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Tech Players Push TV-Web Convergence

Jul 6, 2008  •  Post A Comment

Some of the biggest technology companies are placing their bets on convergence between the TV and the Web, providing the best indication yet as to how the TV business will work when flatscreens and laptops traffic in the same content.
Last month, both Sony and Google introduced new services that will send content to the television set via the Internet. Apple, Microsoft and Netflix also are in the game, investing early to develop technologies that will challenge traditional programming distribution businesses.
The question remains when will content zip between devices seamlessly. At stake is $64 billion in annual advertising revenue.
The business of serving up movies, television shows and Web programs will shift dramatically in the next five years, said Alex Lindsay, a technology expert and the chief architect at PixelCorps, a San Francisco-based consortium of new-media producers.
“It was one thing when it was CinemaNow and these little startups saying, ‘We can deliver movies,’” he said. “Now you have the biggest guys in the game going head-to-head and they know this is the new battlefield.”
Certainly, Sony and Google are a long way off from piping everything consumers want to watch to the TV. But for starters, Sony will begin offering a video download service later this summer through the Sony PlayStation 3 gaming console. Sony also plans to stream movies to the TV, starting with Sony Pictures’ Will Smith vehicle “Hancock.” The movie, released in theaters Wednesday, will be available on Sony Bravia TVs equipped with integrated Internet connections this fall, prior to its DVD release.
Google launched a software application that lets users stream videos from YouTube to a TV set. The caveat is the consumer needs a Sony PlayStation 3 and other gadgets to make the service work, limiting its reach for now to all but the very tech-savvy.
But Google’s efforts are significant because they follow other industry moves. Netflix makes its movies available immediately to consumers via a Roku set-top box. Apple introduced a new version of the AppleTV in January that includes TV shows and movies from all major studios. Microsoft already offers movies, in standard definition and hi-def, on its Xbox.
They’re all after the same payoff: the chance to extract more revenue through the digital delivery of content. But cable operators have their own plans for Web-to-TV migration. Comcast offers CBS, Hulu, Viacom, cable networks and other content for free on its Web video portal Fancast.com.
Later this summer, Comcast will offer download-to-own and download-to-rent movies and TV shows on Fancast, a la iTunes. Down the road, Fancast will add features for consumers to bookmark content online to watch later via VOD on the TV.
With both technology companies and traditional TV cable operators competing, innovation is likely to come quickly.
“There is a huge amount of energy being expended to connect broadband to the TV, and there are lots of players interested in making this happen,” said Will Richmond, an industry analyst with VideoNuze.com.
The big unknown is if consumers are interested in these new services and devices. In a study last year, 20% of consumers in homes with advanced services said they thought it was important to watch Web video on the TV, according to Paul Rule, president of Marquest Media & Entertainment Research, which conducted the study.
The number remained the same this year.
“It just seems like the home electronics industry is firing broadsides at the sweet spot in this market and missing it completely,” Mr. Rule said.
They’re missing because the user experience in Web-to-TV devices is lagging.
“It takes a little bit of engineering on the part of the consumer to get the computer near the TV, to find the plug-and-play devices that work,” said Bill Tancer, head of research at online audience measurement firm Hitwise. “It’s not a matter of flipping a switch.”
Other hurdles include how to find programming, formatting content for multiple media, ownership rights disputes, business models and device compatibility, Mr. Richmond said.
“There are a lot of moving pieces to replicate the TV experience,” he said.
Experts agree there won’t be one winning device. In fact, consumers are likely to still choose the device that is best for each task. That means if you want to write, you’ll still use a laptop. If you want to listen to music, you’ll still favor the iPod. If you want to watch TV, you’ll still turn on the TV set, even if that content is coming from Sony or Google or Microsoft, rather than Comcast, Time Warner or DirecTV.
Besides, Web video still needs its “iPhone moment,” said Kaan Yigit, analyst with Solutions Research Group. “[That means] a deal or a very large investment, a new service or a new technology introduction that will capture our imaginations and erase all doubt that the digital future for TV 3.0 is here. We don’t have that yet. What we have are a number of significant initiatives that are pointing in that general direction.”

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