As you probably know, “January” derives from “Janus,” the two-faced Roman god who could look forward and backward simultaneously.
That ability to see in both directions is helpful when trying to discern the emerging digital landscape of 2004. Some cases in point:
Spread of digital video recorders
This should be the year the DVR light bulb goes on over the collective head of TV watchers. The ease and flexibility of recording and watching television on one’s own schedule will win converts in a big way — note that the word “TiVo” has worked its way into the mass consciousness, just like “Google.” Plus, the nation’s largest cable operator, Comcast, will be among cable companies adding DVR service to their cable set-top boxes by the end of the year to challenge satellite TV for subscribers. Network executives are sweating over the DVR’s ability to skip money-producing ads, so while watching your favorite show in the not-too-distant future, watch for small ads to appear in the bottom right of the TV screen, in the spot where cable networks routinely run promos for upcoming shows.
Digital TV looks better than ever
Speaking of television, those sexy, flat wide-screen TVs will become more eye-catching as the prices continue to drop for superior-quality plasma TV and the image quality rises for cheaper LCD screens. Coupled with the DVR, digital TV will close yet another window to our analog past of bulky TVs, fiddly VCRs and not-so-portable LP record albums.
The bigger picture
Theater chains around the world are spending about $125,000 a screen to install new projectors and computer hardware because digital movies are coming. Chains love the fact that they can download movies beamed to them by satellite, so they don’t have to pay postage to ship heavy cans of films back to distributors after a movie’s run. Not only that, they can determine their own schedule, since digital films can be easily copied and distributors no longer will have a limited number of films for which movie houses will be shelling out big bucks to show the movie first. Don’t wait for ticket prices to come down, though.
Music distribution
Everybody loves music, so advertisers always are looking for ways to make money off it. At movie-theater concession stands across the country last summer, LidRock helped record labels reach more listeners by tucking mini-CDs into the lids of soft drinks, giving buyers bonus music by the likes of Mandy Moore and Celine Dion, as well as limited versions of video games such as “Medal of Honor.”
Colleges looking to tempt prospective students with free, Web-based, non-downloadable music are closely following the alliance between Napster and Penn State University. Penn State is letting most students stream music free (the cost is part of each student’s $160 technology fee, and the Mac and Windows ME operating systems are not compatible with the service). Napster hopes to win a loyal following willing to pay for downloads after they graduate from Penn State. If all goes well, other schools will follow suit, hoping free music streaming will tempt prospective students the way free cable TV service and other amenities have.
Pepsi hopes to woo cola drinkers with a deal with Apple to give away music through the online iTunes Music Store.
Unplugged
Hot spots are going to spread. Starbucks thinks it’s onto something by offering wireless Internet in some 2,700 of its coffeehouses. In its busiest wireless restaurants, people are coming in during the normally dead after-morning-rush period and staying longer than the average Starbucks visitor, increasing the likelihood of sales that otherwise wouldn’t have been made. Starbucks is planning to roll out wireless service to more of its coffeehouses. McDonald’s, with its own hot spot service, and other businesses, including a Chicago Car-X auto service store that introduced a hot spot this year, are taking note.
Free to fee
News Web sites are still trying to figure out how to persuade visitors to subsidize the huge cost of newsgathering. While some news sites are seeing ad revenue climb, most are debating how to charge for some content without alienating visitors. This time last year, Salon.com began offering free access for 24 hours to visitors who watched an ad before reading premium content. That model is OK for well-known sites, but for smaller content providers — indie record labels that might want to start their own music downloading service, for instance — the ability to profitably sell content for $1 or less (so-called micropayments) is essential. Watch for PayPal to build on its eBay success and become a more widely recognized form of online payment. Facilitating micropayments is a tough business, as CitiBank found out in deciding to scrap its c2it online payment service this month.
VoIP
Cable operators are gearing up to use the Internet as a phone line. Voice-over IP, or VoIP, has been around for years, but the spread of broadband is making it more attractive for more and more companies to get into the business of breaking down the voice into data packets and ferrying them through the Internet to your call’s destination. That bypasses the fees governments have heaped on traditional phone lines and makes VoIP a cheaper alternative — until governments find a way to tax Internet phone calls.
Webcasting
The growth of broadband also is good news to video Webcasters whose images rely on faster-than-dial-up connections to be effective. While Hollywood fears broadband can lead to the kind of rampant downloading that has driven the music business to distraction, perhaps moviemakers can learn from MLB.com what record labels are learning from the iTunes Music Store: People are willing to pay for content if you make it easy to get and price it fairly with not too many restrictions on use.
Last year MLB.com scored an estimated $80 million by selling downloadable video files of team highlights, classic games and games shorn of interminable dead time when nothing’s happening. A game costs $3.95 and can be downloaded and stored to CD, unlike some restrictive 99-cent music Web sites that limit your ability to burn CDs. Hollywood is paying attention.
Video games
Academia wants you to stop calling them video games, a term that has been around since Pong landed in a California bar 31 years ago. They’re digital games, scholars insist, because “video games” refers to consoles and excludes “computer games.” Maybe we should listen to them; scholarly writings and conferences around video, er, digital games have been popping up left and right. By studying how and why we play, academia is learning how we live. Expect attendance to swell at events for researchers and the industry alike — such as this week’s International Consumer Electronics Show in Las Vegas. So, you got that? “Digital games,” “mobile phones” and “notebooks,” so stop saying “video games,” “cell phones” and “laptops.”
It’s enough to make Janus’ head spin.
