In January 2004, it became official: Apple’s iPod is this generation’s killer gadget. Everyone has one or wants one, it seems. After completely laying siege to the 2003 tech-products market with the tiny music boxes – reporting sales in the millions of units – Apple delivered the pièce d’résistance when it announced that its newest incarnation of the hot-prod, the iPod mini, sold more than 100,000 units before it ever hit the street.
Already, however, the hounds of destiny are nipping at Apple’s heels. As cool as it is to be able to carry your entire music collection with you wherever you go, consumers are beginning to turn their attention to a new category of handheld entertainment devices: portable media centers (PMCs). Not quite ready for prime time at this writing but expected to hit the marketplace with some force during the second half of 2004, PMCs are wallet-sized electronic devices with screens that measure roughly 4 inches square. They will work in conjunction with personal computers, letting users move not only music, but also still images and video files between them. Future versions may offer wireless connectivity.
Expected to hold as many as 175 hours of video, 10,000 songs, or 100,000 still images on a 40-gigabyte hard drive, the devices already are being called “iPod killers.” Partially, that’s because Microsoft is spearheading the PMC movement. A specialized version of the company’s Windows CE platform will power the first-to-market products, which are based on the Intel Portable Media Player reference hardware design. Mostly though, it’s because the addition of video to the mix is seen by many pundits as not just the next logical step in the evolution of digital portability, but as the next mandatory one. PMCs have been on drawing boards at Microsoft and its hardware “partners” for at least two years, making their first public appearance at the 2003 Consumer Electronics Show in prototype form.
Microsoft Chairman Bill Gates promoted the hell out of the new technology during his keynote speech at the January 2004 Consumer Electronics Show. Gates sees the products as part of his company’s “connected home” agenda (www.microsoft.com/billgates/speeches/2004/01-07CES.asp). Gates’ keynote complemented a presentation by Microsoft Chief Xbox Officer Robbie Bach at the first-ever Digital Games Summit, produced by iHollywood Forum in conjunction with CES. Bach spoke of consumers’ “digital lifestyle wish list,” which incorporates consumer demand for access to the content they own whenever and wherever they please. One approach to meeting this demand, Bach explained, is to utilize PCs as gateways to store, manage and access content anywhere in any format.
It’s always a good sign for an emerging technology when big names in the industry sign on to support it. So far, companies like Intel, Hitachi, Samsung, and Texas Instruments are developing spiffy architecture to support the PMC agenda. Consumer electronics giants Creative Labs, Sanyo, Sony, iRiver, Samsung, ViewSonic, Handheld Entertainment, and others are busily engaged in perfecting the ultimate mechanism for content delivery, and Microsoft already has announced content partnerships with Cinema Now, Napster, and EMI Music.
Apple chief Steve Jobs is not nearly as excited about the concept. Jobs appeared to nix any impending development of a video iPod when he told attendees at the Wall Street Journal’s D: All Things Digital (d.wsj.com) conference in May 2003, “I’m not convinced people want to watch movies on a tiny little screen.” (He’s not a big fan of tablet PCs, either, reportedly telling the same crowd, “There are no plans [for Apple] to make a tablet, because it turns out people want keyboards.” He also has said Apple will not produce a personal digital assistant, because he expects cellular phones to assume most of those functions.) Even so, rumor has it that Apple is now working on a product and an operating system to rival the ones emerging from Microsoft and its friends.
Pros and Cons
As exciting as all of this may sound to devotees of portability, not everyone thinks the PMC initiative will fly – and even if it does, it will never approach the sort of consumer hysteria Apple’s iPod generated. For one thing, at least initially PMCs are expected to be pricey, selling for between $400 and $700. Those figures are “not what I would call consumer-friendly,” Tim Bajarin, president of Creative Strategies, a technology consulting firm, told the Seattle Post-Intelligencer in January. In truth, the anticipated PMC price range is a bit higher than what Apple gets for its entry-level iPod – which retails for $399 with a 20-gigabyte hard drive – but not all that much higher. Similar products already on the market are testing the financial waters: RCA’s 20-gigabyte Lyra Audio/Video Jukebox sells for $399, and Archos’ AV300 series ranges in price from about $400 to $900, depending upon storage capacity. Neither product uses the specialized Microsoft OS, which is reputed to make the transfer of files between PC and PMC much less cumbersome than it might be.
The availability of PMC content is another concern. Although Microsoft is lining up content partners it says will offer downloadable movies that buyers will own like they own VHS tapes and DVDs, most current business models for downloadable video are of the time-limited rental variety. Industry analysts have pointed out that although users can create their own content with the new version of Windows Media that will debut in conjunction with the first PMCs, the process is quite a bit trickier and more time-consuming than the process for converting traditional music tracks to a portable format. There are also Digital Millennium Copyright Act provisions to consider.
Yet another consideration enters the picture for adult content providers: Will users really embrace portable adult video? For a variety of reasons, some don’t think so. Keith Webb, corporate vice president of Titan Media (www.titanmen.com), is one of them.
