Arrival of more boxes supporting internet video for the TV

Active-TV Ecosystem Developers,

The Issue: more boxes are arriving to support internet-video viewing in the living room TV.

Solutions: For cost and technical reasons, most of these boxes require the support of a networked PC.

Behind the scene: Web pages formatted for the TV are known as TV-web. Interaction with these pages is via an IR remote, not a keyboard or mouse. To ensure a box can display the greatest number of TV-web pages or ‘channels’, and also ensure a TV-web channel can reach the greatest number of TVs, they should both support HTML, JavaScript and Flash, building blocks of Web 2.0 technology.

New boxes supporting access to internet-delivered video are arriving in the market from a variety of prominent and lesser-known vendors. The most important criteria by which to measure potential success are box cost and quantity of video sources. Which TV-web device is likely to be offered at a price acceptable to a wide range of users? Previous DMA-styled devices have been priced too high for rapid market adoption, and remained esoteric gadgets

It was recently reported that “Microsoft is going in a hyper-announcement mode: it is announcing its plans to help launch a new line of media extenders”. The report indicates Linksys will introduce a $300 DMA2100 and also a $350 DMA2200 with integrated DVD player. This latter might be better described as a networked DVD player.

A Microsoft press release states “Microsoft Shatters the PC-to-Television Barrier, Releases First Details on Extenders for Windows Media Center”. Microsoft’s general manager for eHome, Dave Alles, states, “the new Extenders for Windows Media Center make it easy to get a wide range of personal and Internet content not only on someone’s main TV but on all the TVs in the house”.

There is also an article in Forbes titled “The iFlop”, which discusses the weakness of Apple-TV. This is also mentioned in paidContent., which states “Apple struggled. It wanted to keep the price low at $300”. The Apple TV is a sort of Microsoft Extender or Digital Media Adapter (DMA). But it has more standalone capability than an Extender, sometimes functioning without the assistance of a networked PC.

There has also been a lot of reporting on the new Vudu box. Much of this reporting is of an optimistic, yet likely misplaced, nature given the $399 price tag. Fortunately, Erica Ogg of CNET remembers prior attempts to build similar boxes. Her report brings a more cautious view, reporting the Yankee Group’s Josh Martin analysis, that, "the biggest strategic misstep by all of these companies is their inability to lease the box and charge for content, or give the box away for free and charge more for content”. He also states, "we're dominated by service providers that subsidize equipment" and "Users get used to that." This is very true for the US market.

The ATSC Set-Top Box (STB) does not have the consumer-acceptance of the European equivalent DVB-T STB. This is why there is more US interest in the DMA-styled box, rather than a networked DVB-t STB.
A D-Link press release, indicates that the DSM-520 DMA “adds more than 200 channels of internet video on your TV” – these are MCE-conformant TV-web channels. This is accomplished using active-TV technology. The D-Link DSM-520 has two advantages over the boxes listed above; I have seen it for sale at a street-price of $150, therefore at approximately half the price of Microsoft Extenders, and it supports more TV-web channels (or sites) than any other box. This is enhanced by active-TV technology’s support for the Flash video format. It is also easy to add more TV-web channels as they become available. This is because active-TV technology supports legacy HTML formatted TV-web. See the chart below.



Media Center Edition (MCE) formatting was initially proposed for TV-web development. It continuous to be most widely used, and is supported by prior and existing display platforms, as indicated in the table above. With the new crop of recently announced Microsoft Extenders (MCX v2), a new TV-web format has been added, which unfortunately is not supported by the legacy of existing platforms.

For those who keep asking, “why can’t the TV process TV-web without the assistance of a networked PC?” the answer is simple. The chip inside a TV costs $15 or less. It is hard to get this chip to perform much the same function as a PC costing $100s. With the PC and TV working together there is also the option of combing PC-web with TV-web operation, with Web 2.0 mash-ups that have not yet been widely demonstrated, but likely offer significant opportunity for enterprising Web 2.0 developers.

This is why it is important that TV-side technology be very low cost to implement – such as active-TV technology. There is also an unwillingness to put complex PC operating systems, such as Windows, inside a TV.

