Tech Giants Battle to Control Your Living Room
If you want thrills, forget the prime-time action dramas on network television this season. The real high-stakes TV action is taking place among tech titans battling it out for boob-tube dominance.
Amazon, Netflix, and YouTube are all competing to beef up their content offerings. Meanwhile, Apple and Google are racing to deliver new TV technologies for your living room.
The future of television consumption is at stake. Since the rise of online video, TV companies have feared the impact of people dumping their cable subscription in favor of content they watch on the Internet. But so far, no mass defection has taken place: According to the latest earning reports by major cable companies, most American households still pay for their cable TV subscriptions. For the most part, analysts say, people who are cutting the cord and dropping their subscriptions are doing so not because the alternatives are so attractive, but because they can't afford the monthly bill. In fact, most of them don't have a broadband connection.
Old-school TV is doing just fine at the moment, with around 100 million cable subscribers--a lucrative market that technology companies hope to tap into by changing the way we enjoy video content. In addition, more than 70 percent of online Americans visit video-sharing websites such as YouTube, according to Pew Internet research, so demand for good-quality online video--and new ways of consuming it--is on the rise too.
That's where content services and technology companies come in, hoping to offer consumers a convenient way to watch whatever they want whenever they want it. On one front, streaming services such as Hulu and Netflix are securing deals with content creators to provide viewers with more than just old movies and TV series. On another, Google has revamped the software for its Web-connected Google TV, and Apple is said to be developing products that may revolutionize our interaction with our television sets.
The Content Services
The three major players in the content streaming arena are Amazon, Hulu, and Netflix. All are battling to get exclusive rights to certain studios' movies or certain networks' TV shows. They hope that exclusive content will entice users to join or stick with their service.
For consumers, exclusive content is not a particularly welcome development, since it means that they may have to subscribe to a number of services, each with its own fees, to gain access to the best movies and TV shows available.
Amazon's Prime Instant Video service is basically an entertaining add-on to the online retailer's $79-per-year fast shipping service. Prime Instant Videos work on computers and on nearly 200 models of set-top boxes, Internet connected TVs, and Blu-ray players, including the Roku box and Google TV devices.
Netflix charges $8 per month to let you stream advertising-free movies and TV shows on consoles (including the Wii, PlayStation 3, and Xbox 360), as well as online, on iOS and some Android devices, and on the Apple TV, Roku, and TiVo boxes. Hulu Plus also charges $8 per month and works on as many devices as Netflix does, excluding Apple TV.
Yet in their current form, these streaming services aren't yet ready to replace your cable provider. For one thing, many new movies are unavailable for streaming for at least one month after they're released on DVD. And TV series are often embargoed until a month after the last episode of a season has aired.
But if you like reruns and older TV shows, streaming services can be a great supplement to your TV subscription. Cases in point: Netflix and Amazon last week unveiled separate deals to expand their lineups of Disney and ABC series, including Alias and Switched at Birth, plus old episodes of Grey's Anatomy and Desperate Housewives, and all episodes of Lost, Brothers & Sisters, and Ugly Betty.
If you don't want to pay increasingly pricey monthly fees for streaming TV and you don't mind watching ads, consider YouTube, which has some interesting plans to shift from its current reliance on user-generated kitten clips to high-quality video. The Google-owned site is set to unveil some 100 channels of original programming from partners such as the Wall Street Journal, Madonna, and Ashton Kutcher. These channels, for which YouTube is reportedly paying producers some $100 million in advance advertising revenue, are set to debut early next year.
The Living-Room Devices
Apple and Google, the ultimate mobile-space rivals, are making slow but steady progress in their campaigns to penetrate consumers' living rooms, with set-top boxes to complement cable or satellite receivers. Google's initial effort, the Google TV-equipped Revue box, was a flop at $299--but this summer Logitech lowered the Revue's price to a more palatable $99.
And late last month, Google began pushing a free update to Google TV OS, which includes (at launch) some 30 new TV-optimized Android apps. The apps consist mainly of casual games and screensaver-like animations (a faux fireplace, for instance), but apps on your TV have the potential to become the channels of the future. For example, video content providers might launch a video app in the Android Market that offers you either free, advertising-supported content or subscription-based, advertising-free content. What the subscription price turns out to be is one of the biggest unknowns that may help determine whether this approach will stick.
So far, CNBC, CNN, Fox, and Wall Street Journal are on board with apps. Apps on your TV will help transform Google's set-top box OS into a casual gaming platform (eight simple games are currently available, including an Angry Birds clone).
Still, don't place your bets on Google TV until Apple has taken its shot. Steve Jobs biographer Walter Isaacson reports that, at the end of his life, the Apple CEO was excited about a project to create an "integrated television set that is completely easy to use." The Apple set wouldn't need to include complex remotes or a bunch of set-top boxes, Jobs believed.
It's unclear whether Apple's approach will take the form of an integrated television or an inexpensive box--essentially an overhaul of the currently available Apple TV. The new Apple TV may ship as early as 2013, according to reports, and it could be based on Siri, the voice-enabled virtual assistant technology found on the iPhone 4S. A Siri-controlled TV would not be without difficulties, however, as my colleague Ian Paul notes. Siri needs a permanent Internet connection to work, so if your connection went down, you wouldn't be able to control the set, unless there's a backup pushbutton remote.
Who's going to prevail in the battle for your living room? It's too early to pick winners among the competing companies. But the winning approach will surely give you much more control over your entertainment options--allowing you to pay for only the content you're interested in and letting you watch that content when you want to.