With TV Apps, Over-the-Top Video Gets New Backers

One of the most remarkable, if least remarked on, developments at last week’s Consumer Electronics Show in Las Vegas was the incredible pace of innovation around connected devices, particularly HDTV sets and their increased capability for integrating over-the-top video.

At last year’s show, a handful of manufacturers showed off a few Internet-enabled HDTVs and about all you could do with them was run a few Yahoo widgets and stream Netflix movies. At this year’s confab, nearly every home entertainment device was network-enabled, and if it didn’t come with its own app store it came enabled with one of the many third-party app platforms being introduced in 2010.

In other words, TV sets, if not becoming genuine multipurpose devices, are rapidly evolving into multi-platform devices, capable of accessing video content from the web as easily as they can from a cable or satellite service. Over time, that could work profound changes in how consumers access TV content and shift the balance of power in unpredictable ways among set-makers, service providers and programmers.

Much of the credit for the rapid evolution in TV applications belongs to Apple, which popularized the app store as a means of getting web content to a device without the need of a full web browser, and to chipmakers like Broadcom and Intel, whose new families of system chips aimed at CE devices are making it possible to embed more sophisticated UIs into TV sets and set-top boxes, such as the app platforms introduced at CES by Vudu and DivX.

An even more far-reaching evolution in TV apps was being promoted at CES by ActiveVideo. Its cloud-based platform promises to make rich, computation-heavy applications accessible on a TV set without the need for significant processing power or storage, and without the need to embed individual apps or widgets in the device.  Instead, its tiny software client transmits navigation inputs to cloud-based application partners, which then manage all computational tasks, such as recommendations, e-commerce functions and updates to the applicaton on their own servers.

At CES, ActiveVideo announced a deal with Blockbuster to bring Blockbuster’s streaming and download service to ActiveVideo-enabled devices. By pairing the ActiveVideo client with a smartphone, users can also use the phone’s QWERTY keyboard to enter data such as search terms.

What all this activity means is that over-the-top video delivery is now being promoted not just by web-based startups like Boxee and Roku, but by major electronics manufacturers as well. While they may not openly encourage cable cord-cutting, manufacturers are doing everything they can to shift  web-delivered video from the PC to the living room.

That was precisely the dynamic that last year led Hulu’s content partners Fox and NBC to demand that the web video portal remove their content from Boxee in order to mollify worried cable operators. While Hulu had little choice but to comply, the active involvement of the likes of Sony, Samsung, Panasonic and Cisco put some pretty big new thumbs on the over-the-top side of the scale.

The growing capability of HDTV sets to integrate web-based content is also likely to attract the interest of powerful retail players such as Best Buy and Wal-Mart, both of which are eager to enter the digital content distribution business to replace their fading DVD business and are apt to view selling over-the-top-enabled HDTVs as a logical entree into that market. Best Buy, in fact, is one of ActiveVideo’s initial app partners, viewing the platform as a means to establish an ongoing relationship with customers after they walk out the door with their new big-screen TVs.

In short, over-the-top video is attracting powerful new constituencies that will serve as counterweights to incumbent service providers like cable and satellite operators when it comes to influencing how and when programmers make their content available on digital platforms.

So what’s a Comcast to do? It could always try buying up programmers. Oh wait

Question of the week

What functionality would you need in a TV to cut the cable cord?
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Paul Sweeting

Principal Concurrent Media Strategies

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3 Comments Subscribers to comment
  1. I’d like to believe I could cut the cord… but I’d need a few channels. Curiously, some of my favorite channels are the least expensive. I’d probably get Comedy Central (around 15 cents), Food Network, and AMC. I saw a poll on the tv a la carte site listing wholesale cost per channel. surprising stuff!

    There seems to be a movement afoot. Folks across the country, especially in the Bay Area, are fed up with paying over $1,500 a year in cable bills when they selective watch just a few channels. Join the movement at:

    http://www.tvalacarte.com/

  2. Sounds great! I cut the cord three years ago, and it doesn’t work as well as you think. Given a strict discipline of Netflix and Roku, I’ve still had to cheat…with those unattended television sets at friends’ homes.

    First of all, I’d like decent digital broadcast TV reception without having to install an antenna on my roof. My area got clobbered in the digital transition. Seems like a simple enough thing for a $1000 television set.

    Second, I’d like something other than crappy Internet television channels. After a month with the Roku Channel Store, I’m less than impressed by Blip.tv, Framechannel, and even MediaFly. What works well for a podcast doesn’t make for good television.

    Third, I’d like to be able to subscribe to premium channels such as HBO and Showtime with the ability to cherry-pick from the basic cable schedule (FX, AMC, Bravo, Discovery, etc.)

    Finally, I’d like everything I want without anything else. So I can put up with the Scripps lineup (HGTV for household detente) as well as a few others.

    In other words, I’d like cable, satellite or IPTV — I just wouldn’t want to pay for it.

  3. catalogues

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