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Year of Internet TV?
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IPTV Feature Article

January 20, 2009

Year of Internet TV?

By Gary Kim, Contributing Editor


Porting broadband-accessed video directly to an HDTV screen was something between a technology demonstration, an announced roadmap and a collection of features at the recent Consumer Electronics Show (CES). Despite those advances, we now must brace for announcements that 2009, or more likely, a year in the very near future, is proclaimed “the year of Internet TV.”  Announcements of that sort typically prove wrong, of course.

 
Yahoo's Widget Channel, for example, will support broadband Internet delivered to some TVs built by Samsung, Sony, LG Electronics (News - Alert) and Vizio. Of course, the push to unify TV and Internet content has been underway for perhaps a decade, initially using cable set-top boxes and video game players and now extending to digital video recorders, Blu-ray players.
 
Xbox 360s, TiVos, Roku DVRs, and AppleTVs already have begun wading in the Internet content waters by streaming movies directly to their TVs via Netflix, Amazon on Demand, and iTunes, while Playstation 3 offers its own movie service.
 
In fact, just about every device platform in the home is now being turned into a channel for transferring Internet video content to the TV. Nintendo is planning a dedicated Internet video service for its Wii platform while Microsoft Corporation has launched a service with Netflix to distribute videos to its Xbox LIVE console.
 
LG Electronics is launching a range of broadband-enabled HDTVs that will stream movies, TV shows, and other HD videos from Netflix. Adobe Systems, Intel, Broadcom (News - Alert) and Sigma are collaborating to embed Flash Lite video capabilities in their chips. That will make Flash available in a range of digital TVs and set-top boxes. And since Flash is such a popular video encoding technique, you can see where the suppliers hope this goes.
 
LG's network-connected Blu-ray player offers 12,000 videos from Netflix and 14,000 from CinemaNow. It also allows customers to stream other videos from the Internet directly to their new range of Internet connected TVs.
 
Samsung Corporation has a new range of Blu-ray home theater systems with a similar offering of Netflix videos. Digital set-top box provider Roku Inc. has likewise announced a partnership with Netflix for video downloads, and has now added Amazon.com’s (News - Alert) streaming video on demand service as well.
 
Cisco Systems has launched a series of digital media hubs for connecting devices in the home and centralizing access to audio, video, and photo content in the home. Customers can also upload and download media through any Web browser.
 
ActiveVideo Networks offers Blip.tv content offered by some cable and telco video providers. The ActiveVideo Distribution Network offers a combination of traditional TV programming and online video.
 
A new television-formatted Web site also is being introduced by YouTube (News - Alert) and available on Play Station 3 and Wii game consoles. So it is no surprise that many--including game console suppliers--expect and hope video game consoles will be an early and significant gateway to Internet television.
 
And TiVo has been supporting viewing of Internet-delivered video from YouTube, since 2008.
 
All of those are directional indicators. But beware of prognosticators saying things such as "2009 is the year of Internet TV." It will not be. And there are several reasons why not.
 
All the new technology will take some time to propagate. Some of the other complementary parts of the ecosystem remain incomplete or user unfriendly. People usually have their Ethernet jacks where their PCs are, not where their TVs are.
 
Of course, there are wired and wireless systems to port content from PCs and PC-like devices and TV displays. How many human beings do you know who have such systems, use them and report they work "really well"?"
 
Then there are the business model constraints. Neither content owners nor major distributors are willingly going to cut themselves out of the value chain. That means content providers will be careful about making their best content, with the best established revenue models, from making large amounts of that content available for what is essentially a new distribution channel, until at the very least the move is revenue neutral.
 
Distributors will be even more cautious in many ways, because they are the existing channel that will be disrupted. Broadly speaking, at stake is the monopoly that cable and satellite companies have on the distribution of video content into households. The point is, if Internet on the television really takes off, why would a consumer continue to subscribe to cable television channels when all the same video content is available with just an Internet connection?
 
But the video value chain is complex. Content owners will want to ensure that they make at least as much money as they now do, and hopefully much more, by emphasizing one channel over another. They have done so before, of course. But very widespread availability of highly-popular Internet-delivered content will wait for better ecosystem development. So 2009 will not be the year of Internet TV.
 

Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary's articles, please visit his columnist page.

Edited by Michelle Robart

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