-Hello, everybody, and welcome to the Next Big Thing.
Thanks for being here.
I'm Brian Cooley, Editor-At-Large for CNET.com and I'm pretty sure this is the biggest crowd we've ever had.
So, give yourselves a hand for being very curious.
And I like to think you've come to the right place, so, we're not going to aid the disappointment today.
For those of you who haven't been to this presentation before, every year, CNET's editors get together throughout Q4 and we take a look at the big trends or big single trend (it'll vary year by year) that is going to really inform what happens in the year ahead.
This is not futuristic stuff.
This isn't flying cars.
This isn't, you know, robots sort of your valet at home.
This is real world stuff that will affect the content you distribute, the marketing messages you put out, the way you handle your retail channel, your product planning--all of this.
We're really working on a message here that's going to really give you stuff to work with, that is usable in the 12 months or a little more going forward.
So, that's what Next Big Thing is all about.
This is not about futuristic stuff that you can't work on right now.
Now, before I reveal what the Next Big Thing is really all about, we wanna get you involved in how we're going to have this discussion.
Those of you who are veterans of the Next Big Thing over the years know that we always
take your temperature during this presentation.
So, if you may recall from previous years, when you sat down, there was a little voting paddle sitting on your chair.
Didn't have that this year 'cause we're doing our voting a little differently this time around, moving into the technology that all of us are carrying, of course, which is a cell phone or smart phone, so, that's how we're gonna do our voting this year.
So, have your phone handy.
Let's see what we can do to absolutely slam the wireless networks in Las Vegas.
Let's try to give AT&T and Verizon and T-Mobile absolute
Let's do a little test vote here.
So, get your phone out.
Get into your text messaging application.
Let's do a little text here, a test text, with the most obvious question of the season, which is, do you play Angry Birds?
Now, we know what the answer is gonna be, 100% yes.
But humor me, so, text, in all cases, to 22333 throughout the presentation and go ahead and text the code on the right that is your choice.
And you only get to vote
We've got technology that keeps you from jamming the ballot box, so, don't even try it.
So, text either BIRDS1 for yes, BIRDS2 for no, or BIRDS3 for what the hell is Angry Birds, to 22333.
Let's give you a few seconds to do that.
If we smell any burning insulation, we know it's the nearest cell tower.
Alright, now, let's get into our topic.
The next big thing this year in the simplest sense, is moving past one of the most important platforms, machines, products
that has every hit the consumer space in electronics, and that, of course, is the personal computer.
It began a lot of things, especially when combined with the Internet.
But it's time for its era to give way to a completely new class of devices and, most importantly, class of consumer and media user behaviors.
That's why we call the Next Big Thing the "Era After the Computer." Let's take a look.
-Today's digital interactive era, it was forged on the PC combing storage, processing, connectivity, and interface to create an experience we've never seen before.
But computers could never escape their roots.
Their kind of cumbersome, rather sterile, and just too much in the way between the user and a natural relationship with the
services they value.
In an era where we spend more time on social networking than on e-mail, when Netflix streaming accounts for some 20% of Internet bandwidth at peak, and 80% of the connective gear in our homes won't even be a computer by 2015, it's time for some new [unk].
That's why smart phones, connected TV, tablets, and the services that leverage them are what comes after the computer.
They're the Next Big Thing.
We're moving away from machines that require us to conform to them to devices that conform to us and our uses: social, mobile, contextual, geo-aware, always on, and usually always on you.
Form will now truly follow function like never before in CE and you could almost hear the consumer say, "What took so long to get to what's after the computer?"
-So what you see in there is the DNA of a number of different product classes and, most importantly, services that power to make them relevant.
So, to get us started on this thing and to get the juices flowing for the panels we have coming and the votes we're going to be harvesting from you, God-willing, let me bring on my colleague Molly Wood, Executive Editor of CNET.com.
Now, we've been prowling this show for about 2 days now.
-Our opening day, our press preview day yesterday and, of course, now our first full day as we all are here, and among the things that we've seen primarily are very cushy chairs.
-But also the tablet revolution is really-- is really on and I think there's something about that that-- were you surprised by the middle ground that the tablet was able to carve out between the smart phone and the notebook?
I was definitely a tablet doubter.
I thought that that was absolutely a product in search of a market, although it obviously found a market as evidenced by the fact that, I think, 80 of them are being introduced at CES this year.
-I suspect 8 to 10 of those will make it to market and/or be successful.
it is-- it is, in fact, raining tablets and it-- it is because, I think, those devices speak perfectly to the idea of that totally portable, always on, always connected dream really.
-And we talked a lot about-- a lot of the DNA there is not about the form factor of the device itself as important as that is, but it's about always on, and always on you.
-It gets you to an-- an innate relationship with media.
We-- we refer to it a lot as a transparency which-- which may sound like almost an academic idea, but it does, I think, create more use of media, more--
more ownership of media.
If it's always available wherever I am, I'm gonna have a greater affinity for it.
I'm gonna feel like that's mine, whether it's a show or-- or a newscast or a webcast or whatever it is.
I can more rapidly feel like that's something that's part of my life.
But it's great news for content creators.
This is really a services story.
-Yeah, it absolutely is.
I think there's a way to go, though.
I think the tablet is not the "be all, and all," nor is the smart phone.
-Nor is it connected TV alone and-- and we have seen a lot of manufacturers so far at the show
talk about the connected ecosystem.
They're calling Smart--
-mainly, and what-- what they really mean is that--
-you know, the undercurrent of all of the gadgets that we see at CES is the connection.
-That ecosystem is exemplified by Toshiba, Vizio, Samsung, are all showing tablets that are often new to them, running an operating system in common with the smart phone Android in just about every case; running an operating system that connects to a smart or connected television, and having them be able to share media wherever you are the same basket of
media, as well as being able to control and communicate with each other so you don't feel like you're starting up every experience from scratch.
When you get home, you start the TV and it's a different world than your smart phone or tablet you were just using.
I think a lot of this also ties into a bandwidth discussion because if we're talking mobile devices, you'll notice we're not talking about being seated anywhere.
This is about mobiles and 4G has been really big at this show.
CES has become sort of a smart phone this year, which is unexpected.
we need mobile broadband and we need it quickly, the pressure is extreme to get those 4G networks rolled out.
So, we're suddenly talking about phones and networks and 4G in just about every device you can think of.
