Jan 12, 2010 13 min read

Cutting The Cord And The Impact of a PC In Every Living Room

If you are a geek, there is a good chance you either have a HTPC (home theater PC) or have at least checked out the concept a bit. It’s a fairly simple concept at heart: buy a small form factor or media center looking PC and hook it up to your TV to consume an endless amount of content and entertainment. Then cut the cord on cable. That’s it. A fair amount of geeks end up building an HTPC themselves by purchasing parts from Newegg, especially the enclosure/case. One of AVSForums’ most frequented boards is on the topic of HTPCs. If you buy a pre-made HTPC, there are a few routes to go:

Just get a Mac Mini that starts at $599. We all know this is the “real Apple TV”.
Purchase a net-top that has an NVidia ION chip for <$400. This might require some more legwork as systems such as the ASRock 330 are barebones with no OS or Apps. The Intel Atom chip is also pretty weak.
Look at some independent system builders that have some pretty good systems. Some try to heavily gouge on price though.

Why is it so great? It allows for an absolutely open platform to consume content and be entertained, that is connected to the rest of my “digital home”. I haven’t had cable for years and I don’t plan on looking back. I can use Boxee to listen to music or consume most content, I have a web browser to access anything else I want such as renting videos on demand from Amazon, and can add other apps that look great in full HD on a 50 inch screen: Google Earth, Skype conferencing, video games, and more. My HTPC serves as a digital hub for my home. It stores all of my videos, my music, and media that I own. For under $600 I have access to an infinite amount of content and entertainment whenever I want, all of my content backed up, and never have to pay a $75 cable bill again. Hooking up a computer to my TV has had as much of an impact on my life as the iPhone. It is that amazing of an experience. Sadly, doing this has been a geek’s delight for people like Scoble, Fred Wilson, or Stowe Boyd. Read their posts linked to in the previous sentence and they all agree- it is a life changing experience for your digital home. Want more proof? Read this article from last month in the New York Times about cutting the cord. A lot has changed over the past 1-2 years though, and I think we might be gravitating towards an era where the concept of a PC in the living room might not be a Geek’s delight, but a mainstream trend. Here’s why…

HDTVs Are Everywhere

Flat Panel HDTVs have come down in price and manufacturers like Vizio are booming. The hottest item during black friday this year was the HDTV, accounting for 30% of Black Friday purchases. For all of 2009, 141 Million LCD TVs were sold, with an expected 171 Million to be sold in 2010. I don’t have numbers for previous years, but 2009 and 2010 alone will bring over 300 million HDTVs into homes. I don’t see the number slowing down either. Hundreds of millions of screens now exist that are begging to be developed on. Video Game consoles are one part of the equation, but people want more than that.

Content is The “Killer App”

You might be thinking: so what? TVs have existed for quite a while and we’ve been able to hook PCs up to them for years. It’s different this time around. The previous generation of TVs were meant for lower definition apps like a super nintendo or your basic cable. More importantly, they didn’t have a killer app available. All successful platforms have a killer app, such as the Personal Computer taking off due to productivity apps like Visicalc. The killer app for the 50 inch screen is content and boy is it here. Here’s just a sampling of what can be accessed right now:

Use Boxee- I think Boxee is the most important piece of software that has been released in the past few years (along with its original project XBMC). Every HTPC and HDTV should be running it. It’s social, it has the right UI, and it has a ton of content available.
NetFlix- Blockbuster stores are closing and Netflix is growing. You can watch thousands of movies on demand with no wait time.
Hulu and Other Network Sites via the Browser- Most of these are available within Boxee, but the networks don’t always play nice. Open the browser and just navigate on over. The networks can’t ban browsers unless they want to commit digital suicide.
User Generated and Semi-Professional Content- YouTube has 20 hours of video uploaded every minute. Think about that. More content is uploaded to YouTube than a single network will air in an entire day (I’m assuming there are at least 4 hours of commercials). I’ll admit, youtube isn’t always my cup of tea. Sneezing Pandas can get old after a while. There are a ton of people producing awesome content every day that is NBC level production quality, and surely above Youtube amateur hour. The Guild is one example.
Pirated Content- I’m not endorsing it, but a lot of people use it. It’s not a way to make a platform survive long term, but it’s one way to get content. Piracy will always exist, but I believe networks+studios are headed in the right direction.
Other interactive apps- google earth, skype, games, tweetdeck, and more can be added with the click of a button. This is where having an open platform that is as powerful and as versatile as a PC wins. Samsung certainly thinks apps like Skype are important.

NONE OF THIS WAS POSSIBLE FIVE YEARS AGO. Skype was just breaking out, Chad+Steve+Jawed had not even started YouTube, Netflix had no streaming, Hulu would have been thought of as the devil by networks, and Gary was just running a wine store in New Jersey. I’m sure if the HTPC becomes a mainstream CE device, there will be apps and uses I cannot even dream of released. Everything will be connected and having a smart home like Bill Gates’ will eventually be possible for the general public. Having a central HUB for these type of home automation and digital living devices makes a lot of sense.

