Rebecca Day

U.S. homes that tune into family network programming or subscribe to premium movie channels are 20 percent more likely than other viewers to have their TV connected to the Internet, said research from NPD. Family network viewers are 22 percent more likely to have a connection to the Internet via TV, followed by premium movie channel subscribers at 19 percent, found a survey of Internet homes, NPD said.

CEA responded to urging from Sen. Chuck Schumer, D-N.Y., for the TV industry to jointly address what he sees as security concerns in smart TVs (CD Aug 6 p4). “We appreciate Sen. Schumer’s concerns about consumers’ safety and privacy as they realize the many benefits of ’smart’ televisions, specifically those TVs equipped with embedded microphones and cameras,” said CEA President Gary Shapiro in a written statement Wednesday. “The consumer technology industry takes these issues seriously and constantly strives to ensure consumers have the opportunity to maximize and individualize control over their privacy and security as they use our industry’s products and services.” The industry has to “move carefully in this area,” Shapiro said, to consider all concerns “and to strike the appropriate balance between allowing consumers to have control over their privacy and providing them with full access to useful product functions and features.” Eliminating video recognition from TVs, for example, “could impair a wide range of useful features such as gesture and facial recognition, interactive gaming and video communications,” he said. CEA is reviewing the issues and Schumer’s request in more detail, said Shapiro.

Speaking in front of the P.C. Richard & Son Union Square location in New York Sunday, Sen. Chuck Schumer, D-N.Y., urged TV makers to beef up security in connected TVs. “The problem is that hackers can hack into your TV and watch you for whatever purpose,” Schumer said in a segment that appeared on a local CBS news report. In a news release issued Sunday, Schumer said major TV manufacturers should create a “uniform standard of security” that would be implemented in all new Internet and “video-enabled” televisions. Schumer cited smart TVs with built-in webcams, microphones and Internet access that allow viewers to access online media and make video calls.

Pushing content from a mobile device to a TV screen -- a content-sharing feature that Samsung debuted in its AllShare technology at the Galaxy 4 launch last spring -- pushed further into the technology mainstream this week. Verizon and Motorola bowed a new family of Droid phones, including the Mini, Ultra and Maxx, with Wi-Fi Direct-based Miracast under the hood. And Google’s new Asus-built 7-inch Nexus 7 tablet -- announced Wednesday -- can be paired with a $35 device called Chromecast, which plugs into the USB port on an HDTV, enabling viewers to “cast” online content to the TV screen. Microsoft, meanwhile, announced embedded support for Miracast last spring in Windows 8.1. It could be a steep climb for all of the technologies, said John Buffone, analyst with NPD Group. According to NPD data, 94 percent of smartphone and tablet users aren’t aware of Miracast since the certification of the technology last September. The primary challenges for all of the sharing technologies are “more or less the same,” Buffone said, including delivering features consumers want in an easy-to-use manner and generating awareness. Google’s Chromecast works with Netflix, YouTube, Google Play Movies & TV, and Google Play Music, Google said. More apps, “like Pandora,” are coming soon, said Google’s Sundar Pichai, senior vice president-Android, Chrome & Apps, in a blog post, calling Chromecast an “easy solution” for viewing content from mobile devices on USB-equipped TVs throughout the house. Google is including a three-month free subscription to Netflix with the device, which could be a “small, but important positive” for Netflix subscriber growth in the second half, “depending on consumer excitement for Chromecast,” said BTIG analyst Richard Greenfield. After connecting Chromecast, viewers can use a smartphone, tablet or laptop to browse and cast content to the TV, eliminating the need for a remote control for functions including play and pause and volume up or down. Users can multitask while casting programs -- send emails or surf the Web -- while watching TV, Pichai said. The device works across platforms including Android tablets and smartphones, iPhones and iPads and Chrome for Mac and Windows, with more to come, he said. A new feature in the Chrome browser, currently in beta, allows viewers to project any browser tab to the TV, including images from a photo-sharing site or a video clip. “We're excited for people to try it out and give us their feedback,” Pichai said. Google has developed Google Cast, a technology that enables developers to build “consistent, intuitive” multiscreen experiences across mobile devices and TVs, Pichai said. Google launched a preview version of Google Cast for developers to incorporate into their apps, Pichai said. More supported apps are “coming soon,” and Google expects the technology to be embedded in hardware products in the future, he said.

