Recently, Krika was present at the Essential Install Live show near London on the stand of our UK distributor Connected Distribution. While walking through the aisles, evaluating the latest gears our fertile industry has churned out, I was suddenly reminded of a recent HomeTech.fm podcast: The interview of Richard Berrie, President and CEO of iHummingbird. To us, the conclusion was obvious: more than 50% of the gears dedicated to integrators exhibited in this show could be inadequate soon. In less than 3 years, “integration” as we know it today will be totally re-imagined. Let's try to find how and why…
With Amazon Echo in 2016, GAFA started a hard reboot of our AV and Home Automation industry. Executed services will eventually be simplified, requiring only “integration” such as mounting TVs and speakers, services effortlessly accomplished any electrician. Think about it - even surround sound is done with wireless speakers now. All the rest will be handled by the simple and amazingly efficient products GAFA and all its partners will create.
Just have a look on what GAFA is producing now: content that people stream on their phone or on their 11” screen tablets. Believe it or not, they fully enjoy it in stereo and with DVD-quality resolution. GAFA determined that 99.999% of everyday people will never display a TV bigger than 65” in 250 square foot living room. So, a TV-show with a standard resolution and a good sound bar is wholly acceptable.
Remember: people consume the programs, not the technology. Technology is boring except to our passionate little industry. Technology is at the service of the content and should not overshadow it. With GAFA on the field now, we will not be able to fool people very much longer with the fake benefits of trillions of pixels, 3D, video-enhancement, and dozens of channels from AV receivers (that create much more problems than they produce entertainment). Shockingly, for decades we were able to sell extravagant and expensive AV systems - that should have never escaped from a real cinema - without any service or maintenance. We wanted to act like pros but without the panache!
The quality of image and sound has never ever made the success of a category. It's the catalog of the content that makes it successful. Apple audio codec quality is very poor, but they have a huge amount of content, as well as the perfect way to sell it: through a range of impressive gear including mobile phones, tablets, televisions, laptops and anything else they can dream up. Netflix is another good example proving that people care much more about the content rather than the quality. Most people do not have the bandwidth to view shows in full 4K HDR, yet that has little relevance to viewers. As long as the video quality is decent enough to watch the latest season of House of Cards, then they just won't care.
Apps will kill HDMI. We still need to integrate HDMI matrix, HDBaseT, video over CAT5 adapters and complicated gears to distribute the signals of boxes on TV across the house. Although their motives differ, both TV-service providers and custom installers share the same secret dream: to be rid of HDMI! For custom installers, HDMI is probably the cause of 50% of problems they face on any given job. For TV-service providers, developing an app on a TV is much more economical than what it would cost in R&D and hardware to develop a TV box. Netflix demonstrated streaming and it has been a viable, technological business model ever since. When all TV services will be an app on a TV, we will finally get rid of this HDMI chimera. Even gaming will be a streaming-based service.
The future of gaming is to stream the game on your TV using an app. It's called Cloud Gaming. There are more and more companies that already provide Gaming as a Service (GaaS). The day Microsoft, Sony, and others release an app to stream games on TV will be the end of integration. This is not for tomorrow, just the day after.
Keep in mind that #GAFA clearly lose money when they build boxes. They make profits on the programs, the advertisements, the services and/or the games they sell to you. Installing home automation devices will be as simple as using a Sony TV pre-installed with the Sony PlayStation app. Other than controllers, there is no need to buy additional hardware as you will stream your game directly to your TV - if you are not using your VR glasses.
Let's talk about home automation. For everyday people, the Home Automation system our CEDIA channel has provided looks as if it has been created by thrilled engineers from small companies that were in a competition that focused on the greatest number of features they could incorporate into a system - rather than its real efficiency and usefulness. Sometimes integrating “Haute Couture” on every job and incorporating lavish customization just because you technically can is not the best option. GAFA does not have this pressure. They do not have to prove they are the best programmer on earth; they already own everyone. They will standardize this part of the industry with simple systems already integrated in our everyday mobile devices. You no longer need to take your guest by the hand to the restroom because it's too long to explain what button to push in the high-tech highly customized home automation wall plates. Everyone will know how to use a GAFA HomeKit house. Mentioning Kris Gamble from customised.uk.com; even the 1% wealthiest, Apple is already a Luxury brand.
