You may have never heard of CEDIA (Custom Electronic Design and Installation Association) but its annual tradeshow is a hotbed of hot and upcoming technologies that will affect anyone interested in consumer electronics and the "digital lifestyle". The show offers everything from televisions, stereo components, and the latest PC/consumer electronics crossover products to the wiring technologies and home automation products that installers and integrators use to supply the rich and famous with the latest in home theater. I attended this year's show in bland Indianapolis, Indiana with Keith Furman. We noted back in our CES 2001 review how out of the loop we felt, after years of attending computer-oriented shows. Now, almost three years later, CES feels like a homecoming. But CEDIA was nothing of the sort: It's a different audience, a different class of showgoer, and a different set of press. In some ways it was exciting, but in others it was scary.

Since it's aimed mostly at small companies that integrate stereo, computer, and related technologies, and install them together in people's homes, CEDIA is more oriented towards product and technology education that shows such as COMDEX and CES, which tend to attract technology decision makers, including individuals. This emphasis gives the show a decidedly unique feel, and the CEDIA show organizers are obviously a small, tight knit family. Everybody seems to know everybody, and executives from large consumer electronics companies such as Sony and Panasonic were calling reporters by name during various press conferences. It reminded us of presidential press conferences, albeit on a far small scale.

In any event, CEDIA's differences were as obvious as its similarities with the shows we frequent. It's a trade show, after all, and has a show floor serving over 22,000 attendees, an attendance record. Given the huge drop-offs at recent COMDEX events and other computer industry tradeshows, that's not shabby, and the show floor was always busy and active. Here's what we did at CEDIA 2003.

Indianapolis

We had never been to Indianapolis, and now know why. The smallish downtown area is pretty and clean, and we had time to sample a bit of the local culture in the form of the somnolescent Indiana State Museum. And the state capitol looks nice. But most of the Indianapolis area appears to be dominated by an endless stream of hotels, chain restaurants, large retailers, and strip mails. This seems odd until you learn that the city's primary business is, in fact, hosting trade shows and, of course, the Indianapolis 500, an event that dominates this town even more dramatically than does the 4th of July in Washington D.C.

As travelers, we actually appreciated Indianapolis' facilities. But after a few days, the sameness of the place wore on us in ways that Orlando and Dallas could only hope to match. We can't honestly say we disliked it here. But let's just say I didn't call my wife and recommend that she join me on a future trip to the city. There just isn't much to do.

That's OK, of course, since most of our time was spent running from CEDIA event to CEDIA event. It was a very busy show.

Panasonic and Sony press conferences

Thursday was press day, and we attended major press conferences by consumer electronics giants Panasonic and Sony, as well as other press-oriented activities. The Panasonic and Sony spreads, however, were notable for their size and scope.

Panasonic

Panasonic president Andy Takani noted that this was the company's first ever press conference at CEDIA, but the company handled it like it had been doing this sort of thing for years. The company presented an impressive collection of television screen technologies, including next-generation LCDs, plasma screens, and projection sets. Panasonic also showed off new DVD recorders, and an incredible SD card-based camcorder. The company's slogan is "Panasonic for life."

Dr. Paul Liao, the CTO of Panasonic US, said his company was experiencing stronger-than-expected consumer demand and would benefit from the anticipated 5 percent growth in consumer spending in the second half of the year. This is the second year running that family and entertainment has replaced career as the primary driver behind consumer purchases. "We make the products that people want," Liao said. "It's a simple command. It's what we're up to. And what people want is all about family and entertainment."

Panasonic's approach to satisfying consumers is a value chain called "3D," which stands for Digital TV (DTV), DVD (both players and recorders), and SD, the standardized portable memory format. The company aims to be a leader in each of these categories, and its products are well set up to accomplish that goal.

Digital TV

Digital TV is all about high definition, or HD. Panasonic's new line of digital TVs are stylish, high-quality, and feature-packed, and the company's cable-ready HDTV models are the first to be certified by Cable Labs for the new cable high definition and digital plug and play standard; this new standard will eventually eliminate the need for set-top boxes. Instead, cable companies will distribute smart cards to their customers that plug into compatible TVs and other devices to facilitate delivery of the digital content to which you have subscribed. All of the major cable companies in the United States have agreed to adopt this standard.

