Internet Connectivity Seen as TV’s Latest Savior

Discussion
Jan 11, 2011

By Tom Ryan

After finding that 3-D TVs didn’t live up to the hype last year, TV makers are hoping that internet-connected sets and related hardware devices will wow consumers this year and reverse the industry’s relentless price declines.

At last week’s Consumer Electronics show in Las Vegas, most major manufacturers showcased connected TV sets. Several ran Google’s new TV software that features full web browsers with access to popular online video streaming services and onscreen widgets.

Netflix was a primarily selling point. Just about every connected TV device, whether auxiliary boxes, Blu-ray players, or TV sets with the connection hardware built in, featured access to Netflix’ streaming service.

The ability to play videogames on TV was also being played up big as a big component to Web-based entertainment. Many TV makers are forming partnerships to play videogames on the TV without the need for a dedicated game console, and many are courting developers to create apps for the TV. LG Electronics Inc. showed a new motion-sensing remote control with six buttons similar to Nintendo Co.’s Wii game controller.

"Videogames are one of the categories that we hope app developers will take to with the new Motion remote," Tim Alessi, director of new product development at LG’s home electronics division, told the Wall Street Journal.

Research firm DisplaySearch said 21 percent of the roughly 210 million TV sets sold worldwide in 2010 had an Internet connection. It forecast that portion will rise to more than 50 percent by 2014.

"From our perspective, bringing gaming onto the Internet TV expands the functionality of the television," Panasonic Corp.’s President Fumio Ohtsubo at a press conference.

Writing for Techland.com, Doug Aamoth said connected TV sets and related hardware devices command a price premium between $50 and $300 depending on the product but he expects component prices will continue to drop over the coming years. The biggest challenge for connected TV, according to Mr. Aamoth, isn’t hardware implementation or consumer adoption but getting TV and movie studios to provide programming. But he expects they’ll relent as adoption increases.

"Ad rates for online video haven’t reached anywhere near ad rates for traditional broadcast TV but as more and more people explore alternative means for consuming entertainment content–specifically via connected TV–larger revenue streams for the studios will follow and they’ll eventually relax their stance on connected TV," wrote Mr. Aamoth.

Lack of 3-D programming also was said to have slowed the adoption of 3-D television sets although plenty were showcased at the show, including a few touting glasses-free 3-D TV screens. Other major trends at the show were tablets promising heavy competition to the iPad, smartphones and as always, robots.

Discussion Questions: What do you think of the likely consumer appeal of internet-connected TVs? What challenges may it face in consumer adoption?

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12 Comments on "Internet Connectivity Seen as TV’s Latest Savior"

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Peter Fader
Guest
6 years 11 months ago

The potential for Internet-connected TVs is massive–but the trick is that it will take longer than expected for it to really catch on.

The obvious analogy is TiVo: it came out years before consumers were truly ready to take control over their TV-viewing habits, and thus it was a financial disaster.

So it probably won’t be 2011 or 2012, but it’s fair to say that by the next decade, TV will be seamlessly integrated with the Internet–but there will be many trial-and-error failures between now and then.

Max Goldberg
Guest
6 years 11 months ago

True convergence between TVs and computers has been a goal for years. That being said, how many consumers are going to rush out and buy a new TV just to get this feature? Over time, Internet connectivity will become a standard feature of TVs, but don’t look for it to suddenly spur massive sales.

Bill Emerson
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Bill Emerson
6 years 11 months ago

While certainly no technologist, my sense, is that internet-connected TV is just another step toward a state where the hardware (TV, PC, tablet, phone) becoming completely interchangeable and, essentially, appliances. All these devices will seamlessly connect the individual user situationally into their provider(s) of information, news, entertainment, social connection, and whatever else (virtual reality) is conceived and delivered. Each will have some sort of identification capability, probably biometric, that will allow the user to access what they want, whenever they want, wherever they are, using whatever hardware is available at the time.

The interesting part will be watching the content providers figure out how to monetize this process. My guess is some sort of EZ Pass equivalent.

Gordon Arnold
Guest
6 years 11 months ago

The television is still a multi-person, single-stage entertainment center; even with PIP (picture in picture) there is only one sound selected at a time. The idea of extending PIP capabilities to include internet access, site and internet gaming, and instant messaging–plus each with separate mono sound capability–might be worth looking into.

But like all new technology, the window for profit is very small and many times ends early due to competitor improvements and expanded capability like adding closed captioning. The true issue with this innovation is where to manage software upgrades and security and of course, the cost of each.

Ben Ball
Guest
6 years 11 months ago

Internet ready TV is the catalyst that has been missing in the transition from traditional physical media (DVDs, etc.) to virtual entertainment. Removing the technical/physical/cost/psychological/just plain old hassle barriers presented by the need to buy, connect and sync multiple hardware components opens up VSD to everyman. The speed of adoption will be the normal TV replacement cycle X the rate at which internet delivered content becomes available. Faster content development will drive a faster penetration rate for connected sets.

