Digitalwerks

Do Home Theater PC’s (HTPC’s) have a future?  If yes, how will they look and operate?  And if not, what will people use instead to bring Internet digital content to their TV’s?  Could there possibly be an HTPC in your future?

There are billions of dollars and thousands of jobs at stake in determining these questions, but it’s hard to say that the answers are yet apparent, much less already decided.  Having played and worked in this area for a while now, I thought I would jot down some ideas.  The timing seemed appropriate as a follow-up to Dave’s recent article on media streaming devices, and as I just finished building a couple of new HTPC’s (and also, sadly, retired my prized DivX Connected “Gej-box” media streamer).

The latest media streaming devices that Dave looked at included a digital media adapter from Netgear, a networked Blu-Ray player from LG, and another networked Blu-Ray player from Sony.  Despite how new they are, they still seem to be hobbled by the kind of issues that have faced basically all streaming devices since they first appeared a few years ago.  These devices are inevitably limited in what they can do, either in terms of playable file formats or by a particular digital distribution systems (i.e. Netflix, Amazon VOD, YouTube, etc.).  None of them have proven to be “universal players,” despite some of the marketing copy them employ.  And as Dave noted, the context for such devices is still somewhat dominated by gaming devices such as the XBOX 360 and Playstation 3, that also have very strong streaming options, but still share a number of annoying limitations (some dictated by hardware, some by business decisions).

Fundamentally, these networked media devices are asked to do something they are just not fully designed to do, no matter their particular pedigree or price point.  They are supposed to recreate the video experience of a full-fledged computer on a TV.  Their promise is to bring all the variety and immediacy of Internet video to the comfort of the home theater (or at least to the couch over the office chair).  And, inevitably it seems to me, that is where they always come up short.  The guiding assumptions behind the design and user experience of all these devices is that a). consumers do not want computers in their living rooms and b). that they do not want a computer-like user interface on their TV.  And even Microsoft, which has fought very hard against the former point with its Windows Media PC initiative absolutely concedes on the latter point.  As someone who has used both PC’s and streaming devices over the last few years, I’ve come to the conclusion that neither points a). nor b). actually hold much water, and that a PC, even with a “standard” OS, can work pretty well in the living room.  For unlike all of these myriad streamers, extenders, networked players, etc., only an HTPC can actually recreate the desktop video experience in the living room, and therefore might end up the ultimate winner of this battle.

When I worked in Marketing and PR for DivX, it was incumbent upon me to explain why consumers would never accept having a PC in their living rooms.  They were expensive, awkward, challenging to operate, and as my friend Jerome “Gej” Rota used to energetically demonstrate, they were far too loud.  (He could make a great “whoooshing” sound in a number of different languages).  And at that time, all those criticisms were generally valid of HTPC’s.  As is often mentioned on the very active AVS HTPC forum, building a Home Theater PC can be more of an on-going hobby than a one-off event, requiring a great deal of tinkering and updating.  Nonetheless, the situation has changed a great deal over the last few years, particularly as Intel and AMD have become far more conscious of heat and energy consumption issues with their chips.  Better, more efficient chips has led to the creation of PC’s that just don’t require the extent of cooling as previously (which is the root of the sound problems, for the most part).  As we are seeing with the Atom and Ion platforms, and I would argue the whole Netbook/Nettop phenomenon, a cheaper, lower powered PC is actually quite sufficient and allows for some very interesting designs, particularly on the smaller end of the spectrum.  The old image of a bulky and annoyingly loud PC in the living room is just not an issue any longer

Just to give an concrete example, I recently put together an HTPC for our bedroom.  It’s based on a mini-ITX motherboard with built in nVidia graphics, which is key as it allows for hardware acceleration of video decoding.  By off-loading the video work the PC requires then only a very minimal (and less hot) CPU and not much RAM, even to display 1080p content.  With this particular build, I used an Intel Core 2 Duo E6600, which is actually overkill for my purposes, but I had one laying around, so in it went.  I put in a very small and quiet notebook hard drive, undervolted the CPU fan with a fan controller, and connected it to my network via a USB N adapter, and now have a perfectly silent and tiny PC tucked away behind our bedroom TV.

