There were two big observations out of the annual Consumer Electronics Show last week. First, from media giants like AOL and Comcast emerged the common vision that 2013 will be the year content providers at last realize the promise of connectivity across multiple platforms. And yet, the CES hordes continued to hear about “technologies” that really amount to little more than slogans (SmartGlass, TV Everywhere) and that represent not some great, futuristic leap forward but, in reality, the interbusiness equivalent of sharing your toys at recess.
Then, there was that familiar refrain of idealistic inventors who trek to Vegas not just this year but every winter to show off their sometimes cool, sometimes just plain weird wares: “This time around, my product will catch on.”
The value these mostly twentysomethings bring to CES in the first place is to develop devices and software that help make other technologies better—even if it means working with competitors. Oculus, a startup run by Palmer Luckey, this year unveiled gaffers-taped prototypes of its 3-D headset, the Rift, which promises to turn video gaming into virtual reality quickly and simply. That’s a much harder proposition than it sounds. Video games aren’t made for head-mounted displays filled with little gyroscopes; they’re made for $60 controllers you buy at GameStop, all of which basically look the same.
Luckey—with what he calls “some hacky driver fixes in DirectX,” Microsoft’s 3-D rendering software used to play most Windows games—demonstrated at the show that one could use cheaply produced sensors to mimic the commands of a gamepad within a headset. Luckey then put the prototype on Kickstarter as a “development kit” for anybody wanting to make a game compatible with his device.
John Carmack, the coding whiz who invented 3-D computer gaming with the Doom and Quake game series, took Luckey under his wing. He helped bring a third company, Epic Games (which happens to compete with Carmack’s Id Software), into the mix. Now, Epic is working with Oculus to provide a special set of tools to make new games playable using the Rift.
Such cooperation isn’t seen as often with the big tech giants. With all tech players of a certain size aspiring to the walled-garden appeal of Apple, large electronics manufacturers have been quick to wow with new gadgets, but slow to make those gadgets compatible with the products of other companies. AOL’s CEO Tim Armstrong told Adweek at CES that he sees that changing. “Ten years ago, this should have been called the BES, because it was all business electronics,” he said. “Last year, it was the TV year, and now everybody’s got connected devices. It’ll be a huge boon for us because it’ll connect everything across.”
Armstrong is referring in part to the Direct Living Network Alliance (DLNA), a wireless protocol created by a third-party, nonprofit developer, and that the industry is rapidly adopting. At this year’s CES, Samsung made the biggest splash with its DLNA devices. At the Samsung booth, huge TVs floated about while maintaining image integrity as they spun forward and receded, as though each was actually a window into a place just behind the screens. A rep demonstrated that a person could pick a video off his tablet and “throw” it up onto another DLNA TV screen—not just another Samsung TV set, but the screen of another manufacturer with the same cross-company protocol.
The possibilities here are easy to see and are already being played out in the media world. In a corner of the Intel booth, Comcast set up its new XG5 “video gateway,” a DLNA-based box that serves as both a router and a very, very fast cable modem. With a Xfinity subscription and the right app, Comcast customers will be able to use their cable subscriptions from nearly any device in the house—tablet, smartphone, computer or TV.
As cable fights a war of attrition with over-the-top providers, recent gambits—tiered Internet packages, bandwidth caps, complicated authentication services—run the risk of further alienating consumers. The XG5 seems to represent a sea change in cable’s attitude toward its customers, namely the realization that the only way to compete with innovation is to add value. –Sam Thielman
‘Knight Rider’ and The Connected You
The New meaning of ‘Throw’
“This year, what’s at the center is the connected you,” Mark Jackson, chief technology catalyst at McCann Worldgroup, said at CES. The backbone of the “connected you” is the ecosystem of devices including TVs, smartphones, cars and appliances that are able to connect to the Internet and then to each other, conceivably compiling loads of cross-channel behavioral data and introducing new arenas for brands to interact with consumers.
Perhaps the clearest—and most recent—representations of that coming interconnected world are the self-driving and driver-assisted cars that auto brands like Audi and Lexus unveiled. These vehicles are able to connect to devices like GPS systems, mobile networks and each other in order to autopilot through traffic while their would-be drivers sit shotgun. “Auto companies are ahead of the game because they want to make safer cars, but they are also making an open ecosystem around the car,” said Greg Armshaw, another of McCann Worldgroup’s chief technology catalysts. For example, Ford announced tools for developers to build apps for its Sync platform. That could lead to apps that take advantage of data funneled from a car’s black box, so that an auto-service chain’s in-car app could, say, alert a driver when his vehicle is low on oil and direct him to the nearest auto shop.
