Startup general interestTV

3D TV and vendor push

By September 6, 2010 4 Comments

It is common in the tech industry for a new technology to be hyped up by industry insiders who hope it will transform their business.  The mobile industry’s attempt to push “WAP” to the mainstream back in 2000 is perhaps the example that stands out most clearly in my mind, and I think the TV industry is now doing it with 3D TV.

I saw a demo of Sky’s 3D TV at the Rewind Music Festival earlier this summer and at the time I tweeted “Just seen 3 min demo of Sky 3D. My view – it’s quite cool, but not enough to go prime time” – and today Henry McCracken has a post up saying much the same thing.  He is at the IFA tech show in Berlin, which is apparently all about 3D, and according in Henry’s words:

All the 3D at the show had one thing in common: It’s lousy.

I’m not saying it’s all equally lousy: Some of it (especially at Panasonic’s booth) was at least somewhat better than I expected. Much of it was unusually blurry–some of the sets that required glasses looked only slightly better than Fraunhofer’s no-specs technology  demo. None of it rose to the level of being good, and I came away thinking that the level of hoopla was bizarre given the lackluster products being hyped.

You might wonder why it is that the TV industry is putting so much effort behind this new technology when the product isn’t great – and the answer is, of course, money, or rather the hope of money.  Hardware companies hope that 3D will drive a massive wave of television replacement, and content companies hope they will be able to add an extra line or two to our cable/satellite TV bills in the way they have done for HD.

I’m writing about this because it creates a dangerous environment for startups.  Judging market timing is key to being a successful entrepreneur and it is important to make a judgement call on whether vendor led technology pushes are going to be successful.  A lot of startups (and VCs, including yours truly) bet on WAP back in 1999/2000 and most of those bets went bad because the underlying technology wasn’t good enough for the mainstream.  3D could go the same way.

Making these judgement calls correctly can be tough, particularly for startups focused on enterprise customers.  Back in the days of WAP there was no shortage of people who really believed, and considerable amounts of money were available from network operators and other businesses to launch services.  Unsurprisingly lots of entrepreneurs went chasing those dollars.  However, when he services they created failed to get traction projects got canned and pipelines dried up, leaving many startups in a difficult place.

Many of those industry insiders believed in WAP because of its potential to transform their business, as the wired internet had done for many other companies over the previous five years.  Their excitement stopped them from thinking rationally about all aspects of the technology and consumer experience – something which happens surprisingly often.  Industries that are in desperate need of a story (arguably like the content industry today) are particularly prone to going down this path, and sometimes large numbers of companies club together to create an echo chamber which leads quickly to collective myopia – as happened with WAP and maybe happening with 3D TV now.

Successful startups (and their investors) need to have the presence of mind and self confidence not to get caught up in all the hoopla.

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