Weekly Update

Microsoft gets Smart about the digital living room

Ever since the first web and app-enabled TVs were introduced, fully integrated displays have been seen as the logical end point in the evolution toward the connected living room. By baking intelligence and connectivity into the TV itself, it was thought, we could eventually be rid of cable boxes, set-top streaming devices, even game consoles as all the necessary processing capacity could reside either in the set itself or in the cloud.

That view still animates the endless speculation about an integrated Apple “iTV,” which many analysts are again expecting will be announced next week at Apple’s Worldwide Developers Conference.

Yet while the world waits for an integrated Apple TV, Apple itself helped usher in an entirely different — a so far more successful —  paradigm for the connected living room with the introduction of the iPad. For content owners today, most of the action in the digital living room is happening on a second screen linked to and synced with the content on the TV, rather than on the TV set itself.

At the E3 show in Los Angeles this week, however, it was Microsoft that seized control of the second screen with the unveiling of its SmartGlass platform for the Xbox 360.

SmartGlass is a combination of free, downloadable apps and embedded technology that enables any mobile device to link to and sync with an Xbox 360. In the gaming context, that means using a tablet of smartphone to control the game action on the big screen. At E3, Microsoft demonstrated how Madden NFL 13 players could draw up plays on their tablets and have them executed on the screen by the Xbox. In the TV and streaming video context, it means delivering supplemental material in sync with the main action on the big-screen TV.

There are plenty of other second-screen companion apps for TV shows, of course. What makes SmartGlass different is that it is a full software and API-based ecosystem for which, like Kinect, developers will be able to create a range of new types of applications based on syncing content across multiple screens.

The SmartGlass client, moreover, can run on any mobile device, regardless of the operating system. In effect, it turns 60 million iPads and tens of millions of Android phones, into second-screen controllers for the Xbox 360. More importantly, it gives second-screen app developers theoretical access to the entire universe of Xbox 360 consoles — and the very powerful graphics processors and CPUs inside them — without having to worry about what type of mobile device the user owns.

Once the SDK is available, developers will have what amounts to a write-once, deploy-anywhere development environment to work in. Presumably, apps can be written to the SmartGlass APIs without having to devote additional development resources to creating separate versions for iOS, Android and Windows Phone devices. That will have strong appeal both to content owners and marketers concerned with reaching audiences at scale and to resource-constrained developers. If and when the second screen becomes a significant monetization platform for content owners, SmartGlass is well-positioned to be the go-to development environment for exploiting that opportunity.

The Xbox 360 is already the most popular device for streaming content to the TV, far surpassing Apple TV, Roku, Boxee or any other platform. According to Microsoft, the average Xbox Live household spends more time each month streaming video content than using the online platform for game play. And at E3 the company announced the addition of 35 new content providers, including including live-streamed sports content from the NBA, NHL, MLB and ESPN.

Given that live sports is one of the content categories that keeps cable subscribers from cutting the cord, the addition of a robust line-up of live sports to Xbox Live comes close to turning the Xbox 360 into something like pay-TV in a box, offering most of the content for which consumers are still willing to pay cable operators. With SmartGlass and Kinect it now also offers users and content providers a fully extensible platform that can sync content across multiple devices regardless of operating system.

That’s a pretty high bar for Apple to meet at WWDC next week, even if it does announce an integrated iTV.

 

 

Question of the week

Can Apple still catch Microsoft in the digital living room?