itvt

Mike Fidler, who had previously headed up Sony’s Home Products Division, was named CEO of Paul Allen-owned interactive media center company, Digeo, in August, 2005. On the first anniversary of his appointment, he spoke to [itvt]’s Tracy Swedlow about his experiences in the consumer electronics industry, about new features Digeo is adding to its flagship Moxi Media Center platform, about the next generation of the Moxi interface, about Digeo’s plans to become more "software-centric," and more.

 

[itvt]: Could you tell us a little about your background, Mike?

Fidler: I’ve been at this business for…I hate to say how long, but approaching 30 years. I joined Digeo in August, 2005. Prior to that, I was with Sony for nine years. The last role I had at Sony was running their Home Products Division. Prior to that, I initiated Sony’s Blu-ray disc initiative, and I also ran a design and engineering group within Sony that was responsible for set-top boxes targeted at the US market.

[itvt]: You were in charge of the set-top boxes that initially enabled Cablevision’s interactive TV services, correct?

Fidler: Yes, I was. I was there for the launch, and for the last year of development work before the launch. As you know, that was a pretty advanced set-top box for its time. Part of the reason for that was that we felt it was important to make sure that this set-top box–as a branded product in a non-branded environment such as cable–was a really advanced product. And it clearly was: even though we started deploying it in 2002, it’s still pretty advanced today. At the time, as you probably recall, it was the first DOCSIS system deployed. So it anticipated that cable would eventually convert to an all-DOCSIS strategy that would allow more enhanced, interactive content and capabilities.

[itvt]: Though Cablevision subsequently switched to Scientific-Atlanta boxes, correct?

Fidler: Yes. I was at Sony during that whole changeover. What happened was that Cablevision had originally planned to distribute and deploy this high-end set-top box across their entire network. As we got close to the deployment stage, Cablevision decided to pursue a multi-tiered product strategy. This resulted in additional negotiations and discussions, which eventually ended with the business relationship winding down. However, I think there are probably around 400,000 to 500,000 units of that set-top still in the field.

[itvt]: I understand that, while at Sony, you were closely involved in their DVR business…

Fidler: Yes. I led the launch of Sony’s TiVo device back in 1999, and I was very involved in the discussions with TiVo that preceded that. I was also involved in the development of the next iteration of that product. My involvement in that project was a big influence for me: having launched a lot of new technologies and understanding a little about what really motivates and stimulates consumers, I recognized that the DVR space was headed toward exceptional growth. Admittedly it started a lot slower than most would have expected, including myself. But now there’s clearly a lot of momentum there, and I expect DVR’s are going to be a fairly ubiquitous product in the mid-range and beyond.

 

Fidler: I was motivated by the value that I believed Digeo’s technology brought to the marketplace, and by the information I had available to me about where the market was headed. I also actually had the opportunity, along with my family, to use the Moxi product as a consumer for around 10 months before joining Digeo as CEO. Using the product convinced me that, if the opportunity presented itself, Digeo would be a great company to work for. The product really had far-and-away the best interface and the best level of applications I had seen. And it was clear to me that the company had a great sense of how to make a product that was truly consumer-friendly. So that convinced me, together with my belief about where the market was heading: two-way connectivity, interactivity, easier accessibility of digital content in all different forms, the growth of HD, and, the huge potential of DVR technology. It was also important that [Microsoft co-founder] Paul Allen was driving the vision and that his support would continue to provide a success path for Digeo.

[itvt]: Now, what stands out about the Moxi box for most people is its interface, which, as I recall, has won two Emmys. Do you have any observations about how people are using that interface?

[itvt]: What made you want to work at Digeo?

Click the link below to see Digeo’s Moxi in action   http://www.itvt.com/Digeo-Moxi-movie-2006.wmv

 

Fidler: Yes. Certainly the interface is the crown jewel of the product. It really drives adoption and usage of the services that it provides access to. Let me give you an example: you know that, since the Moxi box is an IP-connected device, we can track customers’ usage of it–on an anonymous basis, of course. So we’re connected to every single unit that’s out in the marketplace, and the data is all collected through a portal that we’ve developed as part of the infrastructure of the product. From that portal, we get a lot of aggregated information about consumer habits and usage.

As you may know, one version of the Moxi box has a built-in DVD player. And you might well ask, "Well, wait a minute. Don’t most of those customers already own a DVD player? Why would they need a DVD player in this device?" Yet we’re seeing that approximately 50% of these Moxi customers are using their box’s DVD player every month–which means that it has become the de facto player for the household. And I think that has to be the result of its superior interface.

We also have conducted research with MSO’s that shows that VOD take-rates with Moxi are two to three times greater than for customers with conventional DVR’s. Again, this is due to the impact of the Moxi interface: the ease of use and access it provides to customers. VOD is important to MSO’s as a competitive differentiator against satellite: by making it more accessible to customers, Moxi helps MSO’s strengthen their market positions.

