TV and The Digital Living Room

Mark Suster wrote a long investment research report on the "The Future of TV and Digital Living Room" opportunity on his blog last night. I don't know how he has time to crank out these amazing blog posts on a regular basis. But he did it and it is very comprehensive. You should read it.

We've got a horse in this race with Boxee. I spend a lot of time thinking about where this sector is going. And I agree with almost all of Mark's analysis and conclusions. This is an investable space with big outcomes. But you have to swim with sharks (content owners) and walk at the feet of elephants (Google, Apple, Microsoft, Sony, Samsung, etc).

The Internet has mostly been a level playing field where the best product wins. That has not been the case in the world of big media and CE. Money talks loudly in that world. So it is still unclear whether Internet economics will work in this sector. But I am hopeful. If it prevails, this will be a very interesting market sector to invest in for the next decade (at least).

Yesterday I was at Sony's offices in NYC and got to play with the new GoogleTV powered big screens. Here's a screen shot of my twitter stream on the Sony GoogleTV (with the tweet I wrote on it on top).

Google tv

Sony has some cool products coming out that are powered by GoogleTV including big screens like this one and blu-ray players that double as GoogleTV boxes. If you are working in this sector or are interested in seeing where all of this is headed, you should go to a store and play around with them.

I don't think AppleTV, GoogleTV, and Boxee are yet what they can be and will be. There is more high quality streaming content available every day. These software/services for managing, navigating, and discovering it will improve a lot in the coming years.

But I do believe that the old model of TV and Film creation, distribution, and consumption is changing rapidly. Mark's "report" outlines how and why. And with change comes opportunity. In this case big opportunity.

#VC & Technology#Web/Tech

Comments (Archived):

  1. Wells Baum

    I think you’ve hit the nail on the head.Internet television is the next revolution behind mobile.The TV used to be the third platform we’d think about for Internet access.The other two platforms of course being the PC and the Smartphone.The “third screen,” TV, is bound to look more and more like a computer as well.

    1. BillSeitz

      I fear the CableCo gatekeeper/subsidy model will mess up this market worse than the Telco subsidies have messed up the mobile market.

    2. Aaron Fyke

      Wasn’t there a time when mobile was referred to as the “3rd screen”. TV was 1, PC was 2, and mobile was 3. Times have changed!

  2. RichardF

    Finally Sony seem to have woken to their core competence which is hardware.I am a huge Sony fan but the software that was associated with any of their products absolutely sucked in the past. A Sony/Google partnership is a very powerful one indeed.

  3. sachmo

    It’s amazing how fast people comment once a post is up… And also interesting how the early commentators tend to steer the discussion in a particular direction.

    1. fredwilson

      that’s why i need to be in the thread at the start

    2. LIAD

      don’t agree that posts are steered in any 1 direction.most threads go off on multiple diverse tangents during their 24 hours in the a random comment on a post – unlikely you’ll be able to deduce from it what the post itself was about.

      1. sachmo

        I don’t mean to imply that anyone is intentionally steering discussion toward a topic, just that the first comments sort of organically steer the discussion towards perhaps one or two aspects of a post. I’ve noticed it a few times, though I admit I don’t keep track of this sort of thing.

        1. LIAD

          people may steer the conversation towards certain aspects, i’m just saying that over the course of a thread and it’s 100-300 comments, the conversation ends up going all over the place and the initial comments don’t dictate the entire discussion

          1. akharris

            Agree, you usually have a couple of major discussions occurring at various points in the conversation thread. It’s only when the early comments are good that they start off a mini-thread. The issue is that they become hard to find as the stream gets longer and longer.There’s and idea, though. It would be cool if disqus allowed me to tag sets of comments in which I’m interested. That way, rather than just searching for my name to bring me back to threads in which I’m participating, I could change the view to: “discussions I want to see” which would only display those relevant sections. Disqus?

  4. LIAD

    I’ve had a computer hooked up to my plasma for years.The general experience is pretty decent but generally unusable due to:1. issues with resolution2. issues with input device (using a mouse and keyboard lying on the couch can be challenging)3. delays in switching back and forth between internet and TV usage.i dont want a lightweight, ios4-ified walled-garden tv/internet experience. I want the full monty. Full internet and Full TV -playing nicely together – in harmony.why give me a tv twitter client to use, when im happy with what i’ve got. why make me learn new navigation procedures when im happy with a browser. why give me a simplified youtube app when i’m happy with the real deal. – fix the input device, normalise the resolution problem – job’s done.

    1. fredwilson

      i agree with most of thisgoogleTV and boxee are the closest to what you want

    2. akharris

      I have a similar issue. I have my computer set up as a media extender to my xbox, but 9 times out of 10 my wireless network decides it can’t handle the load (probably the lead pipes in my walls or some such). As a result, I use my very large monitor as a tv – just swivel it around to face my bed. My roommate has a big LCD in his room, and I just don’t see the need.When it comes to media consumption, the only material difference between my tv and my computer is really the size of my screen and access to live sporting events.Of course, if you walk into my parents’ home, it’s a different story. Their relationship with their tv is a lot more old school. I’m curious to see the new wave of TVs and if they can reduce the technology gap enough to entice the less tech savvy crowd. That’s going to be a big deal.

      1. Peter Beddows

        Moved this comment to main thread after originally posting it here.

  5. sachmo

    I would find it somewhat annoying to browse the internet from a tv until they come up with something better than a mouse… Maybe a tv remote that you just point at links would be much easier.

    1. Aaron Fyke

      You’re talking about a Wii remote. That might be cool.

    2. fredwilson

      the remote is so importantgoogeTV’s remote is ridiculous

    3. Nick Grossman

      I am looking fwd to seeing the remote that comes with the boxee box. regular-ish remote on one side, keyboard on the other. But I still think the best remote will be an iPad / tablet that you can use as a regular remote, use as a mouse on the big screen (or maybe mirror the big screen onto the iPad), or use independently as a tablet while the tv is doing something else..

