Chris Lanier's Blog

News, Analysis, and Opinion on Microsoft Digital Media Technologies (and TGB News!)

Going Beyond The Enthusiast Market

Charlie Owen, a former Media Center team member wrote a post this week about Media Center expanding its marketplace, specifically going from the current enthusiast market to a more mainstream market.  Charlie analysis comes to the pretty simple answer of It's possible, but highly unlikely at this point.”

I had previously come to this conclusion, but to me the real question is “will Microsoft attempt to develop for the enthusiast market?”  Lucky for me, Charlie replied to my comment with exactly what I was expecting

Charlie: “No. That's because they have never done so. The enthusiast market is always a subset of the overall market any product targets. Put another way: Where the goal is making a profit you wouldn't sacrifice a broad market opportunity of 100 for the narrow enthusiast market of 10. Making a Microsoft-sized profit is different than making a profit if you were a much smaller company.”

In other words the future for Media Center is one or two options.  Option 1: Microsoft stops development of Media Center (very unlikely).  Option 2: Microsoft transitions Media Center to a market which has the possibility to create a “Microsoft-sized profit.” (Hint: TV on your PC)  Re-quoting myself from early this year, the days of Media Center being billed as the do-it-all center of your home are over.

My opinion continues to be that Microsoft will focus more and more on the Xbox 360 as the center of the home.  The benefits of the Xbox 360 over Media Center are almost endless from a business perspective.  The massive amount of end users (an unquestionable 30 million, with 20 million of them being Xbox Live subscribers) means content providers are going to flock to the platform.  Microsoft can sit back and rake in yearly recurring revenue from these 20 million Xbox Live subscribers along with the massive amounts of licensing accessories and the Xbox 360 brand.  Media Center on the other hard makes Microsoft absolutely no money as it is a part of the standard Windows SKU (eg. No one except members of The Green Button ever purchased a Windows license just to get Media Center).

There are still people holding out hope for Media Center to become a platform for the home.  The recent announcement that Dish Network will not be shipping their tuner anytime soon didn’t surprise me one bit.  Why would Dish bother to continue with Media Center when it is pretty clear Microsoft is moving away from the consumer they thought they were buying into?  This same concept is at play with Media Center Extender’s.  There is still some hope that Toshiba will be releasing an Extender, but I think the concept that most people miss is that whether it gets released or not means little in the grand scheme of things.  If Microsoft’s heart is not in providing a platform for the home, you can really know going into your purchase that you’re going to end up disappointed at some point.

The biggest question mark might be Windows Home Server.  For years I have said the concept of including Media Center in Windows Home Server is pointless and does nothing to expand the current market.  If HP ditched Extender’s and CableCARD due to poor sales, why exactly would they have the least bit of interest in shipping a Media Center+Home Server box?  If OEMs are not interested, why is Microsoft going to develop it?

Most people underestimate the OEMs when talking about Media Center.  OEMs are really responsible for Media Center from start to finish from a customer’s perspective.  HP and Dell have shown they have little interest in Media Center by either discounting CableCARD PCs, killing off Extender’s, and even in HPs case killing off their HT-styled z-series Media Centers.  Dish Network and DIRECTV are just as important and have shown that they are increasing less interested.

Microsoft’s latest attempt to make a market for Media Center has been the custom integrator channel, and some have big expectations for what Microsoft might have in store.  Sadly most of the possibilities have already been proven false, and based on what I’ve been told from those in the industry interest in Media Center in the custom channel is dropping fast.  I’m interest to see how much longer Microsoft attempts to push into the market.  With their partner OEMs such as HP, Linksys, Dish Network pulling out these leaves the custom OEMs like Niveus Media and Life|ware to pick up the slack.  Unfortunately there is only such much they can do.  If Microsoft’s commitment in the channel falls it might be the end of the custom market experiment.