We constantly get positive feedback from cable customers about the interface, and the product is proving very popular: we’re seeing very strong penetration of the product in the markets where it’s deployed–consistently higher than the penetration achieved by other DVR boxes in those markets. As an example, in two years of deployments, Adelphia has seen around one out of every four digital homes subscribe to Moxi in those markets where Moxi has been offered. This kind of accelerated demand is clearly being created to a large extent by how fantastic the interface is. When you have a product like this that’s in the cable space, and not available in retail, it doesn’t get a lot of visibility in terms of what its capabilities are. So its popularity is clearly due to word-of-mouth–to consumers showing it off to their friends in their homes.

We’re also seeing a consistent reduction in churn in markets where the Moxi box has been deployed, along with other metrics that would appear to show high levels of consumer satisfaction with the product. An 11-month study in 2005 by a Moxi MSO showed that the churn rate for Moxi owners was nearly 40% lower than the churn rate for other DVR’s that MSO offered in other markets. Again, this is a testament to the value of Moxi’s user interface and advanced features. I think the reason why the interface is so successful is that it provides a unified, simple, consistent way for consumers to access all their content: whether you’re talking broadcast, VOD, photos, digital music, the information we deliver through our ticker service, or whatever.

[itvt]: At the recent CTAM Summit in Boston, Digeo demo’d some new Moxi features. Could you talk a little about those?

Fidler: Yes. What we showed at CTAM were some new applications that we’re rolling out to the market. Most of these are coming in the fall. One that’s really neat is a PC-link feature. It enables you to stream from your network either JPEG photo files or MP3 music files right through the Moxi device, which would typically be in your living room. What’s nice about it is that it aggregates all of that in a very simple filter, or card that reflects the entertainment options that consumers have available to them. These filters or cards also include options such as HDTV, Movies, Kids, Games, Sports, etc.–all easily accessed and managed based on consumer interest.

So, to use music as an example: all of your music–whether it’s music that was burned from a CD onto the box’s hard drive or that’s being streamed via the PC-link feature–is available in one vertical file. The only difference is a little indicator on the file box that lets you know whether each piece of music is stored on your hard drive or is being streamed over a network. So what this new feature does is it provides consumers with a central repository for their music and photo files, and makes accessing those files simple.

 

One of the things that we want to make sure we do–and I think it’s a hallmark of both the product as it exists today and as it will evolve in the future–is to make sure that it’s simple to use, that people get maximum enjoyment out of the experience, and that they aren’t frustrated by trying to figure out how to set it up and use it. We want to avoid all the complexities that are typical of PC-based media center products. So everything works off the primary screen and those two bands, one horizontal and the other vertical. Using the interface is basically a matter of left, right, up, or down and then "enter"–five keys give you access to everything. The entire design of the product is very intuitive: typically, consumers will pick up the remote and away they go. We also have a tutorial built in that guides people through operation, and provides some tricks to get more enjoyment from Moxi for those so inclined.

One of the things that we defined from a consumer-use standpoint is integrating all your media together in a way that makes it simple to navigate and find. With VOD, for example, we have developed a way to blend VOD content with conventional broadcast content. This is because consumers aren’t looking for VOD per se; they’re looking for movies, TV programs or some other specific kind of content: so, if you’re a consumer who’s looking for movies, Moxi will present you with all the movies that are available on your regular cable channels, all the pay-per-view movies, and all the VOD movies–all integrated and aggregated into a single, easy-to-access-and-use list.

[itvt]: Do you have any plans to offer communications features on the Moxi box?

 

Fidler: Yes. We currently have an instant messaging client that we’re working on. We think IM will be an important feature because it satisfies people’s desire for interactivity: the desire to talk about a program while you’re watching it. And also because it’s a useful feature to be able to see what messages you have coming in while you’re watching a TV show. So, IM is something that I suspect will be embraced by end-users and something that we will keep developing as we move forward. We demonstrated it at NCTA, and it currently works with AOL, Yahoo!, and MSN.

[itvt]: When are you planning to launch this IM capability?

Fidler: We’ve announced no specific plans as to when this IM capability will be available. But clearly, this is relevant to our user experience, and combined with the tremendous surge in user-generated content that we’re seeing, instant messaging is an area where we are actively working.

[itvt]: What about email? Presumably that would be a useful feature, allowing people to send their photos to one another, for example.

Fidler: Yes, I think that that’s certainly something we may one day support. Fundamentally, it’s already supported. The enabling elements are all there: we’ve got the IP connection and it’s high-speed; and the box has a JPEG viewer on it. If we added an email client–and we could also do this with IM–then we could allow end-users to attach photos and other images–and, down the road, moving images. So, from a technology standpoint, all that is absolutely feasible. But part of the challenge we have is that, obviously, anything that gets sent and distributed through the box comes through with the permission of the operator. So we have to be concerned about bandwidth issues and security issues and making sure, from the operator’s perspective, that the content on their service is properly managed. I also have had past experience with WebTV, and honestly, email on TV was not the primary driver for consumers.

