Keeping up with consumer’s insatiable demand for content is the key challenge facing the mobile entertainment industry, said panelists on ETC’s final Thursday afternoon presentation.

“There isn’t a technology that can handle the growth we’re seeing today,” said Glenn Lurie, president of emerging devices and resale at AT&T.  ”We spent $17.5 billion on our network this year, and just keeping up with it we’re going to run out of bandwidth.  We need help from the FCC, and we’re pressing on that.  This is a worldwide issue.”

AT&T’s network experienced 6700% growth in data usage in the last 13 quarters, Lurie said.  “There’s no way we’re going to keep up with the demand.  The only way is to look for other alternative solutions instead of all wireless.”

Mobile digital TV is one solution to the bandwidth shortage.

“The network that can bring something like the SuperBowl to every mobile device is the the broadcast network,” said Anne Schelle, president of the Open Mobile Video Coalition.  “What’s missing today is access to live content on mobile devices, and that’s what local broadcasters do.”

She said live local programming is also what people, including millenials, want.  According to OMVC research, people value both live and on-demand content equally, but separately, with news leading as the preferred live content.

Ken Plotkin, CEO of Hauppauge Digital, agreed that mobile digital TV delivers valuable content without jamming the wireless networks.  “The key thing is to preserve bandwidth with broadcast TV,” he said.  “The trend in the future is location-aware TV services broadcast, and broadcast TV preserves bandwidth for people want to have on-demand video on their wireless.”

Of course, business models to pay for mobile entertainment are still developing.

Lurie said subscription models for voice have been evolving for years, from individual to family plans, but the models have not been fully figured out for data plans.  “Three years ago, data was a business tool, but now it’s an everybody tool.  We’re going to continue to innovate around data price offerings.”

He added part of the challenge in the U.S. is the availability of unlimited plans.  “Very few foreign countries have unlimited plans,” he said.  “They all have tiered plans, where you pay this much and you can use this much. The second you have unlimited plans, you have a whole new set of problems.”

“We all want more content and we want it now,” said Dan Dodge, CEO of QNX Software Systems.  “There are two challenges with this: the business model and the back-end infrastructure.  We have to figure out the back-end billing solution and make it easy for the consumer.”

Interactive digital signage that connects users to an expert via video-conferencing or acts as a purchase portal may be in the future, too.

“There’s a really broad interest level in this kind of digital signage right now, but no one has the answer,” said Roger Sanford, VP of media services at Mediatile.  “This could change everything.”

Mitch Singer, president of Digital Entertainment Content Ecosystem and CTO at Sony Pictures Entertainment, said digital distribution will be most successful if it rolls out in a standardized process like the DVD.

“Imagine if you can standardize file format, multiple resolutions, and aggregate it in a single place regardless of how I bought it, and there’s an authentication service that knows who I am and what I’m entitled to, and then it magically appears in my Netflix queue,” he said.  “The moment we standardize that process, we’ve dramatically reduced costs on back-end infrastructure.”

Moderator Steve West of Alcatel Lucent asked the panel about connected cars, since in the US alone people spend an average of 500 million hours a week in cars.

“A car is the ultimate captive environment, but a challenge is that automakers have a cycle of innovation at odds with the current consumer,” said Dodge.  “People spend $50,000 on a car they’re going to own for 10 years and it has out-of-date technology… We’re looking for long-term solutions.  With your car, your media has to live in the cloud and you have to be able to buy it once and access it anywhere.”

Despite concerns about the dangers of distracted driving, Dodge sees some potential positive safety developments with connected cars.

“If your car slips a little on a wet road, that information should go into the car and out to the cloud and back down to the cars behind you, letting them know the road is a little slippery ahead,” he said.  “We talk about the connected car being a source of distraction, but maybe it’s a source of driver safety.  The network ties it all together.”

Looking forward, the panel predicted that tablets would take off, as the natural extension of the small smartphone screen.  However, “if you think the amount of info consumed now is a lot, wait until tablets go big,” said Plotkin.

2010 will be an exciting year for 3D as display sales push content generation and content generation increases display sales, said the panel of industry experts at Thursday’s ETC discussion on emerging 3D devices. But challenges remain to educate consumers, maintain high quality, and create industry standards.

The three panelists agreed that the recent string of theatrical 3D successes, timed with the release of 3D displays at CES and retail, has finally pushed 3D to a place of critical mass.  Now the challenges really begin, said Josh Greer, president of RealD.

“It’s gotta be really good, it’s gotta be really, really easy to use, and there has got to be a lot of content,” he said.  “We no longer have to sell 3D to the big producers, they all get it.  But when you start talking to TV content producers and gaming guys, they always say, well, where’s the TVs?  The more good content offerings we can get for 3D, the more TVs we’ll sell.”

“This is the year we have the products you can go out and buy.  3D is happening,” said Eisuke Tsuyuzaki, CTO of Panasonic.  “Our philosophy is, 3D is not a feature, it’s a platform, and eventually everything is going to go into 3D.  And our company is crazy enough to try to make everything ourselves!”