  6. ErikSchwartz

    As you know I worked on this a long time ago and I have recently started working in the space again.The real opportunity (at least the capital efficient opportunity) is in the interfaces between the screens. Why is Chrome to Phone so powerful? Because it takes content from one screen and sends it to a screen where the content is more natural and useful. TV’s are great for video. TV’s are bad for data. Watch TV (news and sports in particular) and a lot of what you see is incredibly inefficiently transmitted, homogenized, data (transmitting sports stats as video is stupid). Input and interaction on a TV is hard. We struggled with that at ICTV 20 years ago and from what I’ve seen with Google TV and Apple TV little progress has been made since. The computer on your lap (or tablet) is good at input. Your iPad is great for consuming data. But watching a show on your iPad with your spouse ? The big screen on the wall is better.What is needed is the “chrome to phone” for TV. The utility that targets content to the most appropriate screen and acts as an API between the different screens. edit: I edited an egregious grammatical error

  7. Dave W Baldwin

    Remember, it is not necessarily producing something that depends on content, but aiding the customer in viewing/working the content they desire. As in the case of who wins between Apple and Google, it is better to be a part of both and be with the winner.

  8. Riaz Kanani

    This is a really interesting space and has the potential to transform TV advertising over time. Of course forgetting about the revenue opportunities from advertising, it is going to be a huge leap for consumers as well. Tivo et al are great but this really brings ongoing innovation into TV hardware.

  9. Bill Davenport

    I really liked Mark’s post about being in the early stages of “2nd screen” technologies. As a user/consumer over the years I’ve spent less time watching TV and more on the computer. When I stop and think about why, besides the fact that using a computer is a more active process where you have more control over the the content (scrolling down pages, hopping off to related links etc.) 2nd screen technologies offer the ability to relate both activities. I haven’t seen too many of these personally yet though I suspect active twitter users may use their ipads that way to see hashtags on a given topic, e.g. mad men. When I saw Fred’s pic of Twitter on Sony TV it didn’t resonate with me too much, mostly because I’d rather have that over on a 2nd screen on the side.

  10. Peter Clark

    Just wanted to leave a quick comment to say that I watch far too much TV/Film for a startup ceo, but Boxee is 10x better than anything else on the market. I’ve looked at every possible solution, and Boxee kicks all their asses – I think they’ll beat Apple too.

    1. fredwilson


  11. kagilandam

    Converging TV, Mobile and Internet is going to make living very boring. Bringing living-room, roaming, and office to the same room … hell and heaven.

    1. Bill Davenport

      I disagree. For example, it was nice to be able to show some pics I took yesterday up on my Apple TV in the living room last night. Made for a positive family experience.

      1. fredwilson

        a dark screen is a media fail

        1. Bill Davenport

          I’m not quite following the reference, sorry! Are you making a comparison between default AppleTV and Boxee screens? I haven’t looked at Boxee and made a comparison….

          1. fredwilson

            no, what i am saying is if your TV is just dark and not showing something (twitter stream, family pics, etc) that is a lost media opportunity

          2. Nick Grossman

            Right, I think this was a reply to the other comment, hence the confusion.

          3. Bill Davenport

            got it, thx. It’s going to be exciting to see how all this develops. I know you’ve been seeing it that way for a while now with Boxee, for me it’s new ground.

    2. Nick Grossman

      Fair enough, but I actually think there’s room for each experience to be different and appropriate to the context. I think it will at least make (the) living (room) way more fun. I have a jerry rigged macbook-to-tv setup in my living room, and it was super fun watching the double rainbow song and the bed intruder song on youtube with friends last Saturday night. Not to mention how great it is to browse family photos on a big screen tv. (Note: my less techie friends were amazed / freaked out to be sitting in a living room watching a giant computer which I was controlling with an iPhone running mobile air mouse)But clearly the seamless experience is a ways off. Maybe boxee is the answer; I’m not sure. I think what I want is to be able to sit on the couch holding an iPad, and use that to control the TV, which can either watch tv shows or browse content from my computer. Then if I want, I can keep watching tv on the tv and browse the web on the iPad. For me, the biggest annoyance is actually the switching of inputs on the TV — with my TV at least, this causes a big delay and spoils the magic. From what I’ve seen on the sony/google commercials, the switching between regular TV and the internet is very fast, which is key.

      1. kagilandam

        I agree that “once in a while” experiencing outdoor activity in living room and quick check on work related stuff (very important one’s) is good.When i turned entrepreneur a old-time business guy gave me the advice … don’t put your office in the same street or adjacent to your home … you are 100% at home and 100% work and 0% at both places as well. Leave at least couple of blocks between so that you have working hours and home hours. I did not take it seriously but learnt it a hard way about “0% at both places” and it spoils your living (as a human being).Well i may be a old-time-rat who does not take tech advancement to my advantage. I am little scared about the way things are going “One size fits all” …

        1. Nick Grossman

          Right – I don’t think that “internet in the living room” and “work at home” are necessarily the same thing. I don’t have it set up this way yet, but my gut tells me that using an iPad or tablet on the couch for things like reading articles, looking things up, and browsing photos would be really nice. And better if it’s potentially hooked into the TV.Done right, I think that might actually decrease the amount of work I do at home, replacing the living room laptops.But I fully agree that setting this up to allow for work/life balance is really important. One of my co workers even goes so far to have a smartphone but w/ no email on it, to make sure he 100% unwinds when he is away from the office.