Even my wife who is normally very picky about such things, and has a very low tolerance of my computer experiments with her TV, is very happy with it, mostly because she barely knows it’s even there.  And in comparison to a media streaming device or extender, even very good ones like the Popcorn Hour for instance, this HTPC is pricier but is capable of doing far more in terms of format playability, web video streaming (including Hulu), web surfing, etc.  If your computer can play it, show it, or listen to it, then so can this HTPC.  Additionally, my other HTPC, located in our living room, has a video capture device and functions as our PVR, with the h.264 720p HD captures available throughout the house via the wireless network.  And unlike most media streaming devices, HTPC’s are not limited by future developments .  If some, as yet unnamed format or file container becomes popular, then an HTPC can be updated by either software or hardware to deal with it.  If I decide I want to game seriously with an HTPC, then all I have to do is drop in a beefier video card and that becomes a possibility.  Right now I don’t have much interest in Blu-Ray discs, but if that were to change I could easily install a BR-ROM device.  The options are essentially limitless.  (Although considering the torturous history of getting CableCards actually available for HTPC’s, one should never assume too much).

Of course, an HTPC is more expensive than most standalone media streamers, and the likelihood of something going wrong and needing to be fixed at an inconvenient time is pretty high.  However, I’ve found many media streaming devices to be pretty finicky when it comes to their network connectivity, so they are far from hassle-free themselves.  The other widespread criticism of HTPC’s is their need for a suitable UI, but I truly believe that issue is just not relevant any more.  For one thing, there are quite a few software interfaces available, from Microsoft’s Media Center to the incredible open source alternatives from XBMC and Boxee.  What I have found, however, is that with a sufficiently large display of around 37 inches and up (pretty common these days as HDTV’s become ever cheaper), then even a relatively standard OS works fine, whether it’s Windows XP, Windows 7, or Ubuntu.  Settings can be tweaked if a 1080p display makes text too small, of course, and for 720p, it really shouldn’t be a problem at all.  Further, the use of a “standard” OS makes them very familiar to all PC users.  My wife recently needed to find a particular file on our (admittedly byzantine) home network, something she would have had a hard time doing via Windows Media Center or my old Gej-box, for instance.  However, doing so with Windows 7 really wasn’t that difficult, as she was so used to the Microsoft interface, even though she had not used Windows 7 before.  At this point, the need for an amazing “10-foot UI” seems very unnecessary.

I saw Netflix CEO Reed Hastings give a talk last year in which he described his vision of a future television.  It would consist primarily of a web browser as the UI and a Wii-like device for input.  With some of the more innovative remote/mouse hybrids available even now, Hasting’s vision is pretty much already a reality, at least at our house.  Ultimately, I assume much of this functionality will be absorbed into the televisions themselves, but until they are able to replicate fully the flexiblity and breadth that HTPC’s uniquely provide, there will continue to be a computer in our living room.

[And for anybody interested in trying this out for themselves, I highly encourage spending time at both the above-mentioned AVS Forums and the Silent PC Review site and forums.  They are amazing resources for building home theater PC's, or just kick-as computers in general.]

Both the New York Times and The Economist published articles in the last couple of days examining what is happening with online video.  Brian Stelter and Brad Stone in the NYTimes talked to the MPAA, Eric Garland of Big Champagne and the owner of the streaming site SuperNova Tube; the authors conclude that the pirates are “winning” the battle against the studios.  The Economist instead looked at Hulu and declares it the winner over YouTube and Joost, and feel that Hulu proves the superiority of the advertiser-supported in-browser streaming over download or separate application playback.

Janko at P2P-Blog has already pointed out that the NYTimes mistakenly placed TorrentFreak in Germany, not the correct Netherlands (hi Ernesto!) but applauds Stelter and Stone for high-lighting the MPAA’s admission that lawsuits are not going to be a long term answer.  And the reader comments to the article very rightly point out that the figures cited by the studios are utterly meaningless, and that TV and films should probably be analyzed separately because of the very different geographic and financial models of their distribution.  The Economist instead looks beyond piracy for the most part, but does lump it into its criticism of Y0uTube as a visually confusing and unsavory place for professional content (read ad dollars) because of all the user-generated content.

A few points occur to me in reading both these articles back-to-back.  First, the MPAA, I believe, quite deliberately elides any notion of quality in their statements about pirated content.  Yes, as the article says, The Dark Knight was available for download within a few hours of its release to theaters this summer.  However, as previously shown here, the only copies that existed for the first seven weeks of the film’s release were extremely low quality camcorder recordings (a decent copy didn’t show up on P2P networks until September 9, HD not before November 21st).  And considering that The Dark Knight is now the 2nd highest grossing film of all time, those cam copies did little to nothing to impact the film’s financial success, at least at the domestic box office.  Piracy likely does impact DVD sales and box office outside of the US, but certainly not in the widely exaggerated claims of the MPAA that considers every single download to be a loss of a sale.

