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Western Digital may have uncovered the trick to getting into your living room: simplicity. Today, the company is launching its WD TV HD Media Player, a box that makes it very easy to listen to music or watch movies, home videos, and pictures on your TV.

The box isn’t hooked up to the Internet. You simply connect one of Western Digital’s MyPassport portable backup hard drives to a computer. You transfer everything you want to watch to the portable drive. Then you plug the backup drive into the WD TV. After that the WD TV can play the media on your TV screen via a standard TV cable or an HDMI high-speed wire. The WD TV box can play almost any multimedia file.

For consumers, this means it’s easier than every to watch home movies or view pictures of the family on a big-screen TV in full high-definition color. The need for this kind of solution will grow as we take more digital photos and home movies. According to research firm IDC, nearly 334 million GB of photos and more than 3.1 billion GB of video will be stored on consumer desktop and laptop computers in 2008. And that’ll grow dramatically by 2010, IDC says. Most of that data is trapped on the computer, says Scott Rader, product marketing manager at Western Digital.

It’s safe to say that there’s a lot of value in moving the stuff on your computer to your TV. That’s why there are so many contenders among living room boxes. The names include Vudu, Roku, Sezmi, the Xbox 360, the PlayStation 3, and Apple TV. But nobody has figured out how to do it perfectly. Steve Jobs, chief executive of Apple, said that the market for Apple TV still remains a hobbyist’s segment.

The problem is that many of these solutions are still too difficult to use. Part of the problem with Windows Media Center Extenders is that they rely on wireless Internet or wired Ethernet cables to move video from the PC to the TV. That makes it difficult to use and unreliable.

But the WD TV solution can play video at 1080p and play slide shows of pictures in just about any format, including H.264, Divx, or MPEG-2 in full 1080p resolution. The box costs just $129, not including the WD MyPassport or WD My Book backup hard drives. The box has two universal serial bus (USB) connectors so that you can attach hard drives, flash drives, and even Flip video players.

The box is a little slow at booting up and bringing up your content on the TV. But it’s easy to do. It collects the meta data, or identifying information, such as the name of a video or who made a particular song. If you have two hard drives connected to the box, you don’t have to look through multiple folders to find everything. The WD TV box aggregates the videos into the same folder. You can use a remote control to initiate a slide show or otherwise browse through your collection.

However, there are reasons why Lake Forest, Calif.-based Western Digital might fail in the living room. The company’s brand is known in the storage business, but it isn’t a household name. Seagate has the same problem and as a result has begun advertising its backup storage solutions on television this fall. But Western Digital isn’t going that far in putting its brand name in front of the consumer. Without such help, WD TV could be stillborn.

There are also failures among others who tried to grab a foothold. Hewlett-Packard created “digital media adapters,” which could take multimedia on a PC and wirelessly send it to a TV set. But WiFi wireless networking is still pretty unreliable at transferring HD video from one part of the house to another. Amid all the noise in the market, HP pulled the plug on the division making the adapters.

Another failure that’s much closer to Western Digital’s approach was SanDisk’s Sansa TV. That solution used flash memory to store data. You could transfer movies and other data to the PC by putting it on the flash memory drive. But SanDisk shut down the experiment. The drawbacks included limited 4-gigabyte storage and a lack of support for a wide number of playback formats.

WD TV goes on sale today on Western Digital’s web site. It will also be in Best Buy stores. The software for the box comes with ArcSoft Media Convert 2.5 software.

Seagate is elbowing its way further into the consumer tech market with new backup products that it will launch with a broad consumer-oriented ad campaign.

The devices, being introduced today, fall under Seagate’s FreeAgent brand. They range from portable storage drives to desktop backup drives for the PC or the Mac. They complement the more technical Maxtor brand of backup storage products and come in a variety of colors.

The marketing campaign will highlight the usefulness of backup technology in an age where everyone is becoming dependent on computers. TV ads will play to fears that a mother could lose all of the photos of her children if she stores her digital pictures on a computer without backup. It may sound like a political campaign ad, but I’m sure it works. I’d hate to lose all of my kid’s photos.