[itvt]: At the CTAM event, you also demonstrated real-time Web-scheduling capability, correct?

Fidler: Yes. I think it’s pretty obvious why we’d want to integrate a real-time Web scheduler. Web-scheduling technology is already out there–TiVo, for example, integrates it into their products. But TiVo’s Web-scheduler doesn’t have the ability to respond in real time; this can result in issues such as recording conflicts. I believe it pushes data out to the box maybe once or twice a day.

With our Web-scheduler, if you’re away from home and you schedule a recording of a show that you forgot to schedule earlier, it will automatically confirm back to you that "Yes, you’ve scheduled this recording," or will tell you, "You know what? You’ve already set me up to record this other program." Then it gives you a choice of keeping the existing scheduled recording or deleting it and adding the new one. And all that is done on a real-time basis. As far as I know, that’s something that’s not available in the market today. You can imagine how frustrating it might be for you after setting up a recording remotely, and then going home and finding out that the recording did not occur because of a conflict. We have addressed this issue to ensure that this conflict management can be done on a real-time basis.

[itvt]: And all your units in the field have a high-speed IP connection that allows them to use this feature, correct?

Fidler: Yes. We have more than 370,000 units in the field and they all have a high-speed IP connection.

[itvt]: Are you also planning to enable remote scheduling via mobile phones?

Fidler: That’s also something that we’ve demo’d in the past. One of the motivators for me to join Digeo was the opportunity to work with Paul Allen. Paul has always been very intimately involved with our development efforts. He actually has a development group at Vulcan that uses our system developer kit to develop new applications for the Moxi box, and one of those new applications they’re working on is a mobile phone app. It’s still in development–it’s currently in beta. But it’s definitely something we think will be very valuable, and something that you’ll see us rolling out in the not-too-distant future.

[itvt]: Can you discuss any of the other projects that Paul Allen’s group at Vulcan is working on?

Fidler: There are other areas where activity is underway, including how to manage what we expect will be continued proliferation of content.

[itvt]: Another thing you demo’d at the recent CTAM event was the ability to connect an external hard drive to the Moxi box, correct?

 

Fidler: Yes. That capability will be part of our next software release, which is scheduled for this fall. What’s nice about this feature is that it’s consistent with our overall approach of integrating multiple types of media into a single interface: so when a consumer wants to access media stored on the external drive, they don’t have to worry about "Drive C," "Drive D" or whatever. It’s all on a single, consistent list. So this new feature makes it very simple to add capacity–including the capacity to record more programs–without negatively impacting the interface or making it more complicated for the consumer.

[itvt]: Again at the CTAM summit, Digeo demo’d a prototype of the next-generation Moxi interface. Could you talk a little about that?

Fidler: This year, we’ve shown a number of prototype developments related to our interface that provide more flexibility for consumers, as well as a higher level of visual graphics for selecting content. On the flexibility side, we have shown a method that might allow consumers to change their basic design interface–a capability somewhat similar to what folks do with changing their desktops. We’ve designed a number of different skins, including one for kids, and a wireframe design that would allow different users in the household to select their preferred skin. This is still development work, but since our design applications use XML, it’s relatively easy to enable this kind of design feature. It could also be extended to the operator in selecting, for example, background colors for the interface.

[itvt]: You mentioned earlier that you have 370,000-plus Moxi boxes in the field. How many of those are Motorola boxes and how many are Scientific-Atlanta boxes?

Fidler: The bulk are Motorola, because the bulk of our distribution is with Charter and Time Warner Cable. [Note: Time Warner Cable inherited a significant deployment of Moxi boxes when it took over Adelphia's cable systems in Los Angeles earlier this year.

[itvt]: How does Digeo convince its cable operator customers to aggressively market Moxi boxes to their subscribers, rather than inexpensive, generic low-end set-tops?

Fidler: Well, a major part of that is the somewhat unglamorous task of simply ensuring that our boxes work completely perfectly with the rest of their infrastructure. So, over the past year or so, we’ve put a lot of emphasis on and effort into making sure that the product is integrated into multiple different headends and VOD servers, and that it isn’t tripped up by whatever changes to their infrastructure our cable customers might decide to make. And, as a result, I think we’ve consistently lived up to their expectations. But I still think that getting operators to adopt a high-end box like ours is a challenge. The operators are trying to drive capital costs down, and, obviously our box is a premium product. It also has a different–and we believe, superior–interface, and so we’re up against the fact that a lot of operators want a single look-and-feel across their entire customer base. So we do admittedly face some challenges in securing wide deployment of our boxes.