Microsoft’s first round of Extender products had little success in the market. It is difficult to sell such boxes when they cost as much or more than an Xbox 360 or Sony Playstation (now at about $138). These game platforms can also play DVDs and function as DMAs or Extenders. The most compelling scenario involves integrating active-TV technology directly into the TV, thereby eliminating the need for a DMA or Extender, unless it is needed to support the installed base of pre-networked TVs.

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

The PC industry shift from PC sale to ecosystem sale

Active-TV Ecosystem Developers,

The Issue: Until recently the PC has been mostly a standalone device, albeit with internet access. Falling PC and CPU prices are demanding new application for the PC which can reverse the relentless price fall.

Solutions: Support for a networked ecosystem of appliances based throughout the home is establishing a new PC platform standard, which can lead to higher valuations for PC and their component suppliers.

Behind the scene: There are several ecosystem technologies being proposed. Active-TV technology has the advantage of light-weight operation, ease of implementation and openness of accessibility.

The finance.yahoo.com chart below indicates that the Intel and AMD stock price has not grown since about year 2000. Since then it has generally been declining or appears flat. This is partly caused by what is sometimes referred to as the maturing of the PC industry. Intel and AMD are the major suppliers of the CPUs used in PCs and laptop computers. In prior years, improvements in CPU performance, architecture, system integration and fabrication technology, led to improved company fortunes. But with the maturing of the industry, a shift in the use of the PC is required to maintain growth.

With falling PC prices, or Average Selling Prices (ASP), retailers responded by offering more PC add-ons or extra devices which support PC operation. This has traditionally meant printers, extra storage or disc writers. The important shift occurring now is to sell an ecosystem of devices which interoperate in useful ways. PC industry ambitions to sell a PC attached to the living room TV have now faded. Positioning the PC as the ‘center’ of a network of home appliances has also met with very mixed success. Now the PC is being positioned by some as an equal partner in an ecosystem of mostly special-purpose appliances, such as networked Set-Top Boxes (STB), networked TVs or networked audio players.

The leaders in the PC industry know they must shift from promoting a stand-alone PC. Consequently, they are developing ecosystem solutions. The intention is to raise CPU and PC ASPs by having the PC valued in terms of its contribution to the ecosystem. Via the home network, the PC supports the operation of devices in each room of the house. Such as streaming audio to an Apple Airport Express, or even recharging the music in an iPod for use away from home.

At one time the PC industry wanted to put a PC in every home. Then Microsoft had ambitions to promote Windows in every room. But most people don’t need a PC in every room. They also don’t want the cost or maintenance of owning multiple PCs. In the US, most people who want a PC have already bought one. They may look to replace the PC if it is old or can better support an ecosystem of home appliances.

CPU manufacturers are also developing dual- and quad-core CPUs. However, the industry has never found the “killer application” that would justify the use of such impressive performance by the majority of home PC users. Yet these CPUs are expensive to make and may struggle to be sold in a way that improves the PC ASP. The solution is to apply the extra cores to support ecosystem operation. The new “killer application” turns out to be: support for ecosystem operation. A multi-core PC has plenty of performance to support traditional PC operation and assisting the operation of, say, a networked TV elsewhere in the home network.

The Intel chart below shows the relentless decline in price for Performance and Value-Segment PC markets. If PC buyers appreciate the value of higher performance, via whole-home ecosystem support, then the problem of declining ASP can be successfully dealt with.

Microsoft’s latest ecosystem approach is known as HME – Home Media Ecosystem. It first appeared with Windows Media Player 11, but it is also part of Vista. It enables a PC to serve streaming media to a network of embedded client devices. The use of HME enables Microsoft’s Windows Media Player to be a “core” software tool for managing media throughout the ecosystem.

Microsoft has tried before to build a PC-supported ecosystem using Windows Media Connect (WMC - their version of UPnP) and Extender technology (MCX), but with little success. The latest HME strategy is likely two-tier, with WMC used for lesser functionality and the Extender technology replacement, Pika (MCX v2), used for higher levels of operation. Ecosystem appliances connected via WMC support a local standalone User Interface (UI). Ecosystem members connected via Pika technology support a PC-assisted UI; This means a TV-web -like UI, formatted and distributed over the network by the PC.

Apple is building what might me described as an iTunes-based ecosystem. Networked appliances, such as Airport Express or Apple TV all connect with a PC or Mac via iTunes operation. In the case of Apple TV, some amount of standalone operation is supported, such as simple access to YouTube video. However, the more an ecosystem member is equipped to support standalone operation the more complex and costly it becomes. If an ecosystem member relies on assistance via networked support, then the cost and complexity of the ecosystem member is reduced.

