WholeHome

Hey all - great opportunity to get a good look at the product, how it is used, and even see some great B-roll footage we took in a nice guy’s home using our “stand in couple” - both CU students. It was, in fact, a little discomforting when we set up the big lights on the master bed to get the “finish the show in bed” scene - but it all came out great.

Watch the whole segment streamed right from the 9News website -

BOCS Xtender Media Hub. Xtending Sources and Services in the Digital Home

Boulder ­based BOCS is a consumer electronics design and development company that builds and sells the Xtender Media Hub™, a set­top device that allows programs, movies, music and photos to be shared among all TVs in the home. TiVo® solved the problem of time, allowing consumers to watch recorded content whenever they want. The Xtender solves the problem of location, delivering consumers the freedom to watch whatever they want, wherever they want to in the home, without having to buy additional equipment.

BOCS MARKET OPPORTUNITY

Digital Living Room Battleground Supremacy, or is it just simply “let us watch what we want wherever we want from whatever it is”?

The digital home and battle for control over the living room has been debated and argued for years as the domain for the giants of the PC and CE worlds. This was meant to be the product development playground for Microsoft and Sony. Who better than they to lay claim to ownership of the digital living room that would en­able a brave new world of services and devices. These technology breakthroughs promised us that they would free us from the shackles of legacy technology and incumbent business models that restricted our freedom to digitally move about in our own homes. ;­) Digital technology rewrote all the rules. As new technolo­gies and products made it from the drawing boards to the market, consumers began to witness and participate in a whole new digital entertainment experience. We were given the ability to record our favorite programs and watch them at our convenience in ways the VCR couldn’t provide with tools to skip commercials. We now have the ability to watch our programming from across the Internet to wherever we are from our cell phones and PC’s. We can even watch our favorite Internet programming on our High Def TVs. So going digital really has given us a greater amount of entertainment freedom and enjoyment than ever before. Everything is on track and plan except for that pesky service provider and legacy technologies that we just can’t seem to part with. Sure we can record programming and wow, do those programs look great in HD, but they are still limited and continue to play by old analog rules. The service providers have the ability to be a great member of our digital family if they would only keep pace with the digital­freedom revolution. If I want to enjoy whole­house HD pro­gramming I have to have their box at every TV (along with an additional monthly subscription fee; you didn’t think you’d get something for nothing from these guys did you?). If I wanted to pause my recorded program in the living room and resume it up in the master bedroom, I couldn’t. (I hear you AT&T, but you need more wires than I have) If I want to plug my Apple iPod® into the cable box and watch it on all my TV’s I can’t. So what gives? It feels like we are stuck on the proverbial digital 2­yard line. I am so close to full digital nirvana that I can see the other side, but my service providers won’t let me experience the total digital freedom that I desperately seek.

So enter BOCS. We just think differently than most and don’t believe that a service provider should have such a commanding control over our entertainment experience. BOCS feels strongly that the consumer should be in con­trol over their entertainment experience and not the device manufacturer or the service provider. So we set about joining the digital­freedom revolution tour.

WHAT IS THE MARKET ASKING FOR?

Well let’s see, we never asked for the iPod or iTunes, but boy did we love them when we discovered what they enable us to experience. We didn’t de­mand HDTV and, wow, I don’t think we could have imagined how great the picture experience would become. I am also pretty sure we didn’t ask for, or demand, that we be able to record and save our programs to a hard­drive for later playback on our schedule, and in addition, were enabled to skip commercials. During our search for understanding and seeking clarity for our opportunity, we noticed a couple of things that seemed very interesting.

We couldn’t watch our recorded content in another room on any television unless we had a new box and subscription fee tethered to that particular TV and it seemed odd to us that there was no way to access the content from one box via the other. (Legacy business model no doubt)

­We couldn’t share or enjoy our iPod or iTunes with all the televisions in the home; we dug our iPod so much we wanted that slide show playing during our parties. We also wanted our downloaded music to play across every room and we wanted to share our iTunes programming or videos with every room, no matter if we had a SD or HD TV in that room

We were really into Napster, iTunes and Rhapsody and wondered why all of our televisions couldn’t be¬come access points for downloading our content to a central location that was shared by all?

We wanted to give our kids their own HDTV but found it hard to justify the extra costs of monthly fees when we knew they would just use the new TV as bragging rights with their classroom buddies and use it mostly to play video games.

We also noted that there were some very expensive options out there that got close to doing what we wanted to, but we either had to be building a new home or had to have a lot more extra wiring in the walls, neither of which seemed appealing. We also noted that no one had really designed a remote¬control interface that worked for mom, because after all, “if momma isn’t happy, nobody’s happy”.

