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.
And those Web-connected TVs, many of which will work with the Google platform, are beginning to sell, despite their higher price tag. As of last month, these “smart” TVs represented 12 per cent of all flat-panel television sales in Canada, according to NPD Group Inc., twice as much as last year.
The migration of consumers to these services “is not going to happen overnight. There are a ton of customers that are fine right now [with cable or satellite],” said Mike McGuire, a media analyst with Gartner Inc. “But all it takes is exposing somebody to something like Hulu [a popular U.S. television site] or Netflix, where the light bulbs start to go off. They start thinking, ‘Wait a minute, maybe there’s another way for me to get this content.’ ”
TV everywhere
This evolution is already changing the way media companies are doing business – and was a motivating factor behind a massive shift in ownership in Canadian broadcasting, with Shaw Communications Inc. buying the television assets of CanWest Global last year and BCE Inc. acquiring CTV Inc. (The latter deal goes before the broadcast regulator for approval in slightly more than a week.)
But even broadcasters who aren’t directly tied to a major TV distributor have a symbiotic relationship with them. Companies like Toronto-based Corus Entertainment Inc., owner of such properties as W Network, and Montreal-based Astral Media Inc., owner of ad-free pay-TV channel The Movie Network, have a real incentive to keep viewers within the traditional TV ecosystem.
To do that, the cable and satellite companies have adopted the U.S. industry’s strategy, dubbed “TV Everywhere.” Rogers, Shaw, Vidéotron and BCE’s Bell Canada unit have all rolled out online on-demand services that let viewers watch shows any time they want, on any screen. The catch is they have to have a password to prove they pay for the TV service to get the Web video. The broadcasters play along.
