Will Slingbox Be More of a "Revolution" than TiVo has been?

Flash! 30 Nov 2006: "It will push Slingbox past the mere viewing of cable TV programs on the Internet and on mobile devices toward a new realm of its own content, interactive applications, and advertising." Source: http://www.redherring.com. The story is published in response to Sling Media hiring two former MTV execs. Now, back to our regularly scheduled blog entry:

I told my students last Wednesday, the last day of class, that we are headed toward infinite bandwidth at no cost. I think if you an understand that (over)statement, you can better understand the future of the media. Show you the money? Sure. It's called advertising, and in the United States, we are comfortable with the bargain of advertiser-supported media content.

Now, I think it's finally happening. I'm having a mid-life new media crisis. I'm learning something new everyday, and just when I think I've put everything away into neat little piles of forecast failure, modest success, and high acceptance comes along another new technology that has my mind spinning again. OK, as I say many times, nearly all "new" media technologies are really old in that they or their concept have been around for years if not decades (I believe the social networking phenomenon was missed by just about everyone and certainly blew its creators out of the water, too!). I've been hearing about the Slingbox for a while from some of my "ya gotta love 'em" gear-head students. I kept thinking of an arm in a sling, and so in my mind's eye Slingbox was something you carried around with you, you know, like a boombox. Well, I've spent the last 4 hours at the library prepping for next semesters' classes, I decided I need to blog before I'm kicked out of here.

OK, so if you take a cursory look around the internet, you find that Slingbox basically allows you to watch your TV anywhere there is a (presumably high speed) internet connection. My mind starts to swell in anticipation of blowing up this time. Let me watch my TV whenever I want? What, is this some kind of surveillance device that will let me see through my TV who's in my house? (Don't you jus wish the Slingbox folks were reading this to see how an intelligent, reasonably well informed guy had no clue what the product was based on it's TiVoish name; I still don't know the story behind why TiVo was called TiVo as opposed to, oh, I dunno, CastBox. If you laughed, pat yourself on the back for getting my sense of humor).
Support fotosearch.com, source of the watercooler graphic
Slingbox may be the next new video buzz around the water cooler.

OK, so slingbox is hooked up to your TV. Deductive reasoning suggests that your TV is just a cog in the web of getting the signal from the cable or satellite provider (sure, over-the-air, why not?). When I worked in radio and was all by myself, playing MacArthur Park so I had time to go read the meters for the good ol' FCC, I had a good trainer when it came to playing 1930s telephone operator with the cables. He said "you're just completing a circuit." Wow. I'm a visual person and BINGO! I "got it" right away. Well, and this is where I dare anyone to comment on my blog (chickens), my sense is that Slingbox is doing the same thing by completing a circuit. The signal goes into your TV set and out to Slingbox which is connected to the Internet. No, you don't even have to have a TV; just use the set-top box or, theoretically, the rabbit ears. Time for some visuals.

Is that DVR a TiVo? It looks like one with the "IR emitter."

Now, back to confusion. My upstream connection on my wireless LAN at home is relatively slow. I wonder how broad the band has to be to deliver those TV signals upstream. Am I getting this right? Nic, where are you? So Slingbox becomes that "little black box" psychologists liked to refer to as input in, behavior out, but we haven't quite figured out everything that black box can do.

Skipping how the signal gets on the Internet from my TV for a moment, think of the possibilities. How many campuses are wired up for wireless access at this point? So now not only do I have to compete with chatting and whatever else the students are looking at while I'm on the other side of the screen. Can I really compete with South Park or the Daily Show? Or have I, to quote a great Bugs Bunny line, "taken this thing too far?"

I've said for a long time that video is going mobile, and, frankly, I wasn't thinking so much about cell phones. Gosh, I'd love to have access to the research of the video-to-cell phone; I'm usually pretty sure of myself when it comes to predicting the future of new media, but I don't have a good handle on this. Whoops, better hold this for my next post.

Abbey Klaassen. Advertising Age. (Midwest region edition). Chicago: Jun 5, 2006.Vol.77, Iss. 23; pg. 1, 2 pgs
Abstract (Document Summary)
Sling Media's Slingbox weighs only two pounds, costs a one-time fee of $200 and "place-shifts" live television programming, which industry watchers say has the potential to be as revolutionary as time-shifting. Rishad Tobaccowala, CEO of Denuo, the Publicis division charged with exploring business models for a digital world, believes Slingbox could have TiVo-sized impact on advertising models. While the technology is revolutionary in theory whether it will ever be widely distributed enough to change television viewing habits is unclear. Michael Paxton, senior analyst of converging markets and technologies at In-Stat, said Slingbox has smaller appeal than digital video recorders, which Nielsen expects to reach 18% penetration by year's end.

Full Text (1035 words)
Copyright Crain Communications, Incorporated Jun 5, 2006[Headnote]
TiVo gave it to you on your time; now Slingbox gives it to you on your turf

The following is posted temporarily so that the blogger can edit the original document with thanks to Crain Communications, publisher of a variety of periodicals about advertising and the media.

How it works

Like many American families, Jon and Suzanne Davidman used to relax after a long day of work by plopping down on the couch and watching their favorite TV shows, most of which they recorded on their DVR. Some nights they'd pull up "The Sopranos," other nights it'd be "Oprah." If the Dallas Mavericks were playing, they would check out the game, too.

