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The December 19, 2001 Issue Provided by System Dynamics Inc.
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A New Category Emerges: Home Media Servers

The idea is very simple. Take a big hard drive. Add a processor and lots of software. Stir in some great human interface design. Garnish with appropriate connectors and networking to audio/video components and a broadband connection. You've got a new, wonderful, money-making category! Unfortunately, neither the process of doing this, nor explaining its capabilities to consumers, nor its installation in the home is so simple.

A new category of consumer electronics products is emerging. Variously positioned as a personal video recorder (PVR) or digital video recorder (DVR), it's also appearing as a home audio center. In Sweden, it's appearing as a portable media recorder/player. It's growing into a home media server for all media.

DVRs, PVRs, Digital Audio Centers, Home Media Servers

TiVo and ReplayTV have had PVRs in the market for a while. Families that own them swear their lives have been transformed and they rarely if ever engage in "appointment viewing" (seeing shows on someone else's schedule). But it's hard for people to understand what it's all about without using one at home, and TiVo and ReplayTV's sales to date have disappointed their creators.

The satellite entertainment industry has integrated DVR functionality into their set-tops as a way to distinguish themselves from their cable competitors.

Cable is behind because it relies on buying and leasing set-tops rather than letting the consumer make the purchase decision. Cable set-top manufacturers are rushing to build DVR into their boxes -- it was featured in lots of set-tops at the Western show.

The patent lawyers will have their hands full. TiVo was granted one US patent in May, for a "Multimedia Timewarping System." This month it was granted two additional patents. The first covers functions that let DVR subscribers pause live TV, and rewind, fast-forward, play, adjust play speed and play in reverse. The second, home networking patents, cover a method for connecting TiVo's, DVRs and other streaming media devices to a home network.

Meanwhile, SONICblue (which now owns ReplayTV) was granted a patent covering "the fundamental concept of using a program guide or other user specified criteria to select TV shows for recording on a digital video recorder" and announced that it will file a lawsuit alleging TiVo’s infringement of a SONICblue patent and demanding that TiVo cease production of infringing products and pay damages on existing products.

Last month saw Disney, Viacom and GE filing a lawsuit seeking to stop SONICblue from shipping the ReplayTV 4000. They claim its ability to let users automatically delete commercials and send digital copies of shows over the Internet will hurt their revenues, and letting viewers send stored programs to others infringes their copyrights.

It's more than just video. In our October report we wrote about Luminati and SONICblue's previews of home media servers which store many hours of digital audio and video for listening and viewing throughout the home, and about Ucentric's trials of a server integrating phone calls and email as well.

This month, SONICblue unveiled its Rio Advanced Digital Audio Center, a home stereo component to store, organize and access music for downloading to portable Rio players or playing on companion Rio Receivers in the home. At a retail price of $1,499.95 it's not a mass market item. It contains a 40GB hard disk drive, integrated HomePNA and USB, integrated CD-RW drive, an LCD display, high-end MP3 encoding and is (naturally) upgradeable to emerging digital standards through future software releases.

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From Blokks Comes Bokks: A Report from Sweden

We have been intrigued for some time by a Swedish company called Blokks , which has been developing a family of products for broadband service distribution in the home. We used their "broadband soap" in a recent speech to illustrate the diversity of services beyond web surfing (see "Building Blokks" at the Blokks website.)

Blokks has now introduced a new product called Bokks™ which represents somewhat of a change of focus from media distribution to a portable media server. The product won't be shipped until next year but we were invited to visit their office in Lund, Sweden for a pre-release demo.

Our friend Stefan Tordenmalm, who lives in Stockholm, was able to visit Lund to take a look at the demo, and wrote us as follows:

"There has been a lot of talk about how we will consume media in the age of convergence, and what type of devices we will be using. Many companies launch concepts with which they hope to set a de-facto standard, thereby influencing the direction of the industry. One company that went from talk to action, from future to here-and-now, is Blokks who recently launched a broadband media device called Bokks.

"Rather than launching a complete concept that is sold to operators as a system, Bokks is a product that lets today's broadband users handle their media files in a flexible way. It's a media storage/player and a set-top box at the same time. Download a movie, save it on your Bokks, and then connect Bokks to your TV to view the movie. Or transfer your mp3 music to the Bokks, bring it to the party and connect it to the stereo and play the songs. Or use it as a stand-alone unit that lets you surf the net and download files when plugged into your TV.

"Bokks supports all common media and output formats and is equipped with Ethernet and USB ports for input, and Scart and RCA connections for video and stereo output. It's powered by an x86 266 MHz CPU running Linux 2.4 and has a 20 GB hard drive. Being only slightly larger than a pocket book and weighing in at a bit more than half a kg it is easy to bring anywhere. No installation procedure is necessary, neither when connecting to a broadband network, or to a TV or stereo.

"The unit is priced at USD 500 and Blokks consider broadband users globally to be potential customers, especially those into P2P networking. Currently the unit is marketed through the Blokks website, but the company envisions that broadband service providers would offer packages consisting of broadband service and a Bokks.

"Blokks started out developing a concept, also with the name Blokks, that was based on the idea that broadband service providers would like to be complete Multi Service Providers, delivering all types of content and communication services to their customers. Over the past two years the people at Blokks became convinced that things wouldn't quite turn out like that. Rather what was happening was that many different content owners started to offer their services independently, and many broadband service providers were hesitant on how to take on a complete service offering. In this picture, one piece was missing; a convenient way for consumers to watch and listen to the media they download. That's where Blokks hopes Bokks will fit in."

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Broadband Home Labs

After all these theoretical words you may wonder about the user experience of installing and using some of this equipment. Our home is a great test bed for this type of equipment -- we think of it as "Broadband Home Labs". We've got lots of PCs and audio and video equipment, a broadband connection, category 5 and A/V wiring -- plus Dave's technology skills and Sandy's impatience with things that aren't easy to set-up, learn and use. For a while we've been testing some of the broadband products we write about, and going forward we intend to do more. We'll leave detailed benchmarking to professional labs and focus on understanding and writing about how products and services fit in the context of a broadband home.

We've borrowed one of the ReplayTV 4000s mentioned above, thanks to Product Manager Lance Ohara. Next month, and on the Broadband Home Labs section of our Web site, we'll share feedback about the device, its operation and its effect on our video viewing habits.