CES 2011's Next Big Thing: Media panel

-Today's digital interactive era. It was forged on the PC, combining 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 connected gear in our homes won't even be a computer by 2015. It's time for some new [unk], that's why smartphones, 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, GoWare, always-on, and usually always on you. Form will now truly follow function like never before in CE and you can almost hear the consumers say, "What took so long to get to what's after the computer?" Please welcome as I bring on our panelists from the media space, Josh Topolsky, editor-in-chief at Engadgets. Thank you, Josh. Also, let's bring on, you know this guy, David Pogue from the New York Times, personal technology columnist. And 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 of where your crap detector stuck up and where it didn't, so, let's take a look at some of your results here from the votes. Let's go to this question, this is 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. -No? -Throw tomatoes. Throw tomatoes, come on. -That is just you. -Wow. -That's not right. -Just me? -Yeah. -I am so out of a job. Let's go to our next question. Which is the killer app for these device categories we're talking about that are after the PC? Little more balance here. Running away though with content choice and partnerships, what do we just spend the most of our time talking about on the service side is exactly that, always-on connection comes in after that, apps developer and support, location-based services, kind of what 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 is what's the big barrier to the always-on after the PC environment, and here we've got a strong push for the cost of the data plan or all the above and, again, the very closely related bandwidth limitations. Clearly, this is one of a lot of pipeline nervousness, range anxiety they called it in the electric car business. This is kind of the analog 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, two-thirds 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 and 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 days, depending on your media consumption habit so, alright, here is the temper of the room-- the tenor of the room and here are three sharp minds that have been listening to all this. -Brian, I'm deeply disturbed. -Yes. Because I don't-- -Outstanding. I specifically said I wanted no green M&M's in the green room. -You know, it seems to me 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 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-- -I didn't say it was dead, I said it was elderly. -I agree, no, I mean-- -Alright, let me-- let me just ask. I'll prove this neatly and tidily with my own point, you don't even need a phone for this. Raise your hand, please, if you think you will not own a laptop or desktop computer in 5 years. -Who's gonna be computer-free? -I win, Pogue 1, Cooley 0. -I never predicted otherwise. -You know, what's interesting is we weren't really talking during this and this is the first thing I wanted to say, too, the idea that the PC is dead and then this stuff is gonna replace it and that there'll be one thing that will replace it because we need to have the simplified life-- -It's not about dead, it's about-- -I think it's about the evolution. I think it's about-- -No, not evolution, but-- -I was ready for that 'cause the title is "After The-- 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 buying TV-- -Too black and white for you. -No, no-- -Absolutely-- -No, there will be both. It's screamingly obvious. That's the way history goes. Ever 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-- -But I'm like red and green M&M's, 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-- -Let's talk about-- -They don't-- -Wait, wait, we're not talking about-- -I'm getting the point here, too, because-- -Of black and white paint, yeah. -But one of the point here, I mean, these little devices that we're carrying around, these smartphones, they really are computers. I mean, they're getting to that point. I mean, we're looking at the Motorola, we just talked about this Motorola Axia, Axis, smartphone which has a little docking station and you basically-- -Oh, the Atrix, yeah. -Atrix. -Atrix. You dock it up then, bang, you've got basically all of your personal, your PC basic functionality right there, carry it with you in your pocket, it plays both sides, so, I mean, 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 you look at the telephone and the interconnectedness of that at the time with the television which, again, is a very closed ecosystem. Computers came along, 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 are becoming which is a totally connected-- if the computer-- -Uh huh. -The paradigm that's 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 smartphone and my Kindle and my camera and my iPod Touch-- -Well, I think-- -Which I admit I kinda did and that was dumb. -You think-- -It's quite heavy. -It's a question of modality, right, isn't it? I mean, everybody that was up here has their stake and they wanna win and they wanna own it. They wanna have their one thing or that one service that rules, but, really, it's about what makes sense for what you're doing, right? 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, you're not carrying that to talk, you know, you're not gonna have conversations on that, so you have to think about where do 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 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 not one thing is gonna happen. They're all gonna have their purposes, they're all gonna have their places, 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, there's motorcycles, sometimes you see a bike, and I think that in time it's gonna be like that, it can't just be one thing in one place for one price, it's not gonna be some-- -Yeah, 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 that are in 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. Not talking about 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 space, and do we feel as though the smartphone, the tablet, the connected TV, the PC, notebook, and netbook are all gonna level out in terms of amount of time spent by the average consumer, amount of use cases like you point 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's kind of an outrigger. -Aren't we assuming that they'll look and act like are the devices we have now, right, they'll have the-- -That's the ecosystem-- -Different operating systems-- -Get consistent across those screens-- -I mean, in a hypothetical like everything is cloud-based world, right? -Yeah. -And your device is just a portal into that cloud and it works just like the apps you had, I mean, there's all the streaming, you can have all the services, I mean, how does that change our relationship with that? I mean, 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 this. I think, I feel like the answer will be-- I mean, I guess we're going back to what I was saying but I do think that we're looking at this industry is in its infancy and the idea of this iPad with movies on it is from earlier, 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-- -Yeah. -We're used to an operating system with apps running on it, that's