Device manufacturers are solving technology challenges and forging new partnerships with content and service providers to make web TV a reality. The success of early ventures such as Microsoft’s Xbox Live service is persuading competitors that some consumer segments at least are ready to bring web content and Internet services to their big screens and home cinemas. PETER KING, from Strategy Analytics, maps this territory.

More than a decade ago, in the early days of the mass market Internet, pioneers saw the opportunity to bring web-based services and content to the big screen. These failed largely because broadband last-mile access was unavailable and because other key enabling technologies were not able to support content suitable for TV screens.

There are clear signs that these shortcomings are now behind us, and a wave of web devices is now set to target the billions of TV screens in use around the world.

Our research indicates that, in Western Europe alone, by the end of this year, consumers will own 74 million devices that allow TVs to access web content. However, it is highly unlikely that any more than half of these devices have actually been used by consumers to access web content.

We can trace the roots of Web TV back over ten years, to 1996 in fact when WebTV Networks pioneered a thin client approach to using the TV rather than a PC monitor. The following year it was acquired by Microsoft who subsequently renamed it MSN TV.

Although these early initiatives never fulfilled their early promise, today we are witnessing an explosion in the differing methods of accessing web content on our TVs. Digital Media Adapters, Games Consoles, Networked TVs, Set-Top boxes, Blu-ray players and Extenders, are just a few of the examples.
The attraction of the Internet is the breadth of content. So, what are the obstacles in bringing that to the TV with today’s solutions?

• Walled Gardens - Many solutions are based on onscreen portals where selected partners provide video offerings and the Web TV manufacturers collect revenue from those streams. This restricted access could lead to boredom and subsequent switch-off.

• Broadband Speed - Future generations of web applications, such as web-based television and streaming of high-definition videos, will rely on high-speed, stable broadband internet connections. In many countries with high broadband penetration actual speeds are relatively poor and failure to upgrade existing networks could lead to significant disadvantages.

• Expense of extra hardware and too many boxes - Consumers are already faced with a plethora of different boxes to store around the TV receiver to provide; VCR capability, DVD capability, Pay-TV or Free-to-Air services plus possibly a games console. Why then would they want yet another box, and yet another remote control?

• Limited ability of CE devices to handle browser based solutions - Historically, CE devices have not adapted well to browsers, and previous attempts have made them look rather clumsy or inadequate. This situation is in the process of change but the change is slow.

• Mismatch of technology lifespan - A TV has a relatively high purchase price and an expected lifespan of around ten years, although manufacturers would like see replacement more frequently than that. A nascent technology that might enable Web TV might only have a lifespan of a couple of years before it is made obsolete.

• Enabling technologies (eg WiFi) can be low quality, unreliable, and have interference problems - There is always the risk, especially with high-bandwidth video streams that the TV pictures will break-up in some fashion, thus impairing the viewing experience.

• Myriad of video formats and encryption - There are myriad formats and encryption methods for videos on the Web and on computers, meaning some videos may still not be accessible by consumers using the various Web TV solutions. No one has a solution that handles all formats.

Regardless of the obstacles, a wide range of options are available for bridging the Web-TV chasm:

NETWORKED TV - It has proven difficult for TV manufacturers and chip suppliers, who do not rely on an x86 CPU core, to develop hardware and software solutions to enable a TV to perform PC-like tasks, such as web browsing. Most if not all TV manufacturers are developing models with network support. These devices enable media to be transferred between the TV and other networked PCs, appliances and servers. The next challenge is for TVs to support browsing of TV-formatted websites. Without this there is the temptation to tie a networked TV to a managed portal service, and inevitably this will restrict consumers’ viewing experience.

TV 'WIDGET' SOLUTIONS - In this TV based solution, consumers will be able to view content in onscreen "widgets" in either split-screen or full-screen mode. An example of these available widgets might be the most recent entertainment headlines or a news, stock price or weather item. Selecting the widget will open a Web page to the most recent breaking news and associated images. This is a sensible approach to introducing the consumer to the Web experience within the TV environment, regard it as a ‘baby steps’ approach. Given the huge success of the Apple Apps Store for iPhone/ iPod Touch applications, we may well see a similar approach to writing TV apps one day.

EXTENDED SOLUTIONS - Extender technology is built into home entertainment devices such as TVs, Digital Media players and DVD players. In fact they are Extenders for Windows Media Center to give them their full title. The basics are that these silent devices connect to a PC with Windows Media Center, but allow the consumer to keep the PC where it makes sense and use it as a "hub" to provide digital entertainment to TVs throughout the home. While this could be regarded as a reasonable solution for the more technically minded consumer only, there are now 13 million unique monthly Windows Media Center users, so we cannot write this method off, just yet. The PC does the heavy lifting of content, and the Extender does the rendering on the big screen.