  12. Jon Smirl

    No one is talking about AllVid. By moving the TV signal onto Ethernet all of the hardware needed is going to change. It also enables all kinds of new applications. AllVid is a major disruptive event in TV and that’s why Google is behind it.Take a Bluray player. In the AllVid world it will play onto Ethernet. The TV will have a menu to browse the net and pick video sources, one of those sources will be the Bluray player. But now any TV in the house can share that Bluray player.DVRs change. They will be a device on the network. It will talk to the AllVid gateway to record. TVs will browse to the DVR to play. Any TV can access the DVR.Your TV just has an Ethernet jack. No more HDMI/Component inputs.AV receiver changes. No more component, optical, HDMI, etc inputs. Ethernet in and 7.1 out. The TV tells it which stream to listen to and syncs it to the video.The cable STB is gone. For older TVs that don’t have AllVid built in, there will be a tiny Ethernet to DVI adapter box. It will have GoogleTV or similar inside of it.The software model changes for everything. Now software can manipulate the TV streams and know what is playing. The TV streams are still encrypted but the metadata should be accessible.

    1. fredwilson

      i agree that is worth looking closely at

  13. Mark Essel

    I consider it a personal #fail whenever you catch a great post of Mark’s before me Fred. He’s certainly been rocking out the mega posts the past few months. He’s striking while the muse is ready, and maybe not on as many boards as you are 😀

    1. fredwilson

      the early bird gets the wormi was up at 5am today

      1. Mark Essel

        5:15, this day is yours.

  14. howardlindzon

    The problem with the post is subtle…and not your fault.This should all have happened at a Google Experience Store and not a sony store.I can’t believe we dont have them yet. Google needs to steal some retail apple people and make this happen. Same with Facebook.That would be good for Boxee.

    1. fredwilson

      you have been right about the apple store for so long howard

      1. howardlindzon

        what bothers me is how many apple people could be nabbed that helped buildthis concept and build experinece stores for google, facebook, kayak aandlets say intuit. These companies mught not have as much consumer product tosell, but they sure could lock down brand and teach people how to savemoney, search, meet, mingleI dont want a TUMI store anymore. I want a google store with a kayaksection and than maybe some luggage shot in the back :)old retail must DIE

        1. CJ

          I agree and to add a Google store should include an internet cafe with a Starbucks and a few Skype booths.

          1. Dave Pinsen

            I don’t know if it’s still there, but the online bank ING Direct had an Internet cafe in Midtown Manhattan.

        2. ShanaC

          Old retail will die partially. There still is nothing like in person shopping for clothing, and numerous other products. (This is coming from someone who hates buying jeans, for obvious reasons. I have hips, and it makes jeansbuying hard)One of the big reasons Webvan et al was a failure was not purely a delivery problem- it’s that the vast majority of people do not trust someone else in the wild blue yonder to choose their produce for them. You can’t replicated that via web interface. One of the reasons shopping online took off with clothing despite the odds were great user interfaces and known brands in unexpected places (as deals) so that you knew what you were getting (roughly)- if not, most places had free returns…Same thing with stores- we will use both as forms of research and places to buy. I don’t expect brick and mortar to go the ways of the dinosaur.

        3. Dave Pinsen

          Should we expect a bricks & mortar StockTwits store then?

          1. howardlindzon

            YesCEO of and founder of

        4. JLM

          TUMI is a very interesting product to be thrown into the fray — this discussion.It is not usually an impulse buy.It is expensive and is therefore a contemplative purchase.It is a status statement and a luxury good — not the same thing.It is a brand buy.It is large to handle — buy a whole set and you will need a Masai warrior gun bearer to get it to the car. You do not buy a whole set of luggage when tooling around in your Porsche.It calls out for an almost kiosk buying experience in which you have the exemplars on hand, enter the purchase on a computer and have it next day shipped to the consumer. This is only for folks who are truly too dense to be able to do this themselves.This also reacts to the increasing cost of storefront rent at an exclusive mall consistent w/ this product type.BTW, I have a large set of TUMI from when it had a “lifetime” guaranty and now it is showing a bit of its age. TUMI is very, very, very careful in dealing w/ that lifetime guaranty as they no longer offer it.Like that “lifetime” set of shocks and alignment I got on my ’66 Impala convertible back in ’75. My best ever investment thus far. LOL

    2. ErikSchwartz

      Makes me want to go back and watch the first episode of Wallstrip.

      1. fredwilson

        you made howard’s day

    3. Rocky Agrawal

      The in-store marketing of something like this is critical, especially at a $400 price.It will be interesting to see how Best Buy handles this. Will the devices be live? Will they be connected to a wireless network so that you can actually experience it? Will the blue shirts be able to answer questions about the product?Most of their in-store presence has not been great. I was in there a few months ago and the Sony Dash on display just sat there with a “looking for wireless network…” message on the post here:…I was in the Apple store the other day and they had a working Apple TV unit. You could try out all of the features. The staff was genuinely excited about the product and could explain its capabilities, including things that weren’t out yet. (AirPlay) The biggest challenge was finding space in the overpacked store.

      1. howardlindzon

        its not about best buy. they sell fans, tv’s and fridges.its about the BEST products in category opening expereince stores bystealing apple employees.this is no longer an engineer stealing world from msft to google tofacebook.this is retail from apple to google to facebook to intuit.

        1. Rocky Agrawal

          Agreed, but no one has really made an effort going down that path.It extends beyond retail to marketing in general. Few of the companies in the space have strong marketing DNA — Google, Facebook, etc. all grew virally.

