• by Erik Sass  @eriksass1, December 26, 2006

Americans like to set their own agenda. For openers, they like to decide when, where and how they watch TV. And there are big bucks for any company that can indulge their viewing preferences. In short, Slingbox is no longer alone. The first quarter of 2007 will see the launch of a number of competitors to Sling Media's device, introduced in 2005, to cater to audience desires. It's unclear whether anyone will come out on top, but 2007 could become the place-shifting battle royale.

One thing that's definitely not settled is the business model. Although ad-supported video content seems like an attractive way to lower prices and boost demand, Cory Treffiletti, vice president of media for Real Branding, says "it's just too early" to know what type of ads will work best. That's mainly because "market penetration of mobile video is still under 1%," according to Treffiletti--although he expects that number to rise quickly.

David Tice, vice president of client service Knowledge Networks, seconded this opinion--noting: "There's a lot of stuff that we read about in the industry-trade publications, where the actual consumer awareness is very low." Tice stressed the need for simplicity in design and payment schemes if place-shifting and mobile devices are to become more popular: "If they want to go beyond the cutting-edge people, the really early adopters, they need to make the devices really easy to load and hook up, and simplify the payment plans."

Marketers are tinkering with the length and placement of video ads. Media executives are interested in any interactive function that allows consumers to respond to ads directly, bringing online-style accountability and transparency to video advertising. As they try out different models, TV consumers will have a wide variety of different place-shifting platforms to experiment with.

Here is a sampling of what products are available, and what's planned in the new year.

Slingbox

Slingbox is still king of the hill in terms of market penetration, and for now, it owns its particular niche--forwarding TV programming to the user over the Internet, allowing Slingbox owners to watch TV anywhere there's an Internet connection. In August, Slingbox also moved into the mobile space, introducing software that makes programming delivered via Slingbox accessible on "third-generation" (3G) mobile devices. The only requirement on the mobile end is Microsoft's Windows Mobile operating system.

Sling Media is moving to capitalize on the Web's interactivity, evident in the recent hiring of two new executives: Jason Hirschhorn and Benjamin White. Their experience building MTV's online media business suggests that their mission involves creating new products delivered via Slingbox and finding new ways to monetize the service--possibly including ad support.

If ad support is part of the plan, they will have to tread carefully to avoid the wrath of traditional media companies, like the TV networks, which are sure to resist any attempt to decouple their content from their advertising customers.

Monsoon HAVA

There are other storm clouds on the horizon. Monsoon Multimedia has introduced an ambitious technology called HAVA Wireless HD that allows the same kind of remote viewing via the Internet as Slingbox, along with new features that give it a leg up in home viewing.

Using "VBooster" technology, a HAVA unit can wirelessly stream live TV programs directly to multiple PCs as well as an array of other WiFi devices around the house simultaneously. This allows consumers to record TV programming on PCs for playback.

It can also wirelessly stream live TV from the source or recorded video from a Media Center Edition PC in one room of the house to an Xbox connected to a TV located in another room. Plus, it can "back-translate" video content from a PC to a regular TV--something Sling can't do. Monsoon is about to introduce a remote mobile viewing feature for cell phones using the Microsoft Windows Mobile platform.

HAVA's biggest advantage may be its compatibility with Microsoft Media Center. According to Colin Stiles, Monsoon's executive vice president of sales and marketing, Microsoft and PC manufacturers are interested in HAVA technology because it allows users to transmit content from their TVs to their PCs, and vice versa, without bringing the PC into the entertainment area or connect it with complicated wiring.

In the end, HAVA probably won't be a distinct product marketed directly to consumers. As a combination hardware-software solution, it's more likely to be licensed from Monsoon to multiple OEM's partners, including PC manufacturers, PC peripheral companies and service providers, then offered to consumers as part of a hard bundle with new computer purchases. Stiles says Monsoon has the support of industry leaders promoting HAVA to PC manufacturers and other OEMs at trade shows, touting its compatibility with Microsoft's new VISTA operating system and HD support.

Apple iTV and iPod

The HAVA-centered system is clearly being positioned as an alternative to Apple's new iTV system, also slated for rollout in the first quarter of 2007. The Apple iTV system boasts many of the same features as the hybrid Microsoft-HAVA setup: it allows users to forward video content from their computers to their TVs, via wireless connections.