ISPs are the backbone of GAFA. No ISPs mean no GAFA, therefore, ISPs are even more important than GAFA as they literally “own” 100% of all possible clients on earth. They already have a relationship with them and already charge them monthly for an identified service. People hate to change providers so ISPs will make it simple. Just check a box on your existing subscription to enable a security and remote monitoring service for $3 per month. Add an extra $5/month to rent a pair of mesh access points and you're all set.
The modem-router-Wi-Fi-systems that were delivered by ISPs were cheap and unreliable. They stalled with these poor systems as long as they could in order to generate profits. During that time, they were looking for a good excuse to charge extra money for more efficient products. Although cheap gear was the cause of at least 50% of network issues experienced by end-users and needed to be rebooted constantly, they paved the way for dedicated and innovative companies to create better and more reliable router and Wi-Fi systems. This is about to change. VOD, Home Automation, and security relies 100% on the internet now. ISPs experience great pressure along with the responsibilities on their shoulders to provide better equipment and services. ISPs already have the infrastructure in which thousands of people work for them for hotlines and in the field. Everything is ready for them to deliver a new range of products and services. They would be foolish not to take advantage of this opportunity, as it is a new source of RMR for them that will generate billions annually.
Keep in mind that an ISP technically owns the pipes. If they want, they can filter and block any kind of attack or virus before it even reaches the client's house - in turn, making all FireWire and so-called "wise" router with security system embedded totally useless! Should I mention the Network as a Service that ISP are going to offer soon? Maybe it's one of the reasons why Apple suddenly stopped to build network product. (Some people know how to read the future)
Lighting is another market where GAFA will flourish quickly. Philips delved into the production years ago, and now IKEA is in the field and claiming they are Google and Apple compatible. It's just the beginning, and soon, we'll have shading and air-conditioning…
Conclusions: 1) It is always easier to sell stuff to your clients when they agree to sign any kind of service, maintenance, or RMR-like contract. ISP, Apple, Google, Facebook - all of GAFA own their clients so intensely that they will be able to sell them anything. Our industry missed a point here, but it's not too late to do it. 2) As integration will become easier, our new competitors will be the construction industry and, especially, the electricians.
Now what? For the very few and luckiest professional installers that already address the 0,5% wealthiest people on earth, the business will not really change. The BIG challenge is for all other professional that could be in competition with the GAFA products.
The train will not wait for our CEDIA channel and we must jump onto it now. The risk is GAFA and the construction industry could play this game alone. It's what they have in mind, for the moment, probably because our channel is under the radar and not “professional” enough. (We are not organized enough, we do not provide enough service, maintenance, or remote-supervision, and too few of us use third party companies like OneVision Resources to handle it) What they do not realize is the incredible reservoir of talented people in the CEDIA channel that could help them reach everyday people. We are the impeccable group of people with an opportune moment. Yet we are also between a rock and a hard place. The choice is ours: be smashed or be the mattress that will help technology to gently arrive into homes across the world.
What we need now is an organization like CEDIA (for example), to accompany our industry in the future. For now, the future of residential AV and Home Automation is the construction industry. We need to come together and promote our unique savoir faire imparted from 30 years of background in the field. The construction industry will welcome us because right now they don't have a clue about how to implement AV and Home Automation - even if it is as simple as GAFA promises. They cannot take the risk to fail again with Home Automation like they did 10 or 20 years ago. Due to a huge demand and the pressure of GAFA, all electricians and construction companies will be forced to create a Home Automation division.
We should accept that the day we went out of our cozy shop with a toolbox to drill holes into walls for our clients, we became part of the construction industry. For the past 30 years, our roads were parallel and GAFA offered us an incredible chance at a crossroads. This is our opportunity for us to be part of the genesis of all jobs. We will not fight against electricians anymore and we will work hand-in-hand with the construction industry. There are already numerous cases of electricians that are prosperous doing this and we can implement it in large scale.
What do you think?