When Will Digital Video Become a Reality in the Living Room?

We know this much about Americans: we love watching television. So why, then, is it that digital video seems to be taking forever to really take hold? It seems as if the industry is taking baby steps in adding content, devices, and services to stream and download from the Internet--albeit the recent news of Google's acquisition of YouTube should only add fuel to the fire in driving awareness and trial of online video content among the masses.

Our own research, from the MOTION tracking study on the digital video category, shows that only 3% of American adults have ever downloaded a full-length movie, while just 5% have ever downloaded a television show. So, despite the fanfare, the real question is, when will digital video content and services become a reality for the masses? One answer goes something like this: Whenever it becomes easy for us to view this content on our TVs.

This ubiquitous household appliance, sometimes referred to as the '10-foot' experience, is what propelled the DVD player to become the fastest growing consumer technology in history. And, despite the excitement building around the upside of the digital video market in the future, based on a recent data from MOTION, most consumers don't expect to change their current viewing habits much in the near future.

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So, given the realities of traditional video consumption, it seems clear that the lynchpin for growth in the online video market--at least for traditional video content such as television shows and movies--lies in delivering this content to the TV. However, it is relatively impossible for the average consumer to view a television program and full-length movie they have downloaded from the Internet on their TV sets. This `digital divide' will likely constrain online video distribution until a consumer-friendly solution bridges the PC with the TV in the living room.

Strides are being made to bridge this gap. For example, CinemaNow recently launched the first legal movie-download service that lets its buyers burn Hollywood films onto blank DVD. Never mind that the burn-to-DVD service doesn't include first-run films, but rather is offered for only 100 or so older titles. But hey, it's a start.

This allows someone to catalog their downloads on their PC, while giving them the option to view these downloads on their preferred user interface--their TVs--without any real huge technoblabble to comprehend or flaming hoops to jump through in set-up. The convenience of this service is certainly in question, but this is the certainly in line with what needs to happen for digital video to break through to the masses and fully transform consumers' living rooms into a true digital den.

An alternate route to easier TV access of digital video content may lie in that handy MP3 player so many of us own and love. Because of its established device/service linkage, the iPod/iTunes franchise certainly seems to have a potential head start, particularly given emerging details on next-generation iPods and iTunes, and the code-named `iTV' device intended to link iTunes content to the TV. While many of us may not want to enrich optometrists by watching lots of made-for-the-big screen video on tiny portables, they do offer a powerful way to store and move content around, and offer teaser previews of content along the way. Certainly, the burgeoning iPod accessory market that's generating opportunity for firms like Bose could also expand to include next-generation USB-enabled video displays.

So, if you're shopping for new content-enabled devices this holiday season, don't buy one without a USB port. And in the meantime, you can find $20 iPod connector cords for most current TVs. Also, keep your eyes peeled for the oncoming parade of higher-capacity portable media and storage devices to support this ramped-up need for storage in the digital video era. If consumers agree that next-gen iTunes movies offer near-DVD quality and if the iTV launch in early 2007 delivers an experience as seamless as iPod consumers expect, that also should help move digital video closer to potential breakout to the mainstream.

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