So we started putting the pieces together and a picture began to develop. We asked our friends and family a few questions to round out our market research stage and here is what we learned.

Would you like to record programs and watch them in another room in the home without another box from your service provider?

o Yes, you can do that? How much will it cost me and what is the monthly subscription fee? You see, TiVo trained them well, so we told them less than you think and no subscription fees. Bummer to reoccurring revenue model, but hello to new gigantic market opportunity

Would you like to share your living room equipment with every television in the home?

oYes. You can do that? You betcha! And your parties will never be the same.

Would you like to have the ability to press one button and instantly watch and control a media source from your living room on any television located in any room?
o Again, they said yes and when it would become available.

We aren’t Nielson caliber research marketing types, but it sure seemed to us that we kept getting these positive reactions when we exposed our friends and family to what we were up to and thinking of doing. Even we thought we were onto something, which when you get to know us, you’ll wonder why no one ever built this prod¬uct before. Hmm, share content over coax, with little effort to install and program with every television in the home; why wasn’t this done before?

It seemed to us that if TiVo® gave us freedom from time, then Xtender gave us freedom from location. With our exhaustive market research phase now completed - we had our marching orders and market requirements. Off to product development and alpha test we went.

GREAT DIGITAL DISTRIBUTION OPPORTUNITY

There is definitely a great opportunity in the digital living room for any company that can successfully enter this battleground and stake out its territory by giving consumers the ability to have their digital entertainment ex­perience anywhere they want without new wires or more subscription fees. It also became clear to us that there were probably two boxes in the living room that were pretty safe from competitive threats enabled by the digital world. First, the AV Surround Sound Receiver seemed to have weathered the onslaught of the Media Center. It gave us the superior sound reproduction that 5.1 and 7.1 provided, and with so many inputs and out­puts, it seemed inconceivable that we would ever run out of real estate on the back panel. Once HDMI switching and up­conversion was incorporated, say good­by to the Media Center threat to replace it as the sound & hub

stud in the living room stack. Next, we believe the Satellite/Cable TV receiver is pretty safe as well. It’s hard to imagine any technology or product replacing it. No PC is going to threaten this entertainment ser

vice provider incumbent any time soon. While these guys will certainly evolve and may one day even try to pump video and sound around the home (AT&T’s U­Verse comes to mind), we doubt seriously they will want to also distribute any legacy devices such as my iTunes, my iPod, my DVD player, or my camcorder AV input to all my televisions. Even if they believed they wanted to, we are pretty sure they will think Ethernet via CAT5/6 or WiFi will be the right way to accomplish this. Good luck we said to this product strategy. So, the next logical living room battleground participant is the DVD or Blu­Ray player. This technology seems pretty safe for only as long as plastic remains fashionable/economical and the size of your movie library is such that you don’t want to waste your investment. As long as movie download services to other than the Satellite/Cable box remain a niche option, appealing mainly to the ultra geek that some of us are, we are sure evolution in this area will remain marginal in total family value. We also didn’t think that we wanted our digital library of music, movies, photos and programs to be held hostage to the ser­vice provider. Turn off the service, say goodbye to your library!

As we made these conclusions, we were reminded that in many American living rooms, there was a limited amount of shelf space in the cabinet or TV cart. While you could squeeze another ½ height device in there, we thought it was pretty safe to assume that there was room for no more than one more CE device that would gar­ner favor from the family. Well the number of contestants for this last spot on the dance card is many and some of these are really cool products. SlingBox®, Vudu®, TiVo, iPod Dock, Media Center, Xbox® and Apple TV come to mind. It’s probably not likely that a typical Xtender profile consumer would purchase more than one of these other products if they purchase an Xtender; they might, but not in any significant market share way. So, we concluded that in order to be of value to the living room digital experience we felt like we had to offer a capability beyond just the local living room experience and create a whole new product category that would enable all of these devices the opportunity to be shared by every household member, no matter what room or what television they happened to be at. Bingo! Enter the Xtender. We call this new product category the Media Hub.

MEDIA HUB OR MEDIA CENTER? A NEW PRODUCT CATEGORY IS BORN.

We felt strongly that in order to be accepted into the living room of the digi­tal home we needed to provide value to every device in the home. We wanted total digital freedom for all devices to be distributed to any televi­sion without new wires. No power­line or crowded unreliable airwave tech­nology for us. As we defined ourselves and defined the rules for engage­ment, we quickly noted that our Media Hub might get comparisons to Media Centers – we make the argument that we don’t want to offer an OS, Internet and Storage product, but that what consumers were ready for was a true hassle­free Plug­and­Play experience that distributes their media out to every TV in every room without needing a network to accomplish it. As we did this, we also took note that our product might find comparisons with Microsoft’s Extender term for taking the Xbox and using it to extend its capabilities as a networked product. Thankfully for us, Intel, Microsoft and the general PC industry want you to believe that the great digital entertainment experience is available to every­one, as long as you have a network in the home. Hmm, small problem, not everyone has a network­ready home and not everyone wants a network and not every solution requires a network in order to be experienced, but most everyone has either an antenna­, cable­or satellite­ready home. This is why we moved away from the whole PC mindset and this is where our friends say we think differently.

