Internet TV's Future Is Now

By Steve Smith -- TWICE, 10/18/2010

The 2010 class of the CE Hall of Fame will be honored at the Consumer Electronics Association (CEA) Industry Forum on Tuesday night at San Francisco’s Fairmont Hotel. It is always a great event but for an industry that moves as fast as this one — and often prematurely takes profits out of what everyone thinks are upand- coming categories — history is usually last month’s financial results.

But the unveiling last week of Sony’s Google TV gave me pause — especially after I heard what Sony’s Mike Abary said at the unveiling: “We’re combining the power of HDTV, the power of full Internet ... TV and Internet together at last.”

I heard this before, back at International CES Orlando in May 1996. The year’s buzzword was “convergence,” and one of the proposed “PC/TV” solutions at the show came from Thomson, marketers of the RCA brand, and Compaq, the PC maker. TWICE reported that the companies were looking at a 36-inch co-branded tube TV with a retail of $3,500, which would include “DVD video movie playback, hard drive storage capacity,” and, oh yes, “Internet access and gaming.”

As the old cliché goes, pioneers are usually the ones who wind up with arrows in their backs. Compaq is a sub-brand of Hewlett- Packard and RCA, once the top TV brand in the U.S., has been licensed and appears on a variety of CE products. The demise of both companies didn’t happen because the product never happened. Looking back, it was just too early.

In what will eventually be remembered as the “year of 3D TV” in the display business, Sony’s launch of Google TV may be the most significant introduction of the year.

Sony, which has an undisclosed launch exclusive with Google, will probably be joined by several other major TV brands by CES and beyond. The capabilities of the Sony line are a far cry from the Compaq/RCA prototype of 1996.

The Sony Google TV looks like a winner, but it is one of several connected TV solutions available today that provide real, tangible value now. And a variety of choices, explained easily by an experienced retail sales force, usually means success in CE.

But 3D TV has overshadowed Internet TV at this point. 3D TV is a great, new feature for upscale 2D TVs right now, one that will grow in popularity next year and beyond.

But for the manufacturers and retailers the future is now — the fourth quarter. As you have read in our flat-panel TV pricing story and distributor coverage in this issue, inventories are high and prices will be cut deeply and often leading up to and past Black Friday.

If retailers, with the help of manufacturers, can quickly promote and explain the value of connected TVs it could stave off some of the much-anticipated price cutting that will mark this year’s holiday selling season.