Ed Wolff, Panasonic's VP of Merchandising for the Display Group, highlighted the company's new TV sets. "TV has been exciting place to be over past two years," he noted. "There's been a shift in what consumers are buying. They're moving to digital-based products faster than what anyone anticipated. By 2005, 42 percent of all TVs sold will be digital. The growth of LCD and plasma has been much higher than expected, and we've had to recast trends."

Panasonic has a full line of widescreen projection displays, plasma flat panels, LCD TVs, and digital display devices, all in a variety of resolutions and form factors. The quality of some of these displays, especially the plasma displays, is simply amazing. Previously, one of the big weaknesses of plasma devices was their poor rendering of black levels; this problem is not apparent in Panasonic's new screens. And with prices falling dramatically, plasma will soon become a mass market item.

DVD

Panasonic believes that DVD is the foundation of home theater and, as such, the company is making bold moves to ensure that the success of the DVD format and its successors continues. The company said that DVD-RAM, a format that is almost completely neglected by the PC industry, dominates and will continue to dominate the home recorder market in the US. That's because DVD-RAM disks are essentially hard drives, providing the true random access that competing formats like DVD-RW and DVD+RW do not. This means that DVD-RAM recorders can play back and record different TV shows simultaneously from the same disc, a feature that only hard drive-based digital video recorders (DVRs) can emulate. DVD-RW and DVD+RW are essentially linear formats that can only read or write data, but not do both at the same time. Also, DVD Audio is taking off, with almost 550 titles available today, which is about 100 more than offered by Super Audio CD (SACD), a competing technology. Finally, Panasonic noted that the company is working with Microsoft to extend the HiMAT format to recordable DVD.

Reid Sullivan, the VP of Merchandising, noted that Panasonic was the DVD market leader, followed by Philips, Sony, and others. The company intends to continue this lead with recordable DVD, and anticipates that there will be 6 million recordable DVD units in circulation by 2005. This fall, the company is unleashing its DMR-100H DVD recorder, which features a 120 GB hard drive, MPEG-2 and -4 compatibility, SD and PC card slots, and the capability to perform high speed dubbing from the hard drive to the recordable DVD. Sullivan said consumers could store up to 9 hours of 720 Kbps MPEG-2 video on a single-sided, 4.7 GB DVD-RAM; thrifty users not concerned about quality can store up to 90 hours of 64 Kbps MPEG-2 video.

SD

As for SD, Panasonic believes that this portable memory format is the future, and the company cites market surveys suggesting that it will quickly become the de facto standard in the years ahead, eclipsing competitors such as Sony's MemoryStick, CompactFlash, and Smart Media.

Panasonic was showing off a tiny portable camcorder with no moving parts (less the optics) that uses a bundled 512 MB SD card for storage. This device can record up to 20 minutes of MPEG-2 video in normal mode on such a card.

Also of interest to computer fans is news that Panasonic is working with Sony and other companies in the CE Linux Forum to push Linux as a standard platform for consumer electronics devices. Liao said, however, that it would be years before this consortium's work resulted in any end-user products.

Sony

Sony's theme was "Solutions @ Home" and, as Sony Electronics Director Dave Migdal noted, no other company has as many home solutions as Sony. Like Panasonic, Sony sees a trend toward high-definition, but in sharp contrast to its home-oriented theme, the company was touring its high-end products at the show, including a $25,000 projector that offers true 1920 x 1080, with full HD resolution. It also showed off ES series DVD receivers, widescreen WEGA LCDs, and more normally appointed LCD projectors.

Blu-ray (BD-ROM)

One future technology Sony was demonstrating will likely affect most readers. Along with several other consumer electronics companies, Sony is pushing Blu-ray as the next generation optical disk standard that will supplant DVD. Blu-ray disks, called BD-ROM, sport 25 GB of data per layer, good for 135 minutes of 1920 x 1080 HD video content with 5.1 sound, or 3 hours on a dual-layer disk. There's just one problem. Though BD is available today in Japan, Sony doesn't feel that the format will take off in the US until there is an ample supply of compatible media and recordable hardware. For this reason, we won't see BD until late 2005, the company says. However, we will be rewarded with backwards compatibility, so that BD devices of the future will playback today's DVD movies.

