From oddity to commodity

Which of these tech companies would you put your money behind? CNET News.com's Michael Kanellos explores consumer unpredictability.

Michael Kanellos Staff Writer, CNET News.com
Michael Kanellos is editor at large at CNET News.com, where he covers hardware, research and development, start-ups and the tech industry overseas.
Michael Kanellos
4 min read
While sitting around a campfire about two weeks ago, my 10-year-old nephew told me that he discovered something recently: Every person, everywhere, is important.

Naturally, I was floored and elated, and I asked him how he came to that conclusion.

"It's when I was playing 'Halo 2,'" he replied. "When someone gets killed, the Covenant starts to gain the upper hand. If you lose two people really quickly, forget it."

Unpredictability remains the hallmark of the consumer world. You develop a game to stimulate compulsive hand-eye coordination, and the kids come away with philosophical insights.

Unpredictability remains the hallmark of the consumer world. You develop a game to stimulate compulsive hand-eye coordination, and the kids come away with philosophical insights.

A number of the monumental successes in this marketplace in recent years were largely unanticipated. Google? Consumers already had a wealth of search options. Word of mouth made it a global phenomenon. Conversely, the Moxi box sunk. Taste remains difficult to predict, and it's complicated by the fact that you have Harvard-educated MBAs trying to anticipate the needs of 13-year-olds in Missouri.

To get around the problem, venture capitalists often place smaller investments in a wider variety of companies, said Aneel Bhusri, a partner at Greylock Partners. This week, a number of small start-ups pitched their ideas at the iHollywood Forum in San Mateo, Calif. Here's a brief look at some companies that might either rock your living room or get on the next train to oblivion. Please vote with your comments on which might succeed.

• EZTakes. If the Easthampton, Mass.-based company has its way, it will now be a lot easier to get DVDs of award-winning foreign films or discs with outtakes from "The Beverly Hillbillies." EZTakes has developed software that lets consumers legally download movies from authorized sites to their PC and burn them to a standard DVD disc.

The idea is to circumvent the problems with the other video-on-demand ideas, founder Jim Flynn said. Consumers get to own a hard copy of the movie. "They also don't have to buy a new box," he said.

Conversely, producers can cut distribution and packaging costs in selling DVDs, which, in turn, permits them to offer a wider range of content. One film distributor is tinkering with the idea of using this as a way to disseminate the 250 movies and documentaries on the film festival circuit that rarely reach the public. Two film distributors are currently conducting trials. A formal launch will begin this spring.

• Pepper Computer. The Internet appliance is back for another sequel. The company is marketing a Linux-based device for searching the Web, viewing photos and sending e-mail.

The 2-pound gadget comes with a 20GB hard drive, an 8.4-inch screen, built-in Wi-Fi, a QUERTY keyboard, an ARM processor and speakers covered with Gore-Tex (to protect from spills).

CEO Len Kawell says he's familiar with the many failures in this market but that things for his company might be different. Consumers are now acclimated with digital entertainment, and Linux provides better security. Still, the lap-size pad costs more than the budget $699 laptops circulating these days. Pepper is taking pre-orders now and will start selling them in a few weeks.

• Powergrid Fitness. Crossbreed a joystick with a Bowflex, and you get the Kilowatt from Powergrid, a machine that lets you work out while playing video games like "Blood Wake" or "Smuggler's Run." Instead of pushing buttons, the user pushes against a shoulder-high rod to play a game.

"Sixty-three percent of the population wants to lose 20 pounds or more, but fewer than one-third exercise," CEO Greg Merril said. The company sold 250 units last year and hopes to sell 7,700 this year. It's unusual, noted George Zachary of Charles River Ventures, but so was the George Foreman Grill, when it first came out. Models range in price from $1,199 to $799.

• GalleryPlayer. Now bring the treasures of the Musee d'Orsay to your big-screen TV. The company has licensed paintings and photographs from Corbis, National Geographic, Time-Life and others, and delivers them to plasma and LCD TVs, CEO Craig Husa said. It sounds dopey, yes, but it is sort of cool to see the photos of Dorothea Lange on the big screen. The service starts at $4.99 a month. While testing it as an on-demand option, a major cable provider found that 4 percent of viewers tried it out.

And if there isn't a market for art, other things might sell. A source from a video-on-demand company added that one of his customers, an adult publisher, is interested in the technology.

• DigitalDeck. The company sells a home-networking system that lets you watch a DVD in one room and then watch it in a different room without moving the disc. A three-room system costs $4,500. But that's a bargain compared with the $10,000 systems now on the market, said Marin Levine, vice president of strategic development. The systems mostly will be built into new homes, but the price could be a challenge. You could probably decorate your lawn with 45 burl-wood bears for that kind of money.

• Streamload. The San Diego, Calif.-based company has come up with a way to let users send e-mails that contain 2GB worth of files, making it a lot easier to send video clips. For $4.95 a month, consumers get unlimited storage on the company's servers and an xStreamMail account.

• Orb Networks. This is sort of the opposite of Streamload. Rather than send a file, Orb's service transforms a PC into a server. With a password, you can watch a video clip or view photos from a remote location, so the file never has to travel or get copied. The tough part for the company is that it seems that there are a million people out there promoting the same thing.