Intel has been developing its ViiV ecosystem. By not being dependant on Microsoft ecosystem development plans, Intel has an opportunity to find its own solution to the complex technical and business issues relating to ecosystem adoption. Additionally, by having an ecosystem in which they retain some Intellectual Property (IP) rights may enable them to differentiate their ecosystem from another supported by AMD, assuming that any Microsoft ecosystem is made equally available to Intel and AMD.

Intel’s promotion of the home ViiV PC in support of growing amounts of digital photos, video and music, was intended to significantly contribute to addressing the decline in PC ASPs. It continues to be widely agreed that the PC’s support for consuming digital-content at the TV locations (the living room) is key to ‘growing’ the use of the PC, and possibly sparking a replacement cycle for higher-level performance and higher ASP processors. However, the ViiV TV clients still have not appeared. This has caused many to say “where is the ViiV Extended-PC ecosystem?” Without an ecosystem, ViiV is just another MCE PC. After years of development, Intel has been forced to depend on the limited functionality of the Microsoft ecosystem clients – primarily the Xbox.

ViiV ecosystem technology is much like the Microsoft ecosystem approach: They both depend on PC-assistance for delivering a TV-web -like UI. They have both shown a more PC-centric approach than the alternative active-TV technology, in that they suggest broadcast TV reception should be accomplished at the PC, rather than the networked-TV approach promoted by active-TV technology. This has technical and business-development disadvantages, which may have led to lack of ViiV ecosystem acceptance.

It will be interesting to see if Intel will revive the ViiV ecosystem or replace it. They could fall back on relying on Microsoft’s HME with MCX v2 technology. This positions the Windows Media Player (WMP) as key ecosystem application software. Alternatively, they could make more use of the Apple ecosystem and use of iTunes as a key ecosystem application.

DivX Networks has recently introduced is DivX Connected technology for ecosystem interconnect. Again, this is a PC-assisted approach. DivX is working to get its thin-client support firmware embedded into networked TVs. Of course, this is very much the strategy of the other ecosystem developers. Via DivX Connected, a networked TV can access TV-web-like formatted internet-video channels.

Except for Apple, the competing ecosystem developers make use of a common base-level of technology, such as UPnP and DLNA. Apple may have determined that consumers have generally no understanding of these technical-oriented ‘standards’; and hence promote higher-level features such as access to YouTube video. The difference between DivX Connected and the other advanced ecosystem technologies is primarily how they support advanced TV UI features via PC-assistance.

TVersity offers ecosystem-like interconnect of devices without requiring all devices be part of a homogeneous ecosystem. Because of this pragmatic approach, TVersity is not proposing a specific ecosystem technology. But, it very much adds to improved PC valuation via its ability to combine the operation of several devices – such as the Sony PSP, Xbox, networked STB and even iPhone – so as to better utilise and appreciate the new supporting role of the ecosystem-PC.

TVersity can support a PC-assisted TV UI via active-TV technology. However, the UI is by and large generated locally via micro-browser or UPnP support. A local UI usually offers less UI features or UI polish, but it works using the basic ecosystem client’s capabilities. Easy to use buttons are starting to appear in video sites, such as G4TV, making it simple to connect a home-networked media player with available video.

AMD has posted losses for three consecutive quarters. In the fourth quarter of last year it lost US$573.8 million. In the first quarter, it was in the red US$611 million. AMD expects its quad-core processors, due out in August, to drive revenue in the second half of 2007. For this to happen it has to improve the ASP of these processors.

AMD has gained some market share from Intel, but as reported: “its average selling price fell to $75 at the end of the year from $99 at the beginning. Intel’s average selling price fell, but at a far lower rate, to $130 from $137”. Like Intel, AMD will use Extended-PC ecosystem development to address the problem. AMD’s choice has been active-TV technology, although they typically brand this as AMD LIVE! Ready.

Active-TV technology is not owned by any one company, but AMD has been a noticeable user of the technology. AMD and its collaborators have worked closely with MediaMall, a significant supplier of active-TV technology. Using its internet browser, a PC assists video-sharing sites to reach the TV in the living room. In short, all video sharing and distribution sites can be accessed via a PC. Active-TV technology extends this by delivering a TV-formatted web-accessed UI (known as TV-web) to any networked TV in the ecosystem. The PC and its browser ‘engine’ remain the standard universal platform for formatting a TV UI.