The arrival of Common File Format (CFF)-based content and players later this year will facilitate video downloads via the UltraViolet licensing system, Mark Teitell, general manager of its member organization, the Digital Content Entertainment Content Ecosystem (DECE), said in an interview. Downloads are a major part of the UltraViolet vision going forward, said Teitell, saying UltraViolet wants to be viewed as more than a cloud-based system available through Vudu and CinemaNow. He referred to what UltraViolet sees as a “not very strong” electronic sell-through rate of current streaming services, including iTunes, which he attributed to multiple incompatible formats that prevent consumers from watching purchased content on multiple devices.

DTS’s recent efforts to work with tools and infrastructure providers to make the surround-sound codec deliverable via the cloud have paid off with April’s deal for CinemaNow to deliver content encoded with DTS, and with Tuesday’s pact for Paramount Studios to encode its library of UltraViolet movies available in Common File Format (CFF) with DTS-HD surround sound, said CEO Jon Kirchner. He called DTS-HD an “efficient and scalable solution” that crosses multiple listening environments from multi-channel home theater surround sound to two-channel TV sound and the headphone space. “There’s a tremendous opportunity for improvement in the marketplace to enhance entertainment” from smartphones, tablets and PCs, he said. CFF-encoded content, which consumers download once and then can play on multiple devices “anytime, anywhere,” is due out later this year along with hardware to support it -- including Blu-ray players and set-top boxes, Kirchner said. It’s possible that existing hardware could be upgraded with software to play CFF content, he said. There aren’t any products on the market supporting UltraViolet CFF, since the specification was only recently finalized, Kirchner said. Over the next six to nine months, a range of new devices will come out that support CFF, he said. Those devices will come from the iOS, Android, Mac and PC domains, and include Blu-ray players and TVs, he said. “There are lots of people involved in the UV organization and lots of industry support” from the content and device sides, he said. Kirchner said the DTS platform is “largely agnostic” to the file containers, whether they're for streaming or downloads. On UltraViolet, Kirchner referred to the “soft launch mode” of the ecosystem due to studios dealing with “the complexity of completing all the standards” for CFF delivery and infrastructure challenges of launching “what they hope to be the next big interoperable format.” DTS believes there will be a big push behind UltraViolet, he said, with the number of UltraViolet-formatted titles approaching 10,000. Dolby said in January that Sony Pictures, Universal and Warner Bros. Home Entertainment will encode thousands of movies and TV shows in the UltraViolet CFF using its codec, Dolby Digital Plus. Kirchner said initially Paramount is releasing its catalog in UltraViolet only with DTS surround audio as the 5.1 track for the content, but the relationship isn’t exclusive long term. Initially the libraries are going to be released in DTS, he said. “The studios have an interest in monetizing content and will “do what they need to do,” long term, he said, citing the costs involved in converting libraries to the cloud environment.