 

So how can we address those challenges? One way is by continuing to provide a vastly superior interface and an array of compelling applications that will really appeal to end-users. And so we are constantly working to improve the product. But even more importantly, what we have to do is to think about how we can deliver the Moxi interface and its compelling user experience across multiple different devices and platforms–not just in our specific iterations of it. So at NCTA we provided demo’s of a Java version of the basic Moxi interface that can operate in an OCAP environment. We showed it running on a Samsung TV set, on a low-end ADB set-top box that’s deployed predominantly in Europe, on a Thomson box, a Pace box, and so on.

So, as the market starts to evolve and open up, we believe we have an opportunity to bring the experience we currently provide as a premium offering down to a larger part of that market. What we’re doing is becoming more software-centric. We still have to make sure that we continue to meet the need for a high-end product: one that supports the advanced features we’ve talked about, such as IM and remote scheduling–and, eventually, advanced advertising too–which might require a stronger overall product design than the low-end boxes operators are using today. So if we need to build the entire platform ourselves, we will. But we are definitely now focused on how we can bring the software that enables Moxi’s unique user experience to a broader segment of the market.

So we will continue to develop more Java-based solutions that we believe will enable the software to run on other devices such as integrated digital TV sets. It is important for us to ensure we can expand the visibility and accessibility of both our interface and applications to a wide variety of devices and to establish a stronger base of partners to bring our value proposition to market.

OCAP will be an important step in that evolution as it begins to open up markets and to provide a viable path to retail positioning so that consumers can make intelligent choices about what products best serve their needs. We are continuing our OCAP development efforts on both Moxi’s basic guide and its advanced DVR capabilities, and plan further efforts in the future to deliver some of our advanced applications in this space.

[itvt]: Do your plans to expand to a broader segment of the market include moving beyond the cable space?

Fidler: Yes. Even though until now we’ve deployed exclusively with cable operators, efforts to target the IPTV space and the retail market are definitely on track.

But right now, our primary focus is: "How do we make this software stack that we have more transportable?" So, a little lighter, but still capable of delivering the same level of user experience and the same level of interactivity. That’s a path we’re following and focusing on the Linux side of the equation.

The other side of the equation is the Java development that obviously will be part and parcel to the OCAP activity. It will also lend itself–we think–to the development and evolution of digital TV. We can envision the adoption of IP-addressable DTV units that would allow for delivery of content, whether based on broadcast or IP.

[itvt]: So IPTV will be a significant focus for Digeo going forward?

Fidler: Yes. We’re currently conducting an IPTV trial with Comporium, a small telco in South Carolina. We’re now starting to stage it, so that we can determine the feasibility of an actual commercial deployment. Our primary focus is ensuring that we can port Moxi over to other devices, so that we can start to bring its user experience to a broader customer base. Ultimately, we’re platform-agnostic. Whether a DTV service is RF-delivered or IP-delivered, what we’re interested in is providing the interface and an array of advanced applications. As far as we’re concerned, it could even be for a DTV service delivered in a Windows-based PC environment.

So our primary interest is in providing a simple way for end-users to find and navigate all the content at their disposal, regardless of where that content is located or how it’s delivered. While we’re on the subject of IP delivery, though, one thing that might be interesting for us to do would be to develop a hybrid box that would support one-way cable service, and that would then also allow access to content from the Internet via its IP connection–as you know, our boxes already incorporate an IP connection: so, the box would provide access to such services as CinemaNow, Movielink, Vongo, or any of the other IP-based streaming or download services. The mechanisms for doing this kind of thing are already mostly in place: we’d just have to make sure we had relationships in place with all the content providers and that we provided the appropriate levels of rights management.

[itvt]: Do you have any plans to target international markets?

Fidler: Not at this time. At last year’s IBC show in Amsterdam, we exposed the Moxi interface and applications to a number of operators in Europe and Asia, and there seemed to be a high level of interest in finding out how Moxi might migrate into international markets. But right now, both in terms of resource management and business strategy, we’re focused on the US market.

[itvt]: You mentioned earlier that you are interested in having the Moxi platform support advanced advertising. Could you talk a little more about that?

Fidler: We showcased telescoping and long-format "speed bumps" at the NCTA earlier this year. We are also looking at how to personalize the information in ads, based on user needs. That is something that we believe will become important moving forward.

[itvt]: My understanding is that Comcast has been testing the Moxi platform. Can you provide an update on that–might we be seeing deployments of Moxi with Comcast in the near future?

Fidler: We have deployed Moxi with Comcast in the Colorado Springs market. This was a market that Comcast took over from Adelphia, and it has been one of our strongest markets in the country. Since this is already a commercial deployment, not a test, we are hopeful that Comcast will have the opportunity to closely review the impact that Moxi has had in this market and opportunities that might exist beyond Colorado Springs.

URL: Digeo

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