CE Makers Say They're Bracing For Retail Video Downloads Crossfire

LAS VEGAS - In the wake of Wal-Mart’s proposed acquisition of Vudu, CE makers are bracing for the crossfire between rival retailers seeking supremacy in the battle of video download and streaming services, manufacturer executives said at the Nationwide Buying Group meeting here.

With Best Buy expected to introduce its CinemaNow-based service about the same time as Wal-Mart closes on its Vudu purchase, the fight waged on retail sales floors will expand to the Internet, the executives said. And CE manufacturers, who are readying a bevy of Internet-capable flat-panel TVs and Blu-ray players that support Amazon, Blockbuster, Netflix and Vudu, could be asked to take sides, they said."

"Just about every manufacturer is in those stores so we are going to get caught in between or will we have to put them all in every set?” asked Michael Danning, national training manager at Toshiba, which this spring is shipping new Internet-capable 40-, 46- and 55-inch LCD TVs with LED backlighting that feature Vudu and Netflix movie services. “Those are two powerhouses that can push everybody around a little so it will be interesting to see what happens."

While retailers we polled here expressed concern about selling TVs and Blu-ray players with a service that benefits Wal-Mart, CE manufacturers here said they've heard few complaints so far. At the same time, some CE vendors were ambivalent about Wal-Mart’s owning Vudu provided the service continues to deliver. Mitsubishi, which built Vudu into TVs and packaged its standalone players with its sets last year, “doesn’t really care who owns them as long as they have great service,” a spokesman said. An LG spokesman declined to comment.

The competition among video services appeared to further intensify Tuesday with reports that Apple was in talks with movie studios about adding an iTunes video streaming service. It isn’t clear how Apple might land the deals. A major barrier might be the portability of rights to other devices and software. The movie studios have favored an approach that would allow content bought on one service to play on another device that recognizes the Digital Entertainment Content Ecosystem (DECE) “digital rights” locker technology. The DECE alliance has selected a vendor for network-based authentication and approved five digital rights management technologies for use with its spec, which is due in the first half. Apple has frequently insisted that any copy protection come from itself.

Also Tuesday, TiVo took the wraps off its new Series4 DVRs featuring an upgraded search function that combines online video sources -- Amazon On Demand, Blockbuster on Demand, Netflix and YouTube -- with TV listings. A search for a TV show will provide the local broadcast station and streaming versions available on the various services. TiVo also added a flash-based interface that will leave a picture-in-picture window of the current video on the screen. A capacity meter also was added to let users know how much space is left on the hard drive. While most of the content partners were already available on the Series3 DVRs, two new ones were added -- Pandora and FrameChannel. The Series3 DVRs can’t be upgraded to the new software, company officials said.

The TiVo Premiere models come with 320 GB ($299) and 1 TB ($499) storage capacities, enough for 45 and 150 hours of HD content, TiVo said. The DVRs have built-in WiFi, but if the user wants to get beyond the default Ethernet connections an optional 802.11n WiFi dongle ($90) is required. The models also are minus a built-in modem, but a USB adapter ($30) is available from TiVo’s Website.