The term "cord cutting" may sound a little abrupt, but it is stirring up a storm in the US among people in the imagery, broadcasting and communications businesses. In this context, the term "cord" refers to the links delivering TV imagery to homes across the United States, including cable TV (CATV) and digital satellite broadcasting. The total number of subscribers for CATV, digital satellite and everything else surpasses 100 million, and "cutting the cord" is terminating all those service contracts to replace them with Internet-based video distribution.
Internet-based video distribution developed for the PC market, and the next target is TVs. Once it gets up to speed in the home, it could become a serious threat to CATV and satellite broadcasting business... another potential threat contained in "cord cutting."
TVs Tap into Internet Video
As the environment continues to evolve, Google Inc. of the US, Intel Corp. of the US and Sony Corp. of Japan have jointly developed the Google TV software platform (Fig. 1). Sony released the first Blu-ray Disc (BD) players and LCD TVs with the new technology in October 2010, and a number of other major manufacturers are expected to follow suit in the second half of 2011 or beyond with support for Google TV. Media businesses and video service operators are watching the Internet industry closely for new ideas.
Interest in connecting Internet video and TVs is rising fast, and not only in America. In Europe as well it is becoming increasingly popular to watch missed TV programs broadcast free over the Internet, on PC monitors instead of TV screens. The development competition for networked TVs-flatscreens with functions to tap into Web-based services-is intensifying rapidly in the US and Europe (Figs. 2, 3). There has been a succession of dedicated set-top box (STB) terminals making it possible to watch Internet video on the TV, like Apple TV from Apple Inc. of the US
Panasonic Corp. of Japan has sold the VIERA CAST Internet service for TVs in the US and Europe since 2008. "The ratio of people in Europe and the US who buy network-capable TVs and actually connect them to the Internet is at least double what it is in Japan. We plan to expand the service to support low-end models as well in the future" says a manager of the firm.
One source in charge of the European market at a domestic TV manufacturer claims "Even if we don't do it, someone else certainly will. There's no way to avoid Internet-based services in TVs anymore."
Stirring up Debate in the TV Industry
Google TV is attracting such attention because it took a position in the argument about cost cutting: it proposes using television to handle Internet video distribution within the same framework as existing video services like CATV.
The core function here is the capability of searching across broadcast programming, Internet video and Web sites seamlessly. The underlying message is a powerful one, namely that there is no longer any point in arguing whether video content is for the Internet or broadcasting. A look at the circuits in the Google TV-compliant set released by Sony reveals that both types of content are handled in the same way.
In conventional networked TVs, there is a fundamental separation between how broadcast content is used and how Internet video is used. Users select video streams via a dedicated video distribution port, completely separate from the one used for broadcast content. This is the same concept as has been used for decades to select channels on the TV set. The basic business model used by broadcasters and other content providers has been to boost revenue on a per-channel basis, and TV developers were primarily interested in providing functionality appropriate for that end.
The Google TV search function destroys this framework by utilizing Internet search to replace the concept of channels. Viewers now have a way to directly access video content at a level above the frameworks imposed by channels.
Changing Channel Concepts
The impact of Internet search on television will be immense. If the function achieves widespread adoption, content currently broadcast through a variety of frameworks, or streamed over the Internet, will be handled with Web-standard technology such as HyperText Mark-up Language (HTML). The reason is that this type of framework could be built on a global scale
Managing video content for Internet search demands information on where the content is located on the Internet, and this is usually handled via the Uniform Resource Locator (URL). If lateral search across broadcast content and Internet video becomes popular, URLs will be affixed to broadcast content metadata and even video data, facilitating HTML-based management. This would make it possible to prevent specific content from being exposed to viewers via search results.
What it all means is that the URL for the content you hit in your search will take the place of the channel selector on your TV remote. This will affect more than just search functions: it will lead to the creation of new services as broadcast content is tied to a variety of Web services.
One good example is the content recommendation function, linked to social networking service (SNS) sites, blogs and such. Even now, it is common to tell friends about Web-based video by just giving them the URL, and that means it would be easy to build a system allowing users to view broadcast content by just clicking a link. It would also be simple to include a function to recommend films, recipe shows and other content likely to appeal to someone who views content in a particular genre from a video upload site, for example.
Work has already started in the US to standardize a unique identification (ID) for each video content item, to facilitate the management of film and broadcast content through Web-standard technology. The project is being handled by the Entertainment Identifier Registry (EIDR), an industry body established in October 2010 by major movie studios and other companies. The goal is to make it easier to search for and view content information by implementing single-source management of IDs. This would replace the current system where IDs are managed independently by each video service.
Sharing Revenue with the Internet IndustryM
The penetration of Web-standard technology will also accelerate change in the TV business model. Google, for example, will reap significant advertising revenues from advertising tied to search results and content descriptions. There is no doubt that the company is working to establish a business model that allows it to grab a piece of any revenues generated from search results, or advertising related to a search result video.
While Google has yet to announce anything, manufacturers are also excited by the prospect of the revenue stream that Google TV could create.
