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The State of the Connected Home 2012

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For his part, informitv's Cooper bemoans the uneven state of home links to the web via cable or telephone connections. "Average broadband access speeds are still relatively low compared to those of home networks," he explains. "They tend to be asymmetric, offering faster links downstream than upstream. This currently limits the ability to manage large media files. Many homes also remain unconnected, or beyond the reach of fast network access."

In a perfect world, consumers would rise up against these limits and demand better service; bringing the ideal of the connected home closer to fruition. However, the real world we live in is dominated by technologically-illiterate consumers, plus retailers who care more about pushing product out the door rather than selling consumers the tech they need.

"The ultimate reality is that consumers are not sure if they even have a connected home or not, and they're not sure what they need to do to make sure their home network can handle all the new devices they keep buying," observes Cisco's Karen Sohl. She points the finger of blame at consumer equipment vendors: "More education needs to happen from consumers and from retail stores that sell the new devices," she says. "The question shouldn't be, ‘Do you want that new Wi-Fi-enabled tech gadget?' The question from the retail salespeople should be, ‘What kind of network do you have and what wireless router do you own?'."

In an effort to remedy this problem, Cisco is trying to teach customers through in-store information; educational content on its website and blogs; and "talking directly with our customers on our social media sites and website," says Sohl. Still, it's an uphill battle.

Of course, even if retail clerks did ask about customers' home routers and then sold them products that would work with these units, "The complexity of configuring these networks is still beyond most consumers," says Cooper. "While it is getting easier for the average user, it can be difficult for them to solve problems when things go wrong." Metaphorically speaking, it is difficult to launch a revolution when the citizens you are arming can't figure out how to load their guns.

There are other hurdles that must be cleared for the connected home to achieve its potential. One of these is the entertainment industry's resistance to new forms of distribution, and their unwillingness to adapt to it. "Mainstream content is the biggest driver of adoption for the connected home," notes Kippen. "The biggest obstacle still remains pre-existing business models and agreements for content licensing."

A second issue is compatibility, or what Philip Nelson describes as a lack of "devices playing nicely together". We still live in an age when manufacturers insist on pushing their own proprietary platforms for personal gain, even though open standards would make life easier for consumers and likely encourage faster growth for the overall connected home industry.

"From a consumer perspective, the above-mentioned fact that each device supports a different set of services (with none supporting everything) significantly impacts consumer adoption," says Digital Rapids' Eksten. "This is further compounded by content licensing limitations. The fact that a particular OTT service isn't available on a particular device is a frustration point for the consumer if the content they want is only available exclusively on that one service."

To address this problem, content distributors are doing what they can to diversify and enrich their offerings. A case in point: "To help bring more content into Boxee's ecosystem we've just announced Boxee Live TV," says Kippen. "We'll be adding content from the four major networks with a simple add-on to the Boxee Box."

Projected Improvements in 2012

The reality of today's connected home is far from the ideal. The good news is that progress is being made towards that ideal, as technological improvements, network speed upgrades and improved content offerings make their way into the marketplace.

So what's coming in 2012? "Video, video, video." replies Cisco's Sohl. "Streaming video is the wave of the future, and if consumers want to enjoy the best streaming video experience, they'd better make sure their home wireless network can handle the data traffic."

"More personalized TV experiences," forecasts Andrew Kippen. "New experiences built around four screens [TV, computer, tablet and smartphone]. Cheaper devices."

"In 2012 we expect to see online video services grow in significance and network-connected televisions to become mainstream," says informitv's Cooper. "The distinction between broadcast and broadband distribution will become increasingly irrelevant in terms of technical quality. Viewers will benefit from increased choice, convenience and control."

"More and more of the ‘traditional' consumer electronics companies (such as television manufacturers) will be making stronger plays into the connected home, putting increased pressure on the smaller companies that have been on the pioneering wave of connected home devices," predicts Digital Rapids' Eksten. "And Apple's long-rumored next play for the connected living room is likely to be unveiled"

"2012 will be the year when authenticated content comes of age in the connected home," says Conviva's Darren Feher. "More people will be willing to pay for pay per view and subscription OTT, in order to get the variety and quality they want. I also expect more of the 200 individual hours people spend watching media each month will shift away from the TV to the PC, tablet and smartphone."

Time will tell how much the state of the connected home will shift in the next 12 months. But one thing appears certain: We will be substantially closer to the ideal by this time in 2013, than we are today.

As for who will profit from the connected home, and who will fail? "The winner of the connected home has to have a box in the home, the ability to transact commercially, manage a library and have extremely reliable and consistent product," Feher replies. "The first one across the finish line will win."

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