As The Economist rightly points out, streaming is an entirely different beast from download, and combined with a genuinely interesting catalogue of content, Hulu has attracted a sizable audience and in a form that advertisers are relatively comfortable supporting.  The other YouTube competitors, including Veoh, Joost, Revver, Metacafe, and Stage6 all followed what they saw as the YouTube model, i.e., grow an audience through liberal upload policies for user generated content and then use that audience to attract premium content and advertising revenue.  As even the leviathan YouTube has shown, advertisers are just not interested in UGC, so it was going to take something far more managed like Hulu to achieve any kind of critical mass.  As a veteran of the Stage6 experience, I can personally attest to the difficulty in  allowing uploaded content while keeping a site free of porn and illegitimate content, not to mention while burdened by the bizarre strictures of the DMCA ruling.  Sadly, Stage6 ultimately had to close down precisely because it could not find an acceptable balance between attracting eyeballs and paying for the bandwidth those eyeballs were using, not to mention the ever present threat (and eventual reality) of lawsuits.

Of course Hulu has its problems too, particularly around the geographic limitations that rights-holders force it to respect.  And it’s not really sure that the current model for Hulu is self-sustaining, depending as it does on rather fluid advertising dollars and the continued cooperation of the participating networks, something that is far from assured as the re-launch of cbs.com may demonstrate.

Based on my experience, I believe the key dynamic that brings the two stories together to give us a deeper understanding of what is “working” on line is the geographic element.  Wide-scale video sharing took off in the wake of DVD and broadband, but it took off far more strongly in Europe than it did in North America (just look at the market penetration of DivX enabled DVD players to track that phenomenon).  The key driver was the desire to see movies and tv shows that had high consumer awareness but no distribution, that is, high profile, highly marketed films or shows that had been released in the US but were delayed in Europe, so the only avenues available were illegitimate channels.  As communications and marketing become more global, instantaneous, and community driven, they rapidly move beyond any effective notion of geographic boundaries, especially among tech-savvy online participants.  If Hulu can be said to work, it is only in the US context, just as the BBC iPlayer does in the UK, but neither really work outside of it, and in fact likely drive viewers to precisely the kinds of illegal distribution channels mentioned in the NYTimes piece.  Until the geographic restriction/opening window issues get resolved, it will be hard to say that online video “works” as well as it should, or as well as users demand.  And piracy will continue to provide an experience that meets those demands, regardless of the wishes of the content creators.

An interesting bit of news from the doom9 forums.  As anyone who is testing the Windows 7 beta has discovered, and as the above photo shows, Microsoft is breaking with their tradition and including more codec support in the upcoming Windows bundle.  Previous Windows versions did not even include MPEG-2 decoding, which proved to be quite mystifying to many users trying to watch a DVD in their computers for the first time.  And, needless to say, Microsoft stayed far away from any of the more esoteric codecs, including the key MPEG-4 ASP implementations such as DivX and Xvid.  

However, the beta of Windows 7 includes the ability to play back DivX, and Xvid, and even the next generation MPEG-4 AVC, better known as h.264.  Why is this important?  A couple things.  First, if anybody needed further proof that VC-1 is essentially dead in the water, this is another nail in its coffin (to mix macabre metaphors).  Secondly, and more importantly, it appears that Microsoft is jumping on the bandwagon of broad interoperability, allowing Windows users to play back a range of video formats right out of the box, something that will surely be a boon to less sophisticated users who just want to be able to watch something without having to even know what a codec is, much less a container format, audio stream, etc.

Even more intriguing is the news that Microsoft may be working on an implementation of the matroska container, or mkv for Windows 7 (according to madshi and haali on doom9).  For the file-trading community, this is quite significant.  H.264 has a ton of “legitimate” uses today, notably in higher quality Flash videos on YouTube and elsewhere.  MKV however, is almost exclusively used currently by pirates, particularly those sharing HD video.  Blu-Ray rips and high def TV captures are generally distributed as x264 encodes with AC3 audio in mkv containers (both 720p and 1080p), and while HD video content is still a small minority of what is shared relative to standard def video, it is growing and is likely to become the dominant format before long.  Maybe Microsoft is just getting back at the movie studios that went with Blu-Ray instead of the MS-backed HD-DVD formats, but regardless, it would be good news if mkv support signaled that Microsoft was thinking about their users first, and video business strategies second.