So once again the question is what’s next.  Recently there have been some great new bloggers show up in the Media Center community with some great suggestions.  I’m done with suggestions.  Microsoft knows exactly what we want, let’s not pretend they don’t.  The issue is it is no longer in their best interest to pursue most of it.  What’s next?  Who knows.  All I want at this point is for Microsoft to publicly provide a roadmap for what Media Center is to become.

Comments

 

thezigpc said:

I pose the question as to what is keeping us glued to using Media Center at all?

For me, its the interface alone, if SageTV had an interface that came close to media center then I would drop Media Center like a crappy girlfriend.

August 23, 2009 10:42 AM
 

superswiss said:

For me it's the interface and most of all CableCARD support. There's simply no comparable alternative whole home DVR solution out there that provides the ability to record premium HD content w/o the hack and mess associated with STBs and analog hole.

August 23, 2009 10:51 AM
 

thezigpc said:

superswiss, are you kidding me?  

Lets evaluate: A single CableCard tuner has the following limitations:

1) Lack of STV (solvable with a firmware patch)

2) Lack of On Demand Content

3) Every show you are paying to watch is wrapped in DRM.

4) Tuners are excess of 200$+Rental Fees.

5) The dreaded CableCard jitter error that has yet to be fixed since Windows Vista.

The STB HDPVR Route:

1) Every channel you are paying for

2) On Demand Content in tact (granted you have to setup custom IR buttons to relay control of the on demand content)

3) No DRM ;-)

4) Tuners Cost: $190 + Rental Fees but can be re-used for DTV/Dish, admittedly for media center you have to also pay for the DVBLogic software.

5) H264 Format does not experience the judder problem.

To me, "CableCard" is not even a remote option.  To think that something I recorded cant even be placed on a Zune or Windows Mobile Phone is absurd.

August 23, 2009 11:39 AM
 

JonDeutsch said:

Hi Chris,

Thanks for the shout out, and thanks again for providing me with the opportunity to blog at TGB.  

We're on different paths editorially, that's for sure, so I hope my advocacy and ideascaping doesn't furrow your brow too much.  I agree with you that MSFT knows what we want, but what I'm not prepared to give up just yet is framing what we want in a way that MSFT can digest and act upon (eventually).  

I do not believe any one of us will be able to change the market, change their strategy or make a dent in the numbers.   But what I do believe in is that good ideas framed in relevance can move people.  

So, I will continue to try to advocate ideas that are rational and achievable, with the hope that the folks at Microsoft are as smart, savvy and ingenuitive as I know they are.  

I work in a relatively big company, and I have on occasion myself shifted the direction of investment by effectively making the case that there are even "more better" options than the options that most people see due to group-think syndrome.  

It's not just the idea; it's also in the art of persuasion.

Jon

PS - All THAT said, I'm not beyond giving MSFT a good thumpin' where they deserve it for missing opportunities and poorly serving the community they themselves created!  

August 23, 2009 12:23 PM
 

JonDeutsch said:

I have a question:  Who is the leader of the WMC project at Microsoft?  Is there a single leader?  Is this person responsible for other products as well?  Or just WMC?

August 23, 2009 12:24 PM
 

jsmithv said:

Thezig, have you read anything about sagetv updating their GUI? That is what keeps me using media center as well.//

August 23, 2009 1:08 PM
 

hamiltonguy said:

It has taken me a while but I am in complete agreement with you Chris.  If they haven't already, Microsoft will throw in the towel on Media Center soon.  I don't think that is the end of the product though.   There is a chance, abeit a small chance that Media Center could maintain relevancy as a platform for 3rd party developers.  An app store, similar to stores offered on Mobile Platforms could provide enthusiasts new media center experiences for years to come.  However,  developers need an ecosystem ans store to earn a living.

August 23, 2009 1:35 PM
 

bigpunk said:

If Microsoft is about to give-up on Media Center then why did they buy The Green Button and just updated it. Seams pointless to me if your about to give-up on a product. And saying Media Center is not profitable is a flat out lye so your saying all the Vista Home Premium $239 and Ultimate $319 sold just for the use of Media Center is  not profitable. And then you have the Extenders. And you have the XBOX360 that people buy for the Extender and then start buying games and XBOX Live.

