Digital Diversion

Having spent over 12 years with Intel, the last 4.5 of them spent working on consumer platforms and digital media, I figured what better place to kick off my blog than with the role of the PC as an entertainment platform in the home. My involvement for Intel in expanding the role of the PC into home entertainment goes back to 2001-2002 when we foresaw an opportunity driven by the convergence of four major trends:

1. the penetration of broadband into the home,
2. the proliferation of home networking,
3. the increased availability of content being offered online, and
4. the power and flexibility of the PC to manage and distribute diverse forms of media.

The ultimate vision was for any content to be shared seamlessly on any device within the home – a simple statement that belies the complexities of establishing industry standards between the PC and CE industries through collaborating with behemoths with competing interests in the home, namely Microsoft and Sony. As with any standards activity, the concept is that by all parties contributing to a greater good, the market develops faster and the market opportunity is bigger for everyone (the recent Blu-Ray vs. HD-DVD battle is a great case study in how a lack of standards can stymie growth). I’ll save the politics of this undertaking for another day and jump straight to Intel’s motivations.

Very simply, Intel makes money by selling chips. In its vision of the Digital Home, Intel wanted to drive computer density (more PCs per home), drive the need for higher-end/more expensive microprocessors into PCs, expand the types of devices that would require the power of an Intel microprocessor (e.g. networked consumer electronic devices), and ideally get a share of the content revenue much like Steve Jobs was able to achieve with Apple’s iPod and iTunes. We would never say this to our partners, but Intel’s vision was for the PC to be the center of the digital home; the device to which all other devices must connect and through which would all content and services must pass. In order to achieve this, Intel defined and drove three models for how the PC would be used within its view of the digital home:

1. 2’ Local Experience: This is how most people use computers in the home today; sitting at a desk and interacting with a keyboard and mouse. 
2. 10’ Local Experience: The idea here was to replace the audio/video receiver in your home theater with the PC as a “Swiss Army Knife”; a single device through which you could get access to all your content no matter the location or format. A bit over-simplified, but for this to work we needed to address issues such as form factor (the Entertainment PC, or EPC, should fit in a stereo rack), user interface (you need to be able to read the screen from across the room while sitting on the couch), navigation (you need to be able to control your PC with a remote control) and the right consumer features. For Intel, the EPC was intended to drive density and sell-up.
3. 10’ Remote Experience: In this model, the PC’s role is essentially that of a whole-home server; digital content of all forms is stored on the PC and sent to your TVs and/or stereos through the home network to a device we called the Digital Media Adapter (DMA).

My role at Intel at this time was to license in technologies for our platforms and to build out the partner ecosystem in order to support these three usages described above. I served up the Kool-Aid and sampled quite a bit of it in the process. As I’ve mentioned before, I’m a bit of a gadget geek and I took the opportunity to try out a slew of devices and approaches to delivering Intel’s vision of the Digital Home and, in the process, reach my own conclusions about what works and doesn’t work for me. I consider myself to have a relatively high tolerance for technology-inflicted pain and frustration (at least compared to the average consumer) but if something is going to find a permanent place in my home, it ultimately needs to work both for me as well as the rest of my family.  For purposes of this post, I’m going to focus on the 10’ Local Experience (I will return to the other usages models another time).

It should not be a surprise to readers that follow the industry that despite the intentions of major companies, the push for PC’s into the entertainment center did not live up to the hype or expectation. So what went wrong?

Features & Usability. I was a beta tester for Intel’s version/vision of the EPC (Viiv™); it lasted less than a week in my home. There were (and still are) just so many shortfalls in the PC as a consumer-grade entertainment platform that I won’t even try to be comprehensive but let me list the big ones from my perspective. First, Microsoft Windows, and in particular Windows Media Center (Microsoft’s 10’ user interface bundled with Vista) is far from being “CE simple”. While it works fine with organizing and consuming content stored on your hard drive, try installing one of their online services.  You’ll find yourself putting down the remote control and picking up the keyboard and mouse. Second, you can use Media Center to record and watch TV but, in the world of HD, there are very few systems available that can accept anything other than a digital terrestrial HD broadcast (ATSC).  Third, your average PC is going to consume a few hundred watts of power, generating heat that needs to be dissipated using noisy fans which can be heard above the volume of whatever you may be watching or listening to.  Lastly, the PC form factor never really changed to fit the usage model.  Despite a lot of hoopla about new form factors, they never really sold at mainstream price points.  I recently poked around Dell’s and HP’s websites and couldn’t find a single system designed to fit in an A/V rack.  Unfortunately, the other side of the standards coin is that it can stifle innovation and, when it came right down to it, the consumer PC OEMs didn’t believe in the category enough to invest in helping to solve these problems.

Content:  While your more tech-savvy user may be enamored with the thought of accessing any piece of online content from your TV, the reality was that the EPC offered very little unique content.  For the most part, Microsoft’s Online Spotlight is stuffed with 10′ versions of existing websites.  Compare this to over 15,000 pieces of content that is available on Xbox live.  Intel had grand designs for providing unique content to their Viiv PC platform, but the effort was under-funded relative to the goals and eventually shut down because of budget issues.  And while this was going on, online video became incredibly popular in the form of YouTube, access to which is not provided through Windows Media Center. 

Marketing: What Intel wanted to do at the time was to create a new category of personal computers.  It created a brand (Viiv) and pinned its hopes on recreating the success of Centrino which i was considered a great success.  Creating a brand costs $100’s of millions of dollars but as Intel got closer and closer to the launch of Viiv, they cut budgets to the point where Viiv as a brand was destined for the dust bin.  While still used today, it is subservient to the processor brand and I think that you’d be hard-pressed to find a consumer who knows what it is or does.  Microsoft is a completely different story.  At this time, they had three competing activities to win the living room:  Windows Media Center, their IPTV platform and Xbox 360.  With approximately $1B invested in Xbox 360 leading up to and including its November 2005 launch and with Media Center planned to be included “free” in every consumer Windows Vista platform, their decision to focus on the game console was a no-brainer.

Between features, content and awareness, very few users were compelled to drop $1,000+ on one of these devices. 

Now all this said, I know people that love their EPC’s and there is a market for them, particularly within the high-end custom home theater install market where consumers are willing to spend $10’s and even $100’s of thousands on a custom system (unfortunately that’s not me).  If you’re one of these people, the best solution that I’ve seen is from a company called Niveus Media.  What’s great about Niveus Media’s solutions are that they are designed to look great in an A/V rack, they are passively cooled (meaning no noisy fans) and they carry the right features for the audio and videophile including support for HD cable.

As for me, the PC stays in the office where it belongs…