New media, new television sets, new business model

It has become an annual tradition: As soon as the holidays are over, the tech community descends on Las Vegas to conjure the Ghosts of Gadgets Yet To Come.

Sin City’s sprawling Consumer Electronics Show offers a peek at the newest devices vying for your dollar, and every year, something emerges as the main attraction. One of this year’s stars was the Web-enabled television set. Every major company that makes televisions, including Sony, Samsung and Toshiba, has been rolling out screens that connect not just to a cable or satellite box, but directly to the Internet. This will change the way you think about TV, and broadcasting companies are taking notice.

The option to watch television through the Internet has been around for a while, but it has required some patience or expertise with technology. However viewers located a show – by paying Apple for it, streaming it from legitimate or not-so-legitimate websites, or downloading it illegally – they had to be willing either to watch it on a computer screen or jury-rig a connection from a laptop to the TV.

It wasn’t much of an incentive to cancel the cable subscription, and very few people have. Specialty channels, which earn money through advertising and by charging to cable and satellite providers a monthly fee per subscriber, collected roughly $1.4-billion in subscriber revenues in 2009, an increase of almost 7 per cent from the year before, according to CRTC numbers.

But as the Web begins to come to the television more seamlessly, media companies face far more competition from online services (also called “over-the-top” services) that don’t come through a cable TV or satellite feed, but feel an awful lot like simply watching television.

Last year, Netflix launched its online streaming service in Canada, which can be fed directly to a TV, thanks to partnerships with more than 200 device manufacturers. Xbox or PlayStation consoles are no longer just for games; they have been delivery systems for online video for some time, and the Netflix partnership only increases ease of access. Meanwhile, Apple revamped its Apple TV, a device that plugs into your set and beams video you’ve bought through iTunes from your computer to the bigger screen. Google is set to bring its own TV product to Canada this year.

Excerpt from The Globe and Mail, January 21, 2011. Read the full article here.