In the late nineties I bought a WebTV set-top box, among the first services that promised to integrate my TV and the internet. Looking back I is now able to understand why the knowledge wasn't great...
1. The set-top box had limited processing and memory resources (just a 112 MHz MIPS CPU, 2 megabytes of RAM and ROM)
2. The set-top relied upon an association through a 33.6 dialup modem to connect to the WebTV Service.
3. WebTV reformatted pages to prevent sideways scrolling, an issue when trying to reformat PC-sized web pages in to the 560-pixel width of a United States NTSC television screen.
Thirteen years on the promise of TV and internet convergence is finally a reality, fueled by consumers changing media consumption patterns, cheaper and faster broadband and improvements in video streaming technology.
One significant vary from early days is really a shift from "device convergence" to "on demand" services and content. Networks and ISPs are focusing on delivering video on demand services including Telstra BigPond TV in Australia, Hulu in the United States and BBC's iPlayer in the United Kingdom. ifvod Gaming console manufacturers including Sony and Microsoft are making the push to deliver video downloads and unique content online - in fact Sky subscribers can view movies and live sport on Microsoft's Xbox 360 over the Internet, with out a satellite dish. Television and set-box manufacturers are focusing on televisions which are ready to connect to the internet straight out of the box. Futuresource Consulting forecasts that one in five flat-panel TV's shipped in Europe next season is likely to be ready to connect right to the internet. By Christmas 2010, the very first TV equipment based on Project Canvas, the BBC's internet-TV joint venture must certanly be available.
On demand services such as video on demand (VOD) presents a complete new set of challenges for broadcasters, who have never handled the expense of distribution. The dual costs of piping internet video into your home and licensing content from producers might - both paid from a pay per view basis - will challenge longterm profitability and even survival. Every time a program is viewed online through video on demand (VOD) services broadcasters have to pay for companies such as Akamai and Level 3 - in the UK one half-hour programme costs between 2p and 5p to stream which for broadcasters such as BBC which registered 60M TV shows in November adds around over £1 million monthly!
The added difficulty for broadcasters because services such Hulu and BBC iPlayer are free, setting the tone which makes it harder for everybody else to charge. Broadcasters could have plenty of time to figure out the economics of on demand services, given internet video is likely to account for 5 to 10 percent of total TV viewing by 2020 in accordance with Enders Analysis.
The subsription model should not be ignored. My prediction is that Hulu will start charging users for premium usage of programs in early 2011. Why? Comcast, the most effective U.S. cable company, today launched Fancast XFINITY TV a net based video on demand service. Weeks ago Comcast consented to take a controlling stake in NBC Universal (which partly owns Hulu) from General Electric. Fancast is element of a wire industry initiative called TV Everywhere to create popular shows available over the Web to paying subscribers.