August 24, 2009 6:45 AM
 

Chris - Moderator said:

Selling a few hundred copies to people like us is the equivalent of Microsoft not selling any at all.  Think of it this way, if Microsoft sold a copy of Windows Vista to every member of TGB (say ~150,000) that equals 0.05% of total Vista sales assuming 300 million copies.

That's nothing, and no it is not going to be considered 'profitable' in a business the size of Microsoft.  Extender's don't sell, that's part of the issue.  Why do you think HP and Linksys kicked theirs to the curb?  Linksys sold them as low as $59, realize that they lost money on every unit they sold at that price.

TGB members have shown they have little interest in using an Xbox 360 because of various issues.  Have we bought them, sure.  Do the numbers really reflect anything meaningful?  No.

August 24, 2009 7:02 AM
 

htolino said:

Any realistic chance of some other company supporting CableCard digital cable tuners in the enthusiast marketplace?  For that matter, any news out of ATI as to whether the existing Digital Wonders will be discontinued?

August 24, 2009 7:13 AM
 

jagowar said:

"My opinion continues to be that Microsoft will focus more and more on the Xbox 360 as the center of the home."

I think this is the key in the future of media center....  and not even the 360 of today.  I have a feeling there is a serious hardware refresh in store for next holiday season (natal) and the hardware will get a completely new design.  I also think as part of this process it moves into a nearly silent category.

What would be cool (and I see it as totally possible) is they turn the 360 itself into media center (w/o the need to connect to a computer).  It always seemed stupid to me that they needed the computer to act as a glorified rdp session.  They sell tuners for it via usb and it significanly reduces the problem with complex setup involved.

Another key to the system is using WHS.... with powerpack 3 it works really well with media center and the same functionality will apply to what im calling the next extender.  Its not required but if you use it the experience is enhanced (giving the ease of use option with the advanced option for those that want to take advantage).  It also doesnt require the WHS team to integrate media center into their system.

I also could see with such a system that directv/dish might get back on board.  I really think the problem with media center is the numbers actually using it (assuming its in the hundreds of thousands actually using media center with tuner).  One the 360 its a completely different story and millions would take advantage.  The tech is by all accounts done for both systems so thats not the problem.  Its a potential subscriber count problem that goes away if every 360 is a media center.  (Im assuming similar numbers that singed up with netflix would be willing to try this out...  IE 2+ million so far)

August 24, 2009 7:32 AM
 

flamingwoodchuck said:

For the last 5 years, my hopes for a bright DVR future lied with Windows Media Center.   Now I'm placing my hopes on the DirecTV HD - Tivo device.

August 24, 2009 9:34 AM
 

JohnW248 said:

I've been happy with Media Center with dual cablecard tuners. I hope that development continues.

I don't know what zigpc's problem was with jitter/judder with cablecard since it's not a problem I've seen and so it must not be a universal problem with Vista.

As for DRM, is it really a problem? Content plays on Media Center and all extenders and just what do you want to do with content? Having used stand alone DVD/HD recorders and saving off SD to DVD, I thought I'd miss that option. But I do not.

The Tivo with cablecard has the the advantage that a single M card will provide two channels and supports SDV.

Personally I disagree with Chris that the product is dead. Perhaps what MS needs is a new division that developes custom solutions for limited markets so they could compete on the custom integrator market more effectively.

John

August 24, 2009 9:51 AM
 

superswiss said:

thezipc, to each his own. Here's my take on your points:

1) Not an issue for me. By the time Comcast gets around to using SDV in my area, I'm pretty sure this will be solved.

2) I have absolutly no interest in On Demand Content

3) So? I'm really past this. I have a dual HDHomeRun for all the ClearQAM stuff.

4) Again so? Everything costs money. You have to decide if its worth to you. I pay $1.50/month to rent the second CableCARD. The first one is free.

5) Tell me more about this. First time I'm hearing about this issue. I do not have jitter that isn't also present on ClearQAM.

