The World Watches Less TV

Brace yourself. According to a new report by Accenture, the number of consumers watching broadcast or cable TV in 2011 in an average week was just 48%. That number is down from 71% just two years earlier in 2009. (The survey includes an international sample, drawing data from the United States, France, Japan, China, and India.) What is driving the change? According to the same study, one third of the consumers watch video content on their personal computers, and one out of ten watch video content on smartphones.

Clearly, streaming video is one of the primary forces behind this change, but it also appears to signal a shift that I’ve been talking about for years. It seems that the traditional group activity of watching television is transforming into a solo activity done on a personal device. We’ve already seen this shift dominate the music business; how much time do you spend listening to music with other people, compared with the amount of time you spend listening through earphones?

This has some serious implications for the television industry. Are people going to stop putting a large screen in their living room or other central location? Accenture’s report indicates that this may be the trend. Only 20% of consumers indicated that they intend to buy an HDTV (of any size) in 2012, which is down from 25% last year. Yes, it’s likely that the market is fairly saturated at this point and the economy has people budgeting a bit tighter, but this is still a large drop.

We’ve already seen other research indicating that people are looking at their laptops, tablets, and smartphones at the same time that they are “watching” a large screen television. It remains to be seen whether this is just an infatuation with our connected gadgets or a true signal that we are privatizing our entertainment experiences, but it could be that these changes could have a profound effect on the consumer electronics market.

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A True LED HDTV

The Sony CrystalLED display is a true LED display, but sadly, is only a technology demonstration.

One of the most interesting stories to come out of CES 2012 is about a pair of technology demonstration displays that were tucked away in the Sony booth. Labeled “CrystalLED”, these 55″ HDTV panels were quite different from any other display that has been marketed as an “LED HDTV” in recent years. These panels actually were LED displays, using discrete, individual LED components for each sub-pixel in the 1080p display. That adds up to more than six million LEDs.

Reports from the show were that the image quality was excellent, and why shouldn’t it be? LEDs are emissive, so viewing angle should not be an issue, and they are mind-numbingly fast, so there should be no problem with image blur. LEDs have an extremely long lifetime (when was the last time you had an LED power indicator “burn out” on a piece of equipment?), so they should last forever, or at least well beyond the time when you’d want to replace it. The only problems that I can foresee are the challenge of “binning” the parts so that you get consistent color output from all two million LEDs of the same color, and the fact that some LEDs show color shift with changing temperatures.

Oh, and then there’s the problem of how do you actually build these suckers? A tip of the hat goes to my friend and colleague, Ken Werner, did some old-fashioned journalistic legwork for his “Display Daily” column for Insight Media. He cites a “reliable source” who indicated that each of the six million LED chips were individually wire-bonded to the electrodes. It is not immediately obvious how this sort of assembly could be automated at a speed and yield that would be economically feasible. In fact, the display industry is moving toward production processes that let you spray or print the display materials onto the substrates; a move to discrete LED components would seem to be a big step in the wrong direction.

So my best guess is that you should not bank your HDTV budget in hopes that Sony will be selling one of these LED displays any time soon (if ever).

“Dragon TV” Will Let You Talk to Your HDTV

Okay, before I get to my point, I have to stage a little hissy fit that is related to the topic. The topic is the news that Nuance has announced “Dragon TV” which will let future televisions understand your spoken command. And an enormous number of my colleagues in the technical press have written about this as a great advance in”voice recognition.” And it’s not. “Voice recognition” is the recognition of a specific voice, as in biometric security applications. When you try to dictate to a machine, the application is “speech recognition.” There’s a big difference, folks. Getting it wrong is just sloppy. Okay, I feel a little better now; let’s move on.

So Nuance announced “Dragon TV” which is a new interface platform that HDTV manufacturers can incorporate in their future television designs. The system recognizes spoken commands (not VOICES!oops, sorry about that). The cool thing about this is not just that you can say channel numbers or channel names to switch, but it also becomes part of the search interface. You can speak the name of an actor, and it will seek out programming options where that actor appears.

From where I stand, this is far more important than any of the gesture interface announcements that came out of CES 2012. (Who wants to do aerobics just to change channels?) The key to the future of television programming is the ability to access the content that you want to watch, when you want to watch it. The rapid growth of “over the top” Internet streaming demonstrates how much American viewers want to break out of the confines of the traditional channel grid, but the big problem is how to access all that content. (This is something I know a little about, as I wrote a major industry overview report for GigaOM Pro on the subject.) The traditional remote control is not the answer, and as Logitech discovered the hard way, a QWERTY keyboard doesn’t go over too well in most living rooms these days. And trying to spell out T-O-M C-R-U-I-S-E by waving at the screen is probably a non-starter.

