This next generation of video is dubbed Ultra HDTV, and it will offer consumers an incredibly compelling experience – four times the resolution of today’s HDTV, unfathomable contrast, and mind-blowing, life-like picture quality. Imagine not being able to tell the difference between your TV’s picture and looking out your window? Simply put, Ultra HD does to HDTV what color programming did to the black-and-white TV.

Because we witnessed the widespread adoption of HDTV followed by the stark lack of penetration of 3DTV, we know that consumer embrace of technological advancements like this are hardly a given. So what will it take for the general public to get behind Ultra HD?

Behind the screen

Price, availability, engaging (and accessible) programming and the selection of devices are certainly important factors in the potential success of Ultra HD, but one crucial component often gets overlooked: the video-processing technology behind these incredible innovations. It’s a bit of a chicken-and-egg dilemma for the TV world.

HD became our standard TV format due in large part to technology that enables digital video compression, a video codec called H.264. Clearly consumers’ demands for even higher quality streaming video are not going to subside for the foreseeable future. They crave it, and service providers must find ways to quench this thirst while managing bandwidth, and ultimately, network costs. The answer is Ultra HD (often referred to as 4K video), but for it to truly take off, in the same fashion as HD, service providers must embrace a newer, more powerful video codec called HEVC (High Efficiency Video Coding).

The advantages of HEVC

Ultra HDTVs display four times the amount of pixels as HDTVs — and can require up to four times the bandwidth. It should go without saying that service providers don’t look forward to dealing with four times the bandwidth congestion. One major reason HEVC is so essential then is because it packages large amounts of data required to transmit Ultra HD content into manageable chunks, by reducing the bit rate (the number of bits per second transmitted along a digital network) to levels that make sense for service providers.

In fact, early studies have shown HEVC is twice as effective as H.264 – meaning service providers will need, at most, twice the bandwidth they’re using for HD content today to deliver four times the resolution and crystal-clear picture clarity. Sports programming fanatics and movie junkies like me are already salivating at the idea.

Market opportunity

DisplaySearch estimates 600M connected TVs in households by 2015. Add consumers’ appetite for tablets, smartphones, gaming consoles and every other connected device under the sun, and it’s clear the demand for high-quality video isn’t limited to living room sets. Thus service providers will need a solution  that supports a wide range of services, including HDTV, Ultra HDTV, streaming video and on-demand content.

HEVC is the best technology capable of encoding this next wave of Ultra-HD video content  for the living room and, in the not-as-distant-as-you’d-expect future, mobile devices. Tapping HEVC now could mean a 50 percent savings on service providers’ bandwidth costs, and help push video to every edge of every distribution network.

Support from the industry

It’s not a complex notion: Consumers want more video, from more devices, and they expect the best possible quality from their service providers. Today, the Joint Collaborative Team on Video Coding, established by the ISO/IEC Moving Picture Experts Group and ITU-T Video Coding Experts Group, is working feverishly to ensure HEVC is readily available for widespread adoption.

In fact, the Final Draft International Standard is scheduled to be made available later this month, which is certain to launch a wave of new HEVC-powered products. The first Ultra HDTVS are now available – though currently only to those who have $20,000 to spend.  But as always prices can be expected to drop quickly, so that we should see consumers adding Ultra HDTVs to their holiday wish lists in 2013. Nonetheless, it will be up to the service providers to adopt HEVC quickly to make Ultra HDTVs – and its game-changing video quality and resolution – a reality.

Sean McCarthy is a technical fellow at Motorola Mobility, Inc., where he leads advancements in video processing, compression and practical vision science. Dr. McCarthy holds patents on image and signal processing and served on the board of the MPEG Industry Forum. 

Photo courtesy of Vlue/Shutterstock.com.

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I have a Slingbox from years ago, but the problem is that it doesn’t support HDTV. And although we have some nice HDTVs in the house, I find that the family uses them far more than I do. I don’t watch much television — live sports mostly — but it’s becoming more difficult to find an unused screen in the house. Then again, I have plenty of smaller screens between my tablets, smartphones, Chromebook and 27-inch iMac. So I reached out to our resident cord-cutting expert, Janko Roettgers, and asked what might be the best solution to watch broadcast television on these devices.