  15. MHSzymczyk

    Fred – couldn’t agree with you more on the impact of the Digital Living Room. In fact, I think it will be on par, if not exceed, the fundamental transformation we saw in the mobile space. 2 key areas that I think will be game changing in the digital living room:- The disruption this will likely cause to the media buying and planning segment. Who’s to stop Google from one day auctioning television ads/space off in real-time which makes that entire ‘traditional’ process obsolete- The evolution in Natural User Interface (NUI) through gaming consoles like Kinect and Sony Move, that will likely lead to gestural control interfaces for the future digital living room as well. This has huge potential for technology like Augmented Reality.Wrote more about this for Adweek a few months back here –…We ever going to get a chance to meet? :-)MattCEOZugara

  16. msuster

    Ha. Thanks, Fred. The time came by working late into the evening in stead of other activities since my Phillies had already played (and lost) early in the day. As I’m chairing a 3-person panel of SVPs / heads of strategy from 3 of the big studios I needed to be on my A-game anyways. So it was partiaully just prep.Many of us are routing for Boxee to break through the noise – I know I am. Good luck to Avner at the crew with this holiday season. Bummer he couldn’t be at the event but I gather he’s been a ping pong ball this year. Thanks for the post.

    1. fredwilson

      i love the idea of a blog post as prep for a big meeting or presentationi use it for that myself

  17. Prokofy

    I don’t have a TV, and haven’t had one for years. My kids have an old one that they never watch.Why?Because we have Second Life instead — or World of Warcraft, or Youtube, or Facebook.I can’t sit still for TV any more, even TV I might really like (Roseanne, ER, or the old episodes of The Fugitive and Time Tunnel) because once you have Second Life, where you can enter the world and manipulate the scenery and build and decorate the set and chose the many scenes at will, you can’t go back to TV where there is no interactivity.I’m living in the future.

    1. fredwilson

      that’s what the TV programmers are worried about

      1. RJ Johnston

        Rather than fighting the future programmers should embrace and look for ways to monetize the new technologies. They are simply leaving the door open for people like us to make the future rather than shaping their own. I have no problem with this.

    2. CJ

      That’s why I time-shift TV. I don’t sacrifice for it anymore, I simply watch it when I’m ready for it instead of when it’s ready for me. That allows me to spend time with the family, write a blog post of play games and still not miss anything that I find interesting on TV.

  18. Eric Leebow

    In early 2000s I gave Google some great ideas for its Google TV. I’m proud they’ve finally gotten to it. The are some very big ideas in the future of Web TV. AOL TV, Web TV, they were too early in my opinion. It’s companies like Boxee who will innovate in this area. Whether or not we need a “box” is debatable. I think the box, or universal box is necessary.

  19. tylernol

    dont forget about the logitech revue, now that is a sweet product if I do say so myself!

  20. RJ Johnston

    I’ve had an idea for tagging TV content by advertisers with a sidebar providing product information and link to purchase from your TV. Recent innovations are bringing this concept closer to reality. Love the world we’re living in.

    1. Dave W Baldwin

      You are on the money Mr. Johnston. Everyone needs to take a breath and understand the new era of marketing/purchase/customer service that is coming.

  21. Tim Thomas

    I think the keys are actually in redefining the passive entertainment. There are tons of things out there if you want to search for them, but that’s not why I watch TV. I want to be able to have a constantly refreshing list of things that I want to see that I can pick from. I think the important changes are actually:1) Make sure I know about new shows that I might be interested in watching.2) Keep track of what episodes I’ve watched so that I can move on to the next one.There’s also the Netflix disc vs. Watch Now conundrum. I have over 200 movies in my Watch Now queue. I have a built in app on my PS3 that makes it trivial to use. But by and large I still watch my discs. I rarely watch Watch Now. Why? Because when I sit down to watch a movie the disc offers me 3 choices. It’s a manageable choice. How to provide manageable choices in the age of YouTube, Hulu, and Netflix is a big question.

    1. Dave W Baldwin

      Hang in there Tim, we have the answer on that one in a way that does not require buying numerous gadgets.

  22. RichardF

    Not many comments on this post given that you dissed AppleTV 😉

    1. fredwilson


  23. im2b_dl

    content owners “sharks”? Huh?! I know a lot of content owners they are the least shark-like in the ocean. A kibbie that refuses to be eaten is not a “shark” …(Sorry Fred but this one…hit me because it showed me a key to what the problem is for VC’s and start-ups going forward into more complex integration of the web and humanity…and less about machines..who gain traction on being just first..)The problem for VC’s coming out of tech in this industry is they have to invest in story architects (i.e. multi-platform interactive transmedia structures) because that is going to direct the internet. Story or content architecture and technical architecture will be 2 pieces of one steering wheel and column). The living room and the content flow into it will lead almost all of the web social structure…not mobile as everyone thinks. There are a series of books, historical academic focus’ that show how these cells of society effect the overall social architecture. That TV will be like the mothership. The sad part of all of this is those elephants can’t do this… (signatory status’ and their own powerful scale will make it financially unfeasible). Start-ups like Boxee do not /have not appreciated the difficulties in audience experience in long form..that it is not the quality of the tv that delivers people to them…but the level of story experience in that long form …which is the only place that can hold up the next form of advertising/retail integration. It is sad that as I watched technical savvy venture capitalists and developers ignore the reality that in a paradigm shift math and technical expertise may open a door and be looked at as the safe bet but historical talent of understanding humanity is actually the safer bet. Boxee will not sustain on technically savvy product structure…(there are too many big elephants that can do that and run laps around them as soon as they get w whiff) but on having someone who understands the communication structures of the home (historically) …and what it is to be human. Unfortunately many of those people are long form content owners/creators/architects/game designers… …and get dissed as either not as important or not as “safe” as technical know how (you know the “it’s easy” thing…”every human can create good content”) or on occasion (and you know I love ya Fred) …because someone only respects the math and ethics and movement of a machine… and get called sharks. There are sharks in entertainment…they usually are the $ guys..the agents, the studio exec, the publicist…but not the content creators who are most often the content owners…The predominance of those “sharks” are actually fearful kibbies and they are actually the the key to the long tail… not only of internet tv…but the entire internet.

