel can solve this problem by integrating the hardware required for broadcast reception into an Apple TV SOC solution.

3) Apple TV currently supports component video or HDMI connection to the widescreen TV. This can be an obstacle for those lacking sufficient TV-input channels. By integrating a DVD player into Apple TV, the existing inputs used by the DVD player could be put to better use. This is not news to Apple but maybe because of the extra $15 of support hardware, they have chosen not to do so. The use of component signaling does produce a clearer image when viewing digital photos or the TV UI, but it is not necessary for the current YouTube video quality.

Currently there is no support for the popular European SCART connector. However there are conversion boxes which allow Apple TV to be daisy chained with other SCART appliances. This helps reduce competition for TV input signaling for European users.

4) Apple TV technology could be combined with an existing TV service provider’s Set-Top Box (STB). The subsidized or free-with-service STB is the approach most familiar in the US. As previously discussed, such STB providers are more interested in generating new revenue from IP video or advertising delivery. They are not much interested in providing free access to TV-web channels, and hence would rather use the internet to support their existing broadcast shows. Apple could provide a closed-garden solution, but the cost of the extra Apple-TV hardware would be difficult to absorb without passing along some of the cost to the end-user.

In contrast, active-TV technology enables the STB or service provider to provide access to TV web channels at lower hardware costs and possibly negotiate directly with the internet video provider, rather than via Apple and its portal. Subsidized STBs associated with closed garden web access may be challenged in the market by an increasing trend to purchase boxes in retail which are not constrained within a walled-garden environment.

5) Competing with hybrid STBs that include internet access to TV-web is challenging enough, but when Voice-over IP (VOIP) is added to the STB, the pressure is only increased. For this reason, Apple may add some type of VOIP to a future Apple TV. Scendix has developed Skype support for active-TV technology ecosystems. Scendix’s TV-web formatted UI can be used in conjunction with, say, a wireless Skype phone from the living room. The image below shows how an incoming call is announced on the TV.

6) As previously discussed, the Sony Playstation 2 equipped with BroadQ’s version of active-TV technology will have the advantage of enabling a large number of existing PS2 owners to gain access to YouTube and other sources of internet delivered video. The PS2 now sells for about $130, and there may be some additional cost for network support, but some YouTube enthusiasts may see the PS2 as a cost-effective option for viewing YouTube on the living room TV.

Summary: A Piper Jaffray analyst report, states that iTunes is becoming the “de facto standard” for handling media on a PC. With currently 110 million iTunes users, they project that this will lead to Apple securing “$1.2 billion in Apple TV revenue [2008] “, given that the “digital living room market in calendar year 2008 will be $4.7 billion”. They also state, "We are currently modeling for Apple to sell 2 million Apple TV units in calendar year 2007”.

It is interesting that Piper Jaffray tie the success of Apple TV so closely to its interoperation with Apple’s successful PC-side software. I do agree with this ecosystem view of market development – PCs and laptops are clearly going to work in close cooperation with future consumer appliances such as networked TVs. But there is a lot of competition in the PC software business and active-TV technology enables these companies to have a critical presence at the TV. There is also a large and established living room video appliance market that is determined to maintain or grow its market share. Apple securing a reported 25% of the 2008 digital living room market will be a great accomplishment.

In conclusion, Apple TV is an impressive first salvo from an accomplished marketing team into the realm of internet video viewable on the TV. But the lack additional features, an integration path directly into the back of a TV, or TV appliance-like BOM costs, will put great pressure on the marketing team trying to grow sales volume. For now, however, the challenge lies before all those other device manufacturers who wish to build on what Apple TV has achieved, and who will be compelled to use the PC to assist with formatting and delivering universal content to the TV at costs that consumers can readily embrace.

Feedback, corrections and comments welcome. Contact me for more information or support with active-TV technology development.
Daniel Mann

YouTube access added to Apple TV

Active-TV Ecosystem Developers,

The Issue: An Apple TV upgrade now enables access to YouTube video at the TV.

Background: YouTube PC-web user-awareness makes it ideal for a TV platform developer to promote sales of networked TV or Set-Top Box (STB).

Behind the scene: Alternative hardware developers, TV UI software developers and video sharing start-ups, are looking for TV technology which enables them to compete in the internet video market, and therefore with Apple TV. Active-TV technology, which can provide open access to competing solutions and contributes to the delivery of internet video to the living room TV in a cost-effective manner, is likely to be a worthy competitor to Apple TV.

I have been trying out the latest Apple TV support for YouTube video access at the TV. Looking at the latest Hitwise network traffic data (below), it is easy to see why Apple added support for YouTube. Hitwise reports: “As of May 2007, YouTube's market share was 50% greater than those 64 [other video] sites combined”. There are also reports of over 100M YouTube video viewings per day.

Apple TV’s access to YouTube video adds greatly to the amount of video available at the TV. YouTube’s popularity can clearly help drive adoption of the Apple TV device. Currently, the only other video accessible via Apple TV is from the http://www.apple.com/ portal or local video, in the appropriate format, from a home networked PC or Mac.

When iTunes is used on a PC, it can display multiple video formats, assuming the necessary codec plug-ins are added. However, Apple TV only displays videos in H.264 format; this includes videos stored on a networked PC and streamed to the Apple TV. Those individuals with large collections of DivX or Xvid-based videos will surely be disappointed. That said, there are reports of how additional codecs can be added to the Apple TV, without having to open the box. Alternatively, video can be transcoded to the H.264 codec using various third-party solutions.

When accessed from a PC, YouTube video has been provided in Adobe Flash Video (FLV) format. Now, likely to support Apple TV, Google is rebuilding the YouTube catalog in H.264 format. Reports indicate "thousands of videos designed for Apple TV will be available at launch, but that the remainder will become available by the fall”.

