Monday, December 3, 2012

Revisiting Microsoft's Xbox SmartGlass Platform

Last week I had the opportunity to moderate a second screen panel and attend several other panels and presentations at the Variety Entertainment App Summit in LA.  While I greatly enjoyed the panel on second screen monetization with YuMe, Magic Ruby, Cinram/1K and MTV, I thought the most eye-opening session was the presentation of Microsoft Xbox SmartGlass by Mark Turner.  While I had seen Ron Pessner present something similar back at a 2nd Screen Society in NY last June and I had been playing with the platform at home for the past 2 weeks (and even wrote about it last week), somehow the epiphany of just how big this could be for the entire second screen ecosystem had escaped me.  Let me talk you through the key points they get me excited and explain why I spent this weekend re-exploring the platform at home.

  • Nearly 60m Xbox consoles have sold worldwide, nearly 40m of them believed to be in the U.S.  Half of those Xbox consoles subscribe to Xbox online services--even if we use the same ratio as installs to be conservative (the U.S. rate is likely much higher), that gives Xbox more than 20m homes in the U.S.--roughly as many as Comcast or Netflix.
  • Microsoft's stated goals with the second screen platform are to enable 1) Discovery and Control, 2) Immersive Entertainment, 3) better Gaming.  
  • Principles as stated in a slide by Mark: 
    • 1) Connect via People and Content, not devices.  There are only 5 different versions of the platforms in terms of UI: Android, Microsoft Windows 8 PC/Tablet, Microsoft Phone, iPhone, iPad
    • 2) Each screen magically tunes to me.  This is a REALLY BIG deal and we will talk about this most of the blog.
    • 3) Each screen as a "superpower" and the 2 screens cooperate together.
    • 4) There is a clear focus at any given time between the screen.
    • 5) Every second screen experience provides and end-to-end consumer experience. 
  • Development of the experiences is done by the content rights holder (game, video, music) in a web-based CMS using HTML 5 and Javascript.
Ok, I realize that most of you are now feeling like you wasted your time reading this far.

Let me try again.  We discussed the 2nd Screen Technology Hype Cycle in September at IBC.  In that blog and during that weekend, we said the most interesting future capability was an "OS-level ACR", meaning the capability for an iTunes or Netflix to deliver the ultimate video second screen experience because it always knew exactly where the video was at frame level detail.  

This is an implementation of that technology trigger, blowing right past the hype phase (except perhaps for this blog and Ballmer's event last May in LA) and straight into the delivery of real value.  Only instead of delivering this for a video platform, they have created a platform with an SDK for Music, Gaming and Video.

And, there is no "app launching", installing, etc, for anyone in the chain to worry about.  When you put content onto the Xbox, it checks for a relevant enhanced second screen experience.  If there is one, it launches it, and if not, it launches its basic second screen experience.  Create a new or modified experience, and every consumer after that point benefits from it.

While I am slightly torn that there will be no 3rd party content experiences (because I know the content holders will be VERY slow to enhance their content), it is ultimately the right approach (meaning you can't have a UGC YouTube-like second screen system on top of professional content).

Think I am overselling or hit my head?  Go try their music subscription (Xbox Music).  There is a  free trial for 30 days.  Turn on a featured playlist (try the Christmas playlist).  As your Xbox is showing the artist and a few shuffling and Ken Burns-affected photos, your SmartGlass app gives you control (like a remote), Stimulating related metadata to the artist/song and rudimentary Discovery (related music that is just a click a way).  This exists for EVERY SINGLE ARTIST, EVERY SONG in the platform.  In other words, there is a basic, system-provided second screen experience that every piece of content in the platform will enjoy.  Then content creators/owners (or their appointed service providers) and create enhanced experiences for their content.

The default video experience which I wrote about in my last blog is certainly at revision 0.9, but the implications that a basic second screen experience exists for every single title in the catalog with the basic implementation of Control (Simple), a Stimulating Enhanced experience, and an element of Discovery is monumental.

And just before you think I drank some Microsoft Kool-aid at the conference, there are a huge number of things to be improved:
  • Control (Simple).  Tuning required (esp on iPad version).  Better feature control of the Xbox (editing playlists for music, for example), dropping music into a upcoming queue, etc.
  • Enhanced or immersive experience (Stimulating).  The basic experience could be readily improved in breadth and depth just by implementing a scene-level metadata solution (see Digitalsmiths) for every title, and the metadata set for the scene level objects need to be extended (too cursory when compared to Fanhattan or IMDB).
  • Discovery.  Currently, this is very rudimentary (a collaborative filtering approach).  There are 3rd party discovery engines out there that could quickly improve the feature set, but they also need to import my existing effort in the social world (my Facebook likes) and leverage the concept of multiple sources for their partners Netflix and Hulu.  I realize it may be counter-intuitive for Microsoft to launched you to Netflix for a title where they make no money vs. their own version of the same title, but they are not trying to make $0.30 on a rental, they are trying to gain a subscriber who becomes loyal to their ecosystem.
  • Social.  Mark did spend a significant amount of time on the concept, but I left it out up top because it is a closed, Xbox only approach.  There is still nothing that allows me to leverage my other social networks in the "real" world.  This, similar to my comments on leveraging other sources of content, is counter-intuitive, but if you want me to switch to Xbox for the majority of my needs, you need to solve this.
  • Content.  The only major drawback in both the music and video content for Xbox--I cannot take it with me.  I like to purchase/own TV and Film and Music in my Apple ecosystem because I can watch it on a plane, use it while traveling, etc.  This is a must have for the Xbox ecosystem to take on Apple.

However, this is an ecosystem battle and currently it looks Microsoft it way out in front of this war:
  • Cable/Telco - MVPD / Pay TV Operators.  So far, DirecTV and Xfinity lead the way, but are a generation behind this "OS-level" concept of ACR for all content in the ecosystem.
  • Apple.  Obviously we will never know what they are working on until it is out, but so far, it looks like Microsoft has them flatfooted.
  • Android.  Has a long, long ways to go to create a living room ecosystem, though GoogleTV offers them that chance, but they need tighter integration with various players in the chain (the CE players).
  • Amazon.  Has announced "X-ray" for their Kindle Fire HD titles (gives some enhanced experience with related metadata), but this has yet to progress to titles delivered to other non-Amazon devices and into the living room.
  • Sony.  Seemingly asleep, though they own all the right tools for this (Gracenote, Playstation, portable devices, phones, etc).

Excited now?

Come discuss this and more on January 7th at the Wynn in Las Vegas.


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