UPDATED 11:35 EDT / JANUARY 11 2010

The Internet Is Turning TV Into The Wild West

image At CES 2010, no battleground rages between the traditional gatekeepers of the last century and the connected upstarts of the next like television.  TV is center stage at this year’s show, from Samsung’s stunning 3D TV line to Panasonic’s  152-inch monster plasma to the buzzworthy hardware details surrounding the Boxee Box.  Connected Blu-ray players and set-top boxes dominate the show floor, with YouTube and Netflix seemingly available on every screen one can see.

But while the technology delivering "over-the-top" TV is cause célèbre on the show floor, the content that technology delivers is the subject of not-so-quiet caution in the hallways and panels behind the CES hype.  But not even the sexy gear grabbing headlines and popping eyes this year is loud enough to drown out the fear brewing behind the curtain for this new decade in television.

Every major consumer electronics manufacturer at CES is releasing devices or TVs intended to bring Internet content to the biggest screen in the home, but what that content will look like, who will be providing it, and most elusively what money is to be made remain alarming question marks for the business of entertainment in 2010.

Roku’s business development head Jim Funk commented in a panel that the influence of the Internet has been disruptive indeed.  "We are in the Wild West right now with the Internet on TV.  What is the value, what is the price point, what’s best for consumers and providers – no one has figured it out yet."

Mitch Berman, chairman of over-the-top startup Zillion TV, described the problem as an issue of insurgence – several new voices have been added to the business of making TV.  The traditional television constituencies of consumers, advertisers and producers are now joined by network operators like Comcast and DirecTV, hardware manufacturers like Samsung and Roku, and software developers like Microsoft and Boxee.  "The current ecosystem is under attack," Berman said.  "Everybody is protecting their territory and in the middle is the consumer."

The absence of unified voices combined with the voraciously positive consumer demand as created a gap between that which is possible and that which is available.  Hardware and software makers are delivering dozens of different platforms each with a completely disparate user experiences, but are all serving the same content.  Netflix, YouTube, CBS and Facebook are the most commonly integrated content partners for much of the over-the-top ecosystem, but content deals with most of traditional television is noticeably absent from offerings by large corporations and Internet TV startups alike.

Brian David Johnson, an ethnographer from Intel, identified the gap between the tech and the business model as the primary issue that must be resolved for Internet TV in 2010.  "People don’t change as quickly as technology – they just want their TV.  We’ve reached the point where it is about the business. "

In this Wild West of Internet TV, there are a couple dozen "hows" but zero "whys."  Notably absent from any discussion on Internet TV at CES 2010 was participation of cable networks or content owners.  Few ideas are forthcoming on how to make money on Internet TV, and predictably the content community is loathe to embrace the tech at the risk of cannibalizing their business.

Roku’s Jim Funk seemed resigned to their leverage, saying "The content owners will ultimately decide how this plays out. Experimentation is what we will see this year."


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