Just the other day, I took a redeye back from Israel and bumped into a couple of Israeli VCs and entrepreneurs making their annual journey to CES. I have to admit that I am a bit jealous but since I have a number of trips scheduled in the upcoming weeks, I decided to pass on the conference. That being said, I have been lamenting with fellow VC blogger Jeff Nolan on how hard it is to get our entertainment gear to work. I have been waiting to get my home theater system with HDTV for a few years and made the leap this past holiday season. I have to admit that I am pretty proficient with computers and technology but even I got stumped with the process of installing and making it all work correctly and SIMPLY. It is no wonder why so many high-tech vendors are focused on opportunities in the digital home because the dollars are huge (I spent way more money on my entertainment systems in one purchase than I did through accumulation of lots of computer gear over the years) and the complexity is high to make it work right.
While in Israel, I also had the opportunity to discuss home networking and automation with a few bright individuals. In order to get a fully automated home (like a Crestron) where you can control your audio visual, home network, computers, lighting, heating, air conditioning, etc., from any other room or even remotely, one can expect to shell out ridiculous amounts of money to make it happen. These vendors typically sell proprietary and closed-end systems that require custom coding to make them work right. Besides the cost and complexity, the other thing that bothers me about the digital home is that there are too many competing standards and not everyone’s product works together. For example, Sony pretty much only works with Sony and so on and so forth. DirecTV provides Tivos that do not network with other boxes while existing Tivo boxes can be networked. This drives me nuts. As the value is clearly in the software that drives many of these boxes, electronics, and HVAC equipment, the battleground and control will be driven by who can help the consumer cheaply and simply integrate and manage all of their systems. If there is an industry begging to be open sourced, standardized and commoditized, this is it. While it is in all the vendors’ interest to bring the economics down to reach a wider market, I just don’t expect to see enough cooperation from them to drop their proprietary standards to make this happen soon enough.