    1. ErikSchwartz

      Where there’s a lot of misunderstanding is that content creators and content owners are not the same.NBC does not create “The Office”, Reveille Productions creates it.Reveille Productions then sells the exclusive rights for some time period to the show to NBC. The reason NBC is a such a shark in this case is because what they bought are exclusive rights. If they were buying non-exclusive rights they would pay Reveille Productions far less.

      1. fredwilson

        that’s right Erik

        1. calabs

          So what do you envision the content creator market looking like in the future? How will a high quality show like “The Office” get produced in the future?

          1. Andrew Greene

            I am naively going to say something like Kickstarter.Check out this article about television production versus movie production:http://thehollywoodeconomis…Cinema will become more and more populist, in the bad sense.Home theater will be an immersive cultural product for the rich.Or I could be wrong.But look, you can’t extract much time/money from the American television watching population (6 hours/day). So why not send them to the movies and sell them popcorn and soda?

          2. calabs

            You mean Never seen it before but kind of reminds me of an idea I once had where consumers directly invest into internet startups, removing the middle-men like Fred. :)That link was an interesting summary of TV vs Movie economics, and why TV shows are so adult and rich and movies have become (more-or-less) juvenile slogs.For all the analysis, it’s pretty simple from a consumer’s point of view: I want more Hulu. 🙂

      2. Steven Kane

        how does that make NBC a ‘shark”? if you were running NBC, you would not allow the company to acquire exclusive rights? i don’t believe that for one second

        1. ErikSchwartz

          Only in their aggressive nature. NBC is totally within their rights. My point was that it doesn’t matter what the content creator wants because they already sold their rights, they’ve been paid.

    2. fredwilson

      most content creators are not sharksmost of the people who they sell out to are

      1. im2b_dl

        that I agree with…but most content creators are content owners. the way to be successful in this realm is not on hardware or a secondary browser (that really is what these internet tv platforms are really) because soon they will all be redundant. (I hope for your sake Boxee gets an offer to be bought) …the technical knowhow is in how stories and productions are created ..HTML5, browser layering, sound/voice recognition, incorporated 3-D object recognition in production and delivery, AR film layers…… etc etc… it is not the platform…Chrome, Firefox, etc… all going to be the platform.

      2. Steven Kane

        i find this distinction a little confusingbusiness people who seek to optimize their market position and profitability aren’t sharks. they’re just… business people. how many usv portfolio companies that could lock up a market or distribution channel wouldn’t do so? how many would usv tell not to do so, so as not to be a “shark”?is zynga a shark? the company creates content, of course, but also distributes it, trying to capture as much market share as possible, and at maximum profit. i thought the whole scamville things was ridiculous, as I thought, did you, no? i don’t get why one business model is a ‘shark” and the next is just smart?

        1. fredwilson

          fucking people over is not smartwe don’t do it, for example

          1. Steven Kane

            Of course. But that’s just a truism. (that is, who can disagree? who would ever admit to “fucking people over”?)my point is (and i think you know this) that “beauty is in the eye of the beholder,” as — in business anyway – is “fucking people over” or being a “shark”i don’t think zynga did anything wrong. tech crunch and arrington think they were “sharks” who were “fucking people over”who is right?you know i am a pretty rabid defender of the rights of content creators, but i don’t understand how blanket statements and bland assertions accomplish anything, other than to forego reasonable discourse and stir up a fight. but in these times, on these issues, maybe i’m just a silly nostalgic romantic

          2. fredwilson

            we can talk about zynga privately stevei stand by my characterization of content ownersthey fuck people over

  24. Nikhil Nirmel

    People need to stop consuming media, and start working on startups.

  25. InTheBox

    Fred, I find this post really interesting. As a career veteran of media, I will say the following:1. Everybody forgets sports: in all the rhetoric about cutting the cord, sports appear to be absent from the discussion. There are simply no other platforms (other than traditional broadcast cable and satellite) that can support massive, simultaneous HD broadcasts. Sports are a huge driver of the consumer behavior and for this reason, I think the risk of cable cutting is way overblown.2. Content owners answer to only one God: money. The current Fox/Cablevision blackout is an excellent case study. Fox (NewsCorp) has gone beyond the traditional boundaries of the retrans debate by cutting off access to hulu to optimum broadband subscribers. To me, this signals the fact that content owners are waking up to the fact that viewers are at risk of transitioning from one media to the other (as opposed to a complement).The rub is that content economics are famously poor in online TV relative to broadcast (and will be even worse if Fox prevails in the current retrans battle royale). In addition to superior CPMs, broadcast television affords content owners the ability to bundle content and thereby increase ad inventory. While content owners have enjoyed the enlightened proposition of breaking away from cable operators and transitioning to IP TV, they are waking up to the fact that this is a poor economic decision as consumers won’t pay online. So, either they will put erect paywalls for online TV, or they will allow cable companies to do so in their honor.3. Eventually, this is going to mean that free-to-access online TV will be filled with long-tail content that is interesting but has low production quality. While this has worked to destroy print media, consumers won’t betray quality TV for cut-rate tv to save a buck… it simply won’t happen. I want Mad Men, not Schmad Schmen.4. The obvious exception to all of this is netflix. Despite Boxee’s valiant efforts, they don’t have the capital to buy the upfronts that Netflix can afford with their $8bn market cap. Netflix has slipped in nicely as a content aggregator platform for televisions and in my opinion has the best chances at becoming the dominant player here. Google may be successful at wedging themselves onto TV platforms, but only because they are google and most importantly that they are willing to do it for free.