And by the way, folks, I believe we have a-- a Twitter-- a Twitter hashtag for this show.
So, if you're out there Tweeting right now, stick #NBT at the end of your Tweet and let's kinda aggregate together.
I believe, later in the show, we'll be able to take those on the screen and
profanities and all will see what you're saying about what we're saying, so, that'll be fun.
So, that's coming up as we go through the show now.
Let's get started now.
The first module, you know, as we do things here at the Next Big Thing, we break it down into elements, and we're going to talk about the devices first and get the actual hardware out 'cause that's the first thing we and, most importantly, the consumers think of when we talk about this; the amorphous part, the services, very important, arguably the biggest part of the whole picture.
But, they start with devices when they say, "What can I do and what do I do it on?" So, let's take a look now at where devices fit in the picture of this Era After the Computer.
-We're taking this computer revolution in places where it never has gone before.
PCs roiled the market for content, entertainment, the way business is done.
And now, all these things are moving it into more hands and making it portable and we've just seen the tip of the iceberg as far as where is this-- this is gonna go.
-Devices that are personal, online, always on, instant on, and offering an almost transparent connection between user and their digital life, their media, communication, social networks--they are what comes after the computer.
The smart phone with broadband, a true web experience, HD video, location awareness, your choice of hundreds of thousands of applications and services,
all delivered via an impressive screen and keyboard.
It's almost strange to call it a phone.
And by the end of this year, smart phones will outsell personal computers.
-The iPhone came along and said, "You just have to point and touch me," and had the same thing.
It's just so intuitive that anybody can pick up that iPad and go, "I know how to open up the photos, and I know how to move through them, and I know how to pinch and zoom." There is no learning curve anymore.
-The tablet, with many of the same attributes of the smart phone, but sized for the human machine
with enough screen to satisfy our eyes and make room for our hands, and ready to make a real run of becoming a serious video and reading outlet along with many of the same things smart phones do as well.
And then there's the TV finally picking up the traits of its more interesting brethren.
No longer a one-way street, it connects to the Internet for streaming movies, television shows, and apps that make sense on the sofa.
Three classes of device, one mission: to bring users closer to services.
But before we get there, some questions.
Device confusion, it's a real danger.
Tablets and smart phones don't replace each other, let alone notebook computers.
So, are we asking consumers to buy, carry, charge, and not lose all 3?
And at this point, smart devices often face off along platform lines--iOS, Android, Windows Phone, Samsung Apps, Google TV, and more.
Developers and users have to make choices that feel more like bets.
Finally, the devices today are often tied to imperfect buffets of services.
No one offers it all.
That's a way to get consumers to say, "Maybe later." Nonetheless, going forward, it's going to be all about devices that are personal, relevant, and immediate.
That's what's coming after the computer.
-Alright, so the first question is, how many of you during that video Tweeted, "You just have to point and touch me"?
Thank you, Scott Ard, Editor-In-Chief, one of your best quotes ever.
I like that.
That really is almost the essence of what we're talking are devices that there is-- there is no layer between you and the experience with media.
We now have with us our panel that's going to help us get through this and discuss how these devices are developing.
And they're developing very fast on many fronts with a lot of question marks, and also a lot of hits along the way.
Starting from your left
is Drew Bamford who's Director of User Experience at HTC.
I was asking him backstage.
It's been about an hour since you've been here.
I figure you have 1 or 2 new handsets on the market now.
-At least 1 new announced.
Nick DiCarlo, in the center of our panel here, is VP of Product Planning for Samsung Telecommunications, the mobile division and potable division of Samsung.
And on the right, Anthony Wood, who is the founder and CEO of Roku.
How many folks have a Roku box in this room?
There's a few hands now.
Alright, so, let's get started on this idea of the
First question we posted on the video is device confusion certainly when there's a tablet, when there's a phone, when there's a netbook or a notebook.
There's in-car technology arriving as well that kind gets in there.
At what point are we asking consumers to have too many devices as well as in the home with 4 or 5 ways to have over-the-top or connected TV experience?
Who's got concerns about that?
Or is more better?
Or are they just gonna go with whatever we throw at them?
-I have concerns about that.
-None of these guys are gonna say they do, right?
-The more the merrier, right?
-Well, there's certainly.
-I think we all like selling them.
-I mean, for me, the important thing is that people have a consistent experience across all of those different types of product.
-So, a different product may be better, more appropriate to different environments for different types of people.
But if they can use the product the same way, access the same media, the same content everywhere, then I don't think there's such a big problem with multiple devices.
-Nick, what are your thoughts from Samsung?
You guys have quite an array of products.
So, it's certainly a-- the earliest days of this, you know,
transformation in terms of how people are consuming content, they use to buy CDs, order books.
Now, all of that is purely virtual.
Your rights are in the cloud.
And so, how people are consuming that has to change along with it.
And so, they're buying devices to help them do that.
And a tablet in particular is particularly adept to that but of course, they wanna see that same content on their TV, on their computer, elsewhere, and that's the idea of connecting everything.
But it is early and people are confused about it.
So, the industry does need to help them understand.
But, again, the whole industry is not-- or-- the whole market
is not us.
It is super technologically knowledgeable people.
There's a lot of people who are maybe buying their first smart phone this year or next year.
And so, there's a lot of dynamics that are gonna be new still for people to-- for the industry to kind of get their minds wrapped around as we move forward.
-Uh huh, yeah.
A lot of learning curve as much as comfort or almost possibility curve we have to introduce first.
-Less than-- less than 30% of people have a smart phone in the US I think.
-Yeah, still down that low, right.
-Anthony, you're coming from the non-mobile home space for the most part, but to look at the-- I get 2 reactions to the connected TV set top box.
One is, "Yeah, I don't wanna do TV that has connected in it 'cause I just got a television." and that same crowd says, "I don't want another box." Would you- do you find that at Roku in terms of getting people to add another box to an already complicated stack of CE in the TV room?
-Now, most-- I think there is this perception
in the industry that people don't wanna buy another box.
But actually, that's not-- that's not true.
I mean, people do buy boxes all the time.
They just-- they just don't want a box that doesn't anything useful.
Generally, it's the issue.
So, for example, you know, people buy Blu-ray players.
They buy Xboxes.
They'll buy PlayStations.
They buy Wiis.
They buy Roku players.
They buy DVRs.
