Television-internet union gaining strength

That question loomed large at the Consumer Electronics Show last week as manufacturers promoted Internet-connected television sets and companies like Cisco and Sony talked about “redefining television.” All involved know that connecting the Internet to television and vice versa could solidify the distributors’ place in the food chain – or greatly erode it.

“We want to use all this technology to make a better consumer experience,” Glenn Britt, chief executive of Time Warner Cable, said in an interview after speaking on stage here.

A better experience, it stands to reason, will help Time Warner Cable and other cable companies retain customers, protecting the lucrative subscription TV business from the prospect of cord-cutting. It will also help manufacturers sell more hardware for the living room.

During the trade show, however, there was a point in every demonstration where fantasy collided with reality – and it was usually when the cable and satellite distributors came up. “The idea here is to work with cable,” Google’s Rishi Chandra said as he showed off Google TV to Julius Genachowski, the Federal Communications Commission chairman, on Friday afternoon. When working together, Google TV can seamlessly find live television channels, recorded shows, on-demand options and Web streams. So far, though, it works that way only with Dish Network.

“Right now,” Chandra said, “we’re limited.” After seeing television setups at the show, Genachowski said, “They’re incentivizing the cable companies to innovate.”

At the show, media and technology executives largely agreed with that sentiment. And signs of innovation were evident: Time Warner Cable, one of the biggest cable operators, announced that it would start delivering programming via its network straight into some
Sony and Samsung television sets, removing the need for a set-top cable television box.

The so-called smart TVs receive video via the Internet, protect the video as directed by the content owners, and display it all with a program guide that is much slicker than the ones most people are saddled with now. Time Warner Cable customers who buy the television sets will have a cable television app on the program guide next to a YouTube app and a Facebook app, all tied together by a search bar.

Many distributors “will have an app for us” over time, predicted Stuart Silloway, a training manager for Samsung Electronics America. Also last week, Comcast and Time Warner Cable announced that they would replicate their live channel lineups on tablet computers. Other distributors like Verizon and Cablevision are working on similar features. (Of course, the channels themselves are also scurrying to reach consumers on tablets, too.)

The move onto tablets is part of a recognition by the Comcasts and Verizons of the world that they have to keep up with changing consumer habits. “If you buy a video subscription from us in your home, our goal is to make the video available on all your devices,” Britt of Time Warner said, echoing the goal of the “TV Everywhere” concept espoused by his and other companies. He added, “People don’t see PCs and phones and tablets and TVs as different things. They are all just video display devices.”

Making a television subscription available on all those devices is wrenchingly difficult, because of a maze of copyrights and sometimes contradictory content strategies. At first, the live streams to tablets will be available only in customers’ homes, the distributors indicated last week. But that is still progress.

Stand-alone boxes that bring the Internet to big-screen TVs have not caught on with the public, but including that functionality in televisions may make it more popular. It was learned last week that the remote controls for some Blu-ray players and connected televisions will come with red Netflix buttons this year, which is sure to “cause some consternation among those concerned about cable service cord-cutting,” David Joyce of Miller Tabak and Co. wrote in an analyst’s note. But Joyce is optimistic that cable and satellite companies will adapt.

Sensing a big business opportunity, companies are lining up to bolster “TV Everywhere” and, thus, the cable companies. John Chambers, the chief executive of Cisco, proclaimed at a news conference Wednesday that “video is the next voice.” He said Cisco had a software and hardware architecture package called Videoscape to blend television and Internet video sources.