Overall I thought the Super Bowl ads were pretty weak this year. What was up with all those multiple men in underwear commercials – kind of ruined my appetite, even with my impressive snack spread. But one commercial really caught my eye – the Vizio Internet Apps commercial, where Vizio highlighted their upcoming new app enabled Internet TV platform. It’s a natural progression for TVs. Give them ‘Hi Def Wi-Fi’ and/or an Ethernet connection, and TVs become an OTT video and app gateway. That’s just what Vizio and others are now doing. The connected TV wave is upon us.

This wave could have some interesting implications. Obviously a connected TV simplifies the OTT video issue. No need for an additional set-top-box to fumble with – just turn on the TV and use your remote to get to Netflix, Hulu, Vudu, or any number of Internet video and other broadband apps. Sure makes cutting the subscription TV cord a little easier for some.

It also may provide a new paradigm for buying TVs. Could we see the cost of these new app driven TVs subsidized from broadband carriers, in much the same way that we see subsidized smartphones from wireless carriers today? It could provide a new business model to push subscription TV services. Maybe not identical to today’s subscription model for IPTV, cable or DBS, but a new app driven subscription with connected TVs as the linchpin device. It’s an interesting proposition – one definitely worth watching.

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6 thoughts on “Connected TVs Highlight Potential New Video Model

  1. I agree with the stb issue – if you can take the stb out of the picture and have a 'dummy' proof interface directly on the TV, you might begin to see some real traction with ott. The question is, how much will these TVs cost? Will they make it in Walmart at Walmart prices. If not, won't have too much effect.

  2. I also was wondering how many people really understood what Vizio was showing, most consumers probably missed the actual meaning of this ad. If they can perfect the consumers searching experience and bring the prices down, video providers like ourselves may see subscriber counts decline. On the other hand, it just shows that as a telco we need to focus on the broadband pipe.

  3. Nice call Bernie. Connected TVs aren't coming to market as a subsidized product but I could imagine a rural LEC saying that IPTV is just too expensive and selling DBS with a subsidized connected TV. That would be a real test of the axiom about consumers not caring about how content gets to the home just that it gets there.

  4. Here's more <a target="_blank" href="http://www.avrev.com/home-theater-news/lcd-hdtv-news/vizio-xvt-series-ships-monday.html">details on the Vizio connected TVs from the A/V Revolution website:

    All three sets in the line feature access to Vizio’s streaming services which include access to the major video streaming services: Netflix, VUDU, Blockbuster VoD, Amazon VoD, and CinemaNow. You’ll also be able to check out internet video from blip.tv and Revision3, music from Rhapsody and Pandora, and even do some socializing on Twitter. Because of the need for more complex controls, Vizio has equipped their standard remote with a slide out QWERTY keyboard.

    The smallest set in the series, a 42” model, sports a standard LCD screen without LED backlighting. It runs $949, much cheaper than the other two in the series. Going up five inches and six hundred dollars will get you the SV472XVT. At the top of the line, the VF552XVT is a fully featured 55” set that sells for $1,999.

  5. Suppose your TV had only one cable running into it: The power. Your video came strictly from a wifi connection. All TV is IP-based (stuff like Switched Digital Video gets subsumed by IP).

    Now consider what Google is doing (Gbit/home — http://www.msnbc.msn.com/id/35331491) and it becomes clear that eventually TVoIP starts taking root just like VoIP.

    It may be that Google subsidizes it to get the whole eyeball thing.

    Here are some other references to my thoughts on this: http://mfktech.wordpress.com/2009/12/31/what-goog

    — Mike Kilian

  6. The comments we're all hearing along the lines of "online TV is the death knell for pay TV" are way premature, I think. Online TV won't supplant it until more barriers to content distribution begin to fall away, or until the advertising model gets sorted out. For now, ad-supported programmers seem to be doing their utmost to drive people back to conventional TV, where the ad dollars are coming from. Notice that you don't see much TV content online (e.g. Hulu not having more than a few episodes of many of the shows, etc.). But the TV sets themselves – you have Rovi and Yahoo/Konfabulator and other platforms going directly into the TV set now – I can envision a day when pay TV middleware systems will have to support them.

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