So, they-- people will buy another box as long as it's useful to them.
And, I guess, the other point is that connectivity has gotten a lot easier.
So, you know, it used to be hooking up a box to your TV was hard and people didn't know how to do it.
-These days, with HDMI connectors, it's very simple to hook up a new box to your TV.
So, in our case in particular, you know, you have a very-- we-- our view is in terms of boxes versus TVs that-- connect to TVs that, you know, you buy a TV for the panel, for the display primarily.
And, you know, in our space, one of the reasons there's so many different companies is because it's new and there's a lot of innovation and software is changing rapidly.
And so, what that means is, for example at Roku, we update our software probably 12 times a year,
adding new things, adding Hulu Plus, adding, you know, whatever the latest service is, so-- so, it's a very dynamic situation.
So TVs in particular, you know, a TV company will sell hundreds of models of TVs every year and update the software in all those TVs 10 times a year or 12 times a year is-- is hard.
So, our view is that 100-dollar- or a 50-dollar-box or, you know, where that's a controlled environment that the software can be updated is a much better solution, at least in this stage of the market where
things are still very dynamic.
-Drew, I wanna ask you about that idea that the-- the consistent experience, actually, and it's somewhat related to what you said.
When-- and Samsung has talked a lot about the Smart Ecosystem.
Are-- are you talking about a future though where, well, I guess, can you expand on the consistent experience?
-Are you talking about really running the same software?
-From HTC's standpoint, we have-- we have our own brand of experience.
We call it HTC Sense.
-And our goal is to sort of promulgate HTC Sense across all different platforms, different devices, different form factors.
So, that's the one side.
I think the other side is, at the same time that there's this proliferation of devices, there's still some convergence going on, and I think we're not that far off from a-- a time when your 4G phone can replace things, like, maybe your cable modem, maybe your cable box.
Maybe you can send your media which streams to your phone directly to your TV, and you actually start being able to get rid of some of the old boxes and bring in the new boxes.
Does consistency start to mean the one device that will rule them?
-I've been looking for that?
-I-- I-- Honestly, I say that phrase everybody would laugh.
I say that phrase every year, I swear.
-at the Next Big Thing, it's like, what's the device.
-I know you do.
We talk about that, too.
We call it, "the one box to rule them all," and, you know, I think the-- the-- a lot of the-- a lot of this is about choice.
So, I just, for-- and I just from an iPhone 3 to a Droid X and, you know, it's a different UI.
It took me a week or 2 to figure it out.
But I have that choice.
-I have a question.
As I'm listening to this discussion of these devices, to get right down to the core of the device itself, go back
20-30 years, and the device was truly defined by what's in it in terms of the hard components--the transistors, the ASICS, the things that are actually soldered into the box.
More and more, I'm hearing that the device, while it's important, it is distinct to your companies, but it's really virtualized to a degree that the firmware is now the core of the device, not the actual components.
Aren't you really, if you're hardware makers, really firmware
that need a container to-- to retail?
I mean, we have about a hundred employees at Roku and, I think, 2 of them are hardware guys.
-So, you know, and most of them are software engineers.
I don't think the same is necessarily true for Samsung, so, have a-- we make the industry-best processors, display, memory, and hopefully--
-put that into the industry-best devices.
So, I think that what we have found is that there's an immense move towards quality.
So, you know, people who used to buy a free phone because it was free.
Now, they want a great and great is it's easy to use
and a lot of times, easy to use is correlating from spec geeks, like all of us, into a lot of hardware to make it really snappy, really powerful.
You know, the displays get, you know, more and more efficient over time.
So that kinda move towards quality is a very hardware-centric thing in a lot of ways.
Of course, the ecosystem, the software is critically important to that.
Otherwise, they wouldn't be buying the devices.
But there's a lot of interesting quality--
-really like, really robust quality products.
-And I-- I think diversity is important, too.
At HTC, we're really committed to meeting the needs of different types of customers for us.
So, that may be one person who wants a 4.3-inch display.
Somebody else wants a side-sliding keyboard so they can more easily enter text.
We're meeting the needs of different types of people.
There's not one type of person.
There's not one answer, not one phone for them.
Let me ask this question about the operating systems that power your devices.
Some are visible--Android, iOS, WebOS.
visible operating systems.
Anthony, I don't know what your OS is.
It's secret sauce, right?
-Yeah, we have our own.
-It's just in there and that's not surfaced to the consumer.
-So, with operating systems now taking once again, because I know what your operating system is by the experience, even though I don't know what it's called or where the shell of it is, are we in a new operating system where it's making your jobs more complicated or easier at your companies?
Because we kinda have the OS fade out of its--
out its preeminence in the PC market.
Now, it seems to be reemerging with a prominence in this after the computer market.
-Well, from my point of view, what's-- if there was only one OS and it was Windows, there's not a lot-- a lot of room for innovation of any company besides Microsoft.
So, the-- the fact that there's a proliferation of OSes--Android, Linux, you know, iOS--it means, in my mind, that there's a lot more innovation 'cause that's really what's driving the innovation.
-I guess the question is, at what point does-- and this
seems to be coming up over and over particularly with the proliferation of Android, and what point does choice cross over into confusion?
And-- and do you worry about it because, you know, certainly, both of you, your companies make a lot of things.
-That Samsung press conference was packed.
-It is-- it's worked very well for Samsung to support a lot of diversity in terms of bada (our own OS), Linux, Androind, Windows Phone, and I guess I'll let you
know when it stops working.
So, so far, so good, I guess.
-You know I-- well, I think the industry's in phase where there's-- there's gonna be a shake out because people don't wanna learn all these different OSes, so, you know, how-- but there'll be more than one.
And over the next 5 years, I think we'll find out who the small handful of winners are gonna be.
-I'm especially intrigued by your case, Anthony, at Roku.
What business are you in?
Hardware, software, service, apps, something else?
-So, we view our business as next generation cable operator basically.
I mean, we don't like that term because it has a bad--
-It's got some baggage.
-It's got some baggage.
-But, you know, we now have as many customers at a top 10 cable operator and we do end-to-end solutions.
So, we do everything from the software, the hardware, service integration.
We don't do-- we don't do services.
We partner with service provides for the services.
But our-- our business is distributing entertainment services directly to the TV, and we do that by everything from hardware to software to service integration.
-How about at HTC, Drew?