    1. fredwilson

      couple points to an excellent comment1) boxee has no intention of licensing contentthank god netflix and others will do thatboxee can be the interface to get all of that content from netflix and/or elsewhere2) sports will drive the move to over the top. is a great example of an amazing user experience. when you watch in HD 1080p on Boxee, it is way better than HD on cable

      1. InTheBox

        Thanks, I haven’t seen MLB, but I will check it out. It will be interesting to see how it survives, because current sports tv rights are subsidized by the entire subscriber base, not just question: if fox has the right to black-out optimum online subscribers should Cablevision have the same right to block or restrict in the same way this content?I see another net-neutrality post in your future…

      2. Rocky Agrawal

        Except that MLB blocks in-market teams. If you’re a Yankees fan living in NYC, you can’t watch Yankees game.It’s designed for the uber fan who wants to watch out of market games, or for a transplant who can’t get their team in the new market.

        1. fredwilson

          not for longthere are contracts that have to come up for renegotiationthis will change, and soon

          1. ErikSchwartz

            It’s more than ONE contract. The Red Sox are on NESN because NESN pays them a boatload of money. There’s a deal like that in every city. But the league owns the out of market rights, the Sox can’t also do a deal with some TV network in Florida. This is not like the NFL. NFL teams don’t sell local broadcast rights.So first the teams will need to get compensated by the league for NOT selling the territorial rights. Then the league will need to sell distribution through DirectTV, Dish, Apple, Boxee, TW, Comcast, Roku et al. Then they need to come up with some way to distribute money to the teams in an equitable way. The Red Sox and the Yankees sell the local rights to their games for much more that the Tampa Bay rays do.It will happen, but I think it will take some time and the NFL as a more centrally run organization will be first.

  26. Shyam Subramanyan

    Large screen is good for one thing and one-thing only. Immersive video experience (mostly passive) shared with others in the same room. If a “box” is going to enhance that somehow, well and good. I don’t need a “box” to bring Facebook or Twitter to the large screen. I see some of these interactive experiences moving from computer to mobile rather than from a computer to a television.Some ideas on how passive video experience can be enhanced through Internet technologies:1. A “DVR” of videos on the web that I might interested in, wherever it might be, ready to play. Boxee is doing this.2. While consuming content on a device (computer, tablet, mobile), the capability to push it to the big screen (immediately or time shifted) so that I can share with others in the same room.

  27. Costa Rica

    Fred, I do have a comment. I’ve seen the Apple TV and Boxee and both seem to assume that people like the complication of multiple level menu’s. Can’t these things come preconfigurable as channels? If I wanted to give one of these to my mom she would reject it just because of the menus. But if I could configure the extra stuff as channels so that her experience does not change she would like it.I’d say these boxes should come with some ‘default’ channels (such as YouTube most viewed or Twitter’s worldwide trending topics) and allow setup of custom channels (for example one where my mom could see pictures of her friends in Facebook).

    1. CJ

      Ugh, I agree and disagree at the same time. Channels is an old school concept and works well for simplicity but is the antithesis of choice. You have to watch what’s airing, in return there should always be something airing that you want to see…in theory anyway. In practice that doesn’t work now nor would it just because the content provider is the internet and not Comcast.Alternatively, with Boxee you can queue up content with their browser plugin, that’s a pretty good channel but it takes some work. You can play content on your HDD or network, but that involves menus. Until we can plug in like the Matrix, custom will always require a bit of work from the user, no way around it.

      1. ShanaC

        I don’t know, I think long term, the idea of a Shana channel versus a Malcolm Channel which I can share sounds appealing for discovery purposes.

        1. CJ

          Sure, until I’m sharing something you don’t want to watch…what then? Do you change the channel or can you skip to the next show? I’ve no problem with individuals becoming the content discoverers, I just don’t see much difference in it than tuning into ESPN. The real value to me is being able to watch EXACTLY what I want, EXACTLY when I want it and that requires buttons and menus and such and that will turn some people off.

          1. ShanaC

            That’s the big question of how UX/IA will drive problems and solutions inthis space within the limits/nonlimits of both the technical sie and whatcontent providers/general licensee holders (aka networks) will allow. I dothink it is a fair assumption (and one netflixed offered a big prize off of)that if I, Shana, likes watching Audrey Hepburn movies and think Gigi shouldbe watched by everyone, that I should be following around/be followingpeople who want to watch the same movies.* *Much like we discovered with the Drudge Report and HuffPost- there isspace for partial aggregation to do well if it feeds some sort of given loveof a certain kind of content. I think the timing is totally off (doing itnow just doesn’t work, without a variety of ways to interact with otherpeople through my media consumption, what’s the point?): I do think it willhappen.Even with exactly- I think you’ll still need buttons, maybe less buttons. Maybe something along the lines of Pandora (up/down/share that’s it) Theworld you describe is too static for ever changing content and the peoplebehind it, some sort of dynamic filtering is going to neededI also think there may be a generalitional/cultural thing going on. I havea lot less problems with menus/etc/ if they are laid out ok. I also startedwatching lots of tv late in life (if I can call it that, I watch less thanthe average for my age group) because my family got cable late. Cutting thecable is just something that seems normal, mostly because the TV thing isless of an issue as an idea. We always had tons of computing, so for methat environment, just makes sense. I suspect more kids will grow up moreclosely to the way I grew up because the costs of the hardware side versusthe software will drop like a stone compared to when I was a child..

          2. CJ

            I also think there may be a generalitional/cultural thing going on. – Totally agree. This is the main issue with the integration currently. People in my age group get it, older people don’t want to deal with it. Rather be passive consumers than active curators.I do love the way that Boxee handles this and Pandora and can see it working, I just don’t see it working without the concept of a menu or UI that isn’t just Channel UP/DOWN and that’s what it some people want. In the end you’ll get out of it, at least initially, as much as you put in. I have a brilliant XBMC/Boxee setup that works well with Harmony remote and Android remotes on our phones but I know a lot of people who just want a Roku box and Netflix. *shrug*

          3. ShanaC

            To me that setup sounds complicated. I’d probably want to be in the Roku box category- simplicity is a rare artform in all of this.As I said, it’s definitely generational, and we shall definitely see how design in this field plays out. Some menus won’t be a killer, already traditional cable boxes have gotten complicated.

