Display Makers to Push Connected TV at CES, CEA Forum Told

SAN FRANCISCO -- Connected TV will be the focus of TV makers at the upcoming CES and for 2011, Jason Oxman, CEA’s senior vice president of industry affairs, said Monday at the CEA Industry Forum. But the growth of connected TV, whether from TVs themselves, Blu-ray players or set-top boxes from third-party companies, will hinge on managing the content and helping consumers navigate the vast amount of content available.

At a panel discussion called, “Five Technologies to Watch,” panelist Jon Healey, technology writer for the Los Angeles Times, said Hollywood policies have shaped video features but don’t ultimately control what path the market takes. Citing Blu-ray players with Internet connectivity as an example, Healey said studios see the Ethernet jack as a way to update content and push fresh trailers to consumers. Healey said consumers have ended up using the Ethernet functionality more for Netflix streaming than for the BD Live feature Hollywood wanted to push. “You have to watch studios to see where things are going but things don’t necessarily go where the studios intend them to go,” he said.

Connected TV creates a “nightmare scenario” for the cable and satellite companies, Oxman noted, because consumers can now access content without a subscription to either. Cable and satellite guides have traditionally had the electronic program guide to control the viewer experience, he said. Now with a Roku box consumers don’t need a cable box in every room in the house, he said. “You can find another source of content.” An emerging question, Healey said, is whether the content industry will continue to defend the decades-old cable model for how consumers get content or if Internet TV will be the driver that “makes it OK” to circumvent the cable TV model.

Shawn DuBravac, CEA chief economist and director of research, urged members not to rule out the ability of cable companies to identify a trend and make quick adjustments. We tend to think of the cable industry as this “slow-moving behemoth,” he said, but cable companies saw the threat of the DVR and quickly integrated DVRs into their existing infrastructure and “crowded out others that might have moved into that space,” DuBravac said. Oxman of CEA noted the cable model sparked the broadband deployment in use today. “We shouldn’t count them out,” he said, adding that the cable industry doesn’t want to give up content revenue and just be the transmission pipeline.

Regarding the future of Internet TV, Healey disagreed with connected TVs being one of the five technologies to watch. “I don’t think consumers are going to want to change out their $1,500 or $2,000 TV very often,” he said. Instead, the set-top box will become an “open door to things ahead,” he said, and consumers will be much more likely to spend $60 on that type of box to get Internet TV rather than buying a new TV to get Internet content. He applauded TV makers for using a “walled garden” approach to widgets to maintain control over the viewing experience. In doing so, he said, they'll avoid the “Blue Screen of Death” scenario of the PC experience in the living room and ensure that their technical support departments don’t become inundated with calls from consumers about a malfunctioning TV due to untested widgets.

Oxman said connected TVs will be the “number one emphasis” for display manufacturers in 2011. DuBravac added that while consumers still rely heavily on content coming in from TV, “that’s all starting to change as consumers can access video across broadband” in the car, on phones and on laptops, which will “disrupt the business model of the future,” he said. The future of apps, he said, affects everyone “because it gives them an ‘in’ into the consumer,” which will “create winners and losers over the next five years."

The panel agreed that software companies will be in a position to unify all the content on the Internet and TV side. Cable and satellite companies control consumers’ eyeballs now because they guide viewers to what’s available on their services. “You can’t do that on Roku because there’s no syndicated search across silos,” Healey said. “Somebody is going to figure out how to make it easy to find something that appeals to you from the entire universe of things to watch,” he said. That’s the vision for Google TV, he said, but it remains to be seen whether it succeeds.