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Consumer Electronics Show Demonstrates Convergence Becoming Reality

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LAS VEGAS ( -- In a way unlike anything that has come before it, last week's International Consumer Electronics Show demonstrated that the long-predicted era of media convergence is becoming a true reality.
In new weekly audio program, 'Ad Age' editor Scott Donaton discusses why this year's Consumer Electronics Show and its alternative distribution systems mattered so much to the marketing industry.
David Edmondson, president-CEO of RadioShack Corp., was one of a bevy of top executives taking part in CES panels.

New distribution systems
As attendees left this show, which featured a stream of jaw-dropping daily announcements related to the distribution of digital content, much of the talk was about the new kinds of networks of Internet-connected gadgetry that constitute new global distribution systems for TV-like content not controlled by the traditional broadcast and cable TV companies.

It was also evident that many marketers and entertainers alike were making serious efforts to adjust to the new technologies that are dramatically reshaping the media and marketing business. Perhaps Tom Hanks said it best. Sharing a stage with Howard Stringer at the Consumer Electronics Show last week, he told the Sony Corp. CEO: “I’ll act anywhere. I’ll do podcasts.”

The 130,000 who descended on the Vegas strip last week for a glitzy trade show that normally focuses on the latest in high-tech gadgets and gizmos were treated instead to the unveiling of the brave new world of convergence -- replete with the stars of a multitude of screens.

Content is king
Attendees from computer makers to Internet gurus, from movie and TV content players to celebrities talked up content and its anywhere-and-everywhere ability as the new king.

Yahoo CEO Terry Semel said he does not want to make hardware, but offered several times during his keynote to partner with those who do. “Yahoo does not want to make gadgets. We want to partner with you,” he said.

Sony launched its PSP with Location Free as the way to watch TV on the go. Intel turned the spotlight on its Viiv home-entertainment technology supported by content deals from some 50 partners. Yahoo launched Yahoo Go for customers to take and create personal content from almost any device. And Google said it will enter the online-content business with Google Store, where consumers can buy and rent programming.

TV content distribution channel
The Google Store will offer a mix of download-to-own, download-to-rent, and free content. “What we’re doing is allowing content providers to distribute and monetize as they wish,” said Peter Chane, senior business product manager for Google Video in a briefing before the Jan. 6 speech from Google Co-Founder and President of Products Larry Page. The service does not have an ad component yet, but Mr. Chane said “we are open to helping content providers monetize with advertising.”

At least one of the big CES content deals, however, does include advertising. Intel’s announcement of Viiv, a digital platform, includes an America Online partnership to provide video, music and other AOL content free to consumers, but is paid for with ad support, said AOL Chairman-CEO Jonathan Miller. “It’s the true convergence of great content, technology and a business model which is free and ad supported,” Mr. Miller said.

Technology is also serving to shatter boundaries, such as the traditional theater to pay-per-view to home video window. Viiv will be behind the first film to be released simultaneously in theater and for home viewing in 2006. The film “10 Items or Less,” starring Morgan Freeman and Paz Vega, will hit theaters and be available for home downloading on Viiv-based media centers at the same time.

Intel's Viiv
Intel’s Viiv (pronounced like "hive") also got a boost from Yahoo Go’s services, which will optimize its content for Viiv-enabled computers. Actor Tom Cruise praised Viiv’s easy accessibility of movie content anywhere when he appeared during Mr. Semel’s address. Mr. Cruise played into a scripted joke when the movie clip chosen to demonstrate the Yahoo Go TV “failed”; he offered to show the audience his own clip, a yet-as-unseen peek at the upcoming “Mission Impossible” sequel.

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Kris Oser contributed to this report

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