Reflections on CES 2011, Where TVs Really Come From, and Pie

CES 2011 was a true breakthrough for connected television or, in the emerging vernacular, smart TV. All of the big names in the TV space announced their connected TV plans. And they pretty much all said the same thing: Platform A strikes agreement with CE Manufacturer B to bring you the same content as any other connected TV. Except for one: Funai Electric is the first CE manufacturer to embrace the cloud as a smart TV platform—using ActiveVideo’s CloudTV™. Here’s our joint press release about this landmark agreement.

Many people outside of the consumer electronics industry may not have heard of Funai, but they certainly purchase a lot of Funai televisions. That’s because if you walk into a store like Target, Walmart or Sears, chances are you’ll see Funai brands like Philips, Magnavox, Sylvania and Emerson prominently displayed. Target, Walmart and Sears are all ahead of Best Buy on the Top Global Retailers list, with Walmart being the number one retailer in the world. That’s a lot of TVs.

To put this in perspective: When you add these new CE consumers to the 5 million cable subscribers who already get CloudTV, that’s more than the reach of Google TV, Apple TV, Roku and Boxee combined. Just think, to achieve the same kind of reach, Netflix develops for over 250 devices.

That may be impressive to all of us tech cognoscenti, but the average person might ask: So what? What’s the big deal if my smart TV or Blu-ray player is cloud-based, and not device-based? Here’s the big deal:

When people buy TVs, they expect them to last seven years or longer. Will the device-based platforms be able to run the latest and greatest apps in seven years? Will developers even be developing for those old platforms? And even if they are, will people use up the paltry memory on these devices, and have to start deleting apps to make room for new ones? Will consumers get tired of the constant downloads and updates?

With a cloud-based device, the TV’s horsepower is never an issue. The cloud handles all of the heavy lifting. There’s no limit to the number of apps that may be available, and you get the latest versions every time you connect—streamed, not downloaded.

So while everyone else at CES was talking about their slice of the connected TV pie, ActiveVideo® was talking about making a bigger pie—one that everyone can enjoy.