          4. CJ

            It is slightly complicated to setup but it’s simple to use. By no means do I think it’s for everyone, it requires a bit of computer knowledge and time and inclination to do it but it made my TV life so simple after it was done that the couple hours of setup time was a great investment.But you can’t beat a Roku or Boxee box for simplicity. The problem still comes in hosting or streaming your media. I prefer to host my own so I’m not chained the the fickleness of Comcast. However, media costs are decreasing where it may make sense to just stream everything soon. Amazing how that happened. I don’t think the content providers see it though, Streaming is the best form of DRM. If I buy once, play forever we all win. All we have to do is tie the media to an account and we’re done. *shrug* I don’t know why this is so hard for them to understand.

          5. ShanaC

            It’s back to the question of how do you monetize the Shana or Malcolmchannel. I think it freaks chunks of people out to know that tv contentcould go the complicated way of music- which never fully hooked into thismodel at all. TV I think is very very afraid.

        2. RichardF

          Already happening with LastFM. I can absolutely see it happening with TV

    2. fredwilson

      these devices all need to get simplerthat’s part of what i meant by “they are not great yet”

  28. Rocky Agrawal

    I’m a little surprised to see TiVo left out of most discussions on this topic. They have been a pioneer in all things TV. In addition to the DVR functionality, they offer Netflix, (soon) hulu, media streaming, support for multiple devices, etc.Is it price? The monthly service fee?

    1. ErikSchwartz

      I suspect that TiVo is hugely hobbled in innovation by its partners and existing relationships

  29. perfy

    Glad you touched on this subject Fred. I’ve been a long time fan of Boxee. Should be interesting to see what their product turns out to be once it launches. I originally ran Boxee on my Apple TV, then upgraded to a Mac mini running it, but recently switched to Plex for my living room software, because their newest version is just too good.I think Boxee and Plex are a good example of two pieces of software driving each other towards improvements.

  30. paramendra

    “….changing rapidly.” Kind of like the churns in the VC industry.

  31. Dave Morgan

    A critical issue here will be monetization, not just user interface and user experience. Premium video programming is very expensive and the current broadcast and subscription-based multi-channel provider models have done a great job creating and distributing great content and getting viewers and advertisers to support it within relative walled-gardens. For web-based video services to really flourish they will need monetization models that are both robust, but are portable and can be widely distributed. Whether TV Everywhere will satisfy this, and whether we see Internet-like ad networks on TV to support this (we’re trying), all remain to be seen.

    1. Rocky Agrawal

      Done right, you could have the efficiency of search with the impact of TV advertising. There’s no reason I should see ads for Tampax or diapers.But a big challenge will be to change how ads are bought and sold. Hulu is contending with these issues already.

    2. Tara Walpert Levy

      I think you’re right, Dave. Very few technologists or web leaders get how difficult it will be to break the aligned economic interests of traditional TV programmers and distributors. Or how much additional economic incentive will be required to make a move to a higher distribution cost, reduced reach model compelling. Personally I think TV Everywhere is a genius effort by the TV industry to retain their value and prominence. And I think its likely to work – at least for a long time. Significant opportunity exists in all of the advanced TV and related TV services but they are going to take a long time to materialize and involve a lot more of the traditional players than most folks think.

    3. fredwilson

      i think we will see subscriptions and bundling of subscriptions (much like cableTV but different and more diverse) play a huge part in monetization

  32. ShanaC

    I think one of the large questions unaswered (but I already see signs and symbols about) is how will long form/tv content change in its production?Already there is more fragmenting of the audience, more niche shows. What’s interesting in all of this nicheness is the presence of transmedia storytelling. I think that drive towards transmedia storytelling is going to be the gamechanger for any ux or serving platform for tv, or tv like platforms to serve content, including sports. Figuring out how to hook most kinds of media together through multiple screens so that the story is a continual tale in all that is constant in the way it is flavored is the real challenge. And I don’t think we’ve nearly cracked that one yet at all.(The stats, after all, are part of a long story arc of all things sports that I don’t understand)

    1. fredwilson

      suster talks about that in his postit is really good

      1. ShanaC

        I read it, I disagree with him about how the Arcade Fire video is the future. And the nature of games. I think we read fiction and watch fiction to understand other people and how they think (and I think some literature and neuroscience programs are cross testing this idea to see how it bears out). I think reading/watching about me is less interesting than reading/watching about someone else, because I know me. I’m boring in my own head.He’s extremely right otherwsie, but I think in this case, how content develops across many screens will drive the way those screens display that content. And that’s all audience taste. I’m not totally sure how much of future content will be game-esque, or have you interact with it (perhaps super long term with multiple people) It kills parts of the watercooler effect if all of this content turns into a MMORPG.(and if we all don’t play the same adventures, how do we relate?) So in that sense, his thesis is extremely open.Otherwise, extremely extremely good.