The-- the number of carriers that provide to the design and work with, the number of phones, you guys are all Android at this point?
-Oh no, Windows Phone 7--
-You got Windows 7 on your--
-also-- also BMP, Brew Mobile Platform.
-Is there any-- is there any concern that-- that the operating system defines the brand of your handsets?
'Cause you guys emerged in the last few years as a brand, not as a contract manufacturer.
I mean, I think what we're interested in is delivering the best possible experience to our customers.
-And the-- and the flavor of OS that you're using doesn't ever blot out the sun over your brand?
-'Cause all things consumer say, "I want an Android phone."
-Does that mean they understand they're getting an HTC phone?
-Certain consumers are looking for certain OSes but there are a lot of consumers who aren't even particularly aware of the OS, I think.
-So, what we wanna deliver is the best possible experience and we'll work with whatever partner is necessary to do that.
-I think we're also in a device shake out on a different tech and I wonder, you know, you guys, HTC, are doing phone.
Samsung, you seem to be doubling your bet a little bit
because you're doing phones and tablets.
But my phone is an awful lot like a tablet.
I'm not gonna lie.
And in fact, when it came time to pack for this trip, I had a phone, an iPad, and a full-sized laptop sitting on the bed, and I'll tell you, one of them stayed home, and it weighs about a-pound-and-a-half and just didn't seem to make sense.
You know, sort of, at what point, like, is there one that is going to win?
Or is it gonna come out-- come down to choice?
-I think that, you know, I'm not-- I have a job where I'm supposed to try to predict the future, but I wouldn't be foolish enough to try to actually do that in any concrete terms.
But I think that there's, on the tablet side,
to come towards a PC, there's a lot of ecosystem that has to get built up.
In terms of productivity apps, you can't replace a computer quite yet from the productivity perspective with a tablet.
On the flip side, a phone, particularly a Galaxy S, can be a really great entertainment product.
What we see, like, with Media Hub on the Galaxy S and the Galaxy Tab is people use the Media Hub much more on the tab.
And I think it speaks to what the Tab is today, which is
a very entertainment-centric device with a lot of other navigation, information, e-book reading types of services that you get kind of for free for your entertainment dollar.
And so, that's a lot of-- I think, the tablets are very entertainment-focused and because content consumption is changing towards this virtual cloud-based entertainment, the tablet is very suitable.
It's a replacement for, maybe, buying DVDs or buying books or something like that, and in terms of, like, kind of shared wallet type of
We're not-- I don't think we're quite there on the PC replacement yet, but, maybe.
-It's kind of an unsubtle way, too, to ask Drew if you guys are gonna do a tablet.
-I think-- just a follow up on this.
-Well, I'm curious, too.
-I'll get you on that.
-I mean, there are 80, right?
We gotta figure out who's doing this.
-I'm not ignoring your question but-- but to follow up, I'm just gonna-- I think you have to also distinguish between different "mobile environments." I mean, for some people, a mobile environment is, [unk] to a tablet and sitting on a couch at home browsing the web or watching videos.
that might be a place where you'd rather have your tablet than your phone or your laptop.
-Whereas when you get on the plane and come to CES, maybe that's not the time for the tablet.
-Whole different environment.
Alright, folks, this is our device panel.
Please thank our panelists in this module of the Next Big Thing After the Computer: Anthony Wood of Roku, Nick DiCarlo of Samsung Telecom, and Drew Bamford of HTC.
Now, as you heard a lot in that discussion of devices, we lead very quickly into the services.
Every comment about the hardware seems to quickly lead
down a very short path to the services that are powered by it and that are embraced by it.
So now, let's take a look now at the services picture that is really what blossoms out of this container that is the device.
Take a look at this.
-The connected devices of the future may look cool, fit in your pocket, weigh down your man purse,
or take over your living room, but they're all just chunks of circuitry without the services that power them and the connection.
When it comes to powering the post-computer revolution, there are 3 things we'll have to consider: the access, the interface, and the content.
First, let's talk about access.
You can't have an always-connected device without a connection.
So, what's it gonna be?
Wi-Fi, 3G, 4G, something else?
We're relying more and more on wireless broadband connections like our 3G or 4G data plans.
But those are still expensive and the bandwidth is limited.
And let's face it.
How many times am I going to have to pay for a data plan?
Next up, interface.
Today, we're talking about an apps revolution.
You've got the iTunes App Store, the Android Market, Verizon's app store, Palm apps, Windows Phone 7 apps, Symbian apps.
You almost can't launch a new device without an army of developers behind you.
And apps are great.
The benefits include that focused experience,
sometimes faster performance even in the web.
But are apps just the stopgap measure until we get more touchscreen friendly interfaces, or voice controls for connected TVs, or full-fledged HTML5 so we can stop arguing about whether we need Flash support on our portable devices?
Finally, there's that question of content.
There are TV apps and streaming music and video apps for everything from your smart phone to your television and to your car.
But what about the networks and content
providers who don't wanna be part of the revolution until they come up with a foolproof business plan?
And it's not just video we're talking about.
Mobile always-on devices have been variously described as both the death and the saviour of the publishing industry.
Magazines look amazing on the iPad.
But should magazines exist that are only for the iPad?
And then the bigger questions: do these devices enrich or devalue the content?
Will be become an a la carte world of consumers willing to buy songs, shows, movies, and games on the fly based solely on their quality and appeal?
Or will we expect a free
streaming buffet of entertainment with as few ads as possible and as many options as we could ever imagine?
Let's be honest.
The answer to that last question is yes.
So, there's really only 1 question left.
Where do we go from here?
And to help us dive in to that is our services panel.
A great category we've got here, and this is one, of course, so powerful that it makes the device relevant.
If you get to the hardware, you only get-- you only get so far without a compelling
service and media experience.
Our panel now to join us for this is, on your left, Robert Kyncl, who's VP of TV and Film for Google and YouTube.
We've got Jim Lanzone, next to him, CEO of Clicker.
Zander Lurie is Senior Vice President for Strategic Development for CBS.
And on your far right, next to Molly, is Lindsay Notwell who's Executive Director of the 4G LTE Strategy and Planning here at Verizon.
So, you've had some news on your hands, haven't you?
-A little bit.
Okay, so, before we get into our discussion, now, you're probably wondering, "Hey, Cooley, what happened to the voting?" Had a little technical issue; we got it
fixed, so, let's get some vote questions done.