LG has the same commitment to offering quality displays for consumers, said Nandhu Nandhakumar, SVP of advanced technology.  “Last year we announced we would launch it, and we did,” he said.  “This year we have a variety of 3D displays available, and our priority is making sure it is available at the right price and right format for our customers.”

There remains a challenge to keep displays, eyewear, set-top boxes and other 3D peripherals at a high quality.

“We’ve seen a lot of mediocre product, and that doesn’t help the consumer experience,” said Greer.  “People have a bad experience and they walk away, and it’s hard to drag them back.”

CEA has a standards group working on standardizing infrared signals to glasses, and hopefully other work will develop to ensure a great consumer experience. Another key challenge is forming standards for compatibility that ease 3D use for consumers without undermining companies’ competitive efforts.

“The hard work’s just begun,” Greer said.  “We’ve got to make sure that Panasonic’s flavor is compatible enough with LG’s flavor, but they’ve still got to have enough of a competitive edge… These are fantastic companies, and they’re all competitive with unique ways to doing things for legal and cultural reasons.  Can we just get together and agree to make one product that consumers can know will work on all kinds of TVs?”

The ultimate goal, the panel agreed, is to make a simple, excellent 3D experience for consumers.

After the panel addressed the status and direction of 3D, a discussion ensued regarding the technologies behind it.

An audience member asked whether the glasses were here to stay, and Josh Greer of RealD said they were, because of the challenges surrounding autostereoscopic technology.

“With autostereoscopic, the bigger problem is content production. It takes anywhere from 3 to 1200 cameras per shot to shoot in autostereoscopic.  It fundamentally requires a paradigm shift in video capture.  Not that it won’t go that way, but it’s taken a long time just to get the industry to go to two cameras.  You’ll begin seeing autostereoscopic in advertising, signage, in pachinko parlors in Japan,” he said.  “But in your living room, I think it’s still 10 years out.”

An audience member asked about all the new TVs and set-top boxes that include a 2D-to-3D conversion chip.

“I’m not a big fan of real-time conversion yet,” said Greer.  “It’s starting to look realer, but it is still by far not a useable experience.  We all go to conferences, watch for 5 minutes, and think it’s cool.  But try watching a football game for two hours in conversion.  I prefer production of pure 3D content and moving in that direction.”

Eisuke Tsuyuzaki of Panasonic agreed.  “Do we convert black and white into color?  Do we convert VHS into HD?  Probably not.  My feeling is you should shoot it, store it, and keep it in pristine 3D condition throughout,” he said.  “I’ve heard they’re considering converting Titanic to 3D.  That’s a lot of money, but he can probably afford it now.  But will that happen all the way down through all content?  Probably not.  That’s my point of view.”

“We feel the same way,” said Nandhu Nandhakumar of LG.  “Once you watch real 3D content, it’s easy to see where the other stuff breaks down on occasion. We have decided to stick with producing content that is real 3D.”

In response to an audience question about backwards-compatible 3D-to-2D conversion, Greer emphasized that the two formats are really two different art forms.

“In the past we’ve taken stereoscopic and dropped one eye and called it monoscopic,” he said.  “It’s okay, but we find most content creators are making different choices for 3D.  It changes the pace, it changes the composition of shooting.  A lot of creators would rather keep it in the same format they shot in.  So, yes, you can convert it backwards, but a lot of people find it’s not the same content.”

One major topic of discussion that arose in the panel is the need to effectively educate the public about 3D technology.  Consumers are confused about compatibility between displays, eyewear, content formats, set-top boxes, and other devices.  There needs to be a way to train and inform retailers and their employees, so correct information trickles down to the consumer.

Moderator Rick Doherty of The Envisioneering Group held up a Fuji 3D personal camera being sold in Asia, and asked the panelists where they thought user-generated 3D content fits into the equation in the next five years.

“I think [user-generated 3D content] is way earlier than five years away. The key thing has got to be how many TVs we have in living rooms.  That’s the catalyst,” said Tsuyuzaki.  “Once we have a lot of TVs, then it makes sense to introduce 3D cameras.  At Panasonic we observe 3D as transformational.  It changes the landscape and transforms the consumer electronics business.”

“Looking at the [user-generated 3D] products, it’s not yet what it needs to be, but it’s very interesting,” said Nandhakumar.  “It could come fast.  The 3D wave has snowballed, and it caught people by surprise the speed at which it has grown.  I think we can expect many more things to continue.”

Rick Doherty closed the session with optimism about the impact 3D will have on American society.

“3D is a tremendously powerful technology.  I see possibilities in healthcare, government, defense, and other areas,” he said.  “And I think we’ll see people making new friends, inviting people over to watch shows on the first 3D TV on the block.  I think it’s going to be that big.”

Datacolor and Portrait Displays are showing a prototype of SpyderHDMI that automates the calibration of HDMI-based sets with a combination of a sophisticated color meter and firmware in the set.  The two partners have a history of color management and hope to demonstrate to the CE industry the advantage of a widespread in-set alignment connection.

