Electronics: what to keep from the past to build the future
Leonardo Chiariglione – CEDEO.net
An industry is not just determined by markets, customers, or technology. An industry is determined by a shared set of values that are reflected in the collective perception of the customers of that industry. Technology is of course important because it provides the means to express the shared set of values in products or services which then determine the market.
The Consumer Electronics (CE) industry has – or used to have – such a shared set of values that made the industry prosper. For those who care about that industry it is vital to trace back which they were, assess what they have become in the mean time and study how we can best adapt them to build a future as prosperous as the past.
Two words about myself: I worked for many years in a telecom R&D laboratory and I believe I represent the spirit of that industry to some extent. That spirit can be summarised as follows: business thrives if you give your customers what they want. It looks like a tautology but it seems that this basic rule has gone lost with some of today’s industries which seem to put their best efforts in not giving their customers what they want.
Of course it not necessarily easy to know what your customers want. This is a lesson that the telecom industry learned well by selling its customers the ability to talk to other customers for a century and a quarter, and then unsuccessfully trying to sell its customers the ability to view other customers while talking to them for the last 40 years.
The means to reach the telecom industry’s goal was clear: set standards a priori that manufacturers can implement and operators deploy to offer services. Easy, isn’t it? Well, it depends. This has worked very well in the early phases of the business: landline telephony and mobile telephony which responded to basic needs. When these were fulfilled this model stopped being successful. Just see the videophone case.
My first encounter with the CE world was in 1986 when I first proposed the “International HDTV Workshop” . It was a few days after the CCIR (ITU-R today) failed to approve the “HDTV recommendation” that was expected to open a new era for broadcasting. My idea in proposing the workshop was to let technical people, each with their industry background, to talk about this strange new thing that it seemed so difficult to agree on at the political level.
My second encounter with the CE world was 18 months later at the first MPEG  meeting. MPEG was clearly a different beast because it was about making standards for digital audio and video, but the idea of putting together all the stakeholders and agree on the basic things together was the same as the HDTV workshop. Of course R&D work in this space had been carried out for decades by the telcos (because of their videoconference dream) and by the CE and broadcasting industries because audio and video was and is their bread and butter.
Standards were one of the points on which the telco and CE industries had basic differences. I have said something about the telco way to handle standards, but the CE way was to deploy on the market competing products based on different standards made by different companies. The technology underpinning the product surviving the competition would become “the standard”.
Setting aside the apparently fundamental differences between telco and CE standards, let me say that in the early days the results were pretty much the same. The Philips’ Compact Cassette (CC) saw an early competitor from Bosch, but that was soon dropped. The Philips’ and Sony’s Compact Disc (CD) had a brief competition from RCA but, thanks to the unstable economics of RCA, that soon also dropped. No matter the difference in the process the result was the same because both industries could rely on stable standards on which to build the market.
The next case, video tape recording, was a completely different story: it took 27 years to finally resolve the battle between Beta and VHS. This means there is a substantial difference between the telco and CE industries – at least at that time: the CE cared more about competition than making its customers happy. It is hard to say what is the situation today, when also the telco industry seems bent on competition between telecommunication service providers, more than making its customers happy.
Many talk about convergence. MPEG started practicing it 20 years ago not so much because it provided the shared standard for all industries in need of digital audio and video, but because it introduced a “shared” way to define standards blending two different approaches. Instead of having the cozy ITU-T arrangement where standards still are largely defined through agreements between administrations, MPEG introduced competition in standards making. Of course competition had always been present in ISO and IEC standards committees. But that was competition between well-define products. What MPEG introduced was competition at the level of basic technology.
I think this is one of the most remarkable innovations brought in by MPEG, a process that takes the best of the CE industry process – competition – without it so annoying side-effects on customers and blends it with the stability offered by telco standards. I cannot help avoiding the fact that it is cheaper to have a few hundreds researchers fighting for a technology in a standards committee than thousands of employees working on the assembling line.
