Analysis: Internet TV: a fragmented future?

Is your TV connected? And if it isn't, does it matter?

Now in their second generation, 'connected' TVs from the likes of Sony, Samsung, Panasonic, Philips and LG that host a web-powered content portal are getting busier – but are they about to be blown away by Google TV?

All of these web TV platforms are attempts, in various forms, to aggregate content from disparate sources on the internet to make the hardware – the TV itself – more competitive in the market.

At the moment it's all about content, with the basic YouTube widget usually sitting alongside a range of internet channels – such as Dailymotion, weather apps and, sometimes, an interface for the likes of BBC iPlayer and ITV Player, and even Lovefilm.

"Every hardware manufacturer is looking for any vaguely recognisable content to put on their device to provide differentiation," says Alison Casey, Head of Content at analyst firm Futuresource Consulting, but she points out a major flaw in these portals being packed with clips from YouTube and its ilk.

"Maybe on a laptop you might want to watch kittens falling off a settee, but not on a 50-inch plasma. There's a lot of people jumping on the bandwagon here, and an attitude of 'let's embrace everything and see what sticks'. I don't think anyone is getting any exclusivity."

Google TV: a new hope?

So what about Google TV? Does the great search engine attempt – debuted recently in the US on Sony's GT1 range – to aggregate video from across the internet and dump it on your TV screen represents a massive shift – and possibly the end for the first wave of connected TV portals?

"Google TV is a totally different kettle of fish," says Casey of the platform that puts one interface across all content and attempts to make jumping from TV to video on demand to websites, maps, photos and other private content a single seamless experience.

"Google could make a big difference because they are very competent at generating a lot of revenue from advertisers, and search and recommendation – a big problem in walled gardens of content – could be a good thing for the industry. We've already seen it with the TV networks, which have made their content available online for a seven-day window for laptops and mobile devices to access."

So why, then, does Google TV appear to have fallen at the first hurdle? 'Watch again' videos on the websites of the major US networks cannot be watched on Google TV devices (from Sony and Logitech) after Fox, ABC, CBS and NBC put up bariers.

"The minute you deliver it to the TV you've got all of the premium pay TV and networks that pay the content industry a fortune jumping up and down," says Casey. "They pay for the re-transmission and catch-up TV rights, and all of a sudden it's made available for free on Google TV."

It does seem a strange situation since anyone can simply plug a laptop into their flatscreen TV and watch absolutely anything from any website. Google's legendarily laisez faire approach to content – and its refusal to censor – may be putting-off the likes of Disney, which wouldn't want to see its brand next 'kitten clips', or, indeed, pirated videos.

"The networks have to protect their cash cow, and in the interim won't talk to Google," says Casey. Are they holding back the tide? It's a legal thing – the moment something is on a connected TV it sits within a different set of rights – but blocking Google TV can only ever be a short-term strategy."

What can other services offer?

Other tempting services of the future include Hulu, already available in the US, and UltraViolet, a consortium of companies – including Microsoft, Lovefilm, Fox, NBC and all the major CE manufacturers – that want to create a common standard for digital downloads across software and hardware, giving users an online cloud account that inlcudes a digital rights locker; users can then watch any content on any UltraViolet-certified device, be it a mobile phone, games console or TV.

UltraViolet is supported by Sony, which, aside from its US-only Google TV attempt, is also striving for a multi-platform content hub all of its own with its new Qriocity service.

Meanwhile, the web TV platforms of Philips, Samsung, Toshiba, Panasonic, LG and Loewe have recently been bolstered by a range of apps from app developer BiBC that offer content from ITV, Hit Entertainment, the Cartoon Network, Boomerang andboxoffice365 – a suite of content that costs users £2.99 per month.

It's largely archive material for now, but it demonstrates the splintered nature of today's content market. "There will an option to take on sports, movies and other content over the next six to eight weeks," says Paul Hague, the Director of BiBC. "Have a look at some of the channels available on Sky you wouldn't be a million miles away from the kind of content on our platform over the coming months."

At a less advanced stage is DivX TV, which is attempting to use its debut deal with LG Blu-ray players and home cinema systems in the US (it sits on the NetCast platform) as a springboard to launch in Europe in 2011. The current content line-up – including apps from the New York Financial Press, Howcast and Funny or Die (more kitten-based humour?) – seems lacklustre, but that will change.

"The key difference is that DivX TV is free and Ad-supported – users can start it up and just start using it without a credit card." DivX TV's David Holland told us that subscription-based content will soon be rolled-out, as will music streaming.

Too fragmented?

"It's all a bit fragmented right now and there may be some consolidation – and perhaps some consistency on how apps can be developed. At present they have to be rewritten for each different platform," says Holland. "That's what Google is trying to solve, but we'll see what plays out."

"The next four to five are going to be massively fragmented with a lot of collaborations," agrees Casey.

"It's going to be messy, but watch out for the big players with deep pockets – Apple's not going anywhere overnight and is clearly going into the living room – but in a lot of territories it's going to be the dominant TV player that already has the subscribers and the content – and other content experts that are big enough to invest and take risks."

In the UK that could mean Sky or Virgin, both of which are in the middle of a fit of innovation – the former with online video and IP-connected boxes, and the latter with its TiVo set-top boxes.

Or it could mean YouView, a BBC and ITV-owned joint venture that's due to launch in 2011.

Summarised as a 'upgrade path for Freeview', Richard Halton, the CEO at YouView told us that the new service – a joint venture between the BBC, ITV, Channel 4, Five, BT, TalkTalk and Arqiva formerly known as Project Canvas – is an attempt to "fundamentally change the way people watch TV forever."

"You'll get the digital TV you love, plus BBC iPlayer, ITV Player, 4oD, Demand Five and SeeSaw, as well as a potentially unlimited range of content, all instantly available on your TV," he told us. So far so predictable, but this is where it could get exciting. "The on-screen programme guide will go backwards in time as well as forwards, so viewers can discover and watch programmes whenever they want." Add HD, pause, rewind and record live TV, a clutch of pay TV channels (including Sky if they can get over their objections), and YouView could be a defining moment in IPTV.

With so many connected TVs already offering a plethora of services it's tempting to say that YouView could have missed the boat. But we're still to see a genuinely engaging platform that successfully puts must-see content within a next-generation user interface that's as intelligent as it is slick.

Whether that comes from Virgin's upcoming TiVo box, Sky, Apple, Xbox, YouView, TV manufacturers or an entirely new provider remains to be seen.