Speech recognition could be the answer. If it is going to work, nobody is in a better position to deliver on the promise than Nuance. The company’s history starts with Visioneer, a scanning company; it turns out that the same algorithms that help with optical character recognition (OCR) also work with speech recognition. It later acquired ScanSoft (which was a descendant of the famous Kurzweil Computer Products), which in turn goobled up many of the OCR and speech recognition companies of the day including Caere, Lernout & Hauspie, Philips, SpeechWorks, and Locus Dialog. After merging with Nuance in 2005, the company has continued to grow through acquisition, buying Dictaphone, Tegic, and more than a dozen other companies. As a result, Nuance is the repository of perhaps the most extensive collection of speech recognition technology.

I also suspect that lurking in some of those IP collections are some algorithms that can help identify meaning. This will be an essential component to success of any new television interface that tries to sort through the metadata for the universe of movies and TV shows and YouTube clips in order to find matches to recommend in response to a user query.

There are no Dragon TVs on the market yet, but this still could be one of the most significant developments for the HDTV market this year.

Five Rings in 3D

Yup, sales of 3DTVs have been lower than what some people have predicted, or that what manufacturers had hoped for. The reason is not the goofy glasses or the high prices. You now pay little more to get 3D support in a television, and people are just fine with wearing the glasses in the local cinemas. The problem is simple; there’s not a compelling library of 3D content available. But that’s changing rapidly.

Consider “Smart TVs” for a moment. For the most part, that means that your HDTV can connect to the Internet without using a separate computer or other black box, so that you can stream movies and past episodes of TV shows on Netflix. Yes, these televisions can also get sports scores and stock prices and weather forecasts, but the compelling application is the entertainment content from Netflix (and perhaps a few other sources such as YouTube, Hulu Plus, and Amazon on Demand). Once the content became available at a reasonable cost (all you can eat for less than $10 a month), the demand for the feature took off.

The 20 or 30 movies that Hollywood releases in 3D just isn’t enough to sustain consumer interest. Even if you wanted to watch everyone of these movies, you’d run out of content even if you rationed yourself to one a week. Clearly not enough content.

But here comes some compelling content, at least for some viewers. Panasonic has announced that it will be partnering with NBC to bring 3D coverage of the London 2012 Summer Olympics to U.S. television audiences. The 3D broadcasts will be shown on a next-day delay, including both the opening and closing ceremonies. The Olympic Broadcasting Services is planning to produce more than 200 hours of 3D programming, covering a wide range of sports including swimming, diving, and gymnastics. The content will be made available to cable, satellite, and telco subscription TV services across the country.

I’ll freely admit that 200 hours of programming is not much in a market where the average viewer watches more than 150 hours a month, but it’s a good start. And when the content being shown is programming that is in high demand by a large number of consumers — such as the Olympics — I expect that we’ll find more people expressing interest in getting a 3DTV. Sports have always been a driving force for adopting new television technology, and when the SuperBowl is finally broadcast live in 3D, I expect that we’ll stop hearing stories about what a flop 3DTV has been.

The OTHER 55″ OLED HDTV at CES 2012

[Okay, I’m just warning you all. The flood of stories coming out of CES 2012 is likely to keep me busy for a while, long after the Las Vegas Convention Center has been hosed down and refilled with the next two or three conventions. So I’ll get to them eventually, but you’ll have to give me a little time. Write to me at alfred@hdtvprofessor.com if there’s a specific topic that you want me to cover.]

Yes, I’m not at CES this year, so I end up reading about what’s been going on there in some of the same places that you probably read. And so I may not be the first to break a story. But I bet you’ll find commentary here that goes beyond what you’ll find in most of those sources.

For example, take the “Large OLED HDTV” story. LG telegraphed its intention to show its 55″ OLED HDTV well in advance, so we knew to expect it. The big surprise came from Samsung, which also showed a 55″ OLED HDTV. It appears that when it comes to display technology, “Anything You Can Do I Can Do Better” must be the national anthem of South Korea. One reason that this was such a surprise is that Samsung has been pretty quiet about large screen OLED technology for the past year or so.

There are some important differences between the two announcements. LG’s panel is a “color by white” design, which means that they make white-emitting OLED sub-pixels for the panel, and then cover them with red, green, or blue filters. (In an effort to boost brightness, the LG pixel layout also includes white sub-pixels with no filter at all.) The advantage of this approach is that you only have one OLED material which (we hope) will age uniformly. The Samsung design uses separate red, green, and blue emissive materials. This indicates that Samsung has apparently come up with a way to deposit the different materials in a finely patterned way on a large panel, which is no mean feat. We don’t yet know how the faster aging of the blue OLED material will affect the picture quality of the sets over time, and if this is a disadvantage compared with the LG design. Samsung also announced that they plan to fabricate the panels on a Gen 8 production line later this year, which could mean lower manufacturing costs than the panels built on smaller Gen 5.5 lines.

