The rapid growth of Internet-enabled HDTVs and other living room devices is laying a new technological foundation, one that will enable digital video and other media content to exist alongside the current technologies of cable and satellite TV service. Software developers and technology providers are rushing to put in place the embedded software and distribution infrastructure that will enable content owners, aggregators, advertisers and consumers to reap the benefits of network connectivity in consumer electronics devices — and enable the platform providers to slice off some of the $60 billion annual pay-TV business for themselves.
Leading this rush are established platform providers Google, Apple and Microsoft. Each is pursuing a radically different strategy, however, as they seek to leverage their respective strengths in web technologies and the digital living room.
Google’s strategy focuses on Google TV, an Android-based platform built around the Chrome browser. Google hopes to establish search as a significant modality for content discovery on TV, so it can extend its search-based advertising business to the living room. It also plans to extend the Android apps ecosystem to its connected-TV platform.
Apple is moving more gingerly than Google. Its recently launched Apple TV set-top box represents a down payment on what we expect to be broader effort to extend its App Store platform to the living room, and to tie together in-home and mobile access to video content across multiple Apple devices.
Microsoft has already built an extensive online network for video delivery in Xbox Live. Now it is investing in gesture-control technology such as Kinect as it seeks to create new ways of interacting with web-connected devices.
While the established platform providers have to be given the inside tracks, they are joined a number of startups, a sector led by Roku, Boxee and Vudu. Roku pioneered the use of embedded apps in a set-top box to deliver streaming video to the television, whether or not the TV set itself was connected to the Internet. It now finds itself in a face-off with Apple TV.
For bringing streamed video content to the TV, Boxee is the current leader among browser-based platforms. Its free software was designed originally for TV-connected PCs and laptops, but it is now rolling out a set-top box with its software embedded. It now finds itself facing off against Google TV.
Vudu began as a set-top box but now markets its software as an embeddable apps platform and movie VOD service for connected CE devices. Recently acquired by Wal- Mart, it’s a wild card that could upset the plans of Apple and Google.
Some TV set manufacturers are getting directly involved, developing a software platform for their connected displays. Most prominent among these is Samsung. Given its market share in the TV industry, as well as mobile handset market, Samsung’s vertically integrated apps platform has to be considered a contender.
Like Microsoft, Sony has also built an extensive online network around its video game console, the PlayStation 3, which it has expanded to include downloadable movie and TV content. The PlayStation Network could provide Sony with a solid foundation from which to launch a broader assault on the digital living room. But so far it has not attempted to extend the reach of the network beyond its gaming platform.