Tuesday, October 18, 2005

A Hazy Picture for Home Entertainment
Sadly, sometimes the price of technological innovation is confusion

There is perhaps no aspect of life where technological innovation is set to produce more flux than the home entertainment space. And I'm not talking about the video iPod. I'm talking about how the humble home has become the battleground in the fight between all the behemoths of the technology and entertainment industry. And all because of the blazing speed of technological innovation.

Cable service providers are getting into providing telephony, and telecom service providers are in turn getting into TV-over -IP (or IPTV). BusinessWeek writes that "The new holy grail of the communications industry is the triple play: the ability to offer customers data, video, and voice".

In the broader home entertainment space, competing visions have emerged. Computer industry stalwarts such as Microsoft and Intel are pitching a scenario where the PC will be the entertainment hub which will house, and control the flow of, all content such as songs, films and TV programs. Media and content companies such as recording companies, film and TV studios are recalcitrant about such a picture, as they foresee large-scale piracy and potential loss of revenue from content. They would like to see content being housed on disks, as it is today, with plenty of technological bells and whistles to ensure that it is not pirated.

The real battle that is assuming Armageddon-like proportions is one that has all the giants of the technology and entertainment industry arrayed: the DVD wars. This pits Sony's Blu-Ray format in one corner with Toshiba's HD-DVD format in the other. This battle royale is for who will control the next generation DVD format. At stake, aside from multi-billion dollar revenues, is nothing short of the future of Sony and Toshiba as powerful players in the home electronics space, and perhaps that of Microsoft and Intel as potential rulers in this space.

In the midst of it all, of course, and quite forgotten, is the hapless consumer. Can you imagine the fate of the poor bloke who plonks down his hard-earned cash (or credit!) to buy a player supporting the format that will end up on the losing side of this battle? At all costs, all the companies concerned must ensure that only one standard makes it to market.

For consumers, the advice is: unless you are a pioneer, or 'early adopter', and willing to risk being saddled with potentially useless devices, wait until there is more clarity in this space before you make any investment