Verismo bypasses PC for Internet TV

Silicon Valley start-up Verismo Networks this week joined the list of technology vendors that wants consumers to add a new device to the home. However, while its technology requires hardware, it does not require a computer. The tiny apparatus, dubbed the PoD, fits in the palm of the hand and streams Web content to the television without the need for a PC in between. Debuted at the Under the Radar conference in California this week, the PoD can stream any type of multimedia Web content with Windows digital-rights management (DRM) from YouTube to BitTorrent to Amazon and any free content in between.

Verismo CEO Prakash Bhalerao said that while the first incarceration of the Internet was based on text and data, he believes the next generation will be one of multimedia packets, starting with video. As such, the PoD is able to bypass the PC by pulling metadata from online content through a broadband pipe and converting it into viewable content accessed through a simple, search-based user interface. Verismo already has relationships with YouTube and BitTorrent, and VTap will provide the search functionality to give consumers access to non-proprietary multimedia content on the Web. In the future, the company also plans to add social networking features to the box, more advanced than sharing content, which is available at launch.

Verismo is facing competition from a growing list of what Bhalerao calls walled-garden competitors. STB makers like Vudu and Apple TV provide proprietary content streamed from the Web, both based on a charge-per-view business model. Traditional home-delivery DVD provider Netflix also came out with a $100 STB for movie streaming in late-May, and brick-and-mortar giant Blockbuster has even been rumored to be introducing its own version as well.

“The main and only difference that we have with others is that it is an open box, no restrictions,” Bhalerao said “We don’t want to be go into a closed-wall systems; we don’t believe in it. The Internet isn’t – you can go to any Web site that is free, so we are mirroring that. Our vision is that everything available on the PC, you make available on the TV. And that is all over the world.”

By 2012, IMS Research predicts that IPTV STBs alone will be a $3 billion business. As more consumers upgrade to high-definition TV sets and look towards the PC for movie-streaming capabilities, the number of STBs in the home is growing. The risk of reaching a consumer threshold on the number of devices they are willing to have surround their TV sets has caused many vendors to rethink their design.

Movie STB pioneer TiVo is one manufacturer moving in the STB-free direction. Although it has not announced official plans to embed its software on a widespread basis, the company last year signed a deal with Comcast to be embedded as software into its New England cable boxes, thus eliminating the need for extra hardware. Furthermore, through a partnership with Mitsubishi, TiVo DVR boxes come bundled with its TV sets.

Verismo is another company planning for the day when consumers draw the line. Bhalerao said that at less than four inches large, the device could be velcroed under the TV or behind the entertainment system so that it essentially disappears from view. Starting with scratch without the pre-existing relationship with the customer that a carrier owns, however, may prove as a roadblock for the company. To address this, Bhalerao said the product roadmap for the PoD includes embedding it into the TV, STB or DVD player within the next two to four years.

“You are seeing the fusion of the Internet into the TV,” Bhalerao said. “Not the PC, because it’s the wrong fusion. It is an Internet-to-the-TV fusion that I see. If we happened to discuss something in 2012, this is my vision: these boxes will disappear inside the TV, and the TV will become Internet ready. Or they will disappear inside the Blueray DVD player, and the DVD will become Internet-ready so you can watch a Blueray DVD and watch something in the Internet. Or they will disappear inside the STBs.”

Bhalerao compared it to the evolution of cable boxes, which used to be unctuous boxes placed outside of the home. As more TVs came cable ready, the technology became integrated into the TV and cable boxes became a thing of the past. While some analysts aren’t willing to concede the demise of STBs themselves, he sees the same embedded movement happening with the PoD and devices like it. At launch this summer, the product will be available direct to consumers for a one-time fee of $99, but Bhalerao said the company is also opening to licensing its software to other STB manufacturers around the world.