• Casual games through Accedo Broadband (www.accedobroadband.com) — Accedo’s popular casual gaming service, Funspot(R), allows viewers to play a variety of fun games from the comfort of their favorite armchair. Games include Texas Hold ‘Em Poker, Sudoku, and QuizzMaster.
• Video through Blockbuster OnDemand (www.blockbuster.com), Amazon Video on Demand (www.amazon.com/vod), and Neflix streaming services (www.netflix.com).
• Pictures from Flickr (www.flickr.com)
• Music from Pandora (www.pandora.com) and  Rhapsody (www.rhapsody.com)
• Web widges from Yahoo!’s Widget Engine with well-known content providers already developing TV Widgets for deployment include CBS, Showtime(R), TwitterTM, The New York Times(R) and MySpace(R).

We’ve been waiting for this to happen, it’s just good to see Vizio bring it all together.

But the most pleasant surprise was in the remote control – a full qwerty keyboard.  After a year of seeing the ability to browse the web and message with friends on a TV (mainly via video game consoles), we’re finally seeing a remote that will make it practical.  We can tell people about messaging capabilities all we want, but until we put the capability in the consumers hand, literally, it will be difficult for people to adapt.  Similar to how cell phones designed for music spurred music usage, remote controls designed for web and communications apps will spur more usage.  I just hope this becomes standard.

For years, I’ve been talking about a day when you bring home your TV, plug it in to an electrical and broadband outlet, and start getting a range of content and applications – no boxes or cable needed…cable companies would become bandwidth utility companies.  

According to The New York Times, LG is launching a line of, what they are calling, Broadband HDTVs,  which will stream Netflix’s instant library directly to the TV – no PC, set top box, online DVD player or other device needed. 

The implications are enormous both in how this impacts both other industries as well as at how it may accelerate the changes in consumer behavior.

Three Major Industry Impacts

There are many potential changes coming but here are my favorites.

Cable companies – People are shifting their habit to watching TV when they want, not when programmers want.  Cable providers will have to create whole new content and programming strategies that include applications, dynamic on-demand programming, community building and other Web like programming services.  Failing this, they won’t go out of business but may be relegated to bandwidth utility providers.

Application developers – The is on it’s way TV to becoming come the new development platform for consumer, communications and other platforms.  Consumers have flocked to sites like Hulu because they weren’t available on TV.  Now that the day is in site where consumers can play games and watch Hulu on demand on a big screen, they’ll flock back to the couch…and developers will follow.

Video game industry – Assuming that TV manufacturers are thinking of one day licensing video game platforms, then video games have two huge opportunities.  The first is more gaming on demand.  Already, downloading to console stores from XBox, Playstation 3 and the Nintendo Wii allow more demos and sales of video games.  Allowing people to download straight to the TV means more game sales (the real money…those consoles are money losers) as you don’t need to have people invest in a console first.  The second impact is more explosive growth in casual games.  TV watching is a community activity as are casual games.  Now you can play a quick game of checkers or run a virtual football play with a remote friend during breaks in the real game.  So when do I get my new XBox Broadband HDTV?

The marketing and advertising industry – Broadcast commercial, meet the Dodo bird.  Everyone’s been talking about the demise of the traditional TV commercial but, to date, there has not been enough brand-safe (UGC and illegal video is not) online video inventory.  In addition, Americans are watching more TV than ever.  But if that TV watching becomes watching streaming on demand through a broadband HDTV, then the marketing industry can see some serious, and very lucrative, changes.  Ads and branded shows can be delivered on a more targeted and personalized basis with follow through actions…such as ordering a pizza mid-movie.

Of course, it also open up the box to the porn market via CinemaNow’s not-exactly-safe-for-work adult section.   Adult content often drives early adopter media device and ecommerce model sales.  It’s been a big part of CinemaNow’s success (read here) and it may be one of the keys to getting more usage of streaming movie boxes.

http://valleywag.gawker.com/348685/microsoft-cisco-and-lionsgate-are-pornographers

(disclosure: the author sometimes does work for an LG competitor)

Here’s the full release:

LG Electronics Announces New Streaming Content Partners for Its Network Blu-ray Disc Players

LG to Offer Consumers Unparalleled Access to Streaming Entertainment from CinemaNow, YouTube and Netflix

ENGLEWOOD CLIFFS, N.J., Dec. 30 /PRNewswire/ — LG Electronics today announced the expansion of network entertainment options for its Network Blu-ray Disc players through new alliances with CinemaNow and YouTube(TM).