I have not found any information about expansion of the API which gives access to the YouTube catalog. Rebuilding the YouTube catalogue and maintaining both H.264 and FLV versions is surely a major effort. Maybe Apple gains a slight quality advantage from H.264 over FLV, at the cost of a higher bit-rate. It is also likely the encoding resolutions are specifically optimized for Apple TV and iPhone usage. If YouTube provide new API information for accessing their video catalogue in H.264 or FLV formats, other users such as active-TV enabled platforms will be able to select the must appropriate video format. Networked TVs utilizing active-TV technology are able to support the H.264 format.

Last year there was an announced partnership between Google Video and DivX for use of the popular DivX video codec. But it remains unclear where this partnership is leading with respect to the streaming of video to interesting and capable living room appliances. The http://stage6.divx.com/ video-sharing website has emerged as a potential competitor to YouTube – serving-up video in the DivX codec format.

The emergence of Apple TV and active-TV platforms which are not dependant on Microsoft’s Windows Media Video (WMV) format (although active-TV technology has shown optional support for WMV), does raise the question whether or not YouTube will feel the need to maintain yet another copy of its video catalog in WMV format. For now, however, given the lack of Extender-based TVs, or the like from Microsoft collaborators, or even any market significance behind Microsoft’s next generation Extender technology (Pika), there seems little urgency.

Returning to Apple TV, and what the user experience is like, with an upgrade in firmware, a YouTube entry now appears in the top-level menu. After making this selection, the YouTube menu page (shown below) appears. Note I had previously entered my YouTube user-id and password. A blue box is shown around the current selection; this box is moved around the screen using arrows on the small and stylish Apple TV remote.


I had no difficulty using the Apple TV UI. It works well. Selecting the Top Rated menu entry produced the TV layout shown below. A similar layout is used for many of the YouTube support menus. Of course, the video can be made ‘full screen’. Even with the new H.264 formatting, the YouTube video is not high-quality, but I don’t think that will deter YouTube enthusiasts.


Video search at the TV is supported, as shown below. It is easy to enter text strings and the YouTube search engine responded quickly. A new video can be added to a user’s list of favorites. Disappointingly, however, many of my favorites accessible on the PC (in .FLV format) did not appear in the Apple TV YouTube favorite listings, as they have not yet been re-encoded into H.264 video format.


One thing I did miss was support for favorite playlists. On a PC, iTunes supports playlists and YouTube PC-web supports playlists. In contrast, YouTube video favorites organized under playlists, lose their playlist grouping, when accessed from Apple TV. This feature has been discussed in terms of using an Apple TV as a point of sale display controller. In this case, JPEG slide-shows, video clips or YouTube video could be arranged into a playlist sequence.

My interest in organized playlists is to reduce the amount of TV interactivity. The Apple TV UI still feels like a bit like a PC-web interface – that is, something one person is involved with. I think a group of people viewing the TV are not likely interesting in watching another person continually engaged in driving TV operations. One way to overcome this limitation would be to first create a playlist while accessing YouTube via PC-web on a laptop computer, and then sitting back and watching the playlist via the TV. This would allow YouTube video to be formatted in the more familiar TV experience as a channel for YouTube video or as an assembled playlist.

In summary, Apple’s first effort at adding YouTube access to Apple TV is quite good. No doubt they will continue to offer significant improvements. However, there are other software developers which will soon offer alternatively formatted YouTube UIs for the TV. Underlying this are TVs and Set-Top Boxes (STB) supporting active-TV technology, which provide the necessary platforms and means to demonstrate and profit from the inventiveness of new UI software – should they be able to understand what the TV user really wants. Currently, only the Apple TV UI is available for the Apple TV platform.

Regarding video, YouTube competitors also have ambitions of delivering internet video to the living room TV. They can improve their market share by offering a TV-web formatted UI which is more appealing than Apple TV’s YouTube UI.

In the realm of hardware, there are also networked TV and STB manufacturers who do not incorporate embedded Apple TV hardware, but must offer a TV UI for user access to video sharing sites. TV-web channels made accessible by a TV’s support for active-TV technology, provide TV manufacturers with the necessary mechanism to compete with Apple TV’s support for video access.

Given developers are working on TV-web formatted access to YouTube and other video sharing and distribution sites, there is going to be competition and continual development to reach the best TV UI. This new convergence market could be significantly driven by a breakthrough in either hardware or TV UI technology, such as a $100 hybrid STB or low-cost networked-TV; or a TV UI which bridges the gap felt by a large audience of familiar TV users looking for easy and appropriate TV access to networked delivered video.

Steve Jobs is reported as saying “Our model for Apple TV is we want to be like a DVD player for the Internet”. This may have led to the Deutche Bank statement “[Apple TV] will eat up a good chunk of the US$26-billion DVD player market in the next several years” and “one of the primary drivers of this change will be the availability of YouTube content on Apple TV”. While demand may be strong, platform costs are not insignificant: I would doubt that Steve expects a big financial impact from his ‘Apple TV hobby’ in the near term, given the material cost of an Apple TV.

Nevertheless, looking to the long-term, Jobs also said “A lot of people failed to make [media centers] a business, such as Tivo and Microsoft. If we work on it and improve over the next 18 months or two years, we can crack that”. He may not be alone. Despite lackluster or failed attempts in the past, the exceptionally low cost structure of an ecosystem based on active-TV technology will make it hard to build a lower cost box than one based on active-TV technology. The appeal of YouTube and other internet video sites, with content viewable on the TV, is certain to drive overall demand.

Feedback, corrections and comments welcome. Contact me for more information or support with active-TV technology development.
Daniel Mann