This week at the National Association of Broadcasters (NAB) show in Las Vegas, a whole area of the floor was dedicated to streaming broadband content companies. Companies like Vizio, Boxee, Netflix, Vudu and Roku are demonstrating new hardware and service offerings to allow consumers to access Internet movies, music and content from their TVs.
New consumer research from the Leichtman Research Group found that 24% of all U.S. households had a TV connected to the Internet. It’s clear that increased broadband penetration and new content distribution models are combining to provide an alternative, or complement, to the cable/satellite oligopolies. Consumers want more choice and more control, not just pre-defined bundles.
There are three main models for getting streaming (and download) Internet content to the TV (as shown in the diagram below):
1. PC/Mac to TV. An obvious model is to use a personal computer to download or stream Web content and use the TV as a simple display device (the connected model). Running a keyboard and browser-based experience on your living room TV, however, has not proven very popular. Most users view video in a browser, but several hundred thousand use software such as Boxee to provide a more TV-like user experience. Walt Mossberg of Wall Street Journal recently discussed two newly released tools, a browser and remote control for TVs that are connected to computers, which are created to enhance PC-to-TV viewing experience.
2. Digital Boxes. Separate from the cable or satellite set top boxes (STB) provided by the likes of Comcast, DirecTV or AT&T U-Verse, a new generation of Internet-connected devices with simple, clear user interfaces and remote controls provide a hybrid user experience.
WebTV, acquired by Microsoft in 1997, brought a low-quality browser experience to the TV. TiVo later added Internet content, and newer entrants such as Roku offer a very simple way to access streaming content. Roku itself requires no subscription, but offers services such as Netflix and MLB.com that do require subscriptions. All three advanced game consoles (Sony Playstation 3, Nintendo Wii and Microsoft Xbox 360) provide similar access to streaming content and game downloads and some newer Blu-Ray players support streaming services. Twenty percent of households have a gaming system connected to the Internet, and six percent of households have a Blu-Ray player connected to the Internet.
3. Internet-enabled TVs. Dozens of newer TV models feature an Ethernet or WiFi connection that allows the TV to connect directly to the Internet without a separate box. These TVs contain a CPU that runs an operating system (typically Linux) that can support a simple thin client application (such as Yahoo Connected TV widgets or Adobe Flash Platform for the Digital Home) for selecting streaming media. iSuppli recently reported that 18 percent of flat panel TVs sold last year were Internet-enabled TVs (IETVs) and that this number is expected to grow to 60 percent in three years.
Vizio presented a popular Superbowl ad this year promoting their Vizio Internet Apps (VIA) offering, which allows users to “wirelessly stream movies, music, social networking sites and the best of the Internet”. All the major manufacturers, including Sharp, Panasonic, Samsung, Sony, Samsung, LG and others now offer competing services.
