A wild scramble for Web television

It's no longer a matter of if or when Web-based video is coming to the TV set in your living room, but how and from what company. As a flood of announcements at this month's Consumer Electronics Show made clear, the ties between the home PC and the home TV are growing ever tighter.

For telephone companies, this is seemingly good news in their effort to create video services that are not “me-too” offerings compared with what cable and satellite offer today. IPTV services — which AT&T, Verizon and many independent telcos are rolling out — can more easily accommodate Web-based content, as Verizon proved with its announcement at CES of a second generation of FiOS TV.

But the mash-up of TV and Internet also is creating new challengers for the video dollar, from Apple to Google to Sony/AOL to Yahoo!/Akimbo to start-up firms in the consumer electronics space. That means consumers who are most interested in the Web-on-TV experience will have multiple ways to achieve that, without changing service providers. At the same time, this is a very fickle customer base, said Danny Briere, president of the TeleChoice consultancy, and not necessarily one on which to build a business case.

In addition, he said, all the current hype around consumer devices could be just that. Some devices that were hot at CES two to three years ago are no longer even on the market.

“This is going to come down to a battle of the brands,” he said. “This happens over the long-run, not the short term.”

Consumer electronics-makers, especially big TV manufacturers such as Sony and Samsung, will incorporate set-tops into their TV sets and offer applications and features that can lure consumers away from higher-price service bundles from service providers. Major manufacturers, including Cisco Systems and Microsoft, also are looking to build a stronger position in the home, leveraging their existing products and working with service providers, in most cases, to create what Microsoft calls “connected homes.”

All of that will take time, Briere said, and for the next year at least, Microsoft and its service provider customers, including AT&T, “are going to be boring.”

Although AT&T is running national ads that tout its three-screen strategy, the company also is heavily focused on the nuts and bolts of getting its fiber-to-the-node network built and its IPTV service deployed (see story on page 13).