Hardware Fits The Right Mix of Power Efficiency, Price, Form Factor, and Performance

The Hardware aspect of HTPCs is a really interesting one. Putting together an HTPC used to cost a ton of money if you wanted to do it the right way. It wasn’t even possible to really do it the right way either. The key aspects of hardware for an HTPC fall into four categories:

Power efficiency is key for a number of reasons. First off, the device will be on all the time. You cannot run a 500w PSU at full steam without your energy bill being cranked up. Less power, means less heat, means less fans, which means less noise. What good is watching awesome content without being able to hear it? Intel Atom chips and low power processors make this very very possible.
Even though people might be buying another computer, it’s hard to tell them that prices start out over a thousand dollars. Some will do it, but that restricts things from reaching the mainstream. Now you can buy a fully capable mac mini for $599 or a Dell Zino for a bit less (the starter Dell Zino starts at $239 or so, but the specs are pathetic. it’s borderline bait and switch.). You can also build it yourself for even less, but that’s not a mainstream thing, otherwise Dell/HP/etc. would be out of business. Component prices keep going down and eventually the perfect HTPC will hit a $299-$399 price point for mass consumption. Nettops might be there right now, but *I think* they’re lacking in the fourth area of performance as of right now.
The perfect home theater pc doesn’t look like something you would find on your desk. It probably looks something more like a game console. That requires Mini ITX cases, motherboards, smaller hard drives, and slim disk drives. If you add in a discrete graphics card, you need a low profile card. A lot of these parts were hard to come by until recently. Another important consideration is the Wife Acceptance Factor (WAF). Will the wifey or girlfriend like it? Mini-itx cases often look like they belong in the living room and not under the desk.
Performance on a HTPC is similar enough to a basic computer, but there’s a point where the added hardware doesn’t help. An Alienware core i7 system with 12gb of RAM is certainly overkill. The two most important aspects come in the form of the CPU and the GPU. The CPU should be able to handle intensive tasks such as Flash (though 10.1 will fix this to a certain extent) and the GPU should be powerful enough to handle hardware acceleration. Intel is atrocious with this, but their HD Graphics on the Clarksdale i3 chips make things a lot better. NVidia is doing an awesome job with their ION Chip and Broadcom with the CrystalHD as well. The output is also important. HDMI with audio is a must. This is the Mac Mini’s major shortcoming (you can convert the dvi to hdmi, but the proprietary nature of apple does not output audio with the video signal). In summary, the performance can be in sync with the right pricing, power efficiency, and form factor.

An Age Where “Computers” Fit The Purpose

Computers are no longer boring beige boxes that sit under our desk. They are everywhere and they fit a specific purpose. We have computers in our pockets, in our cars, to read books, plugged into our wall, for light travel/web browsing, and more. Why wouldn’t we have a computer hooked up to the most dazzling screen we own? We can visualize that as a reasonable possibility – the market for netbooks went from 0-35 million in 2-3 years time. Our society is conditioned to expect non-computer activities such as reading a book or making a call to have an advanced computer powering it. Steve Jobs thought the Desktop/Laptop PC was the Digital Hub, but I think it’s become more of a spoke. What’s hooked up to your TV might just become that Digital Hub.

Measuring Personal Media In Terabytes Instead of Gigabytes

Our media is gravitating away from being physical. Our family photos, our home videos, our cd collection, and our rented movies are becoming digital. Bill Gates was on to something with “Kodak being toast”. Our personal media collections are gravitating towards being measured in terabytes instead of Gigabytes. The amount of storage we need will only continue to increase with more people buying cheap HD cameras like the Flip HD or blu-ray quality digital downloads. Sure you can get a primary desktop PC (or laptop depending on size), but it makes more sense to store those on a digital hub that can be accessed by every other machine. You can also get a NAS to handle this function, but why not get rid of an extra box by having an HTPC with a TB+ of storage? It also makes sense to have that device hooked up to our HDTV. I had a family member tell me something interesting: the HDTV screen is a social screen. Unlike our phone screen or laptop screen, we often share the HDTV screen with one or more persons sitting next to us. Would you rather enjoy your pictures and family videos by yourself on a 13 inch screen or with your family sitting on the couch in full 1080p resolution?

Cutting The Cord and Non-Linear, Non-Bundled Content

Cable needs to go. 22% of American Cable Subscribers have cut back on TV and 32% of those have hooked a computer up to their TV to do exactly what this article is talking about. Landline telephones are becoming a thing of the past. The landline telephone is being replaced by mobile phones and/or voip like Skype- Cheaper, better, and more capable technology. Cable costs $70-$150 a month. Hooking a computer up to a TV is cheaper, better, and more capable technology. (Yeah, it’s ~$600 to get started, but that’s recouped back inside of a year). Imagine if you went into McDonalds and could only order Chicken Nuggets at 7 pm and had to also buy everything else on the menu. Pretty crappy, right? If you have a cable subscription, that’s essentially what you are doing right now. Content is no longer meant to be bundled and linear. The older generation and the baby boomers might not understand this, but look at first time renters and college students. I’m still looking for a good report on the stats, but from my own personal network I can tell they are not paying Comcast or Cable companies for TV. The missing piece is moving Sports and Local News online. This is only a question of when, no longer a question of “if”.