ENTER BOCS; “WHAT? YOU THINK IT’S JUST AN RF MODULATOR FROM YOUR DAD’S BASEMENT DAYS”?

We knew how to navigate inside the PC world, next came the Pro AV world. These were the custom guys that made a living out of making things work, no matter the cost. These guys are fantastic, they design and create the most amazing AV experiences known to mankind. All it takes is a significant amount of time and money to enjoy the fruits of their labor and expertise. If you have ever wanted a massive AV experience, find one of these guys and don’t be shy about spending some money; it will be worth every dollar you spend. So, we be­gan to investigate how our technology could help this group and quickly got the door slammed in our face. At first we were not exactly sure why. Sure we reminded them of early 80’s technology, and sure we only pumped Standard Definition Television signals around the home, and yep, that’s right, we have our own remote! “So what”, we said to ourselves and to them. Well, not so fast. This group didn’t want to embrace our technology that quickly. They wanted to know how we were different from RF Modulation (See our RF Modulator Technical Bulletin). They wanted to know why we missed the boat by not having HD distribution, and then why on earth would you make your own remote­control when there were so many to chose from that were better, fancier, and more money than ours.

SO HERE IS OUR RESPONSE TO YOUR DADDY’S TECHNOLOGY

We weren’t too shocked by this market group’s reaction. After all, they have never met a manufacturer they didn’t think they were smarter than. We, on the other hand, had never met a group that made it known they were smarter than we were. (even when we knew they really didn’t understand the potential of our product ap­pealing to the common consumer as opposed to the narrow and shrinking demographic they have been servic­ing) Welcome to the Professional AV Installation and Design world you dumb stupid new wannabe start­up we thought to ourselves. Geez!

Not phased by their reaction and Supreme Expertise Guru­like status, we started by addressing the top 3 issues they all consistently had with our tech­nology and product direction.

1. 1. While we employ a RF Modulation scheme, we are magnitudes of order easier to understand, install and program. We also play differently than traditional modulators in that we don’t eliminate channels that our customers will not want to loose (See our Business Case for Existing Homes).

2. We chose to begin our product development plans by distributing SDTV content instead of HD purely based on market demographic information and not because of any technical limitations. The market for HD is growing but in comparison to the size of market for SD, it was not a difficult decision for us to start our product development with distributing SDTV content.

The truth about HDTV is this; HD penetration in the average American household is centered on the main television watching location which tends to be the living room. Beyond the living room, HDTV usage drops significantly. According to research by Leichtman Research, they found that HDTV penetration is up to 33% of all homes, which equates to a 14% penetration of all televisions in the home. While there are more TVs in the home than people (2.73 vs. 2.55 CEA 08), we are still watching television on lots of old CRT SDTVs. As we mulled these numbers and realities we also needed to be conscious of cost – it simply is more expensive to develop around a HD platform than SD and, oh BTW, HD looks the same as SD on a CRT. So as soon as the market begins to shift to more HDTVs, we will certainly bring a HD solution to the market and don’t think we aren’t keeping a close tab on those numbers and have begun developing our HD solution.

3. Lastly, we felt strongly that we needed to have our own interface. We wanted our own remote, designed to appeal to a typical non­tech savvy consumer. Simple to program and simple to use. It had to have the widest appeal to the largest portion of the market. Of course we designed our system so that you can still use your Harmony or Pronto Remote all day long, and Crestron too. We just didn’t think that a Crestron/ AMX and BOCS living room and family were one in the same. One skis in the Alps, the other flies coach.

At the end of the day, we wanted to bring to market a product that appealed to the most homes possible with the most common wiring in­place, had the lowest cost possible, which made for the lowest cost to deploy, and was the easiest to use with the most value to the consumer. We think we excelled on all accounts.

