Las Vegas - The addition of TV shows to Apple's iTunes Music Store in late 2005 proved one thing to HBO chief technology officer Bob Zitter.
People would pay $1.99 to download and watch a program that was available for free the night before. In other words, there was a “value proposition” in delivering video to consumers over the Web.
Last Tuesday, Apple announced a video- and music-playing cell phone, as well as interactive box that sits in the family room. The AppleTV wirelessly pulls movies, photos and TV clips not just from computers elsewhere in the home, but from Web sites like … Apple.com. That was “another shot heard around the world,” in the estimation of Jeff Binder, senior director of Motorola's Connected Home Solutions unit.
Between Apple's announcements at its Macworld conference in San Francisco, disclosures from three other big makers of home-computing devices — Hewlett-Packard, Microsoft and Dell — and what the CEOs of two of the nation's largest video programmers, The Walt Disney Co. and CBS Corp., said in their keynote addresses at the 40th International Consumer Electronics Show here, you'd think that U.S. television viewers will be converted into Web TV viewers in short order.
“It's easy to think that everything is changing overnight, but it isn't,” Josette Bonte, vice president of content and Internet Protocol television at Ovum, said in discussing “ubiquitous video” at CES.
NOT SO GRANDIOSE
Web TV 2.0, in fact, is only a shadow of the grand vision of Web TV 1.0 from a decade ago. That's when a startup with the name of … WebTV promoted technology designed to let couch potatoes surf the Internet using only a TV remote control. The company was acquired for $425 million by Microsoft in 1997, which declared it the cornerstone of its effort to combine the Internet with digital television. By 2000, the grand vision had cracked.
This time, Microsoft wants to ride a video-game console of its own manufacture back onto the Internet. The marketer of Windows operating systems for home, office and mobile computers said it was creating a version of its IPTV communications software that will run on its Xbox 360.
“It was a really easy way to show the flexibility of the platform,” said Shari Barnett, director of media services in Microsoft's TV-software division, who originally worked on WebTV a decade ago.
She said the development took “a few months” and required no extra hardware on the Xbox, which has a “great rendering engine” that will make it easy to display high-quality video images on big screens in family rooms.
Eventually, Microsoft may be looking to have the IPTV software embedded directly into TV sets. Both moves could give a lift to AT&T, which is using Microsoft's IPTV software to deliver multiple-channel video services, though some analysts question the prospects for IPTV on the Xbox.
But the 2.0 approach to marrying the Web to the TV right now is not so involved. It's not about delivering all of a service provider's video to the home; nor is it about delivering everything that appears on YouTube, Revver.com or other Web sites to TV screens.
Instead, what computer makers like HP, Dell and even Apple — as well as cable-equipment makers such as Universal Electronics of Cypress, Calif. — are trying to do is enhance TV viewing with snippets of video from Web sites; streams of statistics, in some cases, for sports fans; and the ability to deliver personally owned or created content shipped to the TV screen either from Web sites or, more often, personal computers and their storage devices elsewhere in the home.
Hewlett-Packard, for instance, is selling 37- and 47-inch high-definition televisions that come with MediaSmart software, which lets viewers pull up digital content from Web sites such as CinemaNow, for movies, or Snapfish, for photos. But they can also pull up photos and movies that they have stored at home on their personal computer.
TV remote-control makers are getting into the act as well. Universal Electronics provides software with some of the remotes it sells to cable and satellite companies that gets installed on a personal computer, to allow viewers to do the same thing. They use their remote to pull up digital content from their PCs on what it calls MyChannel.
THE PC's THE PLACE
In the HP, Apple and Universal cases, the actual downloading, storage and organizing of digital movies and TV shows is designed to take place on the personal computer, not a box attached to a TV.
The AppleTV box “syncs” content automatically when a user adds or deletes something from their home computer, using iTunes software, for instance.
With Universal's MyChannel service, all management of digital content takes place on the PC. The remote just retrieves it.
“Basically, it's easier to manage your content on your PC and watch it on your TV,” said Universal Electronics vice president of product development Ramzi Ammari.
The amount of Web-delivered video appearing on TV sets, though, will keep increasing. This is spurred partly by Web sites such as YouTube, which have become libraries of clips of current events, societal stupidities and personally authored entertainment.