By 2015, hardware companies will be selling retrofit devices to allow current sets to receive programming via the internet–much like the digital only conversion we just went through.

M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
6 years 11 months ago
Had a problem with Netflix’s streaming video recently. Independent of my input, they migrated a third of my queue over to the “Instant” tab (streaming video) and away from my dvd tab. I called to determine the cause and seek a correction, and my customer service representative insisted that there was no way to effect this migration unless I had done it myself. I had not, and the Netflix rep practically called me a liar. I prefer the dvds, not the instant viewing. After a few days, I called back to explore the problem again, was informed that Netflix had suffered a software glitch, was given an apology, and in an instant all my titles were moved to the correct queue. Problem/solution. Customer service moment of truth. They handled it well. I didn’t see a mention of DirecTV in this topic. And yet, they are in the forefront of internet-connected video. It’s called CINEMAplus. My big honking Sony has the right wiring, I’m told, so all I have to do to receive on-demand streaming video… Read more »
Doug Garnett
Guest
6 years 11 months ago

TiVO nearly failed because they never communicated a compelling value – although it existed from the start. DirecTV failed until they offered consumers something important–football and other sports they couldn’t get elsewhere. I’m reminded of both these because they were technologies looking for a reason to exist.

So, too, with connected TV. Why do I care? For 10 minutes of YouTube viewing every week? No way. So I can publicly browse the web? WebTV proved that’s not compelling.

Until connected TV makes our TV experience significantly better, it won’t achieve mass success. And so far, Google doesn’t know how to do that. Apple may have a good idea, but it’s hard to tell. Sony is following Google (where is Sony leadership?). Intel never succeeds at this stuff.

So note to Manufacturers: it’s not about the technology. Connected TVs success is entirely about consumers. The manufacturer who fits themselves into consumer lives will own the business….

Jerome Schindler
Guest
6 years 11 months ago

I think it would be really convenient to be able to sit in front of my big screen LCD TV and check e-mail and hopefully with a keyboard to respond, as well as access all the other available information. My internet service already comes from my cable TV provider, so I assume there would be no additional cost. However, what scares me is all the people who may be downloading movies that sucks up so much bandwidth the internet slows to a crawl.

Gene Detroyer
Guest
6 years 11 months ago
This discussion follows today’s other discussions about integration of communications. And, once people understand this discussion, they will understand the other two. “TV” ubiquitously is the broadcast of entertainment. When we say “Let’s watch ‘TV'”, we are not saying we are going to look at the scene, we are saying we are going to look at NFL Football, or MadMen, or CSI. Because of that thought process, we discuss the enhancements of this device that we look at as extras. What we are not understanding is that the big flat screen that we are calling a “TV” is nothing more than the screen we have for our computers. It is an appliance, not to be defined by the content. Imagine, in the future, there is a screen in every room. On that screen you can do everything you do on your computer. On that screen you can control the lights and heat in your house. On that screen you can watch any entertainment you choose. On that screen you can make all your phone calls.… Read more »
M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
6 years 11 months ago

I’ve got to weigh in on this topic one more time. I multitask, and I’ll bet you do, too. I watch the NBA on TV while answering email using my computer screen. One screen that does everything? No. A screen in every room? No. Multiple screens in a single location for multitasking? Yes. I don’t want the internet on my TV because it keeps me from watching programming. I don’t want TV programming on my computer because it keeps me from email and the websites I manage.

Ted Hurlbut
Guest
Ted Hurlbut
6 years 11 months ago

I think the run that TVs have had in the last 5-8 years is likely tapped out a bit. A lot of consumers spent good money in those years on TVs that still please them greatly. That’s what the experience to date with HD-TV suggests to me.

As a result, I don’t think that pricing pressures are likely to ease up soon. What I do think is that manufacturers who squeeze features into their units, like internet connectivity, will enjoy an advantage over those that don’t. But I don’t think they should expect to get fully paid for those features.

Ed Dennis
Guest
Ed Dennis
6 years 11 months ago

Well my kids gave me a Sony BluRay player for Christmas and I just got around to “hooking it up” last week. Well after reading the directions I found the thing allowed streaming internet as well as playing BluRay disk. Got it set up and watched The Spitfire Grill over my WiFi. I have the cheapest AT&T DSL (slowest) and the movie streamed flawlessly. Quality was equal to good broadcast TV or VHS tape.

In short very good and a fantastic surprise. Now I want to know when I can get everything via the internet and ditch Comcast. I would gladly pay for faster internet if I could get rid of the cable company. You do realize that after world peace everyone’s first wish is to get rid of the cable company. Heck this isn’t TV’s savior, it’s mine. Free the people!

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