WHAT IS THE CONSUMER VALUE PROPOSITION FOR THE PRODUCT

BOCS feels strongly that every home should have a Media Hub distribution system so that every television has the ability to access the living room DVD, DVR, iPod, or any other AV source. We also believed very firmly that the ability to access any of these devices had to be brain dead simple. How much more simple can a single push of a color­coded button be? How brain­dead you ask? Well, we, speak from experience and can tell you that on average it will take a Professional Installer less than one hour to physically install the Xtender system, hook it up, and program all of the remotes. That seemed reasonable to us, considering the old modulation model with IR control could take up to, and in some cases more than, 16 hours depending on the difficulty of the retro. In fact it seemed like a good business model for some elements of the Professional AV Installation Indus­try. We knew our technology would be met by a nose up reaction from the upper end of the market, and that’s OK if you are busy and only service the “recession proof” clientele. But we also knew with a recession economy upon us and a no­growth new home market that some smart business owners would rather see their trucks rolling and creating revenue rather than remain parked in the lot and having to lose those installers in which they have invested over the years.

OUR TARGET MARKET

BOCS MEDIA HUB PRODUCT LINE

Media Hub is a device that is installed with your AV gear and provides Media Distribution to all the televisions in your home over coax cable.

Media Hub provides the connectivity of your DVD Player, iPod, DVR or other AV device to all the televisions in the home and allows control over those devices via RF remote. You can distribute and control up to 3 devices to every television in the home.

WHAT KIND OF PRODUCT IS IT

Media Hub is a new kind of product. It is the AV Hub in the living room. AV products connect to it and the Me­dia Hub distributes that product’s movie, music, photos, stored programming out to every television in the home regardless of location to the equipment. If you can record it, if you can download it, if you can watch it, if you can listen to it, then you can Xtend it.

WHAT CAN I DO WITH IT – APPLICATIONS

Media Hub enables whole home DVD, DVR, iPod, iTunes, Whole Home BluRay and Camera Experiences.

WHAT IS THE FUTURE FOR BOCS MEDIA HUB TECHNOLOGY

Media Hub Technology can be used in any device that wants to share itself with every television in the home or commercial setting where connecting to the coax cable is essen­tial. We believe that Media Hub technology can reside in Cable or Satellite Boxes, HDTV’s and AV Receivers enabling each of these products to have a compelling point of differentiation and competitive advantage. Somewhere near the end of 2009 we should be in a great position to offer OEMs a licensing program and development program/Tool Kit to incorporate Media Hub Technology into their products.

This is really simple… If you:

• Are tired of paying big SS to the big Cable companies
• Really wish you didn’t have to go down to your living room to watch your recorded shows
• Want to be able to pause movies in one room and continue watching in another
• Want to take back control of your home entertainment

then Xtender is something you’ve probably already wished was in the store!

So - let’s take a few steps back - this all started at a party, we wanted to send the kids to the basement to watch a movie (so the fun could really begin) but we couldn’t seem to find a DVD that wasn’t either cracked or had peanut butter on it - after a bit of frustration we ended up with the old “There really has to be a better way”.

The founders of BOCS really have a diverse background - the CEO

is an old “internet appliance guy”, the CTO

has years and years in the hard drive business, and I

(Marketing officer, Tech Support, and all around office-weenie - and yeah, for some reason my head looks like a pumpkin in this picture) came from the WiFi world (Al Gore may have invented the internet but I’ve got dibbs on the early days of Wireless-Lan). We all came at the problem a little differently but ended up with an idea to create something that would work in everyone’s home, wouldn’t take a whole crew a month to install, would be so simple to use it really didn’t need an instruction manual, and hopefully would transform the way we all “do” home entertainment. That idea got us started and we began writing the business plan in the winter of ‘06/’07.

Our first alpha units showed up in August of 2007 - and while they were not pretty they worked pretty well - The remotes were completely different (pretty much off the shelf cases) and we got these out to 30 or so folks to get some feedback on usage, in home wiring, the remote buttons and pretty much every other aspect of the product including how many channels were needed and how far the remotes needed to reach.

I told you it wasn’t pretty…

We realized pretty quickly that the heart of the system was the remote control - how it feels in your hand, what buttons it had, how easy it is to use in the dark etc… And the Xtender box itself needed to look cool sitting on top of your home entertainment center - and the biggie, it really needed to be easy to install. So we took all that input and dove into achieving all those goals as rapidly as possible - all while setting up a world class production and supply chain - those were some busy times…

But, frankly, it was a blast - as the marketing guy, I got to achieve every guy’s dream - I got to design, from scratch, my very own remote -

We got to production in August of 2008 and now have hundreds of Xtenders installed all over the country.

We have some great offices in Boulder Colorado, and this has become a product much more in demand than we ever envisioned. Turns out it is one of those products that people either say “I’ve always wanted something like this”, “I was just telling my wife that I wish we could do that”, or the old “I really wish I’d have thought of that”… which are all good signs.

Stay tuned for a lot more information on BOCS, Xtender, and, hopefully, how we can help to improve your life…