Janko recommended the HDHomeRun, which he featured in a Cord Cutters episode last year. I was able to snag a new HDHomeRun for $85 on Amazon, which is far less than a new Slingbox. So what is it?

Essentially, the HDHomeRun is a small box, roughly the size of an Apple TV. You attach an antenna to it — I have a very small one that works fine — and connect the device to your home router. That’s it. Inside the HDHomeRun are two over-the-air tuners; both of which use the same antenna for a signal. The tuners pull in local broadcast digital television and then make the content available over your home network.

That works out well because I just upgraded my network router to take full advantage of our 75 Mbps home FiOS connection. I was getting around 15 Mbps wireless speeds with an old Apple AirPort Extreme, but now see 70 Mbps and up from the new Asus RT-AC66U router, which is future-proofed with 802.11ac support. These network speeds are easily capable of streaming HDTV around the house.

My original intent was to use the HDHomeRun to watch content on my iMac and it works flawlessly. I paired the included HDHomeRun tuner software with VLC to view television shows. There are better alternatives out there that I’ll look at in the future, but for now, this setup is fine. But after a day, I decided I didn’t want to be tied to my home office just to watch TV.

Mobile apps to the rescue!

After a little investigation, I found InstaTV in the iTunes App Store. I tried the free Lite version and it works as advertised. The software automatically recognized the HDHomeRun tuner, scanned for channels and in a few minutes, I was watching the local news on my iPad mini. The free version limits you to a low resolution, small window for content, so I upgraded to the full version for $9.99 which supports full-screen playback at native resolution.

Of course, I use multiple devices and platforms, so I set out to find something that would work with Android. Turns out I had great timing.

Earlier this week, a third-party app called HomeRun TV landed in the Google Play store. I found out about it by reading the HDHomeRun user forums and immediately bought it for $2.99. I figured if it didn’t work, I had 15 minutes to get a refund. There was no reason to be concerned however. After a configuration tweak and one additional download — I had to get VPlayer for the video output — I got the software working on my Galaxy Note 2 and caught the late-morning local news.

If you’re going to go this route with HomeRun TV on Android, note that there’s one setting to check. By default, the app is designed to watch television that’s streamed from a PC, likely because there are USB tuner sticks for Windows on the market. To get streaming to work on my Android phone, I had to modify this setting by telling the app to “Stream Video Directly to Device.” Prior to that, I was getting error messages.

While I opted for the HDHomeRun over a new Slingbox, there is an advantage to the more expensive, latter option. It’s fairly easy to get a Slingbox to provide access to content over mobile broadband while away from home. I don’t really need that option, but it’s worth a mention for those that do.

I’m also fairly certain there are a few software options that will let me use my iMac as a DVR for content from the HDHomeRun, so I’ll be looking into that as well. For now, I’m just glad that I can watch a football game on a Sunday afternoon on any of my devices while the 60- and 70-inch HDTVs in the house are in use. You can do the same on any iOS or Android device with this setup.

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We do — that was that state of digital media when paidContent launched in 2002. Other weird things were happening back then too: People still got much of their news from television and newspapers, and they learned about major events after they had already happened.

There have been some huge shifts since 2002: Tablets and smartphones are now ubiquitous, lots of people read on their digital devices, and just about everyone is part of a social network or three. This summer is the tenth anniversary of our launch. In an effort to gain some perspective on the past decade in digital media, I’ve been reading back through paidContent’s archives — a collection of over 80,000 posts.

Since I was only a freshman in college when paidContent came to life, I often didn’t know, as I read through the stories from the early days, how things had begun or how they turned out. As I watched them unfold, I wanted to grab our readers’ arms and give them advice (“Don’t buy that Zune!” “Invest in Facebook!” “Go for the good Twitter handle now!”). But I also realized how difficult it is to predict success.

Some takeaways from my trip through the archives:  Some companies — AOL and Yahoo come to mind — have been consistently bad at predicting what consumers want. And a couple of companies, namely Apple and Amazon, have been very good at it. Also, being a native digital company helps, but it’s no guarantee of success (what up, MySpace?). And after all these years, it’s still not clear what content customers will pay for, or how much they’ll pay.