Get your phones back out.
Let's try and melt down that Verizon network again and all the rest of them.
-Bring it on.
-Let's catch up-- bring it on.
There it is.
See what you can do.
Let's do our hardware questions and I've got a couple of services questions for you as well.
Then, we're gonna dive into our-- our discussion here.
First of all, which device category, of the one we just talked about, is the least well understood by the average consumer, by your customers, whether you're in retail, wholesale, media?
Is it the smart phone that needs more explaining,
the tablet, or the connected TV experience?
Again, text your answer to 22333 either DEVICE1 for smart phone, DEVICE2 if you think the tablet is the most murky out there still, or text DEVICE3 if you think connected TV has a lot of explaining to do.
And again, this is for the consumer of the baseline.
We're not talking about the most tech savvy nor are we talking about The Luddites, but let's look at that broad middle and kinda give an answer on what you think is the one that is most the dark horse on this.
Let's go to our next question.
I think you've all got your votes put in, looks line.
Staying on devices, what's the killer app for the device categories all of them together?
Let's just take them as an aggregate.
Is it gonna be great app and developer support that makes the device a rock star?
Is it gonna be really solid, always-on connectivity (4G a lot of the buzz here at the show)?
Is it gonna be the content choices and partnerships, the Hulus and Netflix you can get on those devices?
Or is it gonna be location-based services?
We didn't really touch on that but things that are location aware, geo-contextual, and GPS-powered.
Give us your take on that, texting again either KILLER1 through KILLER4 to 22333 for your choice of what's the most important, the most irresistible feature and service type that a consumer will say, "Yes, now I want that piece of hardware." Okay, everyone's looking well-texted there.
Let's move on to a service question now.
What is the biggest barrier to the always-on,
This is, of course, key to what makes service work and makes it transparent.
Is it limitations on bandwidth, just not enough of it, too much 3G, not enough 4G?
Cost of the data plans?
Even if you can get the bandwidth, if it's too much money, you're not gonna wanna have it.
Too many operating systems and platforms for apps?
That's one that's a real valid concern.
Or is it all of those in equal measure, in equal measure.
Now, if you believe that, then you wanna go with choice number D or service number 4.
So, text one of those service tags to 22
And then we have one more question about services.
Just when your thumbs were starting to recover, let's take a look at this one.
How will people consume media in the future?
A la carte, like Amazon and iTunes?
But the question Molly posed at the end of that video, it really gets down to a big crux of the issue here.
Or via subscription, all you can eat?
Like cable or satellite existing today, or the Netflix and Hulu Plus platforms that are emerging today.
Which of those 2 broad connect-- selections do you think is really the way we're gonna feel more comfortable?
They both have interesting pricing attractiveness to them depending on the consumer.
So, it's not quite so simple as saying, "Well, all you can eat or a la carte is the real winner." It takes a little bit of thought on that.
But, text one of those 2 codes to 22333, and looks like most of your-- most of your phones are down.
So, we're good.
Okay, we're gonna crunch those results in the back and then as we talk with our media panel a little later on the presentation, we're gonna bring those
results to you.
Okay, let's get into services now.
What-- where did you leave us, Mol, with that-- with that-- with that video?
That was the crux issue.
Well, I think that's the crux issue.
I'm-- I'm curious about what you guys think about the barrier question though.
Is it-- is it a preponderance of content?
You know, is it gonna be too much content that's overwhelming?
Is it not enough?
Is it-- is it a bandwidth crunch?
The-- there's no question that we're moving toward this, we think, always-on, always-connected device.
What's standing in the way, if anything?
'Cause I know you guys are fighting with it.
Lindsay's like, "Oh, me." [unk].
We recognized that-- recognized that for a number of years, and that's one of the reasons why we chose to go first and early and heavy with our 4G LTE network.
We recognized that especially when you look at the transformation from text to video, the demand for consumers for video is just stark voracious, and that won't stop.
And so, bandwidth has just got to be there.
We see that as critical.
That's why we made the decision to go with LTE as a technology platform.
-But content has to be there, too, and this is the part where we, I guess, put Zander on the spot a little tiny bit.
I mean, you know, we're all-- everyone is sort of trying to find--
-crack the-- crack the golden egg, I guess, on the business plan.
We, you know, the TV industry is incredibly healthy today.
Nielsen stats came out that showed the average consumer watches 34 hours of television per day.
That does not count any of the video consumption that Lindsay
So, as we see the landscape today with all these new devices and services, you've got the world's highest capitalized companies competing to have new devices and services that offer content.
Without premium content, you know, nobody's spending $800 on a 10-inch tablet to do e-mail.
So, the apps and the content are gonna drive a lot of the sales.
So, we think we're in a great position to partner with folks who can help, you know, satiate that consumer experience and deliver our video in a way that kind of
makes us proud to, you know, put the same experience you have today on television.
So, you know, we tend to sit back, evaluate what this landscape looks like.
We wanna partner with folks that are delivering on a great consumer experience, and then we've gotta get paid for that experience.
So, we're-- we are circumventing the mistakes that some of the, you know, other media sectors made in the last decade and, you know, we're really bullish on what the sector looks like.
-And then, in the meantime, Robert and Jim, are you gonna sneak in and steal the market from Zander?
-From other people who are busy making deals?
-I think it's really important.
You know, your question was about what's-- what's really frustrating for consumers, and-- and I think the most frustrating thing is that when your service doesn't work on a device that you have--
-that is connected, maybe-- may not be on right away, but it's definitely capable of connection, and it's not on.
And then-- and it's really up to us, the Silicon Valley companies trying to figure out how we work with media entertainment companies to figure out how we get their content on all of these devices so that the consumer embraces it.
And the usage that Zander was talking about, 35 hours per week, which is close to 40 hours per week, expanding the market place.
-Jim, we don't do elevator pitches here, but you're going to be lucky in that we're gonna let you do a bit of one because I think your company's one of the least understood in this room.
Tell us where you fit into this with Clicker.
And are you guide?
Are you scraping media provider?
What are you guys?
-Well, the-- the geeky description would be that we are a completely comprehensive, unbiased
structured database of all premium programming that's available online.
-What do we tell consumers though?
So [unk] consumers here is that we're essentially a TV guide for Internet television because in the future, that looks a lot more-- you know, TV, out of the last 50 years, is about when things are on.
It was a calendar, essentially.