Forty percent of smartphones returned through the supply chain are “no-fault-found” returns, said Jim Hunt, senior vice president-business development at Genco, a third-party logistics provider for the consumer electronics channel. Genco, which handles the product returns for AT&T Wireless and U.S. Cellular, makes “plug-and-play” repairs to phones including jack and display replacement, but not soldering work, Hunt said in an interview. The company is working with carriers on what Hunt called a “recent phenomenon” owing to increasingly sophisticated phones. “Four out of 10 phones that are returned don’t have anything wrong with them,” Hunt said. He described a “fairly significant level of buyer remorse” due to customers not understanding the complexities of the latest generation of smartphones. “It’s easier to say it’s broken than to admit they don’t understand how the phone works,” he said. The occurrence is particularly evident with Android phones because of the open architecture that allows users to download “any number of things,” he said. Games are a major culprit because they consume a lot of storage, and the closer a phone comes to reaching storage capacity, “it slows down to nothing,” said Hunt. “They come back and say the phone isn’t working, so take it back.” Under the current retail model, the staff members at wireless stores are motivated to sell accessories, not provide customer support, he said. “It’s easier to take the phone back and give them another phone rather than help a customer resolve an issue.” Hunt worked with a consulting company to determine the cost of no-fault-found returns to carriers and learned that “a $100 bill gets wrapped around every one that loops its way into the return process.” Original equipment makers don’t assume responsibility for the returns because they're not due to defective product, so “carriers are absorbing cost and it’s killing them,” he said. Genco is seeing fewer returns because phones have a longer life cycle than they did three or five years ago. “If you look at Samsung and Apple phones, fewer folks are flocking to the next new model than they did three years ago, because the changes are more incremental,” he said. “People are holding on the units longer.” Genco gleaned that through the number of returns it sees from AT&T and U.S. Cellular due to fewer phones being sold, and less “repair incidence” per phone due to smartphones that are “more robust and sustainable,” he said.

CEA President Gary Shapiro hailed Aereo’s streaming-video service as a technology “disrupter” in his keynote Q&A with Aereo CEO and founder Chet Kanojia at CE Week. Calling Aereo’s TV service the kind of innovation that government shouldn’t “mess up,” Shapiro referred back to the Betamax case that set a precedent for a recording product to be legal “if it has significant legal uses and the legal use is recording over-the-air broadcasts.” The Sony v. Universal case opened the door for a “whole range of technology to come in,” Shapiro said. The decision defined the consumer electronics industry for the next 30 years, he said.

As big-name players begin to stake out positions in the fledgling retail home automation market, work is under way to clarify the branding the various players and platforms use. IControl Networks is the software platform behind home automation offerings from cable companies such as Comcast, Cox Communications and Time Warner Cable -- and for ADT Pulse. It’s working with cable providers on multiple-layer “seals” that will identify the cable provider brand along with an “umbrella mark” that indicates compatibility with the overall platform, Jason Domangue, vice president of ecosystem development at iControl, told Consumer Electronics Daily.

Forecasts for UltraViolet to reach 65 million active users by 2018 are jeopardized by key players not supporting the ecosystem, said a report by ABI Research. “After a shaky start, UltraViolet is starting to pick up steam,” said analyst Michael Inouye. Key players Apple, Disney and Amazon have yet to embrace the digital content locker format backed by Sony, Warner Bros., Paramount, RIAA, Best Buy, Walmart and numerous hardware companies, said the industry research firm. Apple already has a strong ecosystem and Amazon is trying to replicate Apple’s success with its own, Inouye said, giving neither company incentive to make its content available elsewhere. If the big players don’t end up joining, that would “diminish UltraViolet’s value,” Inouye told us. It could also further “fragment” the market, already chopped up into iTunes, Microsoft, Netflix and Amazon ecosystems, he said. The UltraViolet service has been referred to as “clunky” from a consumer point of view, especially compared with straight streaming services that are more streamlined, but Inouye said UltraViolet has enough studio and retail support to be successful. “As long as consumers continue to buy Blu-rays, which they seem to be doing, it seems like a pretty good transition to UltraViolet,” he said. Long-term continuity of a consumer’s digital library is another key uncertainty that could “diminish UV’s appeal,” said ABI. Consumers are looking for access on all their devices as well as assurances they will not be forced to repurchase digital rights to content they thought they already owned, said analyst Sam Rosen. The shift is on from physical to electronic media, he said, but “consumers continue to opt for subscription services and premium rentals rather than purchases,” he said. For UltraViolet to be successful, video transactions have to be as simple to access and store as music is in the digital realm, he said. “If competing video libraries gain consumers’ trust without joining the UltraViolet ecosystem, many of the components of UltraViolet will help facilitate B2B commerce but will fail from a consumer perspective.” ABI estimated UltraViolet’s active user account base is 6 million-8 million and predicts a base of 108 million by 2018, if key players support the platform.