Will Internet-Enabled TV's Kill Cable?

Blu-ray looks to have sent HD DVD the way of the deadpool in the HD disc format war, but can internet TV's do the same to cable and satellite services anytime soon? We doubt it, but it seems a new revolution in TV viewing has begun. Sony now has web-enabled Bravia sets and has signed deals with the likes of CBS Interactive, Sports Illustrated and Yahoo to bring web content to Bravia HDTV's. Panasonic signed a deal with Google this January to bring YouTube videos to internet-connected Panasonic sets. And both companies are part of a growing revolution on the part of TV manufacturers to eventually have the typical home theater consist of an internet-connected TV...

...and that's about it.

It's all about choice, control, and the opportunity for consumer's to define the experience they want on their TV's" according to Randy Waynick, senior vice president of marketing for Sony Electronics. And while TV manufacturers face competition from the the Apple TV's and TiVo's of the world, TV networks and big internet advertisers such as Google are squarely on their side.

~f.jpg Networks know that the web offers a greater audience base and more opportunities for advertising, especially advertising of the interactive type that isn't possible through TV. Not yet anyway. Google, a company who refuses to call themselves a media company even though their recent 10-K filing with the SEC disclosed that 99% of their revenues over the past three year's have been generated through advertising, signed the Panasonic-YouTube deal to make "content accessible to as many viewers as possible", says vice president of content partnerships, David Eun. And the more eyeballs, the more advertising revenues. comScore data for November 2007 revealed that 74.5 million people watched 2.9 billion video on YouTube, an average of 39 videos per viewer. Not everyone is a big fan of the lean-in experience of watching video on the computer though; there's a much larger market segment still pretty fond of sitting on the couch with the remote. Will bringing YouTube to this segment of TV viewers mean they'll use the video platform. Obviously both Google and Panasonic think so, or a contract would never have been signed. Raise the eyeball count viewing online video media, and watch the advertising dollars skyrocket.

But back to the original question: will internet TV's eventually send cable and satellite subscription services and local TV broadcasters the way of the deadpool? According to the LA Times, local broadcasters say that while internet distribution may pose some issues, most viewers tuning in to local stations are watching for local content such as news and weather forecasts. As for cable providers, most of them now provide their own digital video recorders which allow cable subscribers to watch programming at their leisure. This is exactly what backers of internet TV say is so great about their new technology. There's no real reason for cable to die if they provide the choice and on-demand service their customers want and TV manufacturers will have to come up with a better marketing ploy to move internet-enabled TV forward.

In the end, I guess the answer to the original question is no. Internet TV's won't change anything anytime soon. The entire dynamic of TV viewing will first have to change, and that may eventually happen with powers of the magnitude of Google all for the idea. We'll just have to wait and see.

February 18, 2008

Will Internet-Enabled TV's Kill Cable?