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Tuesday, January 6, 2009

Internet-Ready TVs Usher Web Into Living Room

AS posted by: Wall Street Journal

After more than a decade of disappointment, the goal of marrying television and the Internet seems finally to be picking up steam.

A key factor in the push are new TV sets that have networking connections built directly into them, requiring no additional set-top boxes for getting online. Meanwhile, many consumers are finding more attractive entertainment and information choices on the Internet -- and have already set up data networks for their PCs and laptops that can also help move that content to their TV sets.

On Monday, Netflix Inc. is expected to announce a deal with Korea's LG Electronics Inc. that will make a Netflix online-video service available on a new line of high-definition TV sets from LG due out this spring. The online service offers 12,000 movie and television titles.

Amid other developments pegged to this week's Consumer Electronics Show in Las Vegas, Yahoo Inc. and Intel Corp. plan to announce support from several major consumer-electronics companies to sell TV sets that come with software, dubbed widgets, that make it easier to call up Web content on TV sets using ordinary remote controls rather than computer keyboards.

"You are going to see very broad adoption of this open technology by the best brands in the TV industry -- not just for specialty products but deeply penetrated in their product lines," says Patrick Barry, Yahoo's vice president of connected TV.

Of course, similarly optimistic statements have been made by industry executives since the mid-1990s, when efforts to combine Internet technology with TV sets first emerged. The current economic climate could be another stumbling block, deterring consumers from upgrading their existing TV sets.

Still, the topic remains a hot one in high-tech circles because of the potential impact on existing business models in the entertainment industry. Instead of the often expensive packages of video content from cable and satellite providers, the Internet could theoretically deliver a much wider array of entertainment and information choices -- many of them free.

Intel, Apple Inc. and others have promoted specially tailored PCs, set-top boxes and other new devices for bringing video from the Internet to living-room TV sets. Few people bought them, but industry executives believe users will be more receptive as Internet connections become a standard feature of more ordinary gadgets -- such as TV sets, high-definition movie players and videogame consoles.

Putting such Internet services in TV sets, in theory, could make them even simpler for consumers to access. "The symbolism of being directly in the TV is very high," says Netflix Chief Executive Reed Hastings.

Netflix, based in Los Gatos, Calif., has cut deals that make its library of online videos available on Microsoft Corp.'s Xbox 360, TiVo Inc.'s digital video recorders and Blu-ray players from Samsung Electronics Co. and LG.

The technology required to include Internet capabilities in TV sets adds to consumer costs: for example, LG predicts its plasma and LCD Internet TV sets will cost roughly $300 more than comparably-sized sets without online capabilities.

"I think this will be a big, growing sub category in TVs," says Tim Alessi, director of product planning at LG's U.S. division.

Over the past year, Panasonic Corp., Sharp Corp. and Samsung have come out with HD TVs that can access services such as Google Inc.'s YouTube and Picasa photo albums, along with online weather forecasts and stock tickers. Kurt Scherf, an analyst with Parks Associates, estimates the number of Web-enabled TV sets will grow to 14% of the projected 26 million-28 million TV sets to be sold in the U.S. in 2012 from 1% last year.

It isn't clear how strongly consumers will respond. For one thing, many people, especially younger ones, have become comfortable using their PCs as TV sets, watching YouTube or streaming favorite TV shows.

"The number of people who watch an entire TV show on their laptops has tripled," says Genevieve Bell, an anthropologist who is director of the user experience group in Intel's digital-home group. But Ms. Bell says research by the company also suggests that many people also have extremely strong bonds to their TV sets. So any effort to add Internet content needs to be just as simple and not interfere with the experiences and behavior patterns the users enjoy. That means, she says, using a conventional remote control -- not some kind of computer keyboard, or a PC-style Web browser of the sort that emerged as a TV option in the 1990s.

Those findings are one reason that Intel -- which in 2007 abandoned an effort to promote living-room PCs under a brand called Viiv -- became a supporter of what Yahoo calls the Widget Channel. The collaboration is designed to create a standard way for Web services to be unobtrusively offered up on TV sets.

The software displays a strip of icons for Web offerings on the bottom of a TV screen, while traditional programming plays above. Click on one of the icons with the remote and content associated with the Web service expands into a larger view on the left side of the screen. Click again and the service can take up the entire screen. A user could pull up an Internet weather report, for example, or photos stored on Yahoo's Flickr service.

Yahoo and its hardware partners initially will act as gatekeepers in overseeing such offerings -- a bit like Apple does with its store for iPhone software -- but Mr. Barry expects that Web companies will find the process open and non-discriminatory. Intel plans to offer chips that could help manage the widget software in Internet-equipped TV sets and set-top boxes, but its hardware is not required.