Two comments on the STB HDPVR Route:

- You need to rent a bulky STB with wire chaos for every HDPVR. As I said, I only pay $1.50 on top of my cable bill for the CableCARDs. Each STB from Comcast costs close to $10/month. My tuners have long paid for themselves.

- The digital cable signal gets converted to an analog signal, then back to a digital signal. That's just stupid!

August 24, 2009 10:12 AM
 

bigpunk said:

Chris I say this with all due respect what you have done for the Media Center Community is unmatched, Even though you have been down on Media Center lately

But I think you are wrong

“Selling a few hundred copies to people like us is the equivalent of Microsoft not selling any at all.”  1+1 does not equal zero

So even if we use your number of 150,000 users that bought Vista Home Premium $239 that’s $35,850,000 I don’t think Microsoft can ignore 35 million dollars. and I bet most people bought Ultimate at $319. and it’s probably more than 150,000 because a lot of people use Media Center that are not members of TGB like the below article states 13 Million using Media Center each Month. And back when Media Center was OEM only they sold over 50 Million Units.

thedigitallifestyle.com/.../13-million-using-windows-media-center-each-month.aspx

I don’t think Media Center is about direct Profit anyway because it’s part of Windows as a whole like Paint and Notepad it’s a Windows Tool with a specific use it adds to Marketability of Windows.

Amen to JohnW248

August 24, 2009 10:35 AM
 

superswiss said:

thezigpc, one more point on the STB/HDPVR option that I completely forgot and I cringe every time I think about it.

The STBs have to be controlled with IR Blasters. That's about the most unreliable Stone Age form of electronic communication out there. I think it comes right behind smoke signals. I used to have a Tivo/STB combo and I don't wanna think about how many times the IR Blaster decided to fall off the STB or the channel didn't change for some other stupid reason like it was too cloudy outside or something.

I'm taking CableCARD anytime over these archaic hacks and deal with DRM.

August 24, 2009 10:38 AM
 

thezigpc said:

I  do agree that the analog>digital>analog conversion is near absurd but consider that the HDPVR is the only means to get premium HD into media center short of paying the cablecard-tax (new unit) or use a bios emulation route that could very well be disabled.

The STB IR issue is either solved via serial control (DTV) or Firewire based channel changing.

And I understand that you already payed your cablecard investment so for you it does not make sense to switch to the HDPVR route.

August 24, 2009 11:04 AM
 

sgtpokey said:

I don't post much but have been around for a while, using both MC, Sage, and BeyondTV in the past..

In any case to answer the question: what keeps you with Media Center I agree with swiss:

1) wife acceptance factor (elegance of use)

2) Interface on it's own merits

3) cablecard support

I understand zig's use of HDhomerun, but that's not a viable solution for my household; solving issues that are not priority for us, while causing other issues in return.

I will also say that I do agree that Media Center has no focus at the moment , but am of the opinion that there are more "states" than "perfect" vs "failure".

It's a good product hamstrung by the chaos that is HD TV Content, DRM, and competing with internet aggregators.

It's not dead, and in many ways is the only HTPC solution that even has a chance of a arriving at some digital nirvana.

August 24, 2009 11:31 AM
 

Chris - Moderator said:

John:

I would love to Microsoft to create a division to focus on the custom integrator market more effectively.  In fact, such a team already exists.  The issue once again is if the market isn't interested, and if large OEMs are not interested in creating devices (Extenders, TV Tuners, etc) this concept falls apart.

bigpunk:

The vast majority of people using Media Center as a whole home device have an account on The Green Button.  Those 50 million people that Microsoft likes to quote are people who open Media Center on the desktop and watch internet TV, view photos, etc.  This is why Microsoft now markets it as TV on your PC.  They know for a fact that people don't use Media Center the way you and I do.

(Psst, the 150,000 concept falls apart again because it assumes everyone purchased Vista strickly for Meida Center and would have never purcahsed it for use as a standard desktop operating system).

