July 20, 2004 4:00 AM PDT
Will consumers tune in to portable video?
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Portable video players will let consumers download, store and view television shows, movies, music, photos and other digital content on the players' big hard drives and small color screens.
Ready or not, here they come: digital media players that provide portable video as well as audio.
Many say the market isn't ready because there?s little content. But until the devices are on the market, manufacturers counter, there will be little reason to create content.
Manufacturers Samsung, Creative Labs and Archos will promote the portability and ease of use, allowing consumers to record a late-night TV show, for example, and watch it on the subway during the morning commute. The device makers see the strong sales of Apple Computer's iPod as an indication of mobile video's potential.
But there are significant potholes on the road to iPod-level success, which may be why two key arbiters of hip portable devices--Apple Computer and Sony Electronics--aren't rushing their own video devices to store shelves.
"Initially, this is an early-adopter product, but down the road, we're hoping, we've set ourselves up for a hit," said James Bernard, product manager of Microsoft's Portable Media Center, the company's upcoming software for video devices. "It's the early adopters that people turn to for (buying) advice.?
In the short term, few services have been created to deliver content, and consumers will have to get used to the idea of carrying video around to watch while waiting in airports or commuting on trains and buses. By contrast, millions of consumers were already accustomed to using music devices such as the Walkman or a portable CD player prior to the emergence of MP3.
"The total demand from people who need to take their video with them is smaller than those who have time in their day to listen to music, which is a more passive activity," said Ross Rubin, an analyst with NPD Techworld. "It's tough to watch video while you're jogging."
Apple Chief Executive Steve Jobs said pretty much the same thing in late April when asked whether video was on the near horizon for the iPod, which recorded sales of 860,000 units in the last quarter alone.
"You can't drive a car when you are watching a movie," he noted. "It's really hard, anyway."
He said music is often a background activity, played while doing something else. For that reason, he said, Apple is focusing on audio.
On the sidelines
"I tend to think it's premature to get into this market in the United States right now, because of a lack of video services," said Mike Abary, Sony Electronics' general manager of Vaio marketing.
Sony's native Japan is another story. That gadget-happy market will soon have a video player Sony has code-named "Opera." It will download video from PCs or televisions. Sony has voiced no plans for a U.S. version.
Getting content delivery services in place won't be as easy as setting up a Web site. Among the most significant obstacles are copyright and piracy. The technology and entertainment industries have yet to develop a copy protection standard to ensure that copyrighted material isn't pirated on a massive scale, though they took a first step last week.
On July 14, several technology companies and movie studios--including IBM, Intel, Warner Bros., Disney, Microsoft, Sony, Panasonic and Toshiba--announced an alliance that will create a new copy protection standard for DVDs that would provide for some sharing among devices, but the fruits of those labors are probably years away.
While there won't be a wide range of easily deliverable content soon, IDC research analyst Josh Martin notes that some consumers have already collected enough visual content to find the devices useful. Apart from their own digital photos and home video, digital video recorders let many consumers grab their own video content from broadcast television.
"For some early adopters, it's already worth buying these devices, because they have enough digital content from such products as their DVRs," Martin said.
The squint factor
Another problem is making it work for users on the move--and on a screen the size of a credit card.
"You can't drive a car when you are watching a movie. It's really hard, anyway."
--Apple CEO Steve Jobs on why
iPods won't have video soon
"There are two obvious sources of video for these devices--TV shows and movies," said Ross Rubin, an analyst with NPD Techworld. "But I don't see consumers having long sessions with these devices."
So service providers will have to be creative to offer video content in a way that is appetizing to potential users.
Sports highlights could be among the first offerings. Earlier this month, Microsoft said content from the Major League Baseball site will be downloadable to devices using Portable Media Center software. Full and condensed games will be available, plus other clips, such as extended highlights and bloopers.
Music videos are another natural fit, Rubin said, considering that the devices can also play standard music files.
Ready to play
Despite the question marks, the players are coming. This month, online retailer Amazon.com began taking orders for devices from Creative Labs and Samsung, which will use Microsoft's Portable Media Center software. Due this summer, the devices will sell for $500, with 20GB hard drives and screens of about 3.5 inches. iRiver, Sanyo and ViewSonic will also make players that will use Portable Media Center. Archos will have a similar product available this month--its AV400 devices, which will be made compatible with Microsoft's software when it's available, according to Archos executives.
Portable Media Center will transfer video from PCs running Windows XP. Using a USB 2.0 connection, a two-hour movie can be downloaded in about three minutes, according to Microsoft's Bernard. Video playback is at the TV standard of 30 frames per second.
Compatible devices will have color displays of 3.5 inches or 3.8 inches, and minimum battery life should allow three hours of video playback or 12 hours of audio. The hard drives will be 20GB or 40GB, storing up to 160 hours of video or 10,000 songs.
Manufacturers will be looking to use the popularity of audio players as a springboard to attract consumers to video, according to analysts. Video-enabled devices may cost more, and the hard drives in early video players won't be as capacious as in some audio players, but consumers will be getting video with their audio.
"Consumers will get less storage for comparably priced devices, but these devices offer protection for the future," Martin said, noting that if video becomes popular, people with these early devices will already be in the game. "The question is, how much of an advantage that is now?"
Another question: Will that advantage be enough to get consumers to embrace something they haven't accepted so far? Portable analog audio devices, such as Sony's Walkman, helped to establish a market for audio players. With video players, consumers will have to be trained nearly from scratch.
Previous generations of portable video products have never enjoyed the success of audio devices, IDC's Martin noted.
"There have been portable video devices, such as DVD players and televisions," he said. "Ultimately, they became products in niche categories."
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