Internet TV Is Finally a Reality Show

After years of build-up, it looks as if content, computers, and consumer electronics are all finally converging

by Cliff Edwards

If you missed Stephen Colbert's hilarious use of a confusing flow chart to explain the equally confusing history of AT&T (T), Sharp (SHCAY), and other big-name manufacturers are accelerating rollout plans and expect to deliver new TV sets in the second half of the year that can connect to the Internet and deliver digital content at the press of a button.

The Simple Life

Meantime, Apple (AAPL), Microsoft (MSFT), Hewlett-Packard (HPQ), and other companies traditionally seen as big players in the computer industry have announced products that bridge the gap between the PC or Mac and TV. "The digital decade is happening," Microsoft Chairman Bill Gates told the audience at the Consumer Electronics Show in January as he unveiled the company's own IPTV offerings. "People want to do things with their content across multiple platforms."

At least Gates and other digerati are convinced that will be the case with a new generation of tech gear, software, and services. This time around, however, both consumer electronics companies and computer companies such as HP, SanDisk (SNDK), and Netgear (NTGR) have learned an important lesson from Apple: Keep it simple.

Each company is taking a different approach to delivering IPTV, but the one thing they have in common is a new emphasis on delivering compelling content in a way even the most tech-phobic user can understand. "The company that has made it simpler for people is Apple. It's a lesson the rest of us have needed to learn," says Martin Kono, president and chief operating officer of Panasonic Consumer Electronics. Or as, Steve Jobs might put it: It's the software, stupid.

Speaking the Same Language

So far there's been scant consumer interest in Internet TV. Indeed, two-thirds of U.S. homes that have gone to the trouble of setting up wireless networks and Ethernet routers still only use them to share Internet access and have no other devices connected—not even printers or other PC peripherals, according to researcher In-Stat. Even though prices for such products are low, most consumers still consider it too complicated to network all their electronic gear.

To make the technology as simple as possible, Sony, HP, and other vendors are finally creating software that can be used across all their devices—be it PCs, TVs, or set-top boxes. Consumers for the first time won't have to learn new tricks for using different products from the same company. And third-party software vendors will have a common set of development tools for a particular company's products, helping speed time to market.

"It's a new world, where we have a new generation of consumers who care more about the experience than what a particular device's technical specs are," says Jen Hsun-Huang, CEO of graphics chipmaker Nvidia (NVDA), which empowers 3D graphics on many computer and consumer devices.

Internet-Enabled Optimism

Even the king of consumer hardware has realized the need for user-friendly software. Take the Cross Media Bar, an interface Sony created that uses simple icons spread horizontally across the screen.

It was originally created for Sony's failed PSX, a combination game console and media center PC capable of recording TV programs. The consumer electronics giant rescued the software from obscurity and put into the PlayStation Portable, PlayStation 3, stereo receivers, and, now, its Bravia flat-panel LCD TVs.

For consumers, mastering the interface is like learning to drive a car. Once you have a license, it doesn't matter which model you drive.