After a week in Japan for the consumer electronics tradeshow CEATEC in Tokyo, my alarm clocks are sounding off. The total amount of visitors was sharply down. There was no clear theme for the show, as it covers component sourcing, manufacturing equipment, semiconductors, and all the way over to consumer end devices. The show therefore sits between the traditional B2B trade show, and on the other hand, consumer marketing shows. In ways, it is neither fish nor fowl. This is a major challenge for the event. Hopefully the CEATEC organisers will define a clear theme and market position for next year. However, this is not to say that CEATEC is without value, but the show is undergoing an identity crisis. Many new technologies were on show, especially around interactivity, connectivity, and content.
Almost every consumer electronics vendor showed products with Internet connectivity. Last year was the year for Internet connected TVs, and this year was no exception.
At last year's CEATEC show the web-based TV platform Actvila had just been announced. Although a year has passed it seemed as if little ground had actually been accomplished. In fact, vendors were more interested in providing additional, proprietary content on top of Actvila. Consumer mind share and awareness of Actvila also seem to be low.
Many of the TV vendors have partnered with Yahoo Japan (the most popular website and portal service in Japan) in order to stream content from Yahoo Japan to televisions. Toshiba showed its network TV which sports Actvila, Yahoo Japan, and as well IPTV from NTT. Toshiba has essentially integrated the IPTV middleware for NTT's IPTV service into this particular set of TV. NTT has released specifications for device vendors on how to manufacture products that can interact with its IPTV service. This is based on the work done by the Japanese operators, in IPTV Forum Japan. The IPTV Forum Japan specifications ensures that NGN networks that are compliant with the specifications can carry IPTV services across NGN networks. In other words, Softbank's access subscribers can access NTT's IPTV service, if Softbank's NGN access network is compliant to the IPTV Forum Japan guidelines. Currently, only NTT has a compliant NGN network. For device vendors, NTT does not carry any special hardware requirements, it only provides the information on how the services work, and how to interact with the services. It is up to device vendors to implement the specifications, and choose which services will work on the terminal device. The product then goes through a compliance testing, and can then be released on the market. There is no revenue share between the companies, The argument from NTT I that there is no revenue share for broadcast TV services, so why should there be any revenue share for this service input. Sharp is partnering with some publications so that their magazines can be viewed on the televisions, and once again in addition to AcTVila and Yahoo Japan. Panasonic also had its line of products, though somewhat hidden away at the booth, that could connect to Actvila services.
In our view all these efforts are developed in disarray, and is likely to confuse Japanese consumers more than anything else. Why should the available video input depend on which TV set manufacturer a consumer buys from? Video inputs have been, and should be, uniform across the industry. DVD players do not differentiate between a TV from Sony or Panasonic, nor will broadcast TV channels differ from a Sharp or Toshiba TV. Why then create these closed Internet TV video input channels? The most promising developments though were the relationships between NTT and Toshiba for IPTV services. How quickly this will scale internationally, and which standards Toshiba and other vendors will use, is less clear. It is also unclear what, if any, minimum base line requirements the vendors have for their products such as storage and memory.
Sony showed some reassuring moves by making its SDK for Internet services available to third parties. If managed properly, Sony could establish a rich and varied content platform for its TVs (and hopefully this will be expanded to other products). However, disappointing is that so far the Internet TV services so far only apply to TV sets, and there seems to be little or no sharing of developments with for example the Playstation, Blu-ray, handsets, or other devices such as portable entertainment devices. Sony Playstation is keen on entering the content distribution market with its Playstation 3 product, so why are not the Internet TV services developed for Bravia TVs not made available on the PS3? If Sony made Internet services a platform for the company, it could actually build up a brand in the market based on its platform, and the products would have consistent set of services, as well as look and feel. It is understandable that the consumer electronics industry struggles with creating a unified video input for Internet TV services due to the complexity of the industry and lack of intra-industry collaboration, however at least the vendors can ensure that its own products are consistent and use the same platform (and thus same billing, account, and security system). This is what Apple has done, Apple is well rewarded by its customers for doing so.