  33. Peter Beddows

    We have had very good results for sometime now combining our DishTV satellite service with a pc that has SnapStream’s “Beyond TV” software and a Hauppauge TV Tuner card plus an nVidia video card feeding out to a 27″ AOC HD monitor that enables us to choose input between the satellite TV signal input, YPbPr from the DishTV tuner box, HDMI, PC or USB amongst other choices. Our media arrangement also includes DVD and optional surround sound.This gives us 1920 x 1080 definition when using the PC input and BeyondTV enables Tivo like recording.With this arrangement, we can easily use the pc just as a pc because the screen is designed to accommodate pc resolutions and thus we get the best of all worlds with internet access to NetFlix, Hulu and any other web based service or link plus simply switching input option gives us superb TV via the satellite.The other element in use here for media storage – including iTunes stuff – is a 1T RAID 0 disk setup installed in a server on our Windows network that is actually our SharePoint development server. The link between our media pc and our network storage is via NetGear wireless router providing a 162.0 Mbps data rate which appears to handle media processes quite effectively.And, as if all that is not enough already, we have our satellite tuner box, media pc, network routers and storage server on UPS systems so that, in an emergency, we can still receive information via the TV as we did ~ and were the only ones in our neighborhood that could do this ~ during the last firestorm here in SoCal as we all waited to find out the fires progress and if the evacuation orders were to be implemented or not: Since main power was cut in our area, nobody else had any TV coverage during the most critical time yet, through our setup, we were able to provide information to our neighbors.With all of this access to a multiplicity of media sources ~ who now has time for anything else?


    Fred, I’ve read Mark’s post and have commented there as follows: The “Innovator’s Dilemma” is not content rightsholders’ conflict with MSO deals; interactive distribution rights are distinct and separate from telecasting rights. (Just as DVD, satellite radio, terrestrial radio are separate and distinct rights fees). The dilemma is that, let’s use MLB as the example, enjoys 100% of the online revenues. So to give up exclusive interactive distribution rights to share the revenues with another interactive channel, will only do this if the other interactive channel is offered at a premium over and above the price and can afford to share the same unit revenues already enjoys.In order to merit such a dramatic premium, the innovation has to be far more exponential than a 2nd screen experience on the same or a second piece of hardware. And it must not interfere with the high production values which MLB has already invested so much in and considers critical to the brand. There is an opportunity to do this. Consider that people still pay hundreds of dollars to attend a live event with fellow fans – complete strangers – over staying at home with friends to watch on a wide screen television. That’s the experience to emulate to merit a premium over what is paid for cable television now. So that’s a combination of the technologies Mark refers to in #8,9,and10 (gaming, social, transmedia narratives). Separately & additionally, in a world of abundant choices, it will take a much better system for merchandising and discovery to sell these events a la carte as Mark discuss in points #4 &7 (content bundling and content discovery).Think big enough and there will plenty of profit to make above the costs of the premium experience, the marketing costs of the discovery system and returning the same unit revenues to content rightsholders like Demonstrate this kind of revenue generation and instead of sharks and elephants, content owners will be very happy to focus on what they do best and let someone else deal with the distribution technologies, transaction management, and marketing challenges. With kids not signing up for cable and satellite as they move away from home and opting to watch tv online, the timing is right to aim for a home run instead of a bunt.Best,K-

  35. DL

    This is an incredibly dynamic landscape. A lot of what is holding back the space on the premium movie and TV side is not technical, but contractual and business issues. HBO for example, holds cable and Internet rights to films from Warner Bros., 20th Century Fox and Universal Pictures for years to come. Wal -Mart, as the largest seller of DVDs, exerts powerful pressure on studios wary of offending them on pricing issues. Now that they have acquired VUDU, there may be a lot more experimentation by them to create a digital entertainment business that may be a model for other services, but by sheer market power they will have a huge influence. Many films have rights tied up for years in other ways, resulting in the convoluted film rental policies on iTunes that match the pay per view conditions in hotel rooms. And the cable companies seems to be slow getting their act together, but they pay content providers 32 billion a year and no train is going to leave without them even if they seem to be mucking things up right now. This industry needs smart entrepreneurs, no doubt. And I can’t believe I am saying this – it will also need smart lawyers who will be able to push changes in the rights contracts that have existed for years without much change.


      I understand the complexities you are talking about. But lawyers have participated in this parsing of domains, treating content distribution as a property like real estate. I understand that their intent is to generate the most revenue possible for their clients. But when it comes to real estate, you can only enjoy one piece of property at a time. Entertainment and information command a premium when they are multi-dimensional, integrated experiences. When someone will pay a $100/hr to get the whole experience at a stadium or a conference vs. $1 a day for TV, $1 a day for the internet, $1 a day for mobile, $1 a day for satellite radio, that’s $4 a day and pennies per hour. The gap is enormous. To “disrupt” it, there’s more upside to aim for a virtual version of the $100/hr experience than adding another $1 a day platform.We actually own all the rights to a sports event property and have been trying to find the technology to deliver the integrated, multi-dimensional experience and the marketing platform to sell it to prove the upside and shatter the perceived value of the incremental approach to the business. But all the tech is designed for a relatively static, online, free, ad supported experience. When I point out that advertisers have shifted dollars to custom digital publishing to create a more dynamic, integrated platform, I get the dog look.It is disappointing that the tech just isn’t there to capitalize on this opportunity. Until recently, everyone’s been looking in the rear view mirror and thinking things would stay the same. Anyone with a platform that is thinking bigger and to the future should contact .katherine (at) comradity (dot) com

  36. RacerRick

    Question – will we have the interwebs built into the tv? Or will we always have a set top box?

  37. SubmitguRu

    Google everywhere. Google on the mobile phone. Google on TV.Don’t forget, next time Google on your car 🙂

  38. Torrents

    If this is true is the beginning of revolution in technology innovation, another step to Watch TV.

  39. Complete kitchen

    Except that MLB blocks in-market teams. If you’re a Yankees fan living in NYC, you can’t watch Yankees game.

  40. cheap car hire

    I agree with this post. It is incredible how fast all this is changing.

  41. JESSICA BIEL dresses

    When it comes to media consumption, the only material difference between my tv and my computer is really the size of my screen and access to live sporting events.