Putting a PC in every living room is not something that will just happen by half assing things. There are quite a few hurdles that need to be dealt with:

Net Neutrality

I’m not an expert on net neutrality. My friend Marvin does a good job of handling that, and you should read his blog. Cable companies are scared of everyone consuming their content via a PC connected to a TV. Consuming the content on your laptop is one thing, but they at least still keep you as a cable subscriber. At most, they want content such as Hulu and Netflix to be a supplement, not a replacement for cable. Once there’s a computer in every living room, cable companies are replaced and reduced to a dumb pipe. That’s where the importance of net neutrality comes in. If we let ISPs such as Comcast discriminate against what bandwidth can and can’t be used for, they have a strong grip on trying to charge us for more than our internet connection. Have a computer hooked up to your TV and using sites such as Hulu constantly, but not paying for cable? Pay more for your internet. Yes, if cable companies get their way, this could happen.

A Manufacturer Dedicated To Software, Hardware, AND Support

Some Consumer Electronics Manufacturers offer what is a completely suitable HTPC. The Mac Mini is great, the Dell Zino, and more. The problem is, they don’t advertise them as HTPCs. Honest truth, I wouldn’t even use the name “HTPC”. They haven’t made a true push to dominate the market. Apple has tried and failed with its “hobby aka AppleTV”. It’s also not as simple as throwing together a boring PC with Windows on it. Alan Kay said it best:

People who are really serious about software should make their own hardware.

I’d also add in that support is just as important. Getting the mainstream to adopt something like this isn’t the easiest thing there is. I wouldn’t say the learning curve is steep, but it’s certainly unusual when it comes to a normal TV experience. It’s the same way the iPhone doesn’t have a steep learning curve, but it’s certainly foreign from using a normal phone. The good thing is, consumers are already familiar with computers and understand more complex devices.

If someone tackled putting a PC in every living room, it can not be a half ass attempt. It would have to be a movement and a committed effort with real marketing behind it. There are a lot of people who are passionate about cutting the cord, and the benevolence of creating a movement behind this would be quite the force. It could not be a secondary effort. I honestly think there’s two companies poised to do this: Apple or a scrappy focused startup.

Lastly, I don’t think you can just throw Windows on the device with a bunch of bloatware and call it a day. The Microsoft tax drives the price up too much and the experience is subpar for a 10 foot GUI. I would suggest using and modifying Ubuntu the same way Jolicloud has started to do for Netbooks. You can’t cobble some parts together and hope it works out. The OS, the apps (Boxee, google earth, firefox, skype,etc.), and the hardware need to sing in unison. That takes a little bit of intuitive engineering. This is a whole other post by itself.

An Open and Non-Crippled Device

Devices other than PCs may be the solution, but I don’t think so. Competing against them isn’t an easy task, but I still think open platforms that are real computers always win:

What about video game consoles?– I love my XBox 360. I think it’s the best product Microsoft has put out in years. It’s still too closed and crippled. The price is great and it has true computing capabilities (tri core 3.2 ghz processor, graphics, 250 gb hard drive,etc.). What if someone wants to make a great app for it and release it tomorrow? They can’t. What if you want to download content that aired last night? You can’t. What if you want to use the web browser to access something? You can’t. What if you want to add in Boxee? You can’t. What if you want to store all your photos+videos on it? You can’t. What if you want to upgrade the hard drive to 2 TB or the processor to be faster? You can’t.
What about set top boxes like Popcorn Hour, BoxeeBox (this is the best of breed), TiVo, Roku, or AppleTV? There’s a reason why the AppleTV has never taken off. It’s not the Mac Mini. Devices like these are limited for a two reasons- they’re often not powerful enough to be versatile as computers and limited to the content deals that they can secure. They’re usually suplemental devices relying on your other computers. They’re not a fully new experience. Even Fred Wilson says he prefers a full computer such as the Mac Mini over the Boxee Box. That’s nothing against Fred either as an investor in Boxee. If anything it’s a testament to Boxee. Their goal isn’t to be on one device, but every device that is connected to your TV. We all win together, and that’s another reason why I’m insanely bullish on Boxee.
What about Yahoo TV Widgets and Smart TVs?– I think this is a poor answer. I don’t want to be locked into one TV, they don’t have enough power, and they’re still way too locked down. I think they’re a nice step forward, but I don’t see it being an alternative.

The revolutions are usually started in obscurity by early adopter geeks. We’re the ones who discover the cool things before they hit mainstream adoption. Usually the next big thing starts out as a toy. Look at the Mac and PC, it was a bunch of guys at the homebrew computer club building something they loved and found useful. It took some adventurous and determined souls like Steve, Steve, Bill, and Paul to make a world changing device hit the mainstream.