Your right, it does add marketability, and they like to call this PCTV or "TV on your PC."  No where does Microsoft market Media Center as a whole home PVR.  People like to think Microsoft will keep developing for us, but that concept falls apart once OEMs relize the market for Extender's (or TV tuners, etc) doesn't exist.

Bottom line, if Media Center doesn't create a direct profit funds that would have gone to eHome will now go directly to Zune and Xbox (who are not famaously in the same division).

August 24, 2009 11:44 AM
 

joboehl said:

Well, I understand most of Chris frustration, I´ve being there.

I still havent heard any oficial announcement that Toshioba will NOT release an Extender, or that Dish STOPPED the tuner project. Neither I heard Microsoft anouncing that Extenders will not be supported anymore, NetFlix on VIsta and not on Windows 7.  

At the same time, Microsoft spend quite a few resources on Extenders during Windows 7 development (new features, bakclevel support, transcoding), Toshiba announced that Extenders would be available second half 2009 (and that just started), Windows 7 has not launched yet and the list goes on. Beta Testers confirm that the Dish tuner does exists and works (never heard such a thing from Directv btw).

As far as I can remember, MediaCenter community was always a little bit pessimistic. That might be related with the lack of communication and a roadmap clearly defined for MediaCenter.

Maybe we should wait a few more months before defining the platform either dead or limited to a single audience.

We have a great number of opportunities for news in the platform, ranging from CEDIA going trough Windows launch in october all the way to CES. A lot of good things might still happen.

Example: I dont remember anyone being a beta tester for Netflix on Windows 7. At the same time, there are some news that this does exists (including a video). Also, no Vista Extenders were announced before Vista lauch, and even then it took quite a few months before they hit the market. Its too soon for us to say everything is doomed on the Windows 7 ecosystem.

Media Center is a great trojan horse for media consumption on Windows PC if Microsoft decides to use it. It does have value to Microsoft. They dont keep products that are non-profitable unless they have a reson for it. See the recently Microsoft Money dismise. If MC doesnt make a profit, it probabky have another strategic reason behind it.

Anyway, if it is doomed and XBOX+WHS work like a networked DVR environment, is not all lost. But XBOX is FAR, FAR, FAR away from Media Center in terms of media management. Its only ahead in online content.

August 24, 2009 1:12 PM
 

FSUGrad1999 said:

I want to hear more about the jitter that TheZigPC is referring to...  I have cableCard tuners....  I notice compression artifacts... and I sometimes notice that the color "red" especially bright red like on football uniforms "ghosts" or causes trails...  But I too notice this MORE on the HDHomeRun tuners than on the CableCards...  And it seems to be almost channel specific..

Can you describe more what you mean by jitter?

August 24, 2009 1:14 PM
 

monkeydeathsonic said:

MC is in Win7 so they are stuck with it for at least another few years. After that, it's anyone's guess, but there is a bigger push than ever for augmented TV and media center is still best poised to tap that opportunity. So, I guess I'm saying that I disagree.

August 25, 2009 4:27 PM
 

RemkoR said:

Hi Chris,

have you divorced from Microsoft and VMC ? You sound like a husband being let down by his wife.

Get over it and move on.

As an MCIA member I make money with Media Center. Yes, it is possible. Just by being creative and positive.

August 27, 2009 12:59 PM
 

Chris - Moderator said:

RemkoR:

I'm interested to know, as a MCIA member what has the organization done to promote growth of Media Center in the custom channel?

It is fantastic that you are making money with Media Center, however that doesn't mean much in the world of Microsoft.  If Microsoft's interest falls, and OEMs fail to produce products supporting Media Center what is your backup plan?

People seem to take a lot of this personally, but have you given any thought to the reality of the situation?  If the Xbox 360 is the only Extender on the market, are your customers 100% happy with that?  After all, Extender's are required to take full advantage of CableCARD (unless you are using video distribution).  If Dish/DIRECTV never release a tuner are you ok with?  That is to say, are you and your customers 100% happy with CableCARD?  What about DVD streaming?  Are you customer's demanding a solution?

August 31, 2009 6:37 AM


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