Available on new LG Network Blu-ray Disc Players in the first half of 2009, these new services complement LG’s instant streaming from Netflix and advanced Blu-ray capabilities to deliver consumers an exceptional entertainment experience. (In 2008, LG was the world’s first manufacturer to stream movies instantly from Netflix on a Network Blu-ray Disc Player.)

CinemaNow – an innovator in digital entertainment technology, delivering high-quality movies, TV shows and videos to users through online connectivity – and YouTube – a leading online video community for people to discover, watch, and share originally created videos – will be available in LG’s 2009 line of Network Blu-ray Disc players to be unveiled next week at the 2009 International CES(R).

"As millions of U.S. consumers view and download movies or TV shows through the Internet, they are demanding easier ways to access content and more home entertainment options," said Tim Alessi, director of product development, LG Electronics USA.

"From Blu-ray to instant streaming from Netflix to CinemaNow and YouTube, LG is bridging the gap between packaged media and video-on-demand services to provide entertainment solutions for consumers’ demand for content," he said. "With these new alliances, LG continues its innovation leadership by allowing consumers easy access to multiple entertainment options in one device."

CinemaNow: Instant Streaming of Hollywood’s Latest Hits

CinemaNow has pushed the envelope of digital video distribution, becoming the first Web site to offer Pay-Per-View movies from major studios and the first broadband distributor of high definition (HD) content. Collaborating with CinemaNow will enable LG Electronics to offer consumers access to more than 14,000 titles from the major movie studios, broadcast and cable television shows, more than 250 independent film titles and music videos from all major labels. Key benefits include the capability to:

• Browse the entire CinemaNow premium content catalog, including latest Hollywood hits,
• Instantly stream content to enjoy on compatible devices, and
• Access and watch movies purchased from other CinemaNow-powered stores.

"We are extremely pleased to be providing CinemaNow premium content services to these innovative new products from LG Electronics that are helping to drive convenient consumer access to digital entertainment at home," saidMark Ely, executive vice president of strategy, Sonic Solutions (Nasdaq: SNIC), parent company of CinemaNow.

YouTube: Original Streaming Video Content

Leading the way in providing unlimited access to online content, LG’s alliance with a prolific online video community, YouTube, will allow consumers to instantly stream millions of Web videos directly from the Internet to an LG Network Blu-ray Player for viewing on their television (without a personal computer). Key benefits include:

• Unlimited access to millions of videos on topics such as current events, instructional videos for hobbies and interests, comedic and viral videos and
• Easy searching, thumbnail previews and multiple screen size viewing options.

Netflix: High Definition Instant Streaming

Now available to consumers as a free on-line upgrade, LG’s first Network Blu-ray Disc Player (BD300) now delivers a growing number of Netflix titles in high-definition (HD). This new access to high-definition streaming content enhances the existing standard-definition streaming service that LG and Netflix first brought to consumers in 2008.

Future LG Network Blu-ray Disc Players will also offer consumers a variety of ways to enjoy more than 12,000 choices of movies and TV episodes from Netflix. Netflix members owning these devices pay one low monthly subscription for unlimited DVD rental and unlimited streaming.

LG’s full line of Network Blu-ray Disc Players, additional new content alliances and other new products will be revealed at the LG Electronics CES press conference on Jan. 7, 2009 at the Venetian/Sands and will be on display at the 2009 International CES – Booth #8214, Central Hall, Las Vegas Convention Center.

About LG Electronics USA

LG Electronics USA, Inc., based in Englewood Cliffs, N.J., is the North American subsidiary of LG Electronics, Inc., a global force and technology leader in consumer electronics, home appliances and mobile communications. In the United States, LG Electronics sells a wide range of consumer electronics (digital display and digital media) products, digital appliances and mobile phones under LG’s "Life’s Good" marketing theme. For more information, please visitwww.LGusa.com.

About CinemaNow

CinemaNow, part of Sonic Solutions (NASDAQ: SNIC), delivers high-quality Hollywood movies, TV shows and music videos to users across multiple platforms. CinemaNow is partnered with some of the biggest brands in consumer electronics and digital entertainment including ARCHOS, Dell, EchoStar Communications, Hewlett-Packard, Macrovision, Microsoft, Pioneer, Samsung, Technicolor and TiVo to deliver thousands of video titles directly to consumers. CinemaNow works with more than 250 licensors including 20th Century Fox, Disney, EMI, HDNet, IFC, Lionsgate, MGM, Miramax, NBC Universal, Paramount Pictures, Sony, Sundance Channel, Vivendi Entertainment and Warner Bros. For more information: www.CinemaNow.com.

