Rebecca Day

The TV set would end up as a commoditized monitor, warned in 2008 DisplaySearch TV electronics research director Paul Gray -- if something didn’t change. Something did happen when the Internet and the TV collided, and the industry is banking on the connected TV to lead the product category well into the future. Gray said at the DisplaySearch Flat-Panel Conference last week that Internet video is creating a large traffic jam on the road to the future and few solutions are in sight. The world is dreaming of a “wonderful” future in which data and video “will flow unencumbered down this gorgeous open road to our living rooms,” Gray said. “I'd love to believe that, but the reality is this is what it’s starting to look like already,” showing an image of bumper-to-bumper traffic. He said 20 percent of evening Internet traffic in the U.S. results from Netflix streaming by about 20 million households. Describing his experience at home using a connected Blu-ray player, which “works great until 9:30 at night” and then “buffers and grinds to a halt until half past midnight,” Gray said Internet capacity is a “problem of success” and “we have to start thinking about what will happen.” He said Internet TV doesn’t scale the way broadcast TV does. “With broadcast, when you turn on your TV it doesn’t affect your neighbor,” Gray said. “Connected TV may not be like that.” It’s unknown who will pay for the pipeline, “dig up the street, run fiber, and build content delivery networks,” he said. Additional issues Gray said are affecting the broad expansion of Internet infrastructure are net neutrality, “which could suddenly go from being an esoteric, academic subject to one that actually affects business,” conflicts of interest in who installs the infrastructure, tiered data rates and quality of service. Despite all the talk about “cord cutting,” with consumers canceling paid TV subscriptions and getting all their programming online, Gray said the percentage of paid subscribers having made the switch is about 1 percent. Cord-cutting “remains to be proven as a phenomenon, but it’s definitely a growing competitive threat if you're a paid TV operator,” he said. And connected TV is “as much an opportunity as a threat” for providers willing to “think differently,” he said. Intel’s Wilfred Martis, retail consumer electronics general manager, said software compatibility could limit smart TV expansion. TVs that aren’t connected operate in a “monolithic” world determined by broadcast standards, he said. With a smart TV, “you have to make sure the middleware stack can co-exist with any operating system or app environment,” Martis said. If audio from one app overlaps with another’s, as in the PC world as users move between applications, “you can’t mute a screen on a smart TV,” he said. “You have to figure out how the resources don’t step on each other,” which involves “lots of work” for those developing different standards, programming data and audio streams, Martis said. “That limits how fast you can scale around the world.”

IPhone fever appeared fairly low-grade at one of the two largest Verizon Wireless stores in Manhattan early Thursday when doors opened on 34th Street for in-store sales of Apple’s 3G iPhone 4. Verizon had prepared for a much larger crowd, but most of the roughly 18 stanchions perched outside the store for crowd control remained stacked against a post in our 90 minutes at the store. When we arrived about 6:30 a.m., prior to the scheduled opening at 7 a.m., 14 consumers, many sipping hot coffee, stood in line braving 26-degree temperatures. The line was far shorter than we, and apparently Verizon, had anticipated.

AUSTIN, Texas -- Significant opportunities are said to await Internet service providers as smart grid deployment expands and consumers have the option to monitor and manage their home energy usage. While utilities wrestle with new models of interacting with consumers in a two-way environment, giving consumers control in what has been a decidedly one-way relationship, telcos and cable companies are hoping to grab a bit of the smart grid action.

Worldwide factory equipment revenue generated by mobile communications will approach the quarter-trillion-dollar mark by year end, said iSuppli. Global mobile communications factory equipment revenue for 2010 is forecast to be $235.5 billion, up 7.9 percent from last year, on the expansion of mobile broadband worldwide and by sales of 3G phones, the industry research firm said. For 2011, revenue for the segment is projected to hit $271.3 billion. 3G mobile handsets will account for the largest share of revenue at $86.4 billion, up 34.6 percent from $64.2 billion in 2009, the firm said.

Despite interest from distributors in the U.S. and around the world, 3D’s future “is hard to tell,” David Zaslav, CEO of Discovery Communications, said at the UBS conference in New York Monday. “It’s very expensive,” he said, adding that Discovery chose to work with Sony and Imax to minimize the costs of developing a 3D channel and to share information along the learning curve.

Verizon will offer 10 3D films to FiOS customers as VOD selections over the next two months, the company said Friday. The first title, Cats & Dogs: Revenge of Kitty Galore, will appear on VOD menus on Nov. 16, and the series ends with Disney’s A Christmas Carol and Step Up 3D in December, Verizon said. The other seven titles are Chicken Little, Bolt and Meet the Robinsons from Disney, and Journey to the Center of the Earth, Under the Sea, Deep Sea and NASCAR from Warner Bros., Verizon said. Prices are being determined, a Verizon spokeswoman told us, saying they'll “likely be a bit higher” than the $5.99 rentals of FiOS HD VOD titles. She said the model will be similar to the one at theaters, where tickets to 3D movies run “a few dollars higher” than tickets to 2D movies. FiOS TV customers will find the 3D movies in two locations, in the High Definition VOD folder under HD 3D and in the Movies VOD folder under 3D movies. The spokeswoman said Verizon will offer additional 3D programming starting early next year, but the specific names of VOD folder titles may change. As to how popular the offer must be for the company to consider it a success, she said, “If we're able to satisfy even one household by offering a 3D film, that’s a success for us.” She said information on the number of FiOS subscribers with 3D TVs was not available. Last year FiOS showed My Bloody Valentine in 3D. This year, the provider showed a New York Yankees-Seattle Mariners game in 3D produced by YES Network, followed by the first 3D NFL game in September between the New York Giants and New England Patriots. Customers have been requesting “more and more 3D programming,” she said, and Verizon has received “a lot of great feedback” from customers about 3D broadcasts.

With lack of content cited as a major bump in the road to consumer adoption of 3D TV, the near-term picture doesn’t offer much relief, according to members of “The TV Story” panel at 3D Media Markets in New York Wednesday. CBS, for one, is looking for help in footing the bill, according to Ken Aagaard, executive vice president of operations and technology for CBS Sports, who said the network is moving “slowly and cautiously” toward 3D.

SAN FRANCISCO -- Connected TV is a “survival game” for the industry, Gaurav Arora, senior manager of Broadcom’s consumer electronics group, said on a panel at this week’s CEA Industry Forum. The Internet-centric purchasers of five to 10 years from now are in college and if TV sets aren’t connected for them, “the product will die” and be replaced by an iPad, laptop or smartphone, he said.

YES Network has added seven distributors to the list of those showing the first Major League Baseball games to be televised in 3D, between the New York Yankees and the Seattle Mariners this weekend. Joining in the telecast with DirecTV, a co-sponsor of the event along with Panasonic, are Blue Ridge Communications, Cablevision, Comcast, Cox, Service Electric, Time Warner Cable and Verizon FiOS. The game is being played in Seattle, but the feed is being offered only to current YES Network affiliates in the Yankee’s home-team TV viewing territory. “The million-dollar question” is how many viewers the 3D broadcast will reach, said Eric Handler, vice president of communications at YES Network. “There’s no way of trying to come up with any kind of ballpark figure because it hasn’t been done before.” Regardless of the outcome, no additional 3D games are planned this summer, Handler said.

The Advanced Television Systems Committee’s 3D planning team will meet for the first time next month as part of a process to determine the viability of developing a technical standard for terrestrial 3D broadcasts, ATSC President Mark Richer told us in an interview Thursday. The 3D planning team is one of three the organization has put together, along with those covering next-generation television broadcasting systems and Internet-connected TV technologies.