Streaming and Moviebeaming

What do analysts, CEOs and bloggers have in common? None of us can predict the future. Roger Ebert joked in 2002 that “on-demand streaming movies on the Web, like HDTV, are five years in the future — and will be for at least another 10 years.”

If Disney’s Moviebeam had been the only game in town, Ebert probably would have been right. When it launched in three cities in 2003, customers paid $6.99 a month to use a device that could hold 100 movies and plugged into the back of a TV set. They also had to pay for each movie they watched– billing was done via the phone line. The company went through various unsuccessful iterations before India’s Valuable Group bought it in 2008. It was never heard from again.

Netflix almost went down the same road. It had a plan to release a Moviebeam-like “proprietary set-top box with an Internet connection that could download movies overnight.” But instead, it decided to forge ahead with streaming — starting with a complicated “quota hours” system in 2007 and moving to unlimited streaming in 2008. By 2010, the majority of subscribers were streaming something, and the company began offering streaming-only subscriptions, though CEO Reed Hastings said that same year that the company would keep shipping DVDs until 2030. (We’ll see about that.)

ABC was the first network to sell episodes of its shows on iTunes, back in 2006, and to stream shows free with ads on ABC.com — and later on AOL. But by the time premium subscription service Hulu Plus launched in 2010, the platforms getting the attention were devices with built-in access, like Internet-enabled TVs, Blu-ray players, and tablets.

Return of the living dead

Speaking of AOL: It’s something of a miracle that the company still exists. In 2000, when it merged with Time Warner, it was valued at $350 billion, and the next year, more than 24 million people in the U.S. were paying for its Internet access service. By the end of last year, that number had dwindled to just 3.3 million subscribers. Here’s a quick recap of some of AOL’s miscues over the years:

• AOL Voicemail ($5.95 per month)
• A teen service called Red (featuring “a talking head—using the image of an actual employee—that uses software to answer users’ questions”)
• A digital music partnership with Burger King
• A reality show called “Gold Rush”
• Social networking site AIM Pages
• Going free
• The hyperlocal Patch blogs

Though AOL was once a high flier, no other company ever liked it quite enough to buy it. Google bought a five-percent, $1 billion stake in AOL in 2005, leading analysts to wonder if Microsoft missed out. That resulted in a $726 million writedown in 2009. Time Warner bought back Google’s stake and finally spun off “the albatross” in December 2009.  AOL is still promising a bounceback. “The executive team expects a profitable content business by next year,” CEO Tim Armstrong said in May 2011.

Yahoo hasn’t fared much better. The company launched Yahoo Platinum in 2003; for $9.95 a month, subscribers got access to audio and videos.  The program was dead by October of that same year. It later tried a Twitter-wannabe microblogging service (“Meme…where you share everything that you find that’s interesting,”). Perhaps the smartest move Yahoo ever made was not buying AOL.

Where did these companies go wrong? In 2010, former Time Warner CEO Gerald Levin pondered that question in an interview with the New York Times . The AOL-Time Warner deal was “undone by the Internet itself,” he said. “I think it’s something that no one could have foreseen, and to this day, whether Apple is going to dominate entertainment or whether Amazon is going to dominate publishing, all the old business plans are out the window. How do you get paid for content?”

Know what’s cool? A billion dollars

In 2006, an RBC Capital analyst estimated that a certain social networking company would be worth $15 billion in a few years, based on “raw, unprecedented user/usage growth.”

Six years later, Facebook went public with a valuation of $104 billion. Too bad the analyst wasn’t talking about Facebook but about MySpace. The social networking company that Rupert Murdoch acquired for $580 million in 2005 sold for just $35 million in 2011.

Why did Facebook soar while MySpace — and other social networking services like Friendster — sank? It allowed people to build real connections using their actual personal information, and rolled out a product that was ready to scale and had good technology. Other companies realized sharing was important too — in 2005, Yahoo SVP Jeff Weiner called sharing “the next chapter of the World Wide Web” — but Facebook was able to implement it in a way that kept users coming back. The site surpassed Yahoo and AOL for “stickiness” in 2009, when Nielsen found users spending an average of four hours and thirty-nine minutes a month on Facebook.

