08.05.2013 10:03 AM
Tech companies rethinking TV strategies as the Internet gains influence
Companies such as Apple, Intel and Google are conducting extensive research in an effort to shake up established business models.

In an interesting look at the future of television, the Wall Street Journal last week shot down the idea that tough legal contracts and the creation of licensing hurdles will protect the “incumbents” that now control the television business.

“The business is very quickly shifting away from the people that have controlled it forever,” said James McQuivey, an analyst who tracks TV technology for Forrester Research.

Companies like Apple, Intel and Google are conducting extensive research looking to shake up a business that has remained entrenched in its ways for the lifetime of all those who work in it. The time, investment and energy they are investing eclipses any combined research done in recent years by those in the broadcast industry.

Take Intel, for example. The Journal reported that Erik Huggers, a Dutch-born former British Broadcasting Corp. executive, has assembled a 350-person team with a variety of talents to tackle the issues involved in television today. They are about to launch a new Internet-based television service that’s expected to shake the very foundations of the television business.

Intel, according to the Journal reports, plans use a server farm to record every program aired — local, national and international — and store it for at least three days in a “cloud.” With an Intel-designed STB, users of the new service won’t have to own DVRs or even plan to record programs.

They can switch on the TV in the middle of any show and the viewer can simply go back to the beginning. “This is live TV, but you can rewind it,” Huggers told the newspaper.

Intel joins a growing list of companies, including Apple, Google, Microsoft, Sony, Samsung and others, that are vying to reinvent television with features like voice activation, restyled remote controls, new on-screen interfaces and other major changes in the way people interact with TV sets.

Last week, Google announced a device called Chromecast that allows users of mobile devices to play back programming from the device on their home TV sets. Google and Sony, according to the Journal report, are also working on their own Internet-based video delivery services.

Efforts to combine the home television with computer and online services have gone on for the past 20 years. But there is a feeling now that its time has come, especially as the quality of Internet transmissions have dramatically improved.

Cable and satellite TV providers are threatened for the long term, though they currently have strong positions. Yet they have encountered a strong challenge, especially as their costs and prices have escalated as the Internet competition has gotten cheaper. Cord-cutters fed up with huge cable bills each month are using less costly alternative services and dropping traditional pay services.

Negotiations with media companies for content rights, the Journal noted, could delay new services and limit some features, but that’s not expected to last. There is growing consensus, the newspaper said, that underlying technologies are evolving to the point that major changes in the TV experience are all but inevitable, whether delivered by new entrants or incumbents.

“I’ve never seen as much innovation in television as there is right now,” Ulf Ewaldsson, chief technology officer at Swedish telecom-equipment supplier Ericsson told the newspaper. Ericsson is reportedly planning to step up its own TV efforts as well.

Propelling the increased television activity are changes that have made the Internet a more viable delivery medium, including the growing proportion of customers with broadband service that can accommodate high-quality video signals. Many viewers now have Internet connections in their living rooms through various devices, used largely to stream or download video programs from a variety of sources, including Netflix. They also use tablets and smartphones to view movies and TV shows as well as to serve as companions for action on the big screen.

“The phone, the laptop and the tablet have advanced so dramatically,” Tom Rogers, chief executive of TiVo, the DVR pioneer, told the Journal. “Television has been drastically left behind.”

Intel, whose service is to be called OnCue, is testing its technology platform with 2500 Intel employees in California, Oregon and Arizona. Whether complete or not, it is expected to launch be year’s end, setting off another intense round of competition in the television business.



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