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Internet video is coming to your TV

by Barry Flynn

Some interesting stats and predictions from Texas-based IMS Research in their new study Market Opportunities for Internet Video to the TV. IMS reckons that an estimated 65 million households worldwide had the capability of viewing Internet video on their television set at the end of 2008, up 134% on 2007.

The ‘vast majority’ of these were doing so via a game console or ‘proprietary device’, notes IMS, but expects that to change in the future: “it is expected that households using a PC to deliver Internet video to the TV set via a media centre PC and a media extender (or digital media adapter) will see an 85% CAGR through 2013 reaching nearly 60 million households by that time,” says the research firm.

Shane Walker, research manager and author of the study, puts that down to projected price-falls in Windows Media Centre devices, media centres in general, and extenders, with media centre costs falling by as much as 15% annually during the next five years.

After 2013, however, the story changes, as more advanced Internet TV functionality is delivered by digital TV set-top boxes. This will cause a drop in demand for media extenders, although IMS believes that for one category - media centres connected to the TV via a device other than an extender - demand will continue to grow, and they will slowly replace DVRs.

On the whole, I think these are reasonable scenarios, although perhaps the role of the hybrid, IP-connected set-top box is not accorded enough importance given current developments in Europe and elsewhere. Hybrid DTT STBs should arrive in the UK in quantity next year, and there are already substantial numbers of STBs in the UK with at least theoretical broadband capability - namely the later BSkyB PVRs and current Freesat boxes.

It is true, however, that the notion of offering the full panoply of Internet-based, over-the-top video services to the TV through a set-top box is fraught with practical and technical difficulties, so if IMS is talking about that type of advanced capability (rather than a walled garden that might, for example, only offer one or two services such as the BBC’s iPlayer), a 2013 timeline may not be that unreasonable.

Also, the idea that the TV-connected media centre might eventually replace the PVR in this type of environment is not that implausible. By the time you have added a hard drive, IP capability and home networking features to a set-top box, what you have is pretty close to a PC-derived media centre - so why reinvent the wheel? That is likely to be one of the central battlegrounds between traditional pay-TV operators and the ‘over-the-top’ video providers in the coming years.


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