what we've been doing in operating-- 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 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't run really full-featured apps. -And the device can be whatever it wants as long as it's online, right? -It's basically-- -Yes. -Well, maybe look at Google OS, you know, or Chrome OS. -Yeah. -And then the new laptop they put out with a very stripped out cloud base, you know, operating system. I mean, it's fundamentally broken on certain levels. You can't just say this is where we are right now. Maybe we'll 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. -Uh huh. -I think what Microsoft is betting on is big time with this arm development. We'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 operating basic things like printer, drivers, out of the box with these devices that you can connect to and all of the the things you expect with a full-featured operating system. I think probably we wind up somewhere in between. You don't really need the full, you know, full pledged Windows OS in a couple years. Look at it now but eventually you are gonna want a lot of what comes from 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 from 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, more software, we want the lawyers to go away. We want the stupid, ridiculous, lice-- 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 f--" 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 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. What? Where's the music? Oh, wasn't licensed for internet. Oh, God! -Oh, and, you know, without that model, what would the lawyers have to do? They'd go broke. -I wish-- -They won't go broke. There's-- -What are lawyers for-- -Okay, but, seriously-- -[unk] -There's a fundamental question about business, okay, get serious, right? Alright, lawyers, fine. You can like point at that, you know. -You know, first thing, kill all the lawyers. -Alright. But, there is-- -Then hire all the geeks. -The people are [unk] here-- -Business model. -If we pass, we must-- -Serious question's the business model and this idea that you're trading digital or analog dollars for digital panties, you're gonna have to figure out a way to actually incentivize content producers to spend the kind of money, I mean, it's, reading some of these numbers, $2 million an hour for Hollywood-quality prime time television. -Yeah. -[unk] -That is not-- 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 of-- -Dude, dude, it's just not so complicated. Okay, so I'm CBS, I go to Verizon who's just put an ad to sponsor this Sunday's broadcast-- -It sounds complicated already-- -It's already a little tricky-- -It's already-- and you know what? And that road ends with them then I can only watch that show on Verizon. Problem. -Actually, you're 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 vote that we don't Lindsay from Verizon leave the room until he offers to end that 15-second message on-- -That's a whole different campaign. A whole different campaign. -No, but why can't we just say in the new era, "Look, advertiser, for 10% more, I'll leave your ad when we put it on the web," and then you can argue if it's 12% or whatever. Why does it have to be so complicated? -If they get that argument with the 12%, is it 10% or 12%, isn't that how we end up with, "I can't watch what I wanna watch on Netflix," because everybody wants their cut. -Yes. -Right? And if a cut isn't big enough, they can't get what they need to go or what they think they need to get and they're not-- I mean, that's great. I mean, it is-- -But that's my point. -It's their greed, isn't it? -Fundamental. -Pigs. -Right, they're being pig-headed and here is the public, "We want your TV." Here's the TV company and these lawyers are going-- -That could do better, you know? -Just gonna go-- -But there is an alternative and the alternative is cable, premium cable where you get both, you get both subscription and you get pretty premium ad rates. TV gets all of the ad dollars, so if you're gonna trade that out, and you're saying, alright, I've got two channels and you talk to people that are in Hollywood about we're making these shows, they'd probably mention "Always Sunny in Philadelphia," great show. I was talking to the producer of that show just recently, he said, "We're pulling our content off Hulu 'cause it doesn't monetize, we're just getting-- -The agencies and advertisers are standing in the way of this 'cause they can't move the money. Like you say, the dollars to pennies equation doesn't work and that's still where we're stuck and a lot of that is-- -[unk] -A lot of that is because, and we were talking about this-- -Along with CBS. -Is because they can't move their client over to a medium that doesn't have the same conversion, can't often be-- part of it is moving from one old school into a new school, very difficult-- -Do we also, I mean, is it to fair to say that we don't have critical mass? Is it fair to say that there may be a point when we reach critical mass because right now, yes, you have a small-- a number of consumers and it may right now be a small number who's saying I wanna be-- you know, I want-- I need to watch my TV everywhere because I have 19 devices and if I don't have every show everywhere then I'm gonna throw a giant hissy fit. Are we also being a little bit piggy and is it a small enough number now that we're not enough to pay for it? -There are a lot of consumers who think-- -First off-- -That they wanna watch-- they have to watch TV everywhere. Is that really-- -See, I agree-- -I totally do-- -I don't know-- I don't know if I buy that. I don't know-- -I don't buy it either-- -I am a total diva about my TV-- -Talking about-- -I am that person. -My smartphone-- -I'm trying to be better, it's my new year's resolution-- -Don't be so greedy. -Yeah, no one watches TV on their phone. -Yeah. -I mean, you people do but-- -People wanna punish themselves but, you know-- -Alright, so, you're now part of you people so that's what you got out of CES 2011-- -I don't think anybody was arguing that. I don't think anybody here is arguing that we shouldn't pay for content, right? That it should all be free or something. I would love to pay for content. I think this is kind of what David was getting at-- -Okay, let's hold him after the presentation-- -If you could just give me a way-- -Who can I pay? -If you said on opening day "Tron: Legacy" I can go to the theater and pay $25 or I can pay $25 in my house to watch it, I would happily pay $25 to watch it, but nobody can come up with the solution where they can get that-- I mean, there's a lot of fear, right? The fear is, the second it's digital, the second it's available to stream or to download, it's free for everybody which isn't the reality as evidenced by iTunes, and I think Apple is making a little bit of money and I think the music companies are making a little bit of money with iTunes so there's got-- there is a way to do it, we just have to figure out the way for-- to get the fear down a little bit. -Yeah. -To get the money in people's pockets. -Alright, folks. We are well over time. Thank you so much for being with us. Let's have a big hand for our media panel. Great discussion. Josh Topolsy of Engadget, David Pogue, New York Times, Evan Hansen, Wired.com. Thank you so much to you.