-But now, content's gonna be fragmented across thousands of-- of places and-- and no one of those providers will be able to afford to have all that content on their own site or on their own service.
So, it's gonna be sitting across, you know, literally thousands of places.
we, you know, essentially, the TV guide of the future looks a lot more like a search engine and-- but you-- it has to be a structured one because you need seasons, you know, cast, you know, episodes, and all those kinds of things.
You need that normalized across.
Literally, everything whether it's "It's Always Sunny in Philadelphia" or it's a Darwin, you know, hour-long overview of Darwin from Stanford University, in the future, that's all premium programming.
-Let me be a proto-Luddite here and say, "Wow!
I miss the days of TV guide." It was so easy to have one place where you went to get the listings and maybe your local paper as a back-up, right?
I mean, I'm going back a few years here.
But there are so many guides that slice and dice it so many ways coming from just about every firm here that have different ways of aggregating a lot of the same content, a lot overlap, but necessarily 100%.
It'll range depending on the content we're talking about.
We're playing 3D chess here, aren't we, with the-- the discovery and the available picture of any given piece of media?
Where-- where does the consumer start to say, "I know where to go to find whatever exists?" What is the simple answer?
-I would get a little the opposite way, which is, before, to watch that Darwin video, you had to wait for it to be on 2:30 next Tuesday on the Discovery Channel--
And you have to use arrow keys to go up and down or go one letter at a time, whereas now, on our site, and Google TV has done some of this, you could just type in, you know, Darwin, or just start typing in Seinfeld, and bam, and you have it.
it's actually a lot easier than I think it was in the kinda schedule-grid days.
-Well, we've got a lot of services.
We go to Netflix.
We go to Hulu.
Not everything is on every one of them.
-There's not 100% overlap but there's a lot of overlap.
It's changing all the time.
Consumers don't know how much.
No one has a position statement of, "We have everything on the web." Only YouTube comes close, so...
-Yeah, that's-- I think that is-- that is kind of an underlying question about content and delivery is that can we afford this sort of bulkanization of content?
Is it okay if we make deals that say some TV is only gonna be able-- be available on some devices?
you know, Verizon's gonna put up a-- a toll, put up a gate for some content that isn't necessarily approved.
Is that the future that we're looking at where it's literally device-specific content, and will consumers stand for it?
-I-- I-- I don't believe that's the key to success.
I-- I think content has to live on all devices.
It may not live on all services based on the deals that we strike with the media companies, but the content has to live on all devices in order to have the consumer adoption because that drive's simplicity.
Simplicity drives usage.
usage drives economics.
And economics drive contents.
So, it's a beautiful circle.
-I-- I think it's an awesome time for-- for consumers in terms of content consumption.
So, you know, the-- you take what happened with the TV and then the DRV was gonna kill the TV.
We've seen the DVR increase consumption.
What it's done is it's raised the threshold for the quality of content the consumers wanna watch and, you know, for CBS we'll fight that fight every day.
Well, we can compete on the quality on the quality of our content.
We feel like we're in a very good position.
And if you're a consumer with this breadth of
choice and access now, you know, you don't have to watch what was on channel 695 that just wasn't a quality program.
You now do have different devices in access and services that-- that give you more fizz, you know.
So Clicker is the-- is the-- is the classic service that's gonna help enable that choice.
-And then, you know, layer on the social networks and others which help you personalize and understand what your friends like.
And for content companies that are producing a really high quality content, I think that's terrific.
If you're not producing that level of quality, you know, you're probably gonna be marginalized.
-I'm pinned to there and say it's-- it's about openness.
It's about choice.
Consumers don't want us as providers to say, "No, you can't."
-And we've learned that lesson.
We really have transformed our company into collaborative partnerships and openness and that's what consumers want.
You talked earlier about the confusion but the other side of that is choice, and consumers have gotten very, very savvy and they are choosing.
They're voting with
We'll see that happen.
-Well then, you know they've also gotten incredibly demanding in terms of their bandwidth.
Are we-- no offense, but is the 5 meg-- or the 5 gigabyte cap on the 4G networks really gonna-- is that gonna work us for very long?
-You know, people talk about how you can blow through that in 20 minutes if you're very serious about-- if you're seriously downloading video.
Can you-- are you feeling the pressure?
Well, we look at that a couple of different ways.
First of all, if I wanted to setup a science experiment and download 1080p content--
-and do that-- that's-- that's not how the typical consumer works.
Actually, the vast majority of consumers don't use near that amount, and it's the classic play between the few who abuse the system, and you don't want the-- the bulk of people effectively subsidizing those few.
What we see those kinds of paradigms driving is an ecosystem of efficiency.
If you think about it, back in the old days of
computers, when programmers only had 64k to work with, they got very efficient.
-If everything was unlimited in a wireless space with limited spectrum, it can't be, then people are gonna get sloppy and that doesn't vote well for good customer experience.
-So it drives ultimately efficiency.
And if you come and see and visit our booth, you'll
see some examples.
-I love this.
-You like that one?
Thank you for--
-Is that right?
-Is it really-- is it abuse if you have the consumer out there who is saying, "Absolutely.
I wanna take advantage of all the technological innovation that is out there.
I'm gonna go to Clicker.
-I'm gonna stream a CBS show, and I'm going to YouTube."
-How-- you know?
-But we can say the same thing I just did a few minutes ago.
Do I want to do that?
Can I get everything I want for free?
I mean, that's-- at a certain point, there has to be an economic balance.
-It's important to remember device proliferation
does not mean this-- this freedom revolution.
So, there are gonna be business models associated with all of these access points whether it's through subscription services or downloads or bandwidth or license models.
There needs to be an ecosystem healthy for content and application.
So it's-- there is not a constitutional right to get "NCIS: LA" on very single platform that is-- that is [unk].
-Although I want to be getting that show.
-I think it does seem like the flip side of all of
that choice though is the sense of entitlement.
I think that does start to happen.
When, you know, when you open up the buffet, it is-- it's hard for people to-- to recognize that there might have to be those limits.
So, there might have to-- there seems to be a cultural shift in that is kind of a question that we're asking a lot, I think.
-How you convince consumers they can't have it all.
-Alright, folks, that's our services discussion.
Please thank our panel for an insightful array of views.
-Lindsay Notwell from Verizon, Zander Lurie from CBS, Jim Lanzone from Clicker, and Robert
Kyncl from Google and YouTube.
