Why Connected TV Matters?

The connected TV trend is hot and the news coming out of CES adds fuel to the fire. Connected TVs (sometimes referred to as smart TVs) have broadband access, either natively, or through another connected device like a Blu-ray player, game console, or set-top-box and use a TV operating system of sorts to make them “smart.” Customers can access OTT content and increasingly a variety of apps, including social networking apps.

Connected TV: A Friend of Broadband?
Connected TVs are an important trend to watch, not only because of their potential impact on the pay-TV business, but because they may also impact broadband adoption and penetration. Indeed, connected TVs are one of the leading devices that make PCs less relevant (or even necessary) in a broadband home. They, along with tablets and other non-PC devices, can drive customers to want broadband service, regardless of whether a PC is present in the home.

I was reminded of that at the recent ADTRAN Connect analyst briefing, where Valley Telecommunications’ CEO Dave Osborn revealed on a panel that he’s seeing new broadband customers calling for service when they get their new Wi-Fi enabled connected TVs home and out of the box. He joked that the Raymondville, Texas based broadband carrier gets calls asking “can you hook up this ‘weefee’ to my new TV?”

The Valley example also highlights the potential for a home networking service. The connected TV can drive the need for broadband (or maybe better broadband) and the need to network it. The proliferation of connected devices in the home creates demand for a managed home networking service — one that broadband carriers are well positioned to offer.

Connected TV News Out of CES
Connected TVs have been around for a few years, but the developments being showcased at this year’s CES highlight a trend that is maturing. I didn’t get a chance to see everything in Vegas, but here are a few that caught my eye:

Samsung
Samsung made a lot of noise with their SmartTV product line. They are adding some interesting innovation to their connected TV platform, including voice and gesture control of the TV. Think of it as an Xbox Kinect version of a TV, where your hand gestures can control the TV. It will also accept voice commands, allowing you to speak to turn the TV on and off or change the channel.

Filed in the somewhat creepy folder is the face recognition feature of these new Samsung TVs, where the TV recognizes your face for control of certain functions. The most interesting new announced feature in my opinion was the upgradeable expansion slot on the Samsung ES8000 model. Samsung says they will offer future releases for their Smart TV operating system, which can be uploaded via this expansion slot, theoretically extending the life of the TV as new innovation occurs.

Simple TV
Simple TV is the DVR in an OTT world, where customers can integrate this DVR solution with other OTT services like Roku, Google TV, or Boxee. Traditional DVRs are built to interface with existing STBs (or they are the STB). With Simple TV, no STB is required. There are some drawbacks, like no on-board hard drive (meaning you have to connect an external drive) and there is only one tuner for recording. I suspect we’ll see more of these approaches to DVRs and better innovation over time.

Vizio Stream Player
Vizio is no stranger to connected TVs, having offered their own version for some time. With the Vizio VAP430 Stream Player, Vizio is taking on the likes of Roku and Apple TV. The box basically turns any existing TV into a connected TV, offering access to a variety of OTT channels, including the usual suspects of Netflix and Vudu. The box will also feature Google TV and a variety of Vizio TV apps.

These connected TV box approaches are important because they can inexpensively make an existing dumb TV, smart. Roku took this concept to the next level recently with the introduction of their Streaming Stick.

A Set-Top-Boxless Future?
Beyond the potential impact on broadband that connected TVs present, they also matter because they represent a roadmap to a set-top-boxless environment, where video service providers may not need to invest (with both capital and hassle) in STBs to provide video services. You can already see the possibilities.

Samsung, in partnership with DirecTV, introduced what they called a set-top-boxless viewing experience. In this particular case, they were referring to whole-home DVR solution, where the TVs can accept streaming from a DirecTV DVR, without the need for a set-top-box. “Capable of supporting multiple connected televisions simultaneously, DIRECTV’s HR34 Home Media Center HD-DVR enables the set-top box UI and features to be displayed directly on Samsung Smart TVs,” Samsung reports in a press release.

Verizon and LG announced that select FiOS TV channels will be streamed to LG TV sets, without the need for a STB. “The new app will allow Verizon FiOS TV subscribers to access 26 live HD channels directly through their connected LG Smart TV or Blu-ray Player without any additional hardware required,” LG explains in a press release. The LG TV will also provide access to FiOS VOD content.

A few steps in a roadmap to a set-top-boxless environment.