QUOTE (SanFranSoxFan04 @ Jun 9 2009, 06:39 PM)
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The hardware is the easiest part, it's the software, the R&D the constant testing for compatibility amongst updates, hot fixes, patches, drivers, service packs that is the real headache. Anyone who has gone through the HTPC route can attest to that. For geeky DIY folks, myself included, they don't mind the time and hassle. For others, they just want it to work all the time, enjoy their content, not have to worry about a thing and god forbid a problem does crop up, someone is behind it to fix it quickly or replace it.
Hence the high price for Niveus and Kaleidescape. Then again Niveus does have a compact (6"x6"x2") silent running Media Center with Blu-ray that will output 1080p with 7.1 lossless audio for $1,499. Not the cheapest thing out there but for a system that can archive all your DVD and Blu-ray discs for instant playback throughout the home, not a bad deal.
A few years ago when I was seriously looking at reopening an HT store, I focused in on Niveus as a flagship product line. I saw and still see the concept of a turnkey integrated Media Server with an intuitive interface as a market juggernaut. As a necessarily value add operation, I was attracted by the services revenue potential Niveus could drive for everything from installs to a BR/DVD copy service. So I went to EHX (Electronic Home Expo - kind of a mini CES) here in Orlando where Niveus had a lot of reps and a dedicated demo room and extended demo planned.
At the time the MC interface was early Vista and while it was ok, its intuitiveness left something to be desired. When I asked the rep whether the MC was anything more than what was available OTS, he evaded the question. However, the thing I was really taken aback by was the configuration step options, frankly to the point of being offended by the Niveus rep's presumption of consumer ignorance if not outright stupidity. When he said the cost to increase storage capacity from 500Gb to 1Tb was an $1,100 option (with no other feature enhancement - just capacity) I asked what his suggested answer to the sure to come consumer objection to that number, given widespread access to knowledge it was worth maybe $100. The rep was dumbfounded. Later in the demo, I asked about backup and redundancy. The rep was happy to explain the available options from $1,000 disk mirrors to more than $2,000 external device options. When I reiterated my concern the there would be consumer knowledge of such options being worth maybe $500 at the high end the rep asked me, "Why are you being so negative?" He eventually conceded that Niveus' market was limited to consumers with lack of knowledge.
Anyone with even minimal knowledge knows and realizes that it is the software, R&D, compatibility maintenance, etc. that is the value of a particular brand of Media Server. However, anyone with even minimal knowledge also knows it's fundamentally a less than $500 piece of hardware driving it all. I found Niveus' market strategy presumption of consumer ignorance to be off-putting. As again demonstrated by your reference to the six inch box that plays BR and provides lossless audio for $1,499, Niveus doesn't get it yet, IMO. These price points coupled with broad and growing consumer awareness of the value of underlying technology and the general cocky ignorance displayed by the rep, (who was supposedly some big wheel and not just a lowly field guy), told me Niveus had decided for the time being to serve only the throwaway market. By throwaway I don't mean just the hardware but the target customer too. Given the price point/feature offerings, and the innate presumption of indefinite consumer dependency, it was my view Niveus would appeal only to the guy who had money to throw away. In 2006 I correctly estimated the size of that market would shrink considerably not to mention it was already crowded with other purveyors. Fortunately, I was right and declined to enter the business.
When Niveus (or anybody) can give us a turnkey box with an AC cord, gig ethernet port and an HDMI output along with a feature set as simple as a BR, DVR, OTA tuner and a couple of Tb mirrored with open expandability (e.g. eSATA, USB, non-proprietary storage add-on support) for around $599 or so, the sky is the limit. At $1,499 entry level the ceiling and the market size potential is very, very low.
IMO, Niveus should consider some kind of low entry cost, rental/subscription business model, possibly developing an interface which aggregates the viable online content services a la carte. Give away the boxes and maximize the long term subscription revenue at a price point significantly more attractive than that offered by cable/SAT etc. There is a black hole in the market for such a device offering. As demonstrated by the comments in this thread, it appears a lot of people would jump on it. I would.