AMD used to be a second source for CPUs which were pin-compatible with Intel PC products. With the transition to its own x86 architecture a new non-compatible mother board infrastructure was required. AMD had to work closely with collaborators during this transition. Now, with the PC maturing, new industry trends and business pressures, a transition is required to a PC-platform which is the ecosystem’s engine for running web-based application. This PC-engine supports simpler ecosystem members having the benefit of web-based software.

In alignment with this new AMD and PC industry direction, BroadQ is developing is Qtv ecosystem application software. Initially intended to support BroadQ’s active-TV technology for the Sony Playstation2, this web-based application can support any active-TV enabled networked TV or Set-Top Box. From the TV UI, Qtv enables network access to photos, music and video; but it also supports access to internet-delivered videos. These different ecosystem-supporting applications, such as Qtv, iTunes, WMP and more, make use of different underlying technologies; but they are likely to see similar developments such as: support for playlist sharing, social networking, and advertising delivery.

More than any other advanced ecosystem technology, active-TV technology supports the objectives and constraints of the networked appliance developer. It is light-weight in terms of resources required or consumed, easy to embed and its openness enables access to a great deal of internet video. As much as the PC industry needs ecosystem technology to improve business, the consumer appliance industry also requires advanced support for network operation to improve its own products. Any reluctance to engage in ecosystem development will enable Apple, and the like, to attempt to fill the market holes with more offerings to follow on the success of Apple TV.

Summary: Technology companies are giving priority to supporting consumer demand for improved features offered by networked ecosystem operation. At its best, ecosystem operation can combine the best of the PC industry with the best of the entertainment appliance industry. The striving to gain a key role in any widely adopted ecosystem has led to business models and technology proposals which contain elements of exclusivity. Consequently, cross-ecosystem incompatibility is a concern for developers and consumers alike.

For a long time, the Win32 API was the standard for developing PC application software. More recently, Google and others have developed applications which don’t use the Win32 API standard but execute on-top of the popular PC browser. These web-based applications, sometimes called Web 2.0 technology, are evolving a new standard. Active-TV technology enables web-based applications to support ecosystem operation. For example, an Extended-PC assists the operation of a networked TV and enables interaction with the web-based application software at the TV UI.

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

An update for Microsoft Extender Technology

Active-TV Ecosystem Developers,

The Issue: Bringing internet-delivered TV-web video to the living room TV requires mastering multiple engineering disciplines and marketing constraints.

Background: Microsoft offers an option for most, but not all, of the pieces needed to form a home entertainment ecosystem.

Behind the scene: Whereas Microsoft is pursuing a Vista-reinforcing digital media strategy, active-TV technology enables a large ecosystem of TVs, PCs and TV-web channels, by offering considerable openness and flexibility in terms of what devices will work well together within the networked ecosystem - including multiple PC operating systems.

A Microsoft supported blog by Chris Lanier, provides more information about Microsoft’s next generation Extender technology: “Microsoft launched there new MCX Partner Site for Pika the other day. Pika is the codename for Media Center Extenders (MCX) v2. “

Following the provided link to the Microsoft’s MCX web site reveals: “Windows Media Center Extender Technology (or "MCX Technology") is platform-independent software that will enable home network connected consumer electronics devices to deliver full, high-definition Media Center experiences.”

Those of you who have been tracking digital media convergence for some time likely remember the first Microsoft Extender device, including its strengths and weaknesses when it was introduced to the market some years ago. Extender technology, now in its second generation (v2) and codenamed Pika, has some similarities, yet important differences, with active-TV technology. Both require the assistance of a networked PC to complete the processing of a TV-web channel; both claim platform-independence for the firmware portion, the portion integrated into the Set-Top Box (STB), TV, or DMA (Digital Media Adapter). It is the significant differences, however, that I will now outline.

First, to what extent is Pika being adopted in the market versus alternative solutions? Recent news from Beijing regarding collaboration between Microsoft and a Chinese TV maker may indicate that the later is considering the use of Pika: "The project focuses on in-home network digital entertainment - how to connect PCs, TVs and the Internet to provide this digital entertainment experience". To be sure, Microsoft Extender technology can be integrated into a TV or STB, but it is noteworthy that so far no European or US developer has introduced such a product. However, there have been announcements from several US and European developers regarding their adding active-TV technology.