The LG and Samsung announcements are more alike than different, in my opinion. Both promise vague “later this year” ship dates. Neither has offered any information about price or production volume. Remember that the Sony OLED TV never made it beyond pilot production volumes, and it remained a collectible rather than a competitive product for the brief time that it was on the market.

I’m ready to be proven wrong, but I have not yet been given any reason to believe that these sets will come out at prices below the $5,000 to $10,000 range. If they cost that much when they finally ship, it will still be an important milestone for the OLED display industry, but that’s still too high for them to be considered viable competition for LCD or plasma models. These announcements from LG and Samsung are hopeful signs, but I expect that we could still be years away from competitive OLED HDTVs available in the marketplace.

Running into a Burning Building?

HDTV maker VIZIO has decided to enter the personal computer market.

You can’t tell the players without a scorecard. In yesterday’s Almanac entry, I told you about personal computer maker Lenovo’s surprising entry into the HDTV market. Today, it’s time for turnabout. If there’s a technology market that is worse than the HDTV business in terms of slim profit margins, cut throat competition, and distribution challenges, it’s the personal computer market. It’s so bad that the industry leader HP announced plans to exit the business last year (though it quickly rescinded that decision).

So who is running into this burning building? None other than VIZIO, the company that provides high-end HDTV designs and technology at prices well below those of the biggest brands. It uses strong vertical integration in its supply chain to wring out costs, and has managed to become one of the leading brands in the business. Perhaps they were emboldened by their success with an Android tablet last year, but they have taken the plunge and will ship two desktop systems and three notebooks this spring.

The most striking feature of all the products is their elegant design. The desktop systems are “all-in-one” with the computer integrated into the display itself. Two of the notebooks are in the “thin and light” category. Based on the photos from VIZIO, the company has challenged Apple in its area of core competance by making the new products look appealing and state of the art. VIZIO has also drawn on its experience with entertainment hardware, and all the computers are designed with high-definition screens ready to play video from a variety of sources. They include HDMI ports so that you can attach them to Blu-ray players, set-top boxes, or other devices.

This is certainly an aggressive move on VIZIO’s part, but given their track record in the seemingly-impossible HDTV market, I’m not about to bet against them. No pricing has been announced, but if they follow their familiar strategy, they will have features similar to their top competitors but priced a notch below. I’m not shopping for a new computer right now, but I’ll still be curious to see these new products when they become available.

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HDTVs Get Smarter

One of my public speaking topics in recent years was “Why Your Next Computer Will Be a Television.” Even without the network-connected “Smart TV” features that are commonplace now, HDTVs have long relied on powerful processors and other components that outperform the standard desktop computers of not-so-long ago. But even back when I gave this talk, I don’t think I foresaw how far this aspect has develop in such a short time.

Smart TVs connect to the Internet through your home network’s high speed broadband connection, and the widgets or applets or whatever you call them can access information and put it on your screen. Weather forecasts, sports scores and schedules, stock prices, news headlines, traffic reports, and much more are just a remote control click away. These TVs even capture streaming video from Web services, such as Hulu Plus, Netflix, and Amazon on Demand. All that takes some processing horsepower, but it’s nothing compared with what comes next.

Let me describe a new product that was announced by computer-maker Lenovo at CES today. It has a dual-core processor running the Android operating system, 1 GB of memory, an 8 GB hard drive, and support for SD card storage. It also has a built-in 5 megapixel camera. What is it? A new tablet? An entry-level personal computer? Nope; it’s a 55″ LCD HDTV with an LED backlight. The remote control includes a touchpad, and reportedly the system will respond to voice commands. Lenovo also announced a 42″ model. Both will ship this spring, but just for the China market initially. The company plans a later roll-out for the worldwide markets. No prices were announced yet.

This raises the ante for what constitutes a Smart TV, and it marks the entry of a major technology manufacturer in the already-crowded HDTV market. (The pundits are looking for who will be next to drop out of the market, rather than who is looking to join the fray.) With all the rumors of recent months about televisions with motion control and speech recognition commands — many of these rumors paired with the as-yet unconfirmed Apple TV product — Lenovo’s entry kick starts the competition and could set the new standard for what we expect from our televisions.