“We looked at doing that, but we don’t see much financial gain in it,” he says. “I don’t really see where you can sit on the bus and watch porn. It might be good for teasers and promos, but the portability aspect doesn’t really make sense for adult.”
If an incident earlier this year is any indication, he may be correct. In February, a Clifton Park, N.Y., man was arrested for playing an X-rated movie on a monitor in his Mercedes. Police say explicit material could be viewed easily through the car’s windows. Events like that have prompted legislators in Tennessee and Louisiana to seek a ban on what they call “drive-by” porn. For safety reasons, 38 U.S. states already restrict where video monitors can be placed in vehicles.
Falcon Foto (www.falconfoto.com) chief executive Gail Harris says she thinks more states may consider such laws as a consequence of a very few people’s ill-considered but widely publicized behavior. “I think it’s inappropriate to show adult material from the video screen on the back of your headrest in a car,” Harris says. “I don’t think it’s fair to place a parent in a position of having to explain to their child in traffic what they are seeing. It’s distasteful. Unlike the Web or TV, you can’t change the channel on the car next to you. Although I am an advocate for free speech, I think enforcement options must be put into play through swift legislation and fines.”
Jason Tucker, Falcon Foto’s president, sees danger in drive-by porn, too. “It’s distracting and could potentially cause an accident in the same way that using a cell phone without a headset could have repercussions on the highway,” he says. “I must admit I have watched porn in traffic by staying behind a guy with video screens. I nearly bumped his tailgate a few times, so I have proven the ‘po(r)ntential accident’ theory.”
Forward Into the Breach
Despite a few conceptual kinks yet to be worked out, several adult entertainment companies already are planning for the day when PMCs become as ubiquitous as cellular phones are now, because they are certain that’s exactly what will happen. The idea is already popular in Europe and Japan, according to Harris, where mobile users view adult content on their cell phones and other portable gadgets.
“It’s starting to look like the beginning of the Web again,” Harris says. “People in Europe rely on their cell phones for everything. They ‘dress them up’ in all sorts of ways.” Her company already has signed deals with major carriers to provide mobile content in Germany, France, Australia, and Japan. The key to success, she says, is to keep the content softcore. “Handheld content will stay softer, because it’s so public,” she avers, noting that the content Falcon provides shows no nudity below the waist and only implies sexual activity.
“Mobile porn” may take awhile to become popular in the U.S., Harris notes, because the type of mobility Americans enjoy differs significantly from that in Europe and Asia. “In Japan, people are on the subway – a lot,” and commuting time is prime time for mobile entertainment, she says. “In the U.S., most commuters still drive.”
Still, worldwide economic predictions for the technology are astounding. “The mobile industry is estimated to be working its way up to a $6.5 billion opportunity within the next three years, which far surpasses where adult is now,” says Tucker. “Images and video are ideal deliverables.”
Tucker scoffs at the notion that small screens will deter consumers from jumping on the mobile bandwagon. “Of course the screens on cell phones are too small [for effective delivery of video],” he says. “But you know what? People love their porn. They’ll get bigger devices.”
That’s what VS Media Inc. (www.vsmedia.com), parent company of VideoSecrets (www.videosecrets.com), is counting on, too. Although president Greg Clayman hasn’t seen much value yet in offering streaming video to cell phones because the screen size is not up to video consumers’ standards (“You’d have to be pretty creative to want to use one in the U.S.,” he says), he thinks the market for PMCs is potentially huge. Clayman is intentionally sketchy about the details, but he says his company is working on a variety of products for early adopters of the technology, many of whom will be looking for adult content.
“Adult tends to lead the technology roadway, because people will pay for [adult content] even though it’s not perfect,” Clayman says. He adds that he’s had the opportunity to interact with some of the yet-to-be-released PMCs, and “the picture is crystal clear.”
Like Falcon Foto, VS Media is focusing on European consumers first, because mobile carriers there already accept adult content on their systems and consumers are accustomed to being able to get it. Truly mobile video – streaming to PMCs or anything else – probably is still about three to five years in the future for U.S. consumers, Clayman says. “The ‘wired home’ thing is more likely here than video on portable devices, at least right now,” he says.
Tucker’s not so sure. “Bill Gates has yet to be wrong,” he says. “His company always leads the way in which technology infuses itself into society. He is a forward-thinking individual with the tools and knowledge of where tomorrow will end up, so I don’t think there’s really much guess work involved [about this].”
How portable digital content eventually will “play” in the marketplace is yet to be determined, but one thing’s for certain: Consumers will have the final say. “We believe the growth of portable media devices, in large part, [will be] governed by how easily people can take their digital media with them and by the availability of affordable, reliable storage in compact form,” says Scott Horn, director of marketing for Microsoft’s Embedded Devices Group. It also rests on whether or not content evolves that makes the acquisition of portable devices worthwhile.
Tucker believes, in the final analysis, the answer to the question about whether adult content providers should begin gearing up now is a no-brainer: “For us, it’s found money.”
