This year will see two technologies, internet and traditional TV, combine to create the new medium of internet TV. The Consumer Electronics Show (CES) in Las Vegas this month has prepared consumers for what to expect.
The industry giants Samsung, Sony, LG and Panasonic showcased the latest versions of their internet-connected TVs. The electronic communications networking giant Cisco unveiled a new TV platform for service providers called Cisco Videoscape. The US research company Parks Associatespredicts that internet TVs will make up three quarters of global TV sales by 2015.
The internet giant Yahoo unveiled at the Consumer Electronics Show a highly ambitious plan to turn couch potatoes into active web surfers and shoppers using a new service called "broadcast interactivity". This enables TV programmers to create TV applications that let viewers vote in reality-TV contests, get more information about characters, or make e-commerce purchases while watching a show. Broadcast interactivity also allows brand advertisers to connect in real time with TV viewers during commercials or other branded entertainment experiences.
Service providers, such as Yahoo, believe that internet TV will be far more than a hybrid device enabling viewers to switch between traditional TV and browsing the internet. As well as widening the choice of entertainment content, internet TV will offer viewers a bewildering new range of internet-based services. The downside will be that consumers can also expect to have their viewing habits closely monitored and minutely dissected and to be bombarded with targeted advertising.
The interactive Yahoo service will enable advertisers to know which programmes or films viewers are watching and target them accordingly. For example, the new technology enables viewers to buy items such as clothing or furnishings seen on their favourite TV shows or from interactive commercials. Yahoo uses the example of Mattel, the manufacturer of the internationally popular range of Barbie dolls, to show how broadcast interactivity will work. Viewers of a Barbie TV commercial could take Barbie polls, play Barbie dress-up games and view Barbie documentary videos.
Ron Jacoby, the vice-president of Yahoo Connected TV, said: "Our collaboration with leaders in television and brand advertising, combined with the innovative technologies we're pioneering, signals the beginning of a new era of highly personalised, internet-enhanced television. Imagine an immersive, real-time TV experience that brings people even closer to the programmes and brands they love by enabling them to play along while they watch their favourite shows."
But the home entertainment industry is still divided on the extent to which consumers will want to be "interactive" while being entertained. Service providers believe that TV viewers can be divided into two groups: "lean back" viewers and "lean forward" viewers. "Lean forward" TV viewers are those who typically desire to do more with the TV screen than merely be entertained and wish use the whole gamut of internet-based services. "Lean back" TV viewers are happy to sit back and be entertained with no involvement beyond flicking among channels.
There is, however, an opposing industry belief that consumers could be irritated by on-screen messaging and constant exhortations to buy advertisers' products. Sky, for example, is not certain that interactive TV will have the broad appeal other service providers are anticipating. Sky is particularly sceptical of the widely held industry view that users will wish to use the family TV screen for many of the applications now performed on PCs and laptops. These include applications (apps) such as for social networking, personal banking and posting and reading Twitter messages.
Griff Parry, the director of IPTV development at British Sky Broadcasting Group, says: "While we have experienced a lot of success with apps and websites complementing the core TV experience, we believe the jury is still out on whether people actually want to have apps on the shared screen. Rather, our experience tells us that what people really appreciate is the best possible quality TV experience.
"As an industry, we need to question whether people really would want to do their personal banking or update their Twitter or Facebook accounts on a shared screen."
Viewers might also have concerns that the two-way nature of internet TV technology may represent an invasion of their privacy. Connected TV will enable service providers to monitor their customers' viewing habits to extract every last possible advertising dollar from the new medium.
Yahoo, however, believes every advertiser should be allowed an individual set of applications in order to target each specific consumer. Yahoo is working with Connected TV distribution partners including Broadcom, D-Link, Haier, MediaTek, Sony and Toshiba to enable full broadcast interactivity.
But by aiming at the interactive internet TV market, Yahoo is shooting at a moving target. The new services launched in the US by companies such as Yahoo! and Google TV have a limited time in which to capture a big slice of the global internet TV market before viewers simply start connecting TV screens to laptops or PCs and bypassing "legitimate" service providers entirely. Consumers in those parts of the world, such as the Middle East, that are not being fully addressed by the new internet TV offerings but which already have broadband internet connections have alternative ways of accessing content. Despite the concerted efforts of Hollywood and various law enforcement agencies, illicit international websites such as Pirate Bay that specialise in offering copyrighted material free are difficult to close down, as they operate across national boundaries.
No one in the industry can confidently predict which direction internet TV will take and whether today's TV viewers will wish to be constantly connected to web-based services or will be happy to continue being couch potatoes. But whether it is Yahoo's or Sky's vision that proves to be correct, TV viewers across the world can look forward to a widening choice of digital home entertainment throughout this year and beyond.