CES Wrap-Up: Maturing Products Raise Rights Issues on Sports Content

The 2011 Consumer Electronics Show is over, and now it’s up to the sports networks, leagues, teams, and other content owners and creators to figure out how the new TVs, tablets and mobile devices, and computers will impact their business opportunities and rights deals.

At first blush, this year’s CES seemed to be lacking in the type of product introductions that get the consumer media in over-hype mode and set show attendees buzzing. The product themes were almost identical to last year’s: TV sets offering 3D and Internet connectivity, tablet devices designed to compete with the Apple iPad and Samsung Galaxy Tab, and cellular phones with increased multimedia capabilities.

But, in many ways, 2011 CES was the equivalent of the NAB shows that occurred two years after the introduction of game-changing technology like digital tape formats, HDTV, and tapeless formats. What those NAB shows lacked in buzz they made up for in product maturity, offering the refinements needed to fully embrace new workflows and technologies.

Dozens of Tablets
At CES this year, the tablet category, for example, saw dozens of products introduced. Many will fall by the wayside, but there is little doubt that the iPad now has serious competition and that PC users have a device that will make them comfortable.

One of the smaller announcements was that Samsung’s Galaxy Tab is available in a WiFi-only version, freeing customers of the need to ink a cellular data plan. And one of the larger announcements (and the winner of the CES Best Gadget) was Motorola’s Xoom.

The latter could find a big following in the marketplace because of two important features: Adobe Flash-compatibility and reliance on Google’s Android Honeycomb operating system, which is designed specifically for the tab market. The new operating system will allow apps built for the Android phone OS to easily scale and port over to the larger, tablet devices. That, coupled with Flash support, would offer a large advantage over the Apple iPad, which requires app developers to rewrite iPhone apps for the larger form factor.

Motorola isn’t alone in its support of Honeycomb. LG Electronics, Dell, Asus, Samsung, and Toshiba are among those slated to support it. That means sports leagues and networks that develop apps can rest easy knowing that one app will port to multiple devices from multiple manufacturers. That cuts down on development costs and, more important, more easily justifies development of an Android app.

The same, unfortunately, can’t be said of the Microsoft Windows platform. Tom Kilroy, SVP/GM of Intel’s sales and marketing group, was quoted by CNET as saying that Intel, Dell, and others have “tried to get Microsoft to do a tablet OS for a long time.”

Although Steve Ballmer gave a keynote address to introduce the next generation of Microsoft’s phone operating system, it’s important to note that a tablet and a Windows-friendly tablet OS were not at the center of the speech. That said, Ballmer made it clear at CES that Microsoft intends to put the full version of Windows on mobile devices coming in 2012 and beyond. He said customers expect “the full range of capabilities from any device” and Windows “will be everywhere on every kind of device without compromise.”

Smart TVs
And then there were the “smart TVs.” Sony pushed its relationship with Google TV. Both LG and Samsung exhibited variations on the “Smart TV” name. And Panasonic touted its revamped Viera Connect service.

Across the board, services were fairly similar, with Hulu, Netflix, CinemaNow, YouTube, and Amazon Video on Demand available on the platforms. LG, for its part, also has deals with MLB.tv, NBA Game Live, and NHL GameCenter.

And a wide variety of apps have been written for each of the TVs.

Internet-enabled TV, like the tablet, has advanced another year in terms of usability, with simpler on-screen navigation, richer services, and, of course, the app explosion.

And offering perhaps the most potential for intuitiveness was LG’s introduction of a Wii-like wand remote control, which allows users to drill into the services via an on-screen arrow and gives a mouse-like functionality to clicking and accessing content.

For sports leagues and networks, the challenge with all the Internet-enabled TVs involves a mix of rights issues and, as in the mobile space, costs associated with developing apps for different TVs. There is certainly plenty of potential for delivering live sports content over the Internet-enabled TV pipes, but existing rights deals, blackout restrictions, and cable-carriage deals will get in the way of the sports fan’s ultimate dream.

That said, the potential is there, today, to deliver a compelling text- and stat-based service that can bring more information to the fan. Highlights also seem to circumvent most of the rights issues.

Developments in 3D
The biggest development in 3D was simply how ubiquitous it was. It was, literally, everywhere. There were, of course, 3D TV sets. But then there were the other devices: 3D Blu-ray players; 3D computers that didn’t require glasses; 3D computers that required glasses; prototype 3D LCD, OLED, and plasma displays that didn’t require glasses; 3D camcorders, 3D Flip-like cameras; 3D still cameras; 3D headsets; and even a number of 3D glasses.

So what does all the 3D stuff mean? Either 3D is going to be the biggest bust ever for the consumer-electronics industry, or all the new products are laying the groundwork for a 3D revolution in 2012 and beyond.

We’re going to go with the latter. All the manufacturers displaying 3D products can’t be wrong about the potential of the market, right?

Okay, they could be. But there were, again, second-generation developments that offer hope for 3D’s future.

First, there was LG’s introduction of Cinema 3D. Much has been made of the expense associated with active 3D glasses. Cinema 3D uses passive displays, cutting the cost of glasses to around $20 (versus $100 for active glasses), a move that will alleviate anxiety for parents concerned that their youngsters will break expensive glasses.

LG says its sets will be priced to be “competitive” with 3D active displays from other manufacturers. The company will also continue to produce active displays for the high end of the market because active displays provide sharper images than the passive ones.

But LG sees a large market for the midrange passive displays, and its research found that most “average” consumers prefer the passive display.

Other manufacturers, however, consider the compromise in picture quality unacceptable and are sticking with active displays.

The LG sets, however, could signal a watershed for 3D.

First, they would enable CE retailers like Best Buy or Walmart to more easily demonstrate 3D content to consumers. The high cost of active glasses requires them to either be kept under lock and key or chained to a display so that customers can’t walk off with them. But, with less costly glasses, sales associates could be armed with a few pairs and begin building interest in 3D products by readily demonstrating the sets.

More important, if the passive displays find sales success, this could create incentive for other manufacturers to develop passive 3D displays, in turn helping drive adoption. And file potential development of a 4K monitor that could bring full-HD resolution 3D to passive displays away as something to look for at a future CES.

Manufacturers of active 3D sets also took steps to make their sets more attractive to consumers. First, of course, there are the improvements in picture quality: less 3D crosstalk, better blacks, and smoother motion. But, in addition, the glasses are becoming lighter and sleeker, making them more comfortable to wear for longer periods. There were also many more rechargeable glasses at the show, solving another consumer concern.

As for 3D displays that don’t require glasses? Sony’s display of a 22-in. OLED was rather amazing, and Toshiba’s 3D glasses-free laptop exhibit attracted a consistently long line. The former indicated that sets in the 22-in. range offer a compelling experience (some of the larger displays still suffer from a limited viewing sweet spot). And the lines for the latter proved that people are still very curious about the potential for 3D.

And potential, truly, is what 2011 CES was all about. Nearly all the product introductions — from the tablets to cellphones with HDMI output to smart TVs and, of course 3D — have tremendous potential. The question now is whether the content will follow.

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