Also helping things along are services such as Starz Entertainment's Vongo. That movie-download service, like CinemaNow, first took aim strictly at the personal computer screen. But with the release of Microsoft's Vista edition of its Windows operating system, Vongo users could watch their downloads on the family-room TV — competing for eyes against Starz's family of scheduled and on-demand premium movie services.
“There is an explosion of interest in digital content,” Mike Gordon, chief strategy officer of Limelight Networks, a digital content delivery company. The advent of Internet video is a “long wave,'' he said, with momentum that “is just unstoppable” with younger audiences.
The Internet is “built in” to the lives of 18-to-24-year-olds, maintained Gordon, while it's only “bolted on” to the lives of older viewers.
But large technical challenges must be overcome before Web TV 2.0, 3.0 or 4.0 becomes an around-the-clock competitor to cable, satellite or telco-delivered television on the wide and big screen.
For starters, the only pipes with enough capacity to handle video on a massive basis are in private networks constructed by cable, satellite and telephone companies.
“The Internet will not be able to replace the eight hours and 11 minutes of TV the average household watches per day,” said Time Warner Cable executive vice president of product management Peter Stern. “There's not sufficient bandwidth today … to deliver that video programming to large numbers of people.”
But Apple's approach more or less bypasses the problem by letting a viewer download content to a computer and synch it up, so it is ready to play at any time. The AppleTV box, like other so-called media center devices, can become a personal video-on-demand server.
With products such as Apple's TV device, “I think you're going to see a real run at getting a TV experience off an IP network,'' said Bill Wheaton, vice president of digital media at Akamai Technologies, which runs a global network of servers and storage sites that “optimize” the delivery of digital content over the Web.
But that brings up another problem with Web TV 2.0 or 3.0: too much complexity. Too many devices of different kinds.
“I think we'll be astounded at how many devices there will be a market for,'' Gordon said.
This could end up a deterrent to adoption of Web-based video. Diversity means difficulty, as programmers have found out when trying to deliver video to mobile phones.
For every distributor a TV studio must deal with — such as Cingular, Verizon Wireless or Sprint — there is a different technical standard, Zitter noted.
In the mobile world, in fact, there is not a single Windows-like operating system or “even a PC,” said Manish Jha, general manager of Mobile ESPN. Hardware and software varies by carrier. The Apple iPhone likely adds another level of complexity to resolve.
“I have absolutely no confidence that there will ever be a standardization of [mobile] formats,'' said Jan Hofmeyr, executive vice president of business development at Entriq, which provides software for managing the delivery of paid content online. “Innovation will be much faster, requiring us to change.”
To resolve conflicts, he said, intelligence will have to be integrated into an entertainment service, such as HBO Mobile.
Such format hurdles won't stand in the way of moving Web video into the home TV set, given the use of Internet protocols and the fact that there are only a couple of operating systems for home computers. But cable operators aren't standing still in finding ways to compete with HP or Sony's Internet-connected TV sets or Apple TV.
Comcast is building up its library of on-demand video content. And Time Warner Cable is taking in Web video itself, delivering Quick Clips from CNN, CNBC and The Weather Channel to digital-cable customers via an on-screen menu that pops up when viewers watch those TV channels.
Quick Clips is now one of the five most popular video-on-demand services in the South Carolina markets where it has been introduced, Stern said. “We fully predict you'll see a massive migration of Web video to the TV, if done right,” Stern said.
CBS is even using the Web to move video content off the TV screen to the personal computer. It demonstrated last week at CES how a viewer could snip a scene from sitcom Two and a Half Men and e-mail it to a friend, in fast fashion. (See story on page 17.)
And that's key, said Digeo CEO Mike Fidler, whose Moxi Media Center set-top box has won two Technology & Engineering Emmy Awards for the way it easily blends content coming in from a cable pipe, including on-demand and pay-per-view programs, with photos and music stored on personal computers in a home network.
According to a TWICE magazine report during the electronics show, Fidler said Digeo is now working with content partners to make Internet-carried video services available through the device, using the Web's two-way ordering capability.
The trick in Web TV will be to give viewers access to more shows, stats and services from more sources. But “consumers are really not interested in complexity,” he said. “They are interested in enjoyment.”
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