Nothing odd there, except that the Davidmans were living in Soto Grande, a small city in the south of Spain, and were watching their favorite American shows via Slingbox.

The unassuming device weighs only two pounds, costs a one-time fee of $200 and "place-shifts" live TV programming, which industry watchers say has the potential to be as revolutionary as time-shifting. Yes, that thing that that looks more like a candy-bar than a consumer-electronics gadget has the potential to be as disruptive to media and marketing models as a DVR. In conceit with a DVR, it's a veritable game-changer.

"It's unbelievable technology," said Jon Davidman, who's been back in New York for the past two months but still maintains his home in Spain. Hook up a Slingbox to a TV, and the device streams live programming anywhere in the world to a broadband-connected laptop or Windows-enabled smart phone. Connect it to a digital video recorder, and placeshifting meets time-shifting.

RishadTobaccowala, CEO of Denuo, the Publias division charged with exploring business models for a digital world, believes Slingbox could have TiVo-sized impact on advertising models. First, he said, consider that people now shift content between devices-TV to computer, PC to iPod. Then add time-shifting and placeshifting to the equation. Marry all that with the idea that search essentially allows users to go back in time and find content created weeks or years ago, and you've got what Mr. Tobaccowala calls "Einstein's theory of relativity meets marketing."

In less lofty terms, what Slingbox could do is make targeting TV advertising by geography much more difficult, potentially messing with local affiliates' businesses if enough people in one affiliate's region start slinging their content. DVR has already disrupted one fundamental aspect of the way in which TV is bought and sold-the timing of a certain ad. Now suddenly another aspect of how consumers are targeted-their location-could be disrupted too, because it would be almost impossible to tell where a Slingbox-enabled viewer is watching an ad.


"From a consumer perspective, we're seeing social change in mobility," said Coleen Kuehn, exec VP-strategic development at Havas' MPG. "People are spending so much time out of the home and, in many cases, out of the office, so it's become this 'take it with you' culture. [Slingbox] is a perfect product for this time." She suggests the device could also create competition for the iTunes video market, where mobile versions of shows go for $1.99.

The NFL is said to be the most fervently opposed to Slingbox, which inherently undermines the geographic boundaries and blackouts that define much of the league's TV business model. (The league didn't return calls for comment.)

The NFL's objections are perhaps not surprising given that the box was, essentially, invented to counter those sorts of sports-viewing restrictions. Sling Media, which markets Slingbox, was founded by Blake and Jason Krikorian, brothers and baseball fans who wanted to watch their hometown San Francisco Giants' 2002 playoff run while they were away traveling on business. Over the next two years, with the help of friend Bhupen Shah, they refined the device, making it smaller and simpler to use.

While the technology is revolutionary in theory-and said to interest cable companies-whether it will ever be widely distributed enough to change TV-viewing habits is unclear. Michael Paxton, senior analyst of converging markets and technologies at In-Stat, said Slingbox has smaller appeal than DVRs, which Nielsen expects to reach 18% penetration by year's end.

"It's splitting a niche segment into a smaller slice," he said. "Cool technology, questionable demand."

Yet the company has enough believers to have raised $46 million in venture capital in January and spawned a duster of imitators, including Sony's LocationFree TV, which beams TV to a Portable PlayStation, and OrbNetworks, which offers free online place-shifting software. Slingbox is available in such electronics retailers as Circuit City and Best Buy, and the company reported selling 100,000 devices in the first year, a number it argues outpaces many similar product launches.


Perhaps having dosely studied Ti Vo's experience, Sling is taking great pains to present itself not as a threat to advertisers but as an opportunity to reach consumers in places where they wouldn't have been able to view their favorite TV shows. "Whatwedoatthe end of the day is connect consumers and their TVs," said Rich Buchanan, VP-marketing for Sling Media. "If anything, we allow more eyeballs to watch TV." He said the company has worked with local advertisers to explain how the device works and that they're generally receptive to the idea that Slingbox helps them stay connected to out-of-town constituents. He also said that any home in the Nielsen sample using a Slingbox still would be measured, although Nielsen wouldn't be able to report where the viewer was watching.

Robert Davidman, CEO of Earthquake Media, a New York City-based digital agency, has two Slingboxes-the one that his ex-pat brother, Jon, used to watch American TV in Spain, and another that streams programming to his smart phone. One of his clients, Gibraltar-based PartyPoker.com, uses a Slingbox to view the company's U.S. ads and product placements.

"It makes entertainment more accessible," said Mr. Davidman, just minutes after catching up on ESPN via his phone. But the better news, he said, is that the personal, broadband-connected environment Slingbox creates is a ripe marketing platform. Marketers just need to figure out how to harness it, using interactive features that would allow viewers to click ads for more information or the opportunity to buy.

Lori Schwarte, VP-director of emerging media, Interpublic Emerging Media Lab, agrees. "The potential to interact directly with a broadband connection, broadband applications and commerce opportunities while watching content is a very attractive proposition," she said.

You may use this content (better still, argue with me!), but please cite my ideas as © 2006, Dr. Bruce Klopfenstein. Find any typos! Don't smite me, let me know!


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