But mining data from a vehicle is farther down the road than delivering content to a car, said Kris Alexander, chief strategist for connected devices and gaming at cloud-based intelligence platform Akamai, which seemingly has a hand in the distribution of most Internet-delivered content. Alexander would know—Akamai has partnerships with major auto manufacturers, though he declined to name any.
While the growing crop of KITTs may be the most bleeding-edge example of the devices keeping consumers connected, connected TVs are likely to outpace connected cars in adoption. Manufacturers such as LG, Panasonic and Toshiba have partnered to promote smart TVs as another app platform. At its CES booth, LG demoed how a consumer could download The Sims app to his TV and use his iPhone as a controller. The TV-app ecosystem wouldn’t only open up the big screen to console-less gaming but also to cable-less viewing.
Cord-cutting has been a hot topic for years with the advent of devices like Xbox and Roku and streaming services from the likes of Netflix and Hulu. Smart, Internet-enabled TVs could reduce the need for those middleman devices and introduce even more competition for TV networks from existing Web publishers already cranking out lots of video.
In 2013, Forbes intends to “scale our video offering to be a meaningful part of the business,” said group publisher and chief revenue officer Meredith Kopit Levien. In the past, that might have meant more premium videos on Forbes.com and perhaps a YouTube channel, but Levien acknowledged a broader strategy that may possibly include a Forbes smart TV app.
Not everyone is bullish about smart TV applications. Brad Hunstable, founder and CEO of live broadcast platform Ustream, says he’s more intrigued by the idea of a consumer starting to watch a video on his smartphone or tablet and then “throwing” it to a connected TV, á la Apple TV, rather than pulling videos from the Web to his TV.
(Indeed, during CES, companies like Qualcomm and Intel promoted their latest chips, which can wirelessly connect implanted devices to one another.)
For marketers, the idea of everything connected means more data that could conceivably be used for ad targeting, as well as more media on which to run those ads—be it a Jiffy Lube promotion that’s aired over a car’s audio system when its computer detects that it’s time for an oil change, or a supermarket coupon displayed on a refrigerator door to alert you that the milk put inside in a couple weeks ago has likely soured by now.
Said Alexander, “The reality is that anything with electronics will be connected in some way over time.” –Tim Peterson
Why the Agencies Are Really Here
Madison Avenue in the Desert
If you want to know how to do the massive crush that is CES, it’s probably best to ask a 15-year veteran.
Brian Terkelsen, CEO of MediaVest USA, was attending the ginormous trade show long before it was on the radar of agencies and media companies, so he knows what to look for.
“When I see that fridge with a touch screen on its front door for the fourth year in a row, I know it’s coming, but I know they are having problems,” Terkelsen said. “When they still have a coaxial cable coming out of the back of it and they haven’t even figured out how to wire it to the rest of the house, they’ve got a lot of work to do.”
The exec remains bullish on CES, despite its shortcomings and excesses. “There’s an interdependence between the marketing and electronics worlds,” he said. “We help them think like marketers and consumers when we come here.”
So what exactly is Terkelsen most excited about? Wearable technology. (Digital blazers, anyone?)
While the largest agencies have taken to sending veritable armies to CES, some hardly bother with the show floor. “It’s really just a lot of TVs,” said one exec. Some shops, including Digitas, have taken to producing their own content for the event and hosting private client summits at the many hotels on the strip, a world apart from the convention chaos.
If agencies do take their clients out onto the CES floor, curated tours are key. Publicis even produced four custom brochures with titles like “Commerce+” and “Next Generation Storytelling.”
Still, it’s fair to question the value of CES for agencies, given that the event doesn’t necessarily pay off in a traditional ROI fashion. Said to Paul Gunning, CEO of Tribal DDB Worldwide, “One of the best parts of this is the amount of people you run into. It’s almost more about the hallway—it’s the amount of meetings you can get. This is literally like 10 weeks of travel. It feels like the ramp up to Cannes.”