Seagate knows that only about 11 percent of us actually back up our data. There used to be barriers, such as technological know-how or higher storage costs. But those have melted away. And Seagate has an opportunity to score more sales by getting more people to use backup drives. As people collect more videos, music, and photos, the backup drives become critical.

The very fact that the ads exist at all suggests that backing up data — once thought an act performed only by hardware geeks — has entered the mainstream, said Brian Dexheimer, Seagate’s president of consumer solutions, in an interview. And Dexheimer views this as Seagate’s chance to become a household brand among non-geeks. As it does so, it will compete more and more with the likes of its customers, such as Dell and Hewlett-Packard, as Seagate CEO Bill Watkins has said in the past.

These drives aren’t hard to use. You just plug them into a computer via a universal serial bus (USB) port and the software starts automatically. You choose your options from a menu and you can schedule backups on a regular basis. After the initial setup, you can pretty much forget about it. Drive capacities range from 250 gigabytes to 1.5 terabytes of data. You can connect the drives through faster wires such as eSATA or Firewire 800, or Firewire 400. The brands include FreeAgent Go (starting at 500 GB) on the portable side, FreeAgent Go for Mac, FreeAgent Desk, FreeAgent Desk for Mac, and the high-end FreeAgent Extreme. Prices range from $119 to $349.

Seagate’s major competitor is Western Digital, which splits the lion’s share of the market fairly evenly with Seagate (between its different brands). Smaller rivals include Data Robotics’ Drobo backup storage device.

Data Robotics has raised $15 million in a fourth round of funding for its consumer-focused Drobo backup storage business.

The Santa Clara, Calif., company makes “data robots,” or external backup storage units that make it easy to back up data on a computer or a network of computers. The lead investor is Greylock Partners. Other participants include new investor New Enterprise Associates, as well as existing investors RRE Ventures and Sutter Hill Ventures. To date, the company has raised $43 million in four rounds.

The company’s storage products are aimed at consumers and small businesses that don’t want to deal with technical hassles when backing up large amounts of data.

There are a host of rivals for storage inside the home or small businesses. Big companies such as Hewlett-Packard, Dell, Seagate and Netgear are diving into the networked storage market for the home. Most use a technology known as “RAID” to redundantly store data, so no data is lost even if one drive fails. But Data Robotics’ “BeyondRAID,” which uses virtualization technology to create storage that adapts to available disks. While RAID software is often complex to use and is geared toward enterprise technicians, the BeyondRAID software is simple.

Drobo holds up to four 3.5-inch hard drives. It hooks up to a Mac, Linux or Windows computer via USB port, Firewire, or gigabit ethernet wires. It shows up as a single external hard drive and doesn’t require a software installation. Unlike with RAID arrays, you can use different-size hard drives. It has green, yellow and red lights indicating how much storage is on a drive, while a blinking light is a warning not to remove a drive. You can add a drive at any time just by inserting one into a bay. Doing the same thing with a RAID array takes a lot more time. If a drive fails, you take it out and put a new one in.

To share it on a network, you simply plug it into the network via an Ethernet wire. You can then share data on the Drobo drive with other devices on the network. DroboShare can support two connected Drobos at a time, meaning the networked storage can grow to as much as 32 terabytes.

The company has sold more than 30,000 Drobo data robots in the past year, said Geoff Barrall, chief executive of the company. Many of the customers come from high-storage businesses such as video production, education, medical, photography, legal, government as well as consumers. The drives start at $499. The company was founded 3.5 years ago.

Barrall said the company will use the money to expand its sales, overseas operations and product development.

Bill Watkins is a hard driver. The CEO of Seagate, the $13 billion hard disk drive maker based in Scotts Valley, Calif., is racing to take advantage of the boom in storage as digital media spreads everywhere: to iPods, home servers, game consoles, handhelds — not to mention desktops and laptops.

