Going Beyond The Enthusiast Market

Charlie Owen, a former Media Center team member wrote a post this
week about Media Center expanding its marketplace, specifically
going from
the current enthusiast market to a more mainstream market
.  Charlie analysis comes to the pretty simple
answer of It’s
possible, but highly unlikely at this point.”

I had previously come to this conclusion, but to me
the real question is “
will Microsoft attempt to develop for the
enthusiast market?”  Lucky for me,
Charlie replied to my comment with exactly what I was expecting

Charlie: “No. That’s because they have never done so. The enthusiast market is
always a subset of the overall market any product targets. Put another way:
Where the goal is making a profit you wouldn’t sacrifice a broad market
opportunity of 100 for the narrow enthusiast market of 10. Making a
Microsoft-sized profit is different than making a profit if you were a much
smaller company.”

In other words the future for Media Center is one or two
options.  Option 1: Microsoft stops
development of Media Center (very unlikely).  Option 2:
Microsoft transitions Media Center to a market which has the possibility to
create a “Microsoft-sized profit.” (Hint: TV on your PC)  Re-quoting
from early this year, the days of Media Center being billed as the
do-it-all center of your home are over.

My opinion continues to be that Microsoft will focus more
and more on the Xbox
360 as the center of the home
.  The
benefits of the Xbox 360 over Media Center are almost endless from a business
perspective.  The massive amount of end
users (an unquestionable 30 million, with 20 million of them being Xbox Live
subscribers) means content providers are going to flock to the platform.  Microsoft can sit back and rake in yearly
recurring revenue from these 20 million Xbox Live subscribers along with the
massive amounts of licensing accessories and the Xbox 360 brand.  Media Center on the other hard makes
Microsoft absolutely no money as it is a part of the standard Windows SKU (eg.
No one except members of The Green Button ever purchased a Windows license just
to get Media Center).

There are still people holding out hope for Media Center to
become a platform for the home.  The
recent announcement that Dish
Network will not be shipping
their tuner anytime soon didn’t
surprise me one bit
.  Why would Dish
bother to continue with Media Center when it is pretty clear Microsoft is
moving away from the consumer they thought they were buying into?  This same concept is at play with Media
Center Extender’s.  There is still some
hope that Toshiba
will be releasing an Extender, but I think the concept
that most people miss is that whether it gets released or not means little in
the grand scheme of things.  If
Microsoft’s heart is not in providing a platform for the home, you can really
know going into your purchase that you’re going to end up disappointed at some

The biggest question mark might be Windows Home Server.  For years I have said the concept of
including Media Center in Windows Home Server is pointless
and does nothing to expand the current market
.  If HP ditched Extender’s and CableCARD due to
poor sales, why exactly would they have the least bit of interest in shipping a
Media Center+Home Server box?  If OEMs
are not interested, why is Microsoft going to develop it?

Most people underestimate the OEMs when talking about Media
Center.  OEMs are really responsible for
Media Center from start to finish from a customer’s perspective.  HP and Dell have shown they have little
interest in Media Center by either discounting CableCARD PCs, killing off
Extender’s, and even in HPs case killing off their HT-styled z-series Media
Centers.  Dish
are just as important and have shown that they are increasing less interested.

Microsoft’s latest attempt to make a market for Media Center
has been the custom integrator channel, and some have big
for what Microsoft might have in store.  Sadly most of the possibilities have already
been proven false, and based on what I’ve been told from those in the industry
interest in Media Center in the custom channel is dropping fast.  I’m interest to see how much longer Microsoft
attempts to push into the market.  With
their partner OEMs such as HP, Linksys, Dish Network pulling out these leaves
the custom OEMs like Niveus Media and Life|ware to pick up the slack.  Unfortunately there is only such much they
can do.  If Microsoft’s commitment in the
channel falls it might be the end of the custom market experiment.

So once again the question is what’s next.  Recently there have been some great new
show up in the Media Center community with some great
suggestions.  I’m done with
suggestions.  Microsoft knows exactly
what we want, let’s not pretend they don’t. 
The issue is it is no longer in their best interest to pursue most of
it.  What’s next?  Who knows. 
All I want at this point is for Microsoft to publicly provide a roadmap
for what Media Center is to become.

14 thoughts on “Going Beyond The Enthusiast Market

  1. IMHO Microsoft should remove themselves from the equation starting with Windows 8. They should only provide an application layer need for third party’s to interface with windows and UPNP support to external players. By 2012 real time software trans-coding will be common place and fast so codec support becomes less of an issue. What needs to be forked out is a Industry standard for content library’s. I should be able to open my Media library on XBOX360 choose video then Sci-Fi then Letter S see Star Wars IV (Local Share), Star Trek TNG Season 1 (Netflix), and Stargate Continuum (Tivo) . Choose what I want to watch and have xbox360 in background open correct player.
    Right now that is at least 2 devices and 3 different application. I can find what I want to watch but most people can’t.