Calibration through the HDMI connection eliminates the need for a computer or third party solution that requires OSD adjustments.  The software is embedded directly into the TV for calibration.  This is one to watch to see if great color gains traction with the manufacturers.  If adopted this could have a significant impact on production monitors.

You can check out SpyderHDMI in booth 20309 of the HDMI Tech Zone in South Hall.

Nagravision is demoing Nagra Media Guide, a 3D implementation of an Electronic Program Guide that could be used for TV or the Internet.

The technology—for which 3ality Digital is a strategic partner—was used for two recent demos: Sky 3D, scheduled to launch in Korea in 2010; and Virgin Media, at its London store on Oxford Street.

“A lot of set-top box makers are looking at how to roadmap 3D,” explained Nagravision’s Frank Dreyer.  “We deliver the user experience, middleware and technology integration.  Our goal is to take the 3D user experience and technology required for distribution to actively productize the technology so that an operator would use it.”  Dreyer reported that the company is in active discussions with potential partners.

Nagravision is also hoping to test the ability to do online, Web-delivered, secure 3D TV in 2010.

Technicolor is serious about 3D.

At CES, the company is demonstrating several innovations to support the consumer electronic industry’s migration to 3D, including new technologies for Blu-ray 3D, broadcast 3D, 3D subtitling, and auto-stereoscopic 3D delivery to mobile handsets.  Demos are taking place in a private room at the Technicolor booth.

Highlights include:

– A preview of DWA’s upcoming 3D Blu-ray release of “Monsters vs. Aliens,” authored by Technicolor.

– A 3D subtitling creation tool that automatically analyzes depth and recommends the best placement of subtitles to minimize disruption to the creative intent of the content.

– A preview of autostereoscopic content delivery on a Hitachi Wooo mobile phone.  The content was encoded by Technicolor and customized to the screen size.

ETC’s executive director David Wertheimer and CEA’s chief economist Shawn DuBravac gave an encouraging snapshot of consumer feelings about 3D TV at our opening presentation on Thursday.

“The big question is, do consumers think 3D is real?” Wertheimer said.  “And the answer is, yes they do, and they’re willing to pay for it.”

Dubravac quoted results from a recent nationwide consumer survey, including the estimate that 25% of consumers plan to buy a 3D TV in the next three years.  That’s 28 million TVs in three years, with CEA forecasting 4.3 million sets sold in 2010.

Other highlights include:

– 3D is not just a one-time experience: People are coming back to 3D entertainment multiple times.

– “Seeing is believing:” Consumers who have seen 3D have a better impression of the technology, and objections like “the glasses are annoying” or “3D is gimmicky” decreased significantly after a 3D experience.  85% of viewers said they were satisfied with their 3D experience.

– “Unlike with HD, we don’t need to convince consumers that 3D is different; they know it’s different.  What we have to do is convince them it’s different than 3D in the 1950s and 1970s, and that it’s a viable home entertainment technology,” Dubravac said.

– Accelerating 3D Adoption: “Having 3D content readily available is the key driver of adoption.  This is the exclamation point to the announcements of content deals we’ve heard in the last 48 hours,” Dubravac said.  Other factors for consumers include availability of content through different delivery methods, ability to rent content, and video game availability.

– Similarities & Difference to HD adoption experience: The uptake cycle for 3D adoption looks like HD, led by early adopters attracted by sports and action-adventure.  At a similar point in the adoption of HD, 33% of consumers said they would “never” own an HD TV, while only 19% of consumers say they would “never” own a 3D TV.  Unlike HD, animation is another driving factor in 3D TV sales.

– 3D sets will skew to larger models like 46”, especially in the early years.  They’ll also be feature-rich with Internet, Wi-Fi, multiple HDMI ports, and other features.

– Price Sensitivity Meter for TV: While consumers said they were willing to pay $400-$600 for a regular TV, they volunteered they’d be willing to pay $500-$700 for 3D.  It’s great that they perceive a higher quality and are willing to pay for it, but unfortunately those estimates are still only about 1/3 the cost of most 3D units on display here at CES.

Netgear is touting a new adapter that allows the wireless display of content from the PC – including photos, home videos and Internet content – on 1080i HDTVs.  Push2TV attaches to the set via an HDMI cable, allowing untethered control from any laptop powered by the new Intel Core 2010 processor family of i3, i5 and i7 chips.

Select Dell, Toshiba and Sony laptops will come bundled with the Netgear P2TV this year.  It will also be available for individual purchase at $99.

“The chips are so powerful, what they’re doing is compressing the signal in real-time and sending it via Wi-Fi to the TV,” Netgear’s Somshubhro Pal Choudhury said.  What sets the Push2TV apart from other IPTV adapters is that it actually creates a Windows/Intel browser environment for the television, he explained and “it extends the computer screen to your TV.”  While the Push2TV does not display Internet content in true HD, Choudry noted, “You’d be surprised.  It looks really good.”

Netgear is exhibiting here at the Las Vegas Marriott, room #305.