The first Media Center Extender device would only operate fully when networked with a Media Center PC, rather than a PC using Windows XP. The Xbox also supports Extender technology but offers reduced functionality when networked with a Windows XP PC. If Extender-enhanced devices were popular they would help drive adoption of the newest premium PC operating systems. However, reduced functionality is not very satisfactory for existing Windows XP users or TV manufacturers that want to sell a networked TV which will work with XP – there are over 100 million licensed XP users. With Pika technology aligned with Vista-based PCs (a small but growing user base) and not the massive Windows XP installed base, the reduced Extender functionality provided to the XP user, may have limited appeal. Of note, Apple-TV (another DMA variant) also operates with a companion networked PC (know as an Extended-PC), but is not ‘keyed’ to a particular version of the Windows operating systems (OS).

In contrast, active-TV technology does not place any restrictions on the version of Windows used by a PC supporting the operation of the networked TV or STB. For this reason, it is easy to see the appeal this flexibility has for the networked TV manufacturer; it allows them to sell a networked TV which accesses internet-delivered TV-web channels to any existing PC owner – not just a subset of new PC owners.

Active-TV technology is also able to support far more TV-web channels than currently accessible through Extender-enabled DMAs. This is because there are lots of ways to build a PC-web page, and equally, many different ways to build a TV-web channel. However the TV-web channels promoted with the Media Center PC, originally known as spotlights, made use of the Windows Media Video (WMV) codec. It is important to underscore that the Extender platforms do not have support for important video codecs such as the popular Adobe Flash (FLV) – however, here is supported for MPEG2.

As a result, a TV-web channel which uses the FLV video codec, such as the recently described YouTube TV-web channel, can not be displayed on an Extender. Adobe Flash Video is likely the most popular video codec in use by video-sharing PC-web sites. Given that a TV-web channel can draw upon the same video database used by the PC-web site, it is much more convenient to use FLV for a TV-web formatted alternative. Active-TV technology works with any video codec and is very flexible in its support for differently formatted TV-web channels.

Microsoft has introduced MCML and WinFX formatting (Media Center Markup Language and WinFX browser apps) for future TV-web channels. Should a TV-web channel developer chose to use these formatting methods they will only be accessible to Extender platforms which have the necessary underlying support – will this mean only a Pika-enabled DMA and a Vista PC? So far, unless an Extender is connected to a PC using the latest version of Windows, there is reduced functionality, such as only supporting basic DLNA operation when used with Windows XP (no TV-web channel access). Slide 4 of Microsoft's WinHec06 presentation indicates that only Vista Premium or Ultimate will support complete Extender functionality. Earlier Windows users can not expect support for “3rd party applications”, which is Microsoft-speak for no TV-web channel access.

Of course, TV-web channel developers may continue to use HTML, Adobe flash and other formatting methods supported by the legacy of browsers used with older PC operating systems. This will likely give them access to the greatest audience, particularly when delivered to the living room TV via active-TV technology.

Lanier’s blog states that Sigma Designs will provide the chip used in the Pika-based Extender v2. ATI provided the chip for the Extender v1. Likely critical to Microsoft’s decision is chip-support for the VC-1 (WMV9) codec. An alternative chip supplier would have been STMicroelectronics – using their ST710x family. Not surprisingly, active-TV technology developers such as Avtrex , Futarque and others, already offer support for Sigma Designs and ST-Micro based TVs and STBs – they also support ATI-based active-TV systems. ATI is a major supplier of chips for the US digital TV market. ST-Micro is major supplier of chips to world-wide TV and Set-Top Box developers. Not to be left out is NXP-based STB developer TeleGent which has also indicated the importance of active-TV technology support. Note that several other STB and TV developers are listed on AMD’s active-TV support page, including: Wyplay, WorldSat, Dream Multimedia and more. Active-TV technology is not owned by any one company, but AMD has been a noticeable user of the technology.

Returning to the recent Beijing news regarding the use of Microsoft technology by a Chinese TV maker, it is not surprising given the developments of leading US and European manufacturers, that their counterparts in China are also evaluating active-TV technology.

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