  2. In my opinion Microsoft is already only developing for the enthusiast market. Who else would put up with the non-functioning hardware/software that is Media Center ? I made up my mind this weekend to ditch Media Center and switch to Verizon FIOS with their DVR. Microsoft doesn’t get the fact that people want MCE to be an appliance and not another broken Windows PC with all of the attendant problems.

  3. I’m one of those people who got into Media Center because I wanted a TiVo, but I didn’t want subscription fees. If Microsoft made a reliable no-fee STB, I’d have purchased that long before the cumbersome PC I have now.(whatever happened to those UltimateTV boxes anyways?) Also, if these boxes were option for cable companies to provide as a DVR, I think that would be a way for the platform to survive.

    Media Center on the Xbox360 is also an option. But, before too much Media Center functionality makes its way to the 360, hard drive space is going to need to become reasonably priced so people can expand beyond the tiny hard drives in most of the consoles out there. Tuners for the console would no doubt be proprietary (USB? Network-based?), so let’s hope they’re priced competitively with what’s out there already for PCs. They’ll also need to start producing units with minimal drive & fan-noise as a priority.

  4. This direction has been coming into focus for the last year or so but it does beg one question – Why do Enthusiasts stick with Windows MC? Several have switched to alternatives (Babgvant, Pluckyhd to name two) and hopefully more will to help to develop other platforms, like Sage, that are aimed directly at them.

  5. I think your article misses a few tricks here.

    1. OK TV Pack was buggy but many did not realize the amount of work done by MS to build a secure content backend for premium TV. With additional PlayOn and home group technologies I think MS is building the backend eco system for premium TV and web content. MS have to play the game with Content providers

    2. MS want you using here products through the home as one eco system , this includes console , desktops , laptops and the Zone HD when you’re out and about. MS have reorganized the business units to align Media Center with other products. Of course many will not buy a copy of windows just for media center but if a customer is selecting a new laptop the possibility to watch recorded TV or connect your Xbox in the living room as a extender is compelling and might just sway the decision of buying a Apple or Android OS in future. Media Center is a complimentary addition to windows not the main revenue stream. I was told by a insider that MS objective was to own the living room in Europe in the next 10 year. MS are in for the long slog. They have the funds to afford such a luxury…Many companies would of given up with the Zune then we see the Zune HD which looks pretty compelling, oh yes the IPTV division of MS has been loss making for 15 years..but they still keep going and are the largest IPTV solution vendor in Europe.

    3. Maybe you’re talking about lack of interest of the Custom Install channel in the US. In Europe the market is only just growing. I see loads of interest for media center. Tell me about a better DVD Serving and media platform for a custom Installer that is a reasonable price? There a few propriety solutions made by small companies with a fraction of the functionality of Media Center and much less reliable

    4. Media center will never be Mass market customer product in its own right. The likes of HP and Dell are kidding themselves if they can ship loads of units. It’s too expensive. Extenders have failed because the functionality was restricted (No Vob playback etc) and they were slow. MS patented a managed copy system for disc copying. Vob file playback for extenders will return believe me.

    5. Maybe this is not all Media Center specific but why build DNLA compliance, PlayTo and on the fly transcoding into your products if entertainment is not import for the Windows 7 platform. I have just used PlayTo functionality to send recorded TV to my Samsung TV in the living room. Show me all the competitors who can do this

    6. TV Tuners. The driver model has been evolving. I believe the cable card PCI type device is dead. Virtual tuners are the way forward.
    Here is how it works. Buy a Sky HD box in the UK. The settop box has a ethernet port. Your Laptop or media center see’s the settop box as DNLA device and installs the settop box as virtual tuners. You can watch a record from your PC’s around the home using PlayOn and Home Group for content protection. The provider does not directly support this functionality however encourages protected distribution to improve viewing figures and hence advertising revenue

    7. Finally. Ok they don’t cost much in relative terms but why bother buying The Green Button and WebGuide if your killing a platform

    8. Add Silverlight 3 and its capabilities for online entertainment delivery and things get really interesting.

    Maybe the world is not all Media Center going forward but Windows as a entertainment platform is only just getting started

    Of course this is just my view from based on my knowledge and respect everyone’s differing opinion

  6. 1. Premium TV content like Dish and DIRECTV? Broadcast provider’s have basically said they are not interested in Media Center for one reason or another. In the US the premium TV market has gone away from Media Center.

    2. Zune isn’t likely to ever connect with Media Center, it will however come very close to the Xbox 360. Microsoft has shown this by not allowing any content with AC3 audio to be synced to the Zune nativity. You also can’t sync to Zune from Media Center. There is not a single way the products connect. Not sure when you were told (or by who) about Microsoft owning the living room in Europe in 10 years, but it has nearly been 10 years since the introduction of Media Center was all signs point to it going the other way (and least in the US).

    3. Media Center doesn’t stream DVDs, that’s not a feature of the platform.

    4. Exactly, so why is Microsoft going to keep developing it knowing the market is so very small (this is the point of the whole post).

    5. Seems more like a competing product. Under this concept Microsoft has the best offering with Xbox 360, Zune, Media Center, Media Player, etc. Connect them is what is important, not having access to do them using other products.