Social has already disrupted some industries — witness the rise of Twitter and the way it has changed the way news is reported, with stories like Osama Bin Laden’s assassination breaking there first. In a sign of the importance of these emerging platforms, newspapers like the Wall Street Journal and New York Times are launching “Everywhere” initiatives to deliver news to readers where they are already hanging out.

Fast food and music don’t mix

Hard to believe it now, but there was real skepticism that iTunes’ 99-cent songs would be able to compete with peer-to-peer file-sharing services. “According to academics who’ve studied the economics of digital music distribution,” we wrote in 2003, the year iTunes launched, “the cost still seems too high to attract users of peer-to-peer file trading services.” The piece cited an economist who believed “the appropriate price of a downloaded song is 18 cents.” In fact, Real Networks dropped its song prices to $0.49 in an attempt to compete against Apple.

In the end, consumers choose selection and convenience over P2P networks. We called iTunes “a kickstart for the micropayments industry.” Was it? While Steve Jobs said in 2004 that Apple wouldn’t hit its one-year, 100 million songs downloaded goal, global digital music sales crossed $1.1 billion in 2006. In April 2008, Apple surpassed Walmart  as the largest music seller in the United States.

The company that arguably started the digital music revolution — Napster — didn’t survive. Once it no longer offered “free,” it was done, though it tried to reincarnate itself: launching a mobile music service, “Napster To Go,” with AT&T in 2004 (the one smartphone that supported it could hold up to 6 songs), partnering with Circuit City on a digital music store, getting itself acquired by Best Buy in 2008 ,and then being bought back by Rhapsody in 2011. Unfortunately, Rhapsody was already losing out to newer (and free) streaming services like Pandora and Spotify.

The partnerships with Circuit City and Best Buy, though, were probably the kiss of death. One of the big trends of the past 10 years has been brick-and-mortar retail stores’ consistent failure to compete effectively against digital-native companies. Best Buy wasn’t the only retailer to try to crack the digital-content business — and fail: Target and Sears both took a shot. And McDonald’s sold digital content over its WiFi network and even tried DVD rentals in its restaurants.

Do you like the feel of paper?

Just as digital music didn’t really take off until Apple introduced the iPod, the ebook revolution didn’t take place until the arrival of the Kindle. In paidContent’s early years, ebooks were written off as a failure in part because publishers couldn’t figure out what to do with DRM. (In 2003, “temporary electronic ink” that would disappear after a few months was floated as a possible solution.) Barnes & Noble decided to stop selling ebooks in 2003, and Yahoo stopped selling them in 2004.

Meanwhile, Amazon and Google were pushing forward. Google launched Google Print – now called Google Book Search, and still besieged by lawsuits seven years later. Amazon tested two now-defunct programs: Amazon Pages, which allowed customers to buy access to digital copies of select pages from books, and Amazon Upgrade, which bundled print books with online access to the complete work.

Customers weren’t biting. Then Amazon came out with the Kindle in 2007 for $399. Less than two years later, Amazon was selling more Kindle books than print books, and ebooks now make up over 20 percent of some big-six publishers’ sales. Barnes & Noble has had some success with its Nook e-reader and digital bookstore, but bankrupt Borders shuttered all its stores in 2011. Meanwhile, the Department of Justice suit against Apple and five big publishers for allegedly colluding to set e-book prices drags on.

Good thing Steve Jobs looked beyond ringtones

A Forbes survey back in 2002 found that “business professionals” would be willing to pay for “news content to be delivered to their cellular devices,” and some media companies tried early mobile experiments. Verizon offered a cell phone version of the Yellow Pages — which, at $19.95 per year, gained 15,000 subscribers in three months. But starting in 2004, everyone decided the future was in ringtones. A $4 billion global business by the end of the year, one company projected.

So, so many ringtones. You could buy them from Rolling Stone or from an ATM-like device called E2Go. A fall 2004 marketing campaign let you mix your own ringtones on Levi’s website. Billboard launched a top ringtones chart.

Could ringtones “prove to be a passing fad”? we wondered late in 2004. Luckily, yes — a new technology came along to shake up the mobile market. No, it wasn’t the $500 ESPN phone, but the iPhone, which came out in 2007. And by opening its platform up to third-party app developers, Apple got users ready for its next ecosystem-changing device, the iPad, in 2010.

