Intel is hoping that Viiv will do for digital home entertainment what Apple’s iPod did for portable digital music – forge a new brand that captures the imagination of the consumer and defines a new media experience. Apple helped to define portable digital music, just as it is hoping to do for portable digital video. Intel is now betting that Viiv will define the consumer’s perception of the in-home digital entertainment experience, starting first with the PC and then evolving into other consumer electronics.
Yes, the PC stalwarts have been banking on this vision for sometime, only to be disappointed (as has the entire digital home industry). One of the primary inhibitors to this vision, however, was the lack of compelling Internet-based media content. If you are trying to encourage the masses to view their home PC as an entertainment device, then you must (at minimum) offer them content that they consider compelling. Without such content, PC-based entertainment has been relegated to an early adopter or niche market.
Finally, it seems, we are beginning to see small cracks in the protective walls that divide Hollywood from the Internet. Announcements of the last few months have made it clear that video content owners are increasingly willing to share their hottest properties with specific Internet distributors. Yes, the fence-sitters are finally starting to move, and in a big way. We’re not just talking about Welcome Back Kotter or Growing Pains, but the likes of Lost and Desperate Housewives – current content that demands top-dollar advertising during TV broadcasts. This is a different ballgame, folks, one that certainly demands a second glance from new media doubters.
First, these are big content players and once they start to move, they move mountains. Once the top players establish momentum, it soon becomes too much to withstand and the walls go from cracked to crumbling.
Second, although the free-view Internet content will be populated by Eight is Enough or Falcon Crest, Internet-based pay-per-download or pay-per-view content will expand to include virtually all of the top TV programs. When this happens, the Internet truly becomes an entertainment conduit, not just an information and communication pipe. Again, the challenge is to link this conduit into the living room experience (a challenge which Viiv hopes to address over the long term).
So at the end of 2005, we find ourselves finally on the brink of the Internet media age (yes, we’ve been telling ourselves this was the case for years). Strong, well-funded brands positioned to take advantage of this momentum will be rewarded, and that’s that stage upon which Intel’s Viiv arrives.
Is Intel’s timing simply fortuitous? Is it just a matter of luck that the Company is rolling out a new brand of a Centrino-esque scale at the same time that interest in Internet-based media is escalating?
Think what you will about Intel (and I know your opinions are varied), but the Company has dedicated a vast amount of resources in the pursuit of this vision. To grow demand for silicon and software you must build demand for the applications that require said silicon and software, a truth of which Intel is quite aware (and one that AMD still hasn’t grasped). November’s announcement of 40+ Viiv “partners” – including network operators, hardware vendors, and media companies – was only the beginning. 2006 will see Viiv-related announcements that will really shake up the landscape.
Keep in mind that Intel’s Viiv is more than just a technology solution – it is a marketing strategy attempting to once-and-for-all reposition the PC (and the Internet) as a viable entertainment platform in the emerging age of Internet media. The PC has all the components needed to provide a quality entertainment experience, but it has lacked a clear and concise value proposition that resonated with consumers (most of which pretty set in their ways regarding how they use a PC, and how that experience is different that their use of consumer electronics). Enter Intel and Viiv.
Among the themes at the 2006 CES will be Internet-enabled media and Intel’s Viiv platform. Is this concomitance an accident? Of course not. Such accidents don’t happen. And kudos to Intel for not waiting merely to ride this wave but to actually help define it. Remember, the difference between a technology leader and a chipset manufacturer often boils down to having both the vision of where innovations will be applied in the lives of consumers and a sense of purpose in pushing innovations in those directions.
About The Diffusion Group (TDG) –
The Diffusion Group is a strategic research and consulting firm focused on the new media and digital home markets. Using a unique blend of consumer insights, executive-level consultants, and hands-on technical experts, we produce more than just research – we create Intelligence in Action?.
TDG is committed to providing market research and strategic consulting services based on conservative, real-world analysis and forecasts grounded in consumer research.
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