Headquartered in Marin County, Calif, Sonic Solutions (www.sonic.com) enables the creation, management, and enjoyment of premium and personal digital media content through its Hollywood to Home(TM) products, services, and technologies.

About YouTube

YouTube is the world’s most popular online video community allowing millions of people to discover, watch and share originally created videos. YouTube provides a forum for people to connect, inform and inspire others across the globe and acts as a distribution platform for original content creators and advertisers large and small. YouTube, LLC is based in San Bruno, Calif., and is a subsidiary of Google Inc.

The service, which launches as a free upgrade at no cost to Xbox 360 Live Gold members, will offer a social component to the Netflix’s streaming service.  Members will be able to watch with friends remotely using avatars similar to those found in virtual words like Habbo Hotel.    This is part of another new XBox service called Live Party.  The avatar service will also be tied into game shows XBox is developing with Endemol (to be rolled out later this year).

The impact of these three new content areas – Netflix, Live Party and game show programming – sets up the XBox as a fully interactive video and entertainment platform.  There are several key implications for digital media marketing.  First, the type of sponsored programming and associated brand experience can be far more engaging.  Endemol’s game show on the XBox may be an example of this (I have not seen a demo).  Second, for media marketers, the social aspect means word of mouth about great content (including brand sponsored content) can spread quickly….likewise, it can quickly kill someones entertainment experience if a friend starts bashing – live – a show being watched.  Finally, marketers will have a box that provides a cross-media branding experience as they deliver in-ad games, sponsor social activities and advertise against video entertainment.  Whether or not all this happens depends on what Microsoft allows and how consumers and marketers interact.  However, the Xbox is becoming a more interesting box of possibilities.

At the same time, the Playstation 3 should not be forgotten.  They will be launching a video store and Second Life like social platform at some point.  In addition, their web browser gives them a potentially huge advantage should they start pushing programming that way.  As an audio and video capable browser, they can push users and marketers to use the Web platform to deliver unlimited video and social programming without the limitations of a proprietary platform like XBox.  So far, however, there have been few hints about if and how the browser will be used. 

More reading:

http://uk.reuters.com/article/governmentFilingsNews/idUKN1433374520080714

http://www.hollywoodreporter.com/hr/content_display/technology/news/e3icbacc817cd9e1b4ef85b14848782cf8e

Why?

• Ads still look best on television and they will become as interactive as online advertising.  IPTV and interactive TV platforms will allow increased targeted and clicks and purchases right from the couch (couch potato purchases).
• People want TV.  Remote clicking couch potatoes  don’t want to become desk potatoes but they do watch Hulu when that’s the only way to get TV on demand (and we are in a when-we-want-it era).   As online video become increasingly accessible through the TV (fast, high quality, TV interface etc), many web video hours will revert to TV watching hours. 
• Your set top box will increase it’s share of Web features and technology while retaining that couch potato optimized TV interface and remote control controllability.

For an example of where we are heading, just plug in an XBox and you can download a variety of HD content for television watching using a remote control.  Plug in a Sony Playstation 3 (or Nintendo Wii) and you can watch video through Web video sites using your remote control for the console.  I particularly like the PS3 video in a Web browser experience as it shows the equivalent of unlimited TV on demand.  From a media perspective, it’s the equivalent of being able to launch unlimited video channels just as you would as Web page (since it’s all  Web technology designed for the bigger screen).

Now, in addition to the XBox 360’s and PS3’s (to be launched) video download stores, there are rumors of Netflix (and a few wishful rumors about Hulu) being made available through these consoles. 

Now add in a video advertising network  to these platforms and you have a whole new world of television media.  Instead of watching a Netflix movie on a pay per view basis, you can watch a free one with commercials or in-video ads (which you can click on to purchase goods or get more information.

In the end, consumers, entertainers (would you rather be a TV star on a 17 inch screen or a 62 inch screen), media companies, brands and advertisers all are big fans of television.  When they can combine TV screen size with Web type interactivity, choice and features, the hype momentum and dollars will likely swing back to focusing on the large screen.    Set top box makers, cable and IPTV companies and the video game console makers are planning for that day.