However, it's not clear whether it will allow users to record and play back TV content on their computers. Apple has a financial interest in driving traffic to its iTunes store for music and video content. Content purchased on iTunes can only be played with Apple's computer player, an iPod, or iTV.

Another major drawback for iTV, compared to HAVA and Slingbox, is that it doesn't allow remote viewing via the Internet. So Apple has worked around the issue. The company has a huge advantage in the iPod, the ubiquitous mobile music and video device introduced in October 2001. Apple began selling an iPod with video-playing capability, the iPod 5G, in October 2005. The 5G allows users to download video online via Apple's iTunes store, and watch it on the go. As with music offerings, the 5G can also play videos in MPEG-4 format not downloaded via iTunes.

In fact, the popularity of the iPod is a major advantage of iTV. For tens of millions of consumers already invested in the iTunes system, buying music and videos for their iTV should be an easy, rational extension. But the iPod has its own drawbacks.

Converting a feature-length MPEG-4 video to iPod format takes an unfeasibly long time--more than 10 hours by one count. Also, the iPod can't store as much video content for remote viewing as, say, a Slingbox combined with a late-model TiVo. A Slingbox-TiVo combo can make up to 300 hours of high-quality video content available remotely--twice the amount that can be stored and transported on an iPod 5G at the lowest level of video quality.

Microsoft Zune

iPod is being challenged by another Microsoft product, Zune, in a multi-platform assault on Apple's current market position. Zune could enable mobile viewing of content delivered via Microsoft Media Center in the same way that iPod serves content delivered via iTunes.

Zune also offers limited WiFi music-sharing with the hope of boosting demand for music and the Zune device itself. Zune has some distinct advantages: the display is almost 50% larger than the iPod, with pixel density twice that of most laptops.

But there are a number of flaws, and Zune's reception has been lukewarm at best. Strangely, Zune isn't readily compatible with Windows Media Player 11. Consumers also complain that the playback quality of video converted from non-wmv formats is poor. And the much-promoted content-sharing function may end up being a drawback, as many consumers find it frustrating that shared songs are only available for three days.

Finally, like the iPod, Zune doesn't allow mobile viewing of streaming video. All video content is stored as downloads from a PC via a hardwired connection. Zune's WiFi connection can only download (and transmit) songs and pictures.

Sony LocationFree

In the mobile video arena, Zune and iPod face competition not just from Slingbox and HAVA--which both offer wireless streaming video to mobile devices--but newcomer Sony as well. Sony is promoting the PlayStation Portable (PSP) as a mobile viewer for remotely downloaded video, becoming available the first quarter of 2007. With this late entry, the mobile place-shifting market is now, at least, a five-sided melee.

Like Slingbox, Sony's place-shifting video service, LocationFree, uses the Internet to forward video to remote locations. It requires users to own Sony AV equipment like the PSP. Users must be in a WiFi hotspot to receive mobile downloads. The new function also requires an additional 4GB memory stick to store video content--a drawback in the eyes of some techies, who consider it inconvenient.

On the plus side, rumor has it that Sony is striking deals with content clearinghouses like Amazon's UnBox and MovieLink to provide popular programming. The PSP has, by far, the largest screen and best resolution of any of the mobile video devices, and it plays a variety of video formats.

Sony's business model differs from Apple in that its main stock-in-trade is the hardware itself, whereas Apple has built an online content emporium--the iTunes store--around the popularity of the iPod. Thus, Sony doesn't have an interest in making it more difficult to watch certain video formats. Whether consumers see this as a benefit depends on whether they are invested in an iTunes collection to the exclusion of other players.

The Mobile Carriers

Mobile-phone service providers are also scrambling to introduce mobile video to their networks, hoping to cash in on convergence, and in effect, become media networks. Cingular, Verizon, Sprint and others are already selling mobile video offerings as monthly subscriptions, in addition to regular fees.

Verizon V-Cast, for example, offers a selection of news, entertainment, sports and weather video clips on demand for a monthly fee of $15.00. Cingular Video offers a similar selection for $19.99 a month. The video is streamed directly to the user's phone, and there's no limit on viewing. Typically, these services also sell "extras," like wallpaper graphics and ring tones for $1.99 and up.

However, it's important to note that this is not true "place-shifting," because it doesn't allow viewers direct access to TV programming. The mobile video services partner with well-known content providers, like the networks, for a limited selection of short video clips, usually two-to-three minutes in length. While the industry is experimenting with a free subscription model using ad support, none of the big mobile carriers have taken the plunge.