Yoshihisa Ishida, SVP of Sony, who started in the PC business but now heads the firm's TV sector, explains "We haven't talked to Google about it yet, but I suspect they are trying to set up the business in the same way as the PC business. We hope it will be possible to share the revenue."
American companies involved in video on demand (VOD) service to networked TVs appear to already be paying a portion of their revenues to TV manufacturers who include service connection functions standard. If this trend spreads it could well grow into a new revenue source for TV manufacturers eager to escape the "sell once and forget" business model.
The Google TV concept would completely overturn the existing business model, and naturally has earned strong opposition from conventional video service companies. The three major American networks-ABC, NBC and CBS-have made it impossible to view television programming distributed via their own Web sites on equipment supporting Google TV.
Other companies, like satellite broadcasting major DISH Network LLC of the US, have released STBs with functions to link up with Google TV equipment. According to Vivik Khemka, Vice President of Marketing at the firm, they are actively pushing Google TV because "We can't force our viewers to stop watching the netflicks or other content they want to watch. It's better to push ahead of the crowd and give them what they want, instead of lagging behind and losing business."
Getting Hardware and Software Components Ready to Go
The collapse of existing concepts of TV channels is bringing about a significant change in TV development, in both hardware and software. The Web technology standards and hardware needed to accelerate the fusion of Internet video and broadcast content should be all ready to go in about two years.
In the fall of 2010 the World Wide Web Consortium (W3C), which establishes technology standards for the Internet, began work on the "Web on TV" specification within HTML5, the newest version of the HTML standard. In spring 2011 a working group (WG) will be established to look into concrete implementations for linking the Internet and broadcasting in HTML5.
Professor Masao Issiki of Keio University of Japan, who proposed the idea to the W3C, comments "HTML5 is not just a description language, it's an environment for running Web apps. The whole concept of television will be revolutionized if it's run on HTML5." HTML5 will support display imagery significantly more sophisticated that existing browsers, improving operability, and allow application software to be coded without worrying about the OS or specific browser.
The development of the hardware needed to support the processing load for this high-performance software is also well under way. After mid-2011, when Google TV is supposed to go open source, it is likely that inexpensive system-on-chip (SoC) products for TVs will appear, integrating central processing unit (CPU) cores with peak operating frequencies above 1GHz. The frontrunner is the Intel Atom CE4100 SoC for TVs, already found in Sony sets offering support for Google TV. Advanced Communications Co., Ltd. of Japan, which develops middleware for TVs utilizing that SoC, explains "With an SoC running at over 1GHz, it is possible to view one TV program while simultaneously recording a second one, and still have enough power left over to let you browse the Web comfortably."
MIPS Technologies, Inc. of the US, which holds a large share of the TV CPU market, is confident that it will be possible to supply SoCs with performance surpassing even the CE4100 for "overpoweringly low prices." It began licensing its 1074K 32-bit CPU core, designed for use in multicore SoCs, in October 2010. The peak operating frequency is 1.5GHz, and a triple-core SoC would deliver more than twice the processing power of the CE4100. The chip footprint is small, and dissipation low, the firm says. Art Swift, Vice President Marketing at the company, adds "The average price for TV SoCs integrating this core will be under US$10, with the first TV sets released in the second quarter of 2011."
Making the Best UI
While there may be differences in implementation, it is clear that the development of TVs offering functions along the vector mapped out by Google TV will be active in the next couple of years. Google TV, however, also raised a few problems. Many people in the TV industry have pointed out that the functions offered by Google TV are still the same as those found in a PC. These functions, they say, demand active-not passive-use by the viewer, and that will make it difficult to gain a significant user share.
As hardware evolves, however, this problem will also be shortly resolved. Already the first hints of a user interface (UI) that can be used easily by viewers have appeared. One excellent example is the "torne" play/record kit for terrestrial digital broadcasting, released in March 2010 by Sony Computer Entertainment Inc. (SCE) of Japan for the PlayStation 3 (PS3) home game system.
The high processing performance of the PS3 has drawn attention for the way it allows high-speed draw of program listing zoom and selection cursor operations, but what's even more important is the UI implementation that lets users do it all intuitively. SCE created torne by applying the expertise gained through game software design. Manabu Nishizawa, a creative director at the firm, explains that the key element was "making sure users enjoyed viewing and recording operations. We managed it by incorporating game concepts into uniform presentation and worldview."
Japanese manufacturers have an advantage when it comes to designing UIs for television, or technologies to link broadcasting and the Internet, because for over a decade they have been experimenting in the domestic market with data broadcasting as a part of digital broadcasting, and developing TVs with onboard browsers.
This experience will have to be applied quickly, though, because the prices of TVs are plunging fast. To deal with dropping prices and the steady evolution of Web technology, next-generation TVs will be turned into just big monitors, displaying the imagery from high-performance STBs, smartphones and PCs.
The appearance of Google TV marks the start of the "final battle" for TV manufacturers. The television will no doubt remain the king of the living room as a means of offering video from the Internet, but there is no assurance the "TV receiver" will remain the dominant device.