DIGITAL MEDIA STREAMING PLAYERS - These devices are not true Web TV devices, in that the user cannot access web content of his choice. These Set-tops are designed primarily to deliver movie content; Netflix/Roku is one such example. This, mainly US based application is innovative but unlikely to achieve any significant global numbers in the short term.

DIGITAL MEDIA ADAPTERS - Another solution for those consumers who use the PC to access and store their digital content, but wish to use the TV as the entertainment centre. DMAs have been around for several years already, but have failed to capture the consumer’s imagination. There are a couple of possible reasons for this; the products may have been ahead of their time, or, they were just too complicated to sell at retail and to install. That situation is changing, albeit slowly; consumer awareness is growing, and user interfaces are improving, especially following the introduction of Apple TV into the market, this Set-top box works in conjunction with the iTunes store to provide movies and TV programmes to the TV. Furthermore, it will bring web content in the form of YouTube videos, podcasts, imaging material from stores such as Flickr.

BLU-RAY PLAYERS – the LG BD390, is a typical example of just how far BD players have come in a short time. In addition to the Netflix and YouTube it already handles, it also distributes CinemaNow video, and using Wi-Fi it is capable of finding music, images and video on other home network devices. Many of these features overlap those in stand-alone devices described above. While this type of solution will still be subjected to the bandwidth speed issues, we like that fact that it does not require yet another box. As BD player prices fall consumers will more readily adopt BD and in fact eventually choose it when replacing a DVD player, as BD is backwards compatible with DVD.

GAMES CONSOLES - Sony and Microsoft may be losing the gaming battle against the Nintendo Wii for now, but they may well win the Internet video battle. Their media capabilities make them definite competitors in this space.

Microsoft claim the Xbox LIVE Video store has more than twice as many hours of high-definition (HD) movies and TV shows than the nearest competitor. Add to that the 12,000 Netflix movies and the list is impressive. This solution from Microsoft is not only US based, as many of these solutions are, they claim 17 million LIVE members across 26 countries.

Sony has had a good opportunity with the PS3 to enter this market. PS3 has networking capability, Blu-ray capability and of course Sony has plenty of content. It partners with numerous content providers for the service, including Fox, MGM, Lionsgate, Warner, Disney and Paramount - includes about 1200 TV shows and roughly 300 movies.

SETTOP BOXES - A number of STB manufacturers are known to be building solutions for IPTV providers to offer ‘managed’ over-the-top content alongside the traditional private network content. Typically using APIs to get for example the most popular YouTube videos of the day, or the top 20 best ever comedy YouTubes. An IPTV STB or DVR is ideally placed to provide Web content to the TV. Once the floodgates open, and the operators and content owners relax their position regarding ‘free’ content, and figure out how to monetize it, the STB community can demonstrate is a great vehicle for Web TV.

In conclusion, most if not all TV manufacturers are developing models with network support. The Web offerings may be limited, but the trend is clear, in the coming years many TVs will be networked and offering Web TV.

The barriers are coming down and consumer acceptance is of internet-based content on the TV is growing. There is a long way to go, but the Internet will clearly play an important role in the big screen media center in years to come.
The use of TV Widgets is a sensible approach to introducing the consumer to the Web experience within the TV environment. Intel and Yahoo, the main providers of Widget TV, seem to have a good approach and just hope that this time Intel can deliver, several years ago it had a similar but ill-fated consumer approach called ViiV.

With network capability built-in and a healthy customer base already, games consoles are in pole position in the race to deliver Web content to the TV. It is not clear yet what percentage of both the Xbox Live and Playstation Network on-line gamers will actually also download video, but as a solution, these products tick many of the boxes, for best of breed in delivering Web TV.

While a Blu-ray player solution will still be subjected to the bandwidth speed issues, its appeal is the fact that it does not require yet another box. So the key points are that it is a logical replacement for aging DVD kit, it is connected with Ethernet and sometimes Wi-Fi, it is starting to be packed with content goodies from the network and prices are now hitting key consumer price-points. It is too early to suggest domination for BD, but if the industry takes these issues on-board, and delivers country specific content, BD may well be an ultimate winner in the race to bring Web content to the TV.



Peter King is Director of the Connected Home Devices service in the Digital Consumer Practice of Strategy Analytics, focusing on strategic issues relating to the impact of digital convergence on consumer markets. His product specialities include advanced digital television, mobile/fixed broadband network-enabled devices, and next-generation home entertainment enabling technologies. Contact: www.strategyanalytics.com

This is one of the many expert contributions included in the DVD and Beyond 2009 magazine out next week. Ask for your free copy.

Story filed 15.06.09