Monetizing mobile

Advertising has always been a fuzzy business — how exactly do you measure engagement and success? Well, that’s still the big debate about advertising in the digital era.  ”If here’s anything that’s really holding back ad spending on the web, it’s the lack of good measurements,” Tim Armstrong, then Google’s VP of national sales, said in 2007.

Mobile advertising has also faced obstacles. In 2006, mobile carriers began allowing advertising despite fears of annoying customers. Customers were indeed annoyed – 79 percent of them found mobile advertising annoying, according to a 2007 Forrester study — but they could “see the potential benefits of mobile advertising and marketing to themselves,” particularly if they could get a useful special offer or coupon.

Further complicating matters for advertisers: The smartphone market is fragmented among different brands — marketers don’t want to spend the money to create different ads for Android and iOS — and there are two mobile ad universes: mobile browser and apps.

Nevertheless, mobile advertising has gained ground, crossing  $1 billion in the U.S. for the first time in 2011, according to the Interactive Advertising Bureau, totaling $1.6 billion for the year.

The next opportunity is social media advertising. And once again, it will be a challenge to figure out some standardized metrics. What’s a retweet worth, anyways?

Back to where we all began

Though micropayments worked well for music when Apple launched iTunes, the path to payments for written content has been rockier. In 2004, we wrote that “micropayments today are still characterized by a large number of competing transaction types” – including direct-to-bill, merchant aggregation, prepaid accounts and direct transfer – and “each of these face the current incumbent in digital content distribution: the flat-fee subscription model.”

Eight years later, it appears that the subscription model has won out. The iPad opened the door for magazine and newspaper publishers to create new revenue selling content on that platform, but the results have been mixed. When Rupert Murdoch’s “The Daily” iPad newspaper launched in early 2011, the company called it “the model for how stories are told and consumed.” We wrote, “The bet here is that while consumers are less and less likely to reach into their pocket for a few quarters to buy a newspaper, they might not care about the 14 cents on their credit card for a copy of an e-newspaper.” A year and a half later, The Daily has over 100,000 paying subscribers — but it’s living on borrowed time and may not get through the five years its publisher has said it needs to break even.

Writing for the web, of course, has been around for awhile. At the beginning of the decade, blogging was called “nanopublishing,” and the question was how blogs could support themselves doing it. All sorts of models have arisen. For example, Gawker tried a licensing deal with Yahoo, but that relationship ended a year later. The deal “garnered way more attention than we expected, but less traffic,” Gawker CEO Nick Denton said in 2006.

Some bloggers have stayed independent and make a living from advertising (or from their day job); others write their blogs under a newspaper, website or larger magazine’s umbrella — see the Dish’s Andrew Sullivan, FiveThirtyEight’s Nate Silver, WaPo’s Ezra Klein. Or, they go to work for the Huffington Post!

Magazine companies have grappled with whether to bundle digital editions with print subscriptions or charge for them separately. Time Inc. — which first put digital editions of its magazines behind AOL’s paywall in 2003 — started out charging separately, but today Time Inc. and Condé Nast print subscribers get the digital edition free. Hearst, meanwhile, is charging separately, and it said its digital business in the U.S. became “solidly profitable” for the first time in 2011.

Could there ever be a Netflix for magazines? Time tried it for print versions with its 2008 Maghound service. It failed, due to a lack of marketing and reader interest. Magazine publishers are trying again with joint venture Next Issue Media.

Many newspaper publishers, most notably the New York Times, tried paywalls at the start of the decade and then abandoned them – only to return to the model in the past couple years.  In its most recent earnings report, the NYT said it has 454,000 digital subscribers. Is that enough to sustain the newspaper in its 21st-century transition?  Probably the best answer to that came from  Vivian Schiller. But it was in response not to the NYT’s recent digital subscriber numbers, but to the NYT’s decision in 2004 to close the paper’s first paywall, known as TimesSelect. Schiller, then the SVP and general manager of NYTimes.com, was asked whether TimesSelect had worked.  “It did work,” she said. “It’s just a matter of as compared to what.”

Birthday cake photo courtesy of Shutterstock user [Robyn Mackenzie].

TV photo courtesy of Shutterstock user [Somchai Buddha].

