Will 2012 Finally be the Year of the Smart Family Room?

Many of us in the digital media scene have been enjoying the fruits of technology innovation in the family room for years. Microsoft’s Windows Media Center, for instance, has been around since 2004, and DVRs have been around as early as 2000.

Yet, in 2012, digital media management in the home is still in its infancy.  True, DVRs have now become commonplace thanks to leased boxes by cable companies, but they are by and large still not much more than fancy VCRs in terms of flexibility and functionality.  Beyond these cable-company leased DVR boxes, cable-ready DVRs are still slim pickings — there’s really just TiVo and Windows Media Center.  Both offer enhanced media management and streaming options, but go about solving the problem in vastly different ways.  Due in part to up-front costs and setup complexity, neither are close to mainstream when compared to cable-company DVR units.

Then there are the emerging and increasingly popular non-DVR set-top boxes, including AppleTV, [amazon_link id=”B0038JE07O” target=”_blank” container=”” container_class=”” ]Boxee[/amazon_link], [amazon_link id=”B005CLPP84″ target=”_blank” container=”” container_class=”” ]Roku[/amazon_link], Google TV, and even [amazon_link id=”B003O6JKLC” target=”_blank” container=”” container_class=”” ]Xbox 360[/amazon_link] and [amazon_link id=”B003VUO6H4″ target=”_blank” container=”” container_class=”” ]Sony PlayStation[/amazon_link].   These types of digital media add-ons are compelling for manufactuerer because they exist exclusively in the “internet media” space and therefore can avoid the complex, cumbersome and regulated CableCard certification and implementation process required to support digital cable content. (How cumbersome, you ask?  Consider that the federal government needed to get involved to help make things easier for the consumer.)  The relative simplicity of purpose of these add-on devices drives costs down to the point where they can become compelling mainstream products.  And their sealed box approach ensures security for high-value content (i.e., Netflix, Hulu, etc.), while eschewing the complexities of integrating with regional, regulated technologies like digital cable and satellite services.

Even with all of these options, there are serious gaps in addressing mainstream consumer needs:  DVR devices only tip-toe into the internet media/digital streaming space, and internet media add-on boxes generally ignore traditional, cable-based and satellite TV content.  For those who desire the best of both worlds—traditional cable and internet media in one, simple, unified experience—there are very few elegant, all-in-one solutions. (Note: I do recognize that Windows Media Center’s flexibility can get you quite close to having the best of both worlds, but getting there requires serious commitment and technical mojo that is simply out of the mainstream consumers’ grasp and/or interest.)

Which brings us to 2012. This year’s Consumer Electronics Show seemed to be ushering in the first generation of viable “Smart TVs” — based on technologies ranging from proprietary platforms like Samsung’s to more standards-based environments powered by Android.  If digital streaming technology successfully lodges itself inside the television set itself, it will significantly reduce a barrier to entry for the mainstream consumer.  Consumers notoriously don’t like set-top boxes, but they are already used to having them in their homes to enable digital cable or satellite TV feeds.  In other words, if all existing boxes stay as-is, yet the TV gets smarter in the process, then the average consumer will likely stick with their cable-based DVR box for traditional content, and look to their TVs alone to gain access to the growing volume of quality content available online.

Even Microsoft is sensing the trend.  All of the rumors and prognostications lead to Microsoft looking at their own set-top box, the Xbox 360, to be the new digital media master of the consumer’s family room.  While I am skeptical that the consumer’s existing mental model will actually enable them look at their Xbox’s as anything more than their game console, it’s quite feasible that the next generation Xbox will finally live up to its namesake and be the “box that does X,” where “X” is anything you want it to do — from gaming, to media, to communications, to education & training.  No matter how it plays out, the point is that the Xbox (as well as other gaming consoles, like Sony’s PS3) is an existing device that people have accepted in their homes, similar to the cable company’s set-top box.  Meaning, there is an opportunity for Microsoft and other console makers to leverage this “accepted box” and alter it’s purpose in the emerging smart family room.

A new wildcard entering the race for your TV is Google.  Google has proven that when it really wants to, it can dominate an industry (examples: internet search and smartphone OS’s).  Google’s own GoogleTV has so far been quite a flop, proving that a “launch in beta” culture might not be well-suited for the digital family room market.  But it looks like Google is not giving up so quickly — nor should they; after all, Google is in essence an advertising placement company, and to miss out on the TV consumer experience would be a strategic fail for such a company.

One of the most anticipated movers in this space is Apple, who seem to be planning to move beyond the “hobby” stage of AppleTV.  Apple will most likely raise the bar for the whole industry (as they are wont to do), bringing entirely new interaction models and content consumption features that have thus far evaded creative minds in the industry.

For power users (like me), all this “mainstreaming” gives me some worry warts, as I prefer to be on the bleeding edge, with technology power and flexibility (and, frankly, some hack-ability) to do virtually anything I want to meet my discerning digital desires.  Can the more esoteric and high-end solutions like Windows Media Center (and Ceton’s future “Q” product) exist in this increasingly mainstream future?  I’d argue, yes.  Any market that has a broadening appeal is good for all segments within that market.  In other words, a rising tide lifts all boats.

It’s been over a decade since the first DVR was launched, and almost a decade since the first Media Center software was introduced.  Digital media in the family room has experienced a relatively slow evolution, but I think 2012 may be remembered as a turning point — just like 2007 is now thought of as a turning point in smartphones.