    6. How many _naively supported_ products are using virtual tuners?

    7. The Green Button likely didn’t “cost” much. They didn’t “buy” WebGuide as much as they did hire it’s developer.

    8. Fantastic, none of this is supported by Extender’s or the MCE SDK.

  7. Chris, I think you are right on, and it is disappointing. I am also a for MCE user who switched to SageTV and their extenders.

  8. XBox 360 at the center is fine with me… and I may prefer it… as long as they get the noise under control on that console!

    I can’t imagine this ever going mainstream with strange glitches like the taskbar suddenly gaining focus over the MCE window. It’s things like that that stop me from recommending it to anyone who just wants to sit down and watch TV.

    On the other hand, when you put TV on your PC you expose your TV functionality to the ravages of daily PC use such as viruses, conflicts, etc… but at least streaming it out to an external unit removes some of the pain 🙂

  9. Chris, another great “sad, but true” article. On the topic of profit, I would think that since the majority of Media Center users are either in the IT field, or IT is their main hobby, they typically make more money (than the average joe), and therefore spend more money on Media Center related hardware/software.

    Steven J. Ackerman, I also went to Verizon’s FIOS Home Media DVR and have been SEVERELY disappointed (compared to Media Center). Even my wife said she misses using Media Center in our living room!

  10. I’m not sure they’re even in it for the enthusiasts. No WHS support, no extensive file format support, killing (or allowing to be killed) Dish and DirecTV tuners?

    In a way this makes me feel good that I went with the Sage TV/HD-PVR solution. Outside of the lack of a slick interface (which you can probably get with SageMC which I haven’t tried) this solution is the cat’s meow… and offered by a company which actually cares and constantly improves.

  11. I am a tech head and software developer and am more than satisfied with the VMC PC I built last year. I don’t have an XBOX, nor Cable TV so I don’t have issues that some may.

    A friend/neighbour say my HTPC and was very impressed and wanted one. He has a large DVD, Music and Photo collections he wants all easy to access in one place. I just finished building him a HTPC with 2 x 1.5TB Drives and installed it last Monday. I was able to get rid of two DVD players and a HD Set top box along the way, so his equipment setup is way simpler now. It is early days and I will be watching how he and his wife go with great interest. They are not tech heads but so far so good.

    So for me VMC along with menu mender and mediabrowser are very effective in meeting my HTPC needs.

    FWIW I am in Australia.


  12. The real problem is everyone is so obsessed with encryption and protecting content. HDCP and encrypted QAM is an utter nightmare, content protection is doing less to prevent theft and more to prevent technology development and disenfranchising honest paying customers. Regardless of how much security is applied people who steal are going to find a way to steal, and honest people will still pay.

    I just switched from SageTV to 7MC because I spent hours tweaking SageTV to get everything to work right. With 7MC I spent 2-3 hours setting it up and I have had flawless results.

    I work in the custom integration market and have hundreds of customers who would switch in a heartbeat to WMC or SageTV if there was a simple cost effective way to get satellite or premium cable into the mix; and if the platform was stable. So far 7MC seems to have resolved the stability.

    I would keep a close eye on Crestron, they just released the ADMS-BR which runs on a “locked down” version of Vista OS and the GUI looks like modified VMC. If they add cable card or other tuner support, and extenders (which my contact on the inside says are coming) it could be the Holy Grail of the Media Center Concept, and perhaps a hint of where Microsoft is going with the Media Center development, the High End custom integration market.

  13. I think you have to look forward within both the enthusiast and mainstream markets to really understand where this product needs to go and thus its relevance.

    People want to access all their owned content, web content, Paid for TV content from a central point. the question I keep asking my self is why do I even need Windows Media Center. If I have a home server that has all my content and an XBOX that can access it (just improve the dashboard interface so it is more glossy) as well as web content from lots of providers the only missing piece at this point is the DVR piece. Well build a ceton Mcard device into the side of an xbox and have it write the programs to the home server and you pretty much have it all.

    But even that assumes that the way the world watches tv will not fundamentally change to a web delivery model from a channel delivery model. In that case the need for MEdia Center is even less.

    The technology of media center will survive but in a different form. the idea you need a full blown pc to do what media center does now in the future is flawed.

    The final peice to the puzzle is what MS have planned for live mesh. I can see a time in the future where my xbox connects to my live mesh.

    I can see the cable companies getting rid of DVRs altogether. Why go to all that expense when you can have the user identify vi a two way guide what shows they want to have available to them at a future time in the next two weeks. That list then is available on channel 199 (kind of like user defined on demand) and they select the show and it gets streamed to them over their internet connection with all the adds still in it.

    So much is going to change in the next two years, if media center merely gives the enthusuasts what they want today in two years time it is already dead. Hopefully Microsoft are thinking ahead to how this will all work in the future. In the mean time the technology will always be useful.

  14. Andrew:

    Nice analysis. Only problem is you didn’t go mainstream enough. Mainstream doesn’t have a Home Server, and the vast majority never will. This is why Media Center is being turned into a desktop application.Basically they do the recording, you just select what you want to watch and go.

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