Zombie hand photo courtesy of Shutterstock user [lineartestpilot].

Piggybank photo courtesy of Shutterstock user [cardiae]

Fast food photo courtesy of Shutterstock user [Sergio Martinez].

Book photo courtesy of Shutterstock user [TrotzOlga].

Ringtones and apps photo courtesy of Shutterstock user [violetkaipa].

Cash register photo courtesy of Shutterstock user [titelio].

Magazines photo courtesy of Shutterstock user [bernashafo].

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What You Need to Get Started

To start, you will also need an HDTV with an Apple TV attached, an iPhone 4S and a free Skype account. Why Skype and not FaceTime?  Well there are many more Skype users than FaceTime users. And quite frankly, it is much easier to get all members of the family up and running with a free Skype account than to initialize everyone’s iOS and Mac devices with FaceTime.

Prepare the Car Mount

Most iPhone docks are designed for someone sitting at a desk. What is needed is a better mount that can allow the iPhone to be better positioned for larger settings.  Take any decent smartphone car mount with a suction cup, like this one from Arkon for $15 on Amazon. The suction cup needs a smooth surface to attach to, so try mounting it to any household hand mirror. This set up gives extra stability to the video and the added ability to pass the camera in the mount around easily. The great thing about the car mount from Arkon is that it is just about infinitely adjustable, so no matter how or where you need to place the hand mirror you can angle the iPhone the way you want. And if you happen not to have anywhere to place the hand mirror, just tack up a nail and hang the hand mirror upside down on the wall.  Just don’t lock in the iPhone 4S before you make the video call. (The mount’s quick release allows one to attach and detach the iPhone quickly and easily.) Wait until after the call has been established before you put the iPhone into the car mount attached to the hand mirror.

Initiate the Video Call

Placing a video call on Skype with an iPhone is just as easy as chatting or placing a voice call.  To increase the quality of the video once the call is established, be sure to use the back camera of the iPhone. Then double click the phone’s Home button and swipe left twice to reveal the volume and Airplay buttons. To display the call on the big screen, just click on the Apple TV you want to use and turn on Mirroring. Once you’ve done that, mount the iPhone in the car mount and experience video calls on the big screen. As a side note, I have found that when placing Mac-to-iPhone Skype video calls, it is easier to establish a video connection when the call originates from the Mac.

If this solution works great for you, you can always shop around for a more attractive mounting solution.  You could even invest in a mountable surface that permanently affixes itself to the wall just above your HDTV. For instance, the top shelf of my main entertainment system is made of glass, so I don’t really need a mirror in that room of the house.  There are just as many car mounts on the market as there are solutions on how to mount them on or near an HDTV.

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Tank Riders ($1.99 Universal, $3.99 Mac) is a good cross between a maze, puzzle and third-person shooter game that can be really fun in the right circumstances on the right devices. Thanks to well-thought-out maps, Polarbit has done an amazing job at keeping the gameplay interesting enough in single-player mode, while also making multiplayer competitive and fun.

Tank Riders has just two basic controls: one for steering your tank, and one for shooting.  As the levels progress, you’re faced more challenging level puzzles barring your way to the finish line, and more bad guys trying to stop you from getting there. Along the way, you can pick up extra health and special weapons.  But with the start of each level, you get set back to your tank’s starting configuration.

As mentioned, the maps are what make this game shine. In single player mode, crumbling walls and crates that can be destroyed make for a delightfully changeable environment.

What’s great about multiplayer mode is that you can have multiple online accounts on your iPhone, iPad and Mac to play against visiting family and friends.  So if you happen to have more than one Apple device at your disposal, you can set up a tournament in the comfort of your own home.

Tank Riders isn’t without problems. On the iPhone in particular, the screen is just too small to spot the enemy, navigate your tank, and shoot your gun turret all at the same time. I did, however, find that using the iPhone like a traditional game controller while playing the game on my HDTV through my Apple TV over AirPlay was a perfect solution to that problem.  On the iPad and Mac, you won’t have the same problem, and the Mac’s controls make the experience far easier.  So if you plan on going head-to-head with your friends in multiplayer mode, get the Mac version to gain the competitive advantage.

