Coming Soon to TV Land: The Internet, Actually

 

LAS VEGAS, Jan. 6 - What would a world with television coming through the Internet be like?

Instead of tuning into programs preset and determined by the broadcast network or cable or satellite TV provider, viewers would be able to search the Internet and choose from hundreds of thousands of programs sent to them from high-speed connections.

At the International Consumer Electronics Show here this week, a future dominated by Internet Protocol TV, or IPTV, seemed possible, maybe even inevitable.

Giants like Yahoo and Google turned their attentions to offering new Internet programming. Hardware companies like Intel introduced chips and platforms that can push videos sent via an Internet connection to living room screens. And Microsoft looked for alliances that would allow its software to dominate living rooms as well as the home office.

"At one level it's clear that the dam has broken," said Paul Otellini, chief executive of Intel. "There's an inevitable move to use the Internet as a distribution medium, and that's not going to stop."

The rapid emergence of the consumer electronics and computer companies as Internet video providers is certain to challenge the control of the cable, telephone and satellite companies, which seek to dominate the distribution of digital content to the home. Competition has intensified as more consumers have upgraded to digital televisions.

Indeed, the easy availability of on-demand content over the Internet is certain to accelerate consumer expectations that they will have more control over digital video content, both to watch programs when they want as well as to move video programs to different types of displays in different rooms of the home.

"Appointment-based television is dead," said William Randolph Hearst III, a partner at Kleiner Perkins Caufield & Byers, the Silicon Valley venture capital firm. "The cable industry is really in danger of becoming commoditized."

Mr. Hearst sits on the board of Akimbo, a provider of an Internet service that permits users to download video content via the Internet to a set-top box digital video player. This week, Akimbo announced its first mainstream content deal to enable its customers to download Hollywood movies for later viewing on their televisions.

In the battle for the living room, cable, satellite, and increasingly, phone companies are trying to defend their turf by offering more choice through an array of content in video-on-demand programs.

But fending off the Internet's openness will be a struggle, one that the online companies themselves lost years ago.

At the onset of the dot-com era, large online service companies like AOL, Compuserve and MSN tried to lock customers into electronic walled gardens of digital information.

But it quickly became apparent that no single company could compete with the vast variety of information and entertainment sources provided on the Web.

The same phenomenon may well overtake traditional TV providers. Potentially, IPTV could replace the 100- or 500-channel world of the cable and satellite companies with millions of hybrid combinations that increasingly blend video, text from the Web, and even video-game-style interactivity.

Though still new, IPTV is already commercially available in limited areas both in the United States and internationally. To date, the new digital Internet content is hard to find and of uneven quality. Moreover, the consumer electronics industry is still struggling to complete copy protection agreements with Hollywood and other content providers.

But the advantage of IPTV is that it can potentially be deployed at lower cost than current cable television systems and can offer consumers features like the ability to record several programs simultaneously without having to add costly additional tuners. (And IPTV can potentially record many streams if bandwidth is available.)

A prototype of one feature of the Microsoft IPTV service, known in the industry as a matrix channel, allows several baseball games to be viewed simultaneously along with textual information like player statistics.

Internet search is also likely to play a defining role in shaping IPTV, according to executives attending the consumer electronics show.

Both Yahoo and Google announced plans to distribute video at the show, and Yahoo showed a new application intended to be used with a high-definition television to ease the search for video content, stream digital video and permit users to keep their personal information and files in sync whether they are viewing a PC, TV or mobile phone.

Proponents stress that the open- video Internet is still in its infancy and the battle may not be completely joined until a new generation of faster Internet connections reach the home. This is because to stream digital video requires about 1.5 megabits of bandwidth to send conventional NTSC video and from 6 to 8 megabits to send high-definition video.

Currently broadband data rates in the United States reach just 1.5 megabits or less, but those speeds are beginning to rise after years of delay as D.S.L. and cable companies upgrade their plant and equipment with fiber optic lines.

There are powerful companies that are now anxious to reach homes without being subjected to special content arrangements with D.S.L., cable and satellite providers.

They are companies like Apple, Google, Intel, Microsoft, Yahoo, and others, with all of them beginning to make available an ever-widening array of video content that looks more like a world of five million channels rather than 50 or even 500.

On Thursday, Intel introduced its new ViiV computer design that is intended to bring the abilities of the personal computer to the living room. ViiV is a set of computer hardware and software technologies that will go inside computers and set-top boxes.

Several hundred consumer electronics and computer companies announced plans to build ViiV-based systems, and Mr. Otellini said that more than 100 companies, including AOL, ESPN, MTV, NBC and Turner Broadcasting, would offer digital content for ViiV-based systems.

In his presentation at the consumer show Wednesday, Bill Gates, the Microsoft chairman, said that its home television Media Center version of Windows would be available for the new ViiV computers.

The logjam that has prevented such digital content delivery deals has been broken, Mr. Gates said, because the consumer electronics industry has now begun to reach so-called managed-content copyright protection agreements with Hollywood.

Moreover, many industry executives expect Steven P. Jobs to extend iTunes video service of Apple Computer from his company's portable iPods into the living room, possibly as early as next week at the company's annual MacWorld Exhibition in San Francisco.

Microsoft is also cooperating with two of the largest telephone service providers. After spending more than a decade courting the cable industry, with a plan that was originally called Cablesoft, Microsoft shifted allies and is now introducing its technology with telephone service providers.

Last fall, both AT&T, formerly SBC, and Verizon began limited introductions of Microsoft's version of IPTV.

Still, critics charge that the telephone companies are intentionally crippling the Internet capabilities of their services to appear much like traditional closed cable offerings.

"They're trying to construct their own separate world to keep their walled garden," said Robert Frankston, a personal computer industry pioneer and former Microsoft researcher.

The growing tension has begun to show in the objections of existing D.S.L. and cable providers that are threatening to create surcharges for Internet content providers as well as the prospect of the deployment of a two-tiered Internet in which favored customers would in effect have special high-performance lanes reserved for their use.

"They believe that if you control the user interface you make more money than if you are a dumb pipe," said Rob Glaser, chief executive of RealNetworks, the Internet music and video service provider.

Microsoft executives defend the way in which the telephone companies are deploying the company's IPTV technology, saying that if consumers are exposed to the chaos and uneven quality of the open Internet, it is likely to undermine the development of the new services.

"You need to begin with something that is easy to use and not overwhelming," said Christine A. Heckart, marketing general manager for Microsoft's TV division. "If we do this well you will have an experience much like TV today, only better."

She acknowledges that today's Internet generation may be far more receptive to a more interactive experience than traditional TV and eager not to be fenced in by their television service providers.

Microsoft has an early lead in offering IPTV technology both to the industry and to consumers, but at the electronics show this year Intel showed significant independence and introduced its own software features including digital video recording abilities with its ViiV platform.

Both companies, however, are trying to change the nature of television by making it possible for small start-ups to compete with giant networks by making available content that has never before been able to reach a global audience.

One such company is International Television Networks Inc. of Laguna Niguel, Calif. It recently struck an agreement with the National Lacrosse League to broadcast all of the league's games as well as customized player descriptions.

The company has adopted a strategy of making video content available for specialized markets, which was previously not possible using traditional television broadcasting technology.

"I can do everything a cable company can do," said David Koenig, the company's founder and chief technology officer, "but I will have 100,000 channels."