CEOs view digital entertainment puzzle

SHANGHAI: Imagine a world that is always interconnected, a world filled with people linked to one another through devices so intuitive they figure out your needs before you even lay a finger on them.

What would a home in such a world look like?

"The natural trend is now going from indoor to outdoor and from bigger to smaller products," said Kei Kodera, chairman of Sony China, speaking during the 15th China Daily CEO Roundtable.

Held at Shanghai's Grand Hyatt hotel, a group of 35 top industry executives discussed the future of digital entertainment in China.

Their visions, some executives noted, are not part of some distant future but are happening now.

South Korea, the world's most connected country, has made this future into virtually a reality.

"All these things have become possible because they have the infrastructure," said Kodera. The country, which has made connectivity a priority, has 25,000 hot spots.

China is also steamrolling its way to widespread connectivity, and gamers are leading the way.

Last year, China already had 26 million people who played video games online. Cities across the country have large Internet cafes with convenient payment systems and fast connections.

The end result is simple. The technology to create what Phillips calls a "connected planet" is there.

Piet Coelewij, senior vice-president and general manager at Phillips Consumer Electronics Group, said the company's vision of the future is one in which technology links people from everywhere to everywhere and, perhaps more importantly, is not challenging or scary but easy to use.

"Many companies, like ours, have a vision of the future," said Coelewij.

The key, he said, will be ease of use. Information and entertainment will "be more intuitive," he said.

During recent research, Phillips placed state of the art hardware - some still in the test phase in the homes of test consumers.

"The overall results were extremely positive."

"This illustrates how consumers, if we make them the programme managers, can become more satisfied."

One stumbling block in the path to this connected future is complexity of use. Consumers want gear and gadgets that are easy to use and intuitive.

New hardware and software has to be compatible both with the new and the old. This "connected planet" has to evolve naturally rather than lead from technological revolution to technological revolution.

China, he said, may just be a natural leader in this technological evolution.

"What amazes me most about China is the recognition that everything has changed fundamentally in the last 20 years."

In Europe or North America, change is a temporary state that leads from one rest period to the next. In China, change is the norm.

More than that, whenever the country embraces something new, it does it in mass.

"People here don't mind jumping into new technology, new gadgets," said Kodera.

The Internet, which is relatively new in China, has been widely embraced, said Guo Yu, director of user experience and design at The company has seen the growth first hand, with more than 50 million users logging on to their online bulletin board services.

In 2005, China was expected to have 107 million Internet users and 26 million online gamers. By 2007, those numbers were expected to jump to 141 million people on the Internet and almost 42 million gamers.

Another example is mobile phones, which are now also digital cameras and game consoles, portable digital assistants, schedulers and even television consoles. They have GPS systems and other uses limited only by the imagination and ever-vanishing technological barriers.

In China, 83 per cent of mobile phone users send SMS with their phones, 61 per cent use them as note books and 35 per cent play games.

In many ways, China is embracing the digital age and not only in the big cities, explained Alastair Campbell, president of Thomson S.A.

"China's entry into the digital age is incredibly fast," he said, pointing out a small city he recently visited in South China as an example. The city, with a population of 250,000, has recently built a state-of-the-art multiplescreen digital theatre.

The next big step, said Coelewij, will be digital television and that is likely to happen during the 2008 Beijing Olympics.

"Digital entertainment is not about technology, it is about changing consumer behaviour."

More and more, entertainment is an integral part of everyday life and technology allows for entertainment tailored to the individual.

"You are unique. You are the centre of your world," said Yeh Ying, vice-president at Eastman Kodak and chair of the Greater China Region.

A few technological problems still have to be addressed. An obvious one, said Y.C. Chao, president of TSMC, is power. Power sources and batteries, are not significantly more efficient but the processing of power has improved drastically.

At the end of the day, however, there is a big difference between what's technologically possible and what's feasible.

"What technology can do and what human beings can do is quite different," said Kodera.

With the technology available to allow for unique experiences, it may just be content that drives future developments. And it is here that the hurdles begin to become more apparent.

Who will create, own and profit from the content is one big question for developers. Culture, the need to create local content on a global world, is another.

"We are very, very worried about IPR issues," said Stanley Cheung, executive vice-president and managing director at Walt Disney. "We are doing a lot worldwide and China is definitely one of the markets we are looking at... As a content provider we are sensitive to that."

In the years to come, content may be the driver for business.

As markets in Asia grow, so does the need for content that speaks directly to them. "There is not much difference in the products from country to country but content is quite different," said Kodera.

The big question, said Patrick Whitney, director of the Institute of Design at the Illinois Institute of Technology, is not so much finding similarities between different markets but rather identifying the differences and catering to them.

As the vision of the future becomes clearer and technology makes the idea of a connected planet not only easier but feasible and, in fact, inevitable, the task at hand will be putting the nuts and bolts in place.

"It is important for China to develop more network infrastructure," said Kodera.

"Many people will bring new ideas," he said, and more Asian content will soon become available.

"I am expecting a lot from this digital entertainment puzzle."

(October 12, 2005)

Copyright 2004 by All rights reserved.