This brings us to a different turn in our Next Big Thing presentation.
Normally, we would go to a third module, roll another tasty video, and bring in another discussion panel of some product or service.
But now, we're doing something different.
We're going to be bringing on fellow media partners, our colleagues in the technology media, in the interactive space, that are going to help us figure out what just went down here.
What made sense and what didn't, and this is where we're gonna reveal the votes that you've been placing as well.
So, please welcome as I bring on our panelist from the media space.
Josh Topolsky, Editor-In-Chief at Engadget.
-Thank you, Josh.
Also, let's bring on, you know this guy, David Pogue from the New York Times personal technology columnist.
And then Evan Hansen, Editor-In-Chief at wired.com, old colleague of ours in CNET.
Alright guys, you were backstage, kinda like the dating game listening in.
But we didn't have you in a soundproof booth, so, you heard it all.
We're gonna reveal some of the results now from what the room said, and then we're gonna compare it to what you thought just went down here in terms where your crap detector stuck up and where it didn't.
So, let's take a look at some of your-- your results here from the votes.
Let's go to this question.
This was our first device question.
Which device category is the least well understood?
By far, you said connected TV.
I gotta say I'm kinda surprised.
That to me is so-- is so obvious to consumers more than a tablet.
But that's just me.
-That is just you.
-Throw tomatoes, come on.
-That is just you.
-That's not right.
It's just me?
I am so out of a job.
Let's go to our next question.
Which of this is the killer app for these device categories we're talking about that are after PC?
A little more balanced here, but running away though with content choice and partnerships.
What we just spent most of our time talking about in the service side is exactly that.
Always-on connection comes in after that; after, developer support; location-based services, kinda where we expected.
So, big strong play there on content choice and partnerships.
Our services question, let's take a look at the results on that.
The first one we asked you was what's the big
barrier to the always-on after the PC environment?
And here we've got a strong push for the costly data plan or all the above, and again, the very closely related bandwidth limitation.
Clearly, this is one of a lot of pipeline nervousness, range anxiety they call it in the electric car business.
This is kind of the analogue to that.
And our final services question, your response to that was, how will people consume media in the future, the broad one, in terms of a la carte or via subscription?
And our results are coming in there.
are saying subscription, and one-third of you say a la carte.
And there's some interesting math there.
If you think about cutting the cable on how that could be a way to save money, if you do some math on a Netflix and a Hulu subscription, and then throw in even one busy weekend's worth of a bunch of Amazon a la carte, you can blow through a typical cable bill in a couple of days, depending on your media consumption habit.
So, alright, here is the temper of the room-- the tenor of the room, and here 3 sharp minds that have been listening to all this.
-Brian, I'm deeply disturbed.
-But first of all--
-Probably because I don't--
-I specifically said I wanted no green M&Ms in the grooming room.
It seems to me that the problem with this whole panel, including the survey, is that all of you guys are buying into this "one thing replaces the other" philosophy that over and over again, in the history of this industry, it has been shown to be not true.
Every time in your video you said, you know, the PC is dead.
The PC is over.
I winced because--
-I didn't say it was dead.
I just said it was elderly.
-Well, alright, let me--
-No, I mean--
-Let-- let me-- let give stats.
I'll prove it's nearly tied with own poll.
-It's an evolve thing.
-You don't even need a phone for this.
Raise your hand, please, if you think you will not own a laptop or a desktop computer in 5 years.
-Who's gonna be computer free?
Pogue 1, Cooley 0.
-I never predicted otherwise.
-You know, what's interesting is we-- we weren't really talking during this and this is the first thing I wanted to say to the idea that
the PC is dead and then this stuff's gonna replace it--
-and that there'll be one thing that will replace it because we need to have the simplified life [unk].
-It's not about dead.
It's about pre-eminence.
-I think it's about the evolution.
-I think it's about the evolution.
-No, no, no, no.
-It's the evolution but--
-I was ready for that 'cause the title is "After"-- you know, what's the big next thing after the PC.
-That I can buy.
-Like, what will be popular and buzzy--
-that you're right.
But in the video, you kept saying when the PC is gone, when the PC is going away, and stuff like that.
And this last question, the same problem.
The question said, "Which will the model of buying TV should be?"
-Too black and white for you?
-No, no, absolutely.
There will be both!
It's screamingly obvious.
That's the way history goes.
Everyone said, "Oh, TV will kill radio because who would ever just listen when they can also watch."
-And you heard the panelist say--
-"Oh, the VCR, the DVR will kill television."
-But I like red and green M&Ms.
I just like green ones a little bit better.
I think we can agree that they can co-exist.
-Everything adds on in this business.
Yeah, it don't [unk].
-Let's talk about the [unk].
-We're all talking about one other point here.
-We're [unk] of black and white paint.
-But one other point here.
I mean, these little devices that we're carrying around, these smart phones,
they really are computers.
I mean, they're-- they're getting to that point.
I mean, we're looking at the Moto-- we were just talking about this Motorola--
-Axis smart phone which has a little docking station and you basically--
-Oh, the Atrix.
You dock it up then bang.
You've got basically all of your personal-- your-- your PC basic functionality right there.
Carry it with you in your pocket.
It plays both sides.
So, I mean there's a-- there's a sense in which these devices that we're carrying right now are computers.
It's really, to me, the computer has won
because if you look at the telephone and the interconnectedness of that at that time, with the television which, again, is a very close ecosystem, computers came along and blew that whole paradigm wide open so that everything can connect.
Everything can work together here on this network or on this platform.
That's what all of these devices will be coming, which is totally connected.
It's the computer--
-the paradigm is winning.
-Well so, which, if any of them, will evolve then?
Do you think nothing will be replaced?
I'll have my-- I'll travel with my tablet and my laptop and my smart phone and my Kindle and my camera and my iPod Touch.
-I, well, I didn't say--
-[unk] I kinda did, and that was dumb.
-I-- I do--
I do think--
-It's quite heavy.
-it's a question of modality, right?
I mean, everybody that was up here has their stake and they wanna win and they wanna own it.
-They would have their thing or their one service that rules.
But, really it's about what makes sense for what you're doing, alright?
When you're out, you don't-- maybe you don't want a 10-inch tablet if you're on the go and you're walking around town and you're not carrying that to talk and, you know, you're not gonna have conversations on that.