LED TVs to Dominate World Market

The worldwide economic downturn put a damper on consumer demand for televisions, according to NPD DisplaySearch’s Quarterly Global TV Shipment and Forecast Report. High inventory levels meant that shipments for 2011 are exepected to be flat compared with 2010. The good news is that there are signs of improvement, and the forecast is for a modest increase of 2% in 2012, reaching 254 million units.

NPD DisplaySearch forecasts rapid growth of LED LCD HDTV shipments.
[Source: NPD DisplaySearch Advanced Quarterly Global TV Shipment and Forecast Report]

The report cites a number of interesting findings. As the price gap between LCD and plasma shrinks, consumers favor the LCD choices. As a result, the forecast is for plasma unit shipments to decline much more rapidly over the next few years than had been predicted recently. As the price for 50″ sets fall below $1,000, demand for the larger sizes will increase rapidly.

Perhaps the most interesting finding, however, is the growing popularity of LED backlights for LCD HDTVs. Their share of the LCD shipments is expected to be about 46% for 2011, but will jump to nearly 68% for 2012. This is probably driven by a combination of factors, including dropping prices for the individual LEDs, increased power efficiency, and more attractive form factors that result in a thinner and lighter TV set. By 2014, DisplaySearch predicts that fluorescent backlights for LCDs will be less than 10% of the LCD HDTV market.

So if you’re going to be in the market for a new flatscreen television this year, chances are excellent that you’ll end up with an LCD HDTV that has an LED backlight.

Roku Sticks It to TVs

Roku is probably one of the most successful network media players out there, and they seem to keep getting better. The boxes keep getting smaller and programming choices available through them keep growing. It’s a great way to make a dumb TV smart.

But now Roku has decided to think small again. The company has announced the Roku Streaming Stick, which looks like a typical USB thumb drive. Plug it into an HDMI port of a supported television, however, and you get streaming access to video from the Internet using a wireless connection to your home network.

The one speed bumb in the preceding paragraph is the single word “supported.” The Streaming Stick relies on Mobile High-Definition Link (MHL) technology, which is not yet widely implemented. Roku announced that Best Buy intends to produce HDTVs under the Insignia brand that will support the Streaming Stick sometime this year, though the Roku press release did not offer any more specific details.

The problem is that the a typical smart TV offers much of what the Streaming Stick delivers, so it will likely appeal more to buyers of low-end models who want to add smart-TV-style access to streaming video. Unlike the existing Roku boxes that will work with older sets, however, this new device will only work with new televisions that have MHL support. Still, it could provide a lower-cost upgrade route for consumers who buy a low-price HDTV now, but who decide they want to add streaming video support later. Since the average TV will probably see eight to ten years of use over its lifetime, this could be an attractive feature. Whether or not this represents a large-enough market for Roku to make the product successful remains to be seen.

Big OLED TVs Coming…

I know, I should be excited. I was hoping that maybe there’d be a viable 32″ OLED HDTV on the market sometime this year, but I wasn’t holding my breath. And here comes the news that LG will be showing a 55″ monster of an OLED HDTV at CES in Las Vegas next week.

Fifty-five freakin’ inches! That’s crazy! This tells us that they apparently don’t need polysilicon for the thin-film transistor (TFT) switching backplane, which should indicate that they’ve worked out the problems for a metal-oxide semiconductor layer to replace polysilicon. So we can expect to see a giant high-resolution panel that is gorgeous and thin and bright, and it won’t be affected by viewing angle or motion blur problems.

But then you see the weasel words in the news stories: “Pricing and availability will be announced later.” I will be amazed if LG announces either of those items at CES, which means that the display is little more than a technology demonstration at this point. Will people get excited and drool all over this new display, giving it lots of coverage? I have no doubt that this will happen, even without a price or a ship date. And I’ve got just one word for you to keep in mind when you read those glowing reports: SED.

If you don’t remember, Surface Emission Displays were the joint project of Canon and Sharp, and for a few years running, the panels were the darling of CES and the display industry. They looked amazing! And they never came to market.

I’m not saying that 55″ OLED HDTVs won’t come to market; I’m just saying that it may not be this year. And when they do ship, think back to the early days of plasma televisions when you imagine the pricing. I won’t be at all surprised if the first models come with a $5,000 price tag, or even more. At that price, I don’t count them as a real product any more than the “world’s fastest production car” is a real product. Someone I know in the display industry used to say, “There is no HDTV market above $2,500.” The point is that above that price point, the number of units sold is so tiny that it is nearly impossible to make it worthwhile.

At this point, I’m willing to accept LG’s demonstration at CES as a hopeful sign, but I’m not ready to count it as the launch of OLED HDTVs as a competitive product.