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Where we are now

The combination of low price, increased functionality and the HD upgrade cycle have spurred consumers to adopt HDTVs en masse. According to recent research from Leichtman Research Group, about 70 percent of Americans now have at least one HDTV — up from 17 percent five years ago. Moreover, a number of those consumers already have multiple HDTVs, with about half of all HDTV households owning two or more.

I personally think that’s a trend set to continue, but not everyone agreed. In fact, I received a fair amount of criticism in the comments on the original post, as well as on Twitter and on other sites. (Check out Alexis Madrigal’s “The New Laws of TV Upgrading” for a pretty complete counter to that original post.)

The key argument against seems to go like this: Consumers bought a bunch of HDTVs over the past five years to take advantage of a noticeable difference between SD and HD feeds of their favorite content. But now that they’ve got the right-sized pane of glass for their living rooms capable of displaying HD video, there’s little reason for them to go out and buy a new TV. In other words, the HD revolution is nearly over.

The dumb smart TVs of CES

The counter-argument is that there will soon be a new revolution of smart TVs to pick up after the HDTV craze has worn off. And after attending the Consumer Electronics Show last week and seeing all the hot new HDTVs, 3-D TVs and Smart TVs available, I’m even more convinced consumers will soon be buying new TVs in increasingly shorter periods of time. But it’s not because I believe this year’s TVs are such a huge step above last year’s TVs that consumers will want to run out and get them.

In fact, just the opposite is true. This was illustrated in a dinner I was having with a few other journalists and executives Wednesday night when one of them asked what TV I would buy, of everything I saw on the show floor and in demos. The answer was easy. “None of them,” I said.

The reason is this: there are better things to come. There’s a huge opportunity for real innovation on the TV that’s gone completely untapped. But I have a feeling that’s going to change, and that change is going to come sooner than most think. Until it does, I’m sitting on the sidelines.

Where are the killer apps?

The killer app for most smart TVs today is Netflix. Pretty soon, pay TV operators like Comcast and Time Warner Cable and Verizon will make their services available as well. And HBO has some pretty ambitious plans to bring its authenticated on-demand service to connected devices.

But in each case, what we’re really talking about is making more TV available on your smart TV, but delivering it over the Internet. Think about that for a second: The main reason for most consumers to buy a smart TV today is to gain access to more of the same stuff that they already watch through cable.

And that gets to the heart of why I believe we’re on the cusp of another huge upgrade cycle. Today’s TVs are not much smarter than they were a year ago, or even two or three years ago. And that’s why everyone who already bought a shiny new HDTV set or even a first-generation “smart” TV will soon be in the market for a TV with some actual smarts built-in.

Real innovation is yet to come

Think about all the things that you could do with a truly smart TV that haven’t been enabled yet:

• HDTVs with cameras built-in could enable viewers to video chat with friends while watching a TV show together on the big screen. You know, real social viewing.
• Smart TVs could provide personalization of content and easier discovery of your favorite shows. As creepy as it may seem, facial recognition — like that enabled by Microsoft Kinect and shown off by Samsung at CES — could finally break down household usage and target TV programming based on who’s watching the box at any given time.
• Sports broadcasters could overlay real-time stats on a sidebar that runs alongside a football matchup, or provide a synchronized experience with a second-screen tablet or mobile app. Viewers could get fantasy updates or manage their teams in real-time from those apps.
• Networks could provide additional features — director commentary, behind-the-scenes footage, additional information about actors and scenes, etc. — into apps and make them available on TVs and other screens. (I’m thinking of extending HBO Go’s Game of Thrones interactive features, which had only been available when streaming in the web browser, and bringing them directly to the TV.)
• TV apps could provide real-time polling for competitive reality shows, replacing text messaging and Twitter counts. How many Google TVs do you think would sell if you could vote for your favorite American Idol directly from an app while watching the show live?
• For the enterprise, connected TV apps could provide new levels of collaboration and video conferencing tools, without the need to hook into expensive proprietary systems.

Of course, there are a number of technology companies looking to enable these types of features, but very few implementations have actually come to market, and none of them are mainstream. The important thing here is that the software is becoming more capable and powerful much more quickly than the hardware is changing. That means that the next wave of TV buying won’t be driven by screen resolution, refresh rate, screen size or the like, but by the power of the apps available on the TV platform.