The Texas-raised son of an oil man has been CEO since 2004. He joined the company in 1996 after Seagate bought rival disk drive maker Conner Peripherals. Watkins, a former enlisted soldier with Army, views morale as critical. That’s why he started “Eco Seagate,” a week-long endurance program in New Zealand, way back in 2000. At a cost of $2 million a year, he puts 200 employees through the grueling adventure program – which culminates in a rock-climbing, mountain biking, and kayaking endurance race. Fortune just posted a story on the most recent trek.

He recently talked loudly above the din at the Foreign Cinema restaurant in San Francisco with a group of journalists. He is outspoken, crass, and he pulls no punches. His style invokes the same gregariousness of Seagate founder Al Shugart, who favored Hawaiian shirts and ran his dog for Congress. What doesn’t quite come through here is the cackling, almost maniacal laughter that punctuates most of Watkins’ sentences. These days, he is glad that storage is on the upswing because everybody needs it to store all of their music, videos, pictures and games. Here’s an edited transcript of the interview.

VB: Is storage a commodity?

BW: It is and it isn’t. We thought it was a commodity. But I’ll tell you, in the last four years, the most money in electronics has been made by storage companies. Intel’s growth is slowing down. In storage, the profits and revenues are up. It’s because storage is everywhere, not just in online businesses. You have a terabyte of storage in your home now, or you soon will. Look at an iPod. The music has to be stored somewhere on servers. That uses our enterprise hard drives. And guess what? It has to be backed up. More drives. Then the user downloads it to a desktop or notebook. More storage. And they need more backup. Then they transfer it to a hard drive on the iPod. It’s all about content being delivered digitally. It creates an ecosystem of storage devices. The center of that is all hard drives. A seven-megabyte song is stored a lot of times. Video is even more data. Then you take it, mash it up, and put it on MySpace or on YouTube. The number of petabytes being stored is consistently up 60 percent a year. That’s not even counting new applications, like on a storage device in the car.

VB: So digital media is driving growth?

BW: It’s going to go on and on and on. Look at all of those bootleg copies of concerts and music recordings out there. They’re getting digitized.

VB: That would be crazy if all of the bootlegged recordings got uploaded and stored again.

BW: This is going to be phenomenal. If all content in the world gets digitized, then you’ll have multiple copies. You will have a copy. It’s going to sit in the server cloud. It’s going to get backed up. That’s our Kool-Aid and we’re grateful for it. I talked about this bootlegged concert thing in the Wall Street Journal. You wouldn’t believe it but three billionaires emailed me and asked me about digital recordings of Grateful Dead concerts. I said I didn’t have it. But it’s amazing how social media gives a new life to these things.

VB: There are a lot of Deadheads out there in the corporate world. I guess the Grateful Dead were the start of social media?

BW: I don’t think I would have made it through my teenage years without the Grateful Dead. People emailed me and said they’ve got Dead tapes. That’s just a small thing. But it goes back to social media. The Dead had a huge social following.

VB: You’re thinking of putting storage servers into homes?

BW: If you look at the ’90s, it was all about digitizing the work place. Now it’s about digitizing the home. How do you bring this to a unified system. We think the handheld has a little storage. The car has a little. But the home has a lot. You carry it with you.

VB: Is Seagate going to manage that experience?

BW: Yes, that’s the ideal. We’ll become a big software play. We will put our software on the storage to manage it for you.

VB: What’s your thinking behind Eco Seagate?

BW: It’s a way to break down barriers and get to know people. We’ve got more than 50,000 employees. The only way you can handle the scale of a company like ours is structure and function. How do you break down those barriers and bring back human nature into our company? I had a discussion with a guy on one trip. I told him that the most important thing in my life was to get my daughters through high school without them becoming pregnant. That guy said it was his No. 1 goal too. We may be a billion dollars different in income but we are really just the same humans. I’ve done 10 of these Eco Seagate trips now. The stories from those trips about teamwork come back into our culture. I want to create the right stories in the right atmosphere so those people come back and use those stories at work. We’re creating the culture of our company this way. Read the rest of this entry »