Another factor holding back BD in the US, of course, is copy protection. Sony, as a content company, also has a stake in ensuring that its digital recorders don't make it too easy to copy and distribute perfect digital duplicates of major Hollywood movies and other content. Sony feels that its experiences today with DVD and copy protection technologies will help it protect BD from professional pirates and peer-to-peer copiers alike. We'll see.

Mark Cuban keynote address

One man who doesn't agree with this approach is entrepreneur Mark Cuban, owner of the Dallas Mavericks basketball team and founder of HDNET, the country's only national TV network broadcasting a 24 hour schedule exclusively in high definition. Cuban made his fortune selling broadcast.com to Yahoo! for several billion dollars; since then, he has pioneered the distribution and acceptance of HDTV.

Cuban provided a humorous and refreshing keynote address Friday morning. As we are veterans of many computer industry speeches by the likes of Bill Gates and others at Microsoft, the candid everyman nature of Cuban's talk was jarring in a welcome way and a reminder of how corny and boring Microsoft-oriented speeches can be. Cuban obviously delights in technology, but in sharp contrast to large companies like Microsoft, he is less beholden to the bottom line and is still able to pursue better technology because it's the right thing to do. His enthusiasm is infectious, and we believe that his vision is true.

Cuban is not interested in compromising on the quality of HD entertainment and has licensed only those TV shows from the past that were recorded on film and could be easily converted to HD. Likewise, he has picked up as many newer shows which were recorded on HD or film, and he is producing thousands of hours of unique HD content for HDNET. Many of these shows are educational in nature, and feature the soaring travel-oriented vistas that best show off the HD format. "We only show in 1080i [format]," he said, "in the original aspect ratio. The content is completely unedited, and compatible with upcoming HD-PVRs--never copy never and never down rezzed. It's sometimes the only chance to see what directors really had in mind [when they created these films]."

Cuban also has a movie-oriented channel called HDNET Movies, which shows HD-formatted widescreen film content, and is launching an independent film company called HDNET Films that will create original content. What's most exciting about Cuban, however, is his insistence that HD not be held back by draconian copy protection measures. DRM, he says, is stupid. "Are you really telling me that Hollywood can't compete with a guy with a camcorder in a theatre?" he asked, to laughter. "Then use HD. Copy protection is bogus. If you think piracy is such a huge problem, use HD." The rationale here is that HD content is so bandwidth intensive that the personal computers of the near future will be unable to easily pirate them. In any event, Cuban's HD content is provided completely devoid of any form of copy protection. And Cuban forces companies that license his content to display it only in its original resolution and aspect ratio. To technology purists and digital media geeks, this news is exciting.

Cuban also addressed how his small company can compete with media giants like NBC. "The big media companies have issues," he said. "They're public companies and there's no immediate return for them to go HD." Cuban says that NBC and the other major networks derive most of their value from their extensive libraries of TV shows. "But if HDTV succeeds, what happens to the value of their huge libraries stored at 4:3 [format]?" he asked. "It all becomes the equivalent of black and white. If HD happens quickly they have some problems. There are only so many "I Love Lucy's" and "Seinfelds" out there. These networks can't survive on just a few hit shows." Licensing, acquiring, and converting TV shows to HD format is expensive and time consuming, but many shows can't be converted at all for various reasons. In some cases, the original negatives just don't exist anymore. "HDNET is sliding under the door," he said. "[The major networks] have to create side-by-side networks, [to cater to their 4:3 customers and HD customers], but [cable and satellite] providers don't want two versions of the same network. So we're starting to see the beginning of a war."

Show floor and meetings

Coming in part two: Our look at the CEDIA show floor and private meetings we had with various consumer electronics companies.

CEDIA 2003 Photo Gallery

Here are some pictures from the show! All photos by Keith Furman.

This should silence Keith.
Panasonic press conference.
All of Panansonic's digital display devices now support SD.
Panasonic DVD Recorder (DVD-RAM) with hard drive.
Cool Panasonic SD-based camcorder.
BD-ROM features.
Sony's first-ever full HD resolution projector.
Mark Cuban keynote address.
Paul takes an important call...from his wife.
Indianapolis, looking toward the RCA dome and convention center.
Indianapolis museums.
More coming soon!