Looking to mobile for clues

It wasn’t too long ago that the killer app on mobile handsets was email. A user might have upgraded when his two-year contract was up to get a phone with a camera, or maybe not. Mobile web was a joke.

And then the iPhone came along and people realized the opportunity that was available through an open apps ecosystem that allowed developers to create new experiences that were previously unheard of on the TV.

Anyone who’s looked at connected TVs today and decided that there’ll be no reason to upgrade in three years hasn’t considered the possibility of future apps or what sort of change is in store. The next generation of connected TVs won’t just be panes of glass that you watch Netflix on. They’ll be smart devices will full-on interactive components that will fundamentally change the way we engage with TV programming and with each other. And when that happens over the next few years, CE makers will be giving consumers a real reason to buy another new TV.

Photo courtesy of Flickr user Sugar Pond.

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During a stop at Nvidia’s CES booth, I got a chance to see games such as Skyrim and Shadowrun on big screens, along with a new 7-inch Tegra 3 Android tablet from ZTE. All were impressive as you can see in this short video. Most impressive was that Skyrim was actually running on a Windows desktop and being remotely rendered on the Transformer Prime via Splashtop’s software!

The first games were played on the Asus Transformer Prime, the first quad-core Android 4.0 tablet. With the optional keyboard dock — which has a battery inside of it — the whole set up can run for more than 20 hours. And yet, the device can push console-quality graphics on its own screen, an HDTV, or both. I was very impressed, even though I didn’t kill the dragon in Skyrim; clearly it’s not the silicon that’s the problem.

ZTE’s 7-inch Android 4.0 slate was also running a Tegra 3 chip and showed similar performance in a smaller package. I haven’t heard about any pricing or availability for this slate, so stay tuned.

And we’ll be waiting a few months to see products with Nvidia’s DirectTouch solution on Android devices. The company can remove the touch controllers from devices and have the Tegra 3 GPU interpret touches. The result: up to three times better touch performance, which could help remove Android’s laggy feel.

Although not in the video, I spoke at length with Nvidia about its opportunity with Windows 8. And why not? The market is wide open now for all chips that use the ARM architecture. From what I saw today, Windows on ARM won’t necessarily mean a poor experience.

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With its latest Smart TV platform update, Samsung plans to enable “smart interaction,” which will add voice and gesture control, as well as facial recognition to apps developed for its connected TVs. That will enable viewers to turn the TV on and off, open and navigate apps and search for content without picking up a remote control. The system will support between 20 and 30 different languages, using unidirectional array microphones to isolate voice commands and a built-in camera to recognize user movement. The system’s facial recognition software will also be able to differentiate between members of a household, giving them access to personalized profiles, preferences and apps based upon their previous activity.

It’s all very Kinect-like in the way that Samsung describes it, and points to a future where remote controls disappear and consumers interact with their TVs in a potentially more natural fashion. Of course, Microsoft is only one proponent of voice and gesture control that Samsung may have to contend with — rumors of an HDTV set from Apple that is controlled by the company’s Siri voice recognition software shows that others may also soon jump on board.

The big advantage that Samsung will have over Microsoft Kinect is that it’s opening up its APIs to enable developers to take advantage of these features. While Microsoft has increased the number of apps that run on its Xbox Live platform — including those which take advantage of its Kinect capabilities — it still falls well behind Samsung in the variety of applications available. Samsung has about 1,400 TV apps available worldwide, with users expected to download some 20 million apps in January 2012.

That app volume comes in part from an open SDK and APIs that are available to developers. That enables pretty much anyone to develop rich content experiences on its platform and take advantage of features like the ability to sync up companion mobile applications with whatever’s happening on-screen. With the introduction of its smart interactions capabilities, Samsung will enable developers to use gesture and voice control, as well as facial recognition in the next generation of their TV apps.

Meanwhile, Microsoft is still largely taking a walled-garden approach to its Xbox Live and Kinect apps — which could improve the quality of those that make it on the platform, but also limits the ability of third-party developers to reach its customers. Unless that changes sometime soon, Microsoft could find itself falling behind as new Kinect-like capabilities are added to other connected device platforms, like Samsung’s Smart TV or even Apple’s iTV.

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