So, you have to think about where these devices live, where am I using them?
I mean, even Apple.
Right, they revolutionized tablets with the iPad but then they said, "Oh, we got this dock with a real keyboard if you wanna get
some real work done if you really wanna type on it." It looks a lot like a laptop.
So, I think it's a real question of where do these devices, where do you live with these devices, and where do they live with you?
It's-- it's not one thing is gonna happen.
They're all gonna have their purposes.
They're gonna-- all gonna have their places.
And I-- and I think that, you know, it's kind of like, it's a terrible metaphor but, you know, roads work really well.
-All kinds of different cars drive on them.
Sometimes, you see a bike.
And I think that it-- it kind of is gonna be like that.
It can't just be one thing in one place for one price.
It's not gonna be some--
-I don't think we're looking for a single answer.
-But we are looking for where's the bell curve of both consumers.
And within that, what's the bell curve of their preferred device.
Because we do tend to see some distillation, and I know a lot of people doing the retail and the wholesale space look for that.
You look for the sweet spot of where things are going to have the most consumer interest.
I'm not talking blotting out the sun on other devices necessarily but to find where the power is where you can really get some traction as a retailer or a wholesaler, especially if you're in that side of the consumer electronics
And, do we feel as though the smart phone, the tablet, the connected TV, the PC, notebook, and netbook are all gonna level out in terms of amount of time spent with the-- by the average consumer amount of use cases, like, you pointed out Josh?
Or is there not a consistent among, you know, within our society sort of a rock star within those 4 or 5 devices, especially the ones that are mobile and computing-oriented?
Let's take connected TV out.
It was kind of a-- an outrigger.
-Well, are we assuming that they'll look and act like other devices we have now right?
They'll have the different--
-That's the ecosystem, different systems--
-the different operating systems.
-across all screens.
-In a hypothetical, like, everything is cloud-based world, right?
-And your device is just a portal into that cloud and it works just like the apps you have, and it does all the streaming, and you can have all the services.
I mean, how-- how does that change our relationship with that?
I mean, what-- are we still thinking about, "Can I run these apps here?" Or is it just a question of what size screen do I need?
Or is it comfortable to use like
I think, I feel like the answer will be, I mean, I-- I guess I'm going back to what I was saying but I-- I do think that we're-- we're looking at, this industry is in its infancy and then the idea of iPad with movies on it is, from early, you know-- in 2010, you know, mid-2010.
So, we have no way of really getting a picture of what that ecosystem will be.
I guess this is broad but, it's--
-We're used to an operating system with apps running it.
That's what we've been doing in operating-- in OSes--
-for 25 years.
That's gonna change.
That has to change fundamentally before, I think, we can have this cohesive understandable system.
-I mean, to me it's the connection, right?
Isn't the underlying sauce the always-connected part?
-You-- you have to have the bandwidth.
If you don't have the bandwidth, you can't connect to the cloud.
-You certainly can't stream.
You can run really full-featured apps.
-And the device can be whatever it wants as long as it's online, right?
-a screen, isn't it?
-Well, I mean, if you look at Google OS, you know, or Chrome OS--
-and that the new laptop they put out with, very stripped-out cloud-based, you know, operating system.
I mean, it's-- it's
fundamentally broken on certain levels.
I mean, you can't just say this is where we are right now.
Maybe we get there 5 to 10 years.
But, I mean, out of the box today, you're gonna find problems with that kind of machine as a replacement for what you currently use.
-Look, what Microsoft is betting on is big time with this ARM development.
They're saying, "Hey, all of these devices that you see right now, they're crippled in a fundamental way." We need to get back to offering basic things like printer, drivers, out of the box with these devices that you can connect to,
and all of the things you'd expect with a full-featured operating system.
I think probably we wind up somewhere in between.
You don't really need a full, you know, full-fledged Windows OS in-- in a couple of years or even now.
-I think we're--
-But you are gonna want a lot of what-- what comes with that package.
-One of the most interesting results of that poll, I think, is that what people really want is have all the TV shows available, not this, "Oh you can get some of them on, you know, Hulu, and some of them directly form the
networks." And this, what we're saying is that what the masses really want, and I totally agree with this, is not more gadgets and more software.
We want the lawyers to go away.
We want the stupid, ridiculous, license-- I do these segments for CBS Sunday Morning and for years, I'm like, "Now, can you put it on the web for people who weren't up at 6 a.m.
on the West Coast?" They're like, "Well, no, because of licensing." What the-- what is that?
You want to show your television.
That's why you made it.
You want to
sell ads, do you not?
Why go to the trouble of creating television and then saying, "We're not gonna show it in that country and we're not gonna show it on the web." You know, so, finally 2 years ago, they started broadcasting these segments that we spend weeks and weeks on with no music.
Where's the music?
Oh, it wasn't for Internet.
-Without that model, what would the lawyers have to do?
they'd go broke.
-We won't go broke.
-There's divorce law.
-There's a fundamental-- there's a fundamental question about business model.
I think it's serious right?
Alright, lawyers, fine.
You can, like, point at that, you know, first thing, kill all the lawyers.
Alright, but, there are [unk].
-They're [unk] geeks.
-I think we're adjourned here.
-There are serious business models.
-If we must, we must.
-Serious question is the business model and this idea that you're trading digital or analog dollars for digital pennies.
-You're gonna have to figure out a way to actually incentivize content producers to spend the kind of money.
I mean, this-- reading some of these numbers, $2 million an hour
for a Hollywood-quality prime time television dramas?
-That is like, you can't just put that up on the web and expect web ads to monetize all of that.
We need to figure out some kind--
-way to make those stuff happen.
-Dude, it's just not so complicated.
So, I'm CBS.
I go to Verizon who's just put an ad to sponsor this Sunday's broadcast.
-It sounds complicated already.
-And I say--
-It's already a little-- it's really--
-It's already-- and you know what?
And that road ends and then I can only watch that show
-You're actually right 'cause I'm gonna call Verizon and what I'm gonna hear is, "You may begin speaking at the tone.
When you have finished recording, you may hang." How many-- how many vote that we don't let Lindsay from Verizon leave the room until he offers to end that 15-second message on our voice message?
-That's a whole different campaign.
-No, no, no, no, no.
-A whole different campaign.
But why can't we just say in the new era, look, "Advertiser, for 10% more, I'll leave your ad on whe
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