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Coming to a Living Room Near You: Smart TV!

A few months ago — January 4, to be exact — I made a ‘fearless prediction’ that Google would get into the Web TV guide business by the end of 2010. Turns out, I was off by about seven months!

Google, along with partners Logitech and Sony, unveiled a new product called Smart TV at the Google I/O developer’s conference in San Francisco. If successful, Smart TV would be a sort of TV Guide on steroids. It would allow viewers of NeTVs and Web-connected peripherals like Blu-ray players and TiVo DVRs to find just about ANY video content through ANY connection, coaxial, Cat-5, or WiFi.

Smart TV differs from the current ‘app’ approach to NeTVs in that it isn’t bound by proprietary agreements to specific sites. Enter a keyword search for a program like The Office, and you are just as likely to find it on Hulu.com as you are on an NBC terrestrial TV channel. Or, you might be able to download it from Amazon, or even stream it in real time.
It takes a huge amount of computational and database power to pull this off, which is right up Google’s alley. And Smart TV would enable custom-built TV Guides for different viewers. No more plowing through listings for shows you don’t watch, or channels you don’t receive.

Most importantly, Smart TV would fully exploit the return channel capabilities of NeTVs, sending back information about what you’re watching and when. That, in turn, would enable targeted ad insertions, the ‘Holy Grail’ for advertisers. It’s a promise that cable TV MSOs have been trying to make good on for some time. Now, it looks like Google will beat ‘em to the punch.

I mentioned partners. Sony announced today that they will soon launch ‘Sony Internet TV’ in the fall of this year, building the Google platform into two products — a stand-alone LCD NeTV, and a multifunction set-top box with integral Blu-ray drive. (We’ll catch up to the Japanese Blu-ray/DVR model eventually!) How about that: For once, Sony is actually ahead of the curve. (Shades of 1980…)

Logitech, the third company in the mix, also made its Smart TV announcement today. They will provide the first companion set-top box for Smart TV. This is good news for folks like me who purchased a new TV two or more years ago, but don’t have the NeTV interface. This box will provide that connection and the Smart TV EPG overlay, based on the Android open-source platform. Logitech will also offer a brand new remote control for the box, as well as an HDTV camera and video calling service that will run direct through the TV.

There’s no reason to stop there. Why not add the platform to the new generation of Mobile Handheld (MH) DTV receivers that will be coming to market soon? Such a device, with ATSC mobile reception AND Wi-Fi would be extremely popular, and there would be lots of interest in supporting return paths through the latter connection for targeted advertising. A marriage made in heaven, I say.

Some analysts have already commented that Google’s move into the ‘find it anywhere’ TV space spells the end for broadcast TV in another decade. The Diffusion Group released a report stating that they expect online video viewing to surpass broadcast video by 2019. They based that bit of crystal ball-gazing on the fact that online video viewing jumped 84 percent between 2008 and 2009.

Yet another analyst, Sarah Morgan of Smart Money’s “On The Street” column, went so far to say that Hulu — the #2 site for viewing video online — could eventually clobber cable TV channel subscriptions. Supposedly the site is going to move to a $9.95 monthly subscription fee for its full archive of content. The fixed revenue stream will allow Hulu to expand service and provide much-needed revenue, since most Hulu shows play out with only four minutes of commercials per hour. (The average for normal one-hour network TV programs is about 16 minutes.)

putmanheadshot_titleCouple that model with Smart TV and targeted advertising, and it’s indeed a paradigm shift for television viewing. Other TV manufacturers are certain to want in into the game, so we can certainly expect a surge in NeTV models, Blu-ray players, and now multifunction set-top boxes that incorporate BD capability for CES 2011.

What’s next for Google — digital signage networks? Hmmm…

Pete Putnam is an analyst for Insight Media. Reach him at pete@hdtvexpert.com

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