But Simon Bond, CMO of BBDO North America, thinks CES is about more than networking: “We bring out a crew, basically shoot interviews with some of the leading tech and media partners that are here.” From there, the agency produces three-minute pieces and distributes them across its network of 70,000 employees, “from Australia to Argentina to China,” he said. “We’re educating our whole network and all our clients. We write newsletters and thought pieces. All of our clients get educated. So we feel it’s a good ROI.”
Despite their starring roles at CES, forget tablets, smartphones, smart TVs and gaming devices—the hottest new advertising medium is on four wheels, according to Tribal’s Gunning. “The car is going to be one of the most hotly contested media placements,” he said. “Between who’s making the car, who’s owning the screen, who’s got the operating system, the connectivity, it’s rightfully going to be a bloodbath considering how valuable it is for retailers.”
Just how valuable? “We have radio and out of home. We’ve had them for 100 years. There’s been no innovation there for 100 years,” said Gunning. “This could largely replace radio and out of home.” –Mike Shields
D.C. Does Vegas
Meet Me in the Internet Lobby
Vint Cerf, Internet legend, attended CES, doing what he does best. Cerf, Google’s “chief Internet evangelist” (yes, that’s the title on his business card), symbolized the fervor of the online community when it comes to policy. The Internet—protecting it and cultivating it, keeping it free from harm—is practically a religion, worshipped by everybody. Does the Internet have any enemies?
There certainly weren’t any in Las Vegas. In fact, you would have to go to a whole other country to find them—say, Russia. As it happens, that’s precisely where Cerf’s title recently got him into trouble. Russian officials thought Cerf might be peddling an actual religion. His response: “I told them I was Geek Orthodox.”
Alexis Ohanian, a co-founder of Reddit, is another apostle. Practically a fixture at policy sessions, he was still riding on the success of his Reddit bus tour through the heartland this past summer, forever immortalized in Silicon Prairie, a 22-minute film that was premiered at CES and that will be shown inside the Beltway on Jan. 15. Speaking about his first foray into politics, Ohanian said, “It’s worked out OK. We are a generation that cares so much about this Internet.”
Now is the time to take Internet politics beyond the SOPA blackout and develop a more permanent strategy, he added. “We can’t just keep phone bombing Congress,” he said, referring to the 15 million people who dialed up Congress, demanding members stop SOPA.
Ohanian’s next big idea? Geek Day. “We’ll descend on Washington in a very geeky and polite way,” he explained. (The doubters should remember that Reddit’s bus tour got a lot of attention.)
One of the latest apostles is Michael Beckerman, president and CEO of The Internet Association, a newly formed consortium of companies including Google, Facebook, Zynga and IAC whose mission is the protection of “Internet freedom.”
A former Hill staffer, Beckerman knows what will move lawmakers. “The more we can get into positive stories, quantify how many jobs the Internet is creating in sectors, tell how the Internet impacts peoples’ lives, the more we can get into [lawmakers’] minds,” Beckerman said. “Each company, each individual needs to contact their congressional representative and tell them how their business has reached new markets, hired new people. So when a bill comes around, the House member or Senator knows they talked to constituents. That matters to every elected official and it changes the dialog.”
Then, there’s the Don Quixote of the Internet: Sen. Ron Wyden (D-Ore.), the reason the online community spent so much time taking victory laps after shutting down SOPA a year ago. Looking beyond the SOPA fight, Wyden came equipped with a new meme: “The freedom to compete.” Because of Wyden’s status as an Internet policy rock star, the phrase is likely to reverberate among lawmakers and Internet policy advocates, taking its place alongside such terms as net neutrality and Internet freedom. “The innovation that is displayed in Vegas needs to be disseminated around the world,” as Wyden put it.
If the online and tech communities are looking for their next big fight, it might be taking down the patent trolls. Rep. Peter DeFazio (D-Ore.) aims to slay those players that extort $29 billion in patent settlements from unsuspecting companies, or at least deal them a serious blow. He announced plans to reintroduce the Shield Act (Shield is an acronym for Saving High-Tech Innovators From Egregious Legal Disputes). “Congress is wary of going after software patents, so we’re going after the procedure. It may be small ball, but I believe it will have an impact,” DeFazio said.
Meanwhile, FCC chairman Julius Genachowski picked up a new nickname at CES: “The spectrum chairman.” He spoke to a highly receptive audience, announcing that the agency will next month begin the process of freeing up more spectrum for WiFi.
“When you see what is going on on the [CES] floor,” he said, “you realize we have to do something about this.” –Katy Bachman