There is one more difference between the telco and CE industries that it is important to mention at this point or, at least, there used to be one. In the telco case the two communication ends are peers. If you make one happy, it is likely that the other one will also be happy. In the CE case the two communication ends are hardly peers. If you make one happy most likely you will make the other unhappy. More about this later.
The history of CE has been a never-ending quest for an “ever better” user experience. Let’s briefly see how this happened in a series of cases that will be, sometimes loosely, grouped under “CE industry”.
The endless list of technologies that have been summarily listed in the preceding chapter had the goal of proving a “better” experience. But actually the user experience can be measured along an increasing number of dimensions. This is a sample of those dimensions for a set of important cases:
Easy to print
Easy to share
It no longer cost
More video resolution
Better colour gamut
Viewpoint selection (receiver side)
I can make it myself
I can share it
I can find what I want
I can share it
All my music in my pocket
Knowing “what’s there” and choosing it
Portability to different devices
From the analysis of the past and the situation of today it is now time to provide views on the future.
One of the most crucial problems of CE is what happens to the “previous” experience when a “better” experience” has been provided?
MPEG has provided (or tried to provide) technologies to preserve the continuity of the experience:
CE products today require more and more functionalities. This is achieved by embedding many different technologies. As the number of technologies providing the same functionality is large, many products from different source do not interoperate.
Welcome to the new world of unintended non-communication.
In its Multimedia Application Format (MAF) standards (ISO/IEC 23000) MPEG has developed standard solutions aimed at product interoperability through the process of assembling MPEG technologies and, when not available from the set of MPEG technologies, non-MPEG technologies as well.
Current list of MAF standard is already impressive:
The CE industry has been shaped by the “asymmetric paradigm”. This assumes that at one end of the communication there are few big media companies and at the other there are millions or consumers. However, today there is finally growing awareness that so-called “long tail” content that may be equally if not more interesting than content at the centre of the histogram.
The basic rules – hence the technology – underpinning distribution of long tail content are not necessarily the same as those for premium content. The web is tilting the equilibrium point between creators and users even more towards a “symmetric paradigm”. The basic rules – hence the technology – of the symmetric paradigm are likely to be even further apart from those of premium content. Many of the Digital Rights Management solutions developed so far have been influenced by the asymmetric paradigm.
Three years ago I started a new initiative called Digital Media Project (DMP) . Today the DMP can boast
MPEG has a very simple but effective business model
The model has been successful but...
MPEG is discussing the so-called “dual-track” approach where a parallel track is instituted for standards that are expected to be royalty free but have possibly inferior performance compared to non royalty free standards
In my country I am involved in a grass-root initiative called Digital Media in Italia (dmin.it) , triggered by the observation that digital media have a hard time and cannot realise all the potential of digital technology because
This happens because the market is paralysed by two conflicting requirements:
The dmin.it idea is to find the middle ground between the two conflicting requirements as follows
From the above points I would like to draw the following conclusions:
CE is a great industry to be in and I am not saying this to please those attending ICCE 2007
CE is the industry whose task is to provide products that enable human beings to
Express what they feel with media
Convert what others have expressed with media into human perceivable signals
The CE mission: to provide an ever improving “better” experience is still of value today as a target to strive at and probably never fully attain
Standards play a key role, because the first priority of any industry is to make one’s customers – those who foot the bill – happy no matter what. And customers want interoperability
It is too expensive, too damaging and too likely to make consumers enraged – or uninterested – to let the market decide the standards. There is the proven MPEG method that is based on a much cheaper form of competition – between researchers
The policy of sharing technology platforms by industry members is a great principle. The platforms should be standards based and implemented in Open Source Software
The asymmetric paradigm – few large media companies on one side and millions of consumers on the other – is becoming more and more a thing of the past. There is a need for a flexible platform that enables a balanced Digital Rights Management and a solution is there – the Chillout® Open Source platform for digital Rights Management with a human face
CE is part of a bigger whole. It is a good opportunity to influence other industries that have often lost their raison d’etre
CE will continue to thrive if there will be incentive to innovate. As some digital media technologies are becoming royalty free there is a risk the industry will stagnate