The demise of HTPCs is not for a lack of effort
We've had a fascination with home theater PCs since the first time we saw video running on a PC -- remember Intel MMX? There's something empowering about seeing video run on a PC, and there's been a PC connected to our TV ever since. In fact, we use an HTPC now and have enjoyed its benefits for what feels like forever. But all that being said, we wouldn't offer to set one up for a friend, and we wouldn't give our mother one, ever. The problem is that while a computer geek can make an HTPC do just about anything, a typical user has a hard enough time using a PC to surf the web. There are just too many things that can go wrong, and with the exception of some very high-end models, commercial HTPCs are non-existent. HP stopped making 'em four years ago. Dell never even bothered. Nope, no matter how hard PC manufactures and Microsoft try, HTPCs simply will never go mainstream.
Microsoft has tried as hard as anyone to make this geek dream come true, with multiple versions of Media Center and money dumped into R&D trying to entice programming providers in the US and the rest of the world to bring their programming to Windows. We'd bet that if stock holders had any idea how much money was spent compared to the return, someone would surely get fired. Right about now, there are some people screaming at their computer, complaining that Microsoft never marketed Media Center. Seriously? A company as successful as Microsoft knows a thing or two more than most about marking a product. No, the problem is there's no mainstream market for an HTPC, so realistically-speaking, another few billion dumped into marketing wouldn't have changed a thing (c.f. Kin). Consumer electronics have to be like an appliance, they just need to work. Even some top brass at Microsoft use a TiVo as a DVR instead of a HTPC because they just work. This all makes it easy to understand why Microsoft has re-purposed its software and lined up new partners for an embedded version of Windows 7 Media Center.
Why an embedded Media Center just makes sense
The one thing that every single mainstream DVR and smartphone have in common is that they are all embedded. It's a match between hardware and software that is designed to do a few specific things and do them very well. Microsoft has been making embedded software for a long time, and odds are you've used it at an ATM or stood right in front of someone who used a Windows embedded machine to ring you up at a department store. What's new is that Microsoft ported its Media Center software to the latest embedded version of Windows and is giving hardware partners the chance to build a DVR without spending all the big bucks on developing software. This means that some entrepreneurial electronics manufacturer can grab off the shelf parts, add in a little of Redmond's software and deliver a dependable DVR to mainstream America -- in theory. And a number of companies have already stepped forward with plans. We've been seeing demos at trade shows, and at CES one company even announced it'd ship a product in the 1st quarter for $499. Still a little steep for the mainstream, but far less than the thousands that off the shelf HTPCs cost today. And besides, the first products to market typical cost more.
The bad news is that embedded also means restrictions, and while some are sure to hack their way to more functionality, it won't be as easy. For those not willing to meddle and risk their investment, there'll likely be sacrifices that will have to be accepted. It is impossible to know what exactly until the products hit the market, but the inability to install your favorite codec isn't out of the realm of possibilities, and installing software to automatically skip commercials is almost certainly a no go.
There is some more good news though. Embedded devices make more than just mainstream consumers happy, they also appeal to content owners. Netflix, VUDU, Blockbuster, cable video-on-demand have all been available to embedded devices for some time. Comcast, Time Warner Cable, Verzion and DirecTV weren't showing their programming on a HTPC at CES this year, but they were showing 'em on a variety of other embedded devices. Of course, the PC is completely capable of delivering all this content and more, but media giants aren't going to spend their time and money developing software for a niche whose only measurable result would be to open up a new attack vector to circumvent DRM. So embedded doesn't just mean stability and affordability, it can also mean content.
Extenders vs set-top-boxes
Now, this is where things get interesting. Microsoft tried a few times to proxy the PC into the living room via Extenders and suffice to say the attempts all failed pretty miserably -- same goes for embedded devices, by the way. Maybe the hardware wasn't ready, who knows, but what we do know is that two Media Center PCs don't play well together with DRM'd content and if more than one Media Center in the house has a tuner, things can messy real quick. There have been a few recent changes in the content world that could really impact success here though. The first is the recent change to the CableCARD specification that allows a tuner to be shared over a network. Basically, this means that you can install six CableCARD tuners into a Media Center in the house and watch live TV on any other Media Center (set-top box or PC) in the house that's connected to the same network. That opens up some options, but there are still the DRM problem. Currently, shows recorded from cable marked as Copy Once by the provider are locked to the device they're recorded on, which frankly sucks. But connecting a few dots paints a rosier future.
InfiniTV 6 CableCARD tuner
What does Microsoft, Comcast, Timer Warner Cable, CableLabs, and just about every major movie studio have in common? They are all a member of the Digital Entertainment Content Ecosystem and have vowed their support to UltraViolet. We know that joining a group and actually participating are two different things, but it isn't out of the question that UltraViolet's new DRM could be added to the CableLabs spec. This would mean that "each household will be able to create an account for up to six members who can access the household's UltraViolet Movies, TV... Consumers will also be able to register up to 12 devices." This new tech won't be ready until later this year, but it does offer hope that DRM might not always be this bad, some day.