No “it’s coming” or “find out more".”  Just a banner that says I can watch Netflix on PS3 now (once my DVD arrives).  And this just after I start seeing those great PS3 commercials showing how it is also about the Playstation Network and not just games.  So if both the PS3 and XBox offer Netflix, and the Wii by Christmas, what does this do for the console, cable and broadband TV industry?  Possibly everything.

If people start seeing Netflix as a service they can get via video game console boxes, then they start seeing their console boxes as a broadband replacement for cable boxes.  This can potentially change how consumers view the whole TV experience and start redirecting TV viewing habits from live to TV to greater increases in TV on demand.

The thing that is clearly a force in digital are the game devices. I think when we see the Wii come into the market with the ability to stream movies, which I think is maybe going to happen as soon as this year, I think that’s going to be a big marketplace for digital distribution.

This comes on the heals Wii announcing a video service in Japan, of Sony reporting strong video sales for the PS3 ($180 million according to this article), XBox reporting strong streaming viewers for the Netflix service (1 million activations reported here), and increased reports of people looking for more video on demand services.

Given the Wii’s simple to use design, it’s possible it could be a breakout device for video downloads as well as people that find other devices and services complex, find the Wii’s potential service simple.  However, success or failure, future hype around a Wii video service increase discussion around cable vs. direct to TV video delivery.

(Also reported by Greg Sandoval of News.com here.)

3D camera technology can tell if you’re kicking, punching, swinging a golf club and more.  In other words, you can turn on the TV by just moving your hand, turn on a video game by pointing to it and then play all those Wii like games but with more accuracy and without a controller.  The technology is actually available today so manufacturers are not simply exploring technical feasibility, but how to roll out and market it.  CES 2010?

Video content will be created specifically for the Wii with cartoons being cited as the first example.  There will be a mix of paid and free content.

There are a few interesting points to note:

1. I’ve been waiting.  The Wii has the most intuitive channel (as in TV channel) interface.  It’s easy enough that my kids would probably prefer watching video through the Wii than flipping through the cable remote.
2. Is this a partial story?  I’m assuming a December 25th story means either it’s bad news (not the case) or it was leaked the Reuters rushed by print it (my bet)
3. The are launching with a cable like model of paid  premium and free entertainment.
4. The article implies that Nintendo and Dentsu are matching the content to the demographic.   They are producing for the Wii so that, like the video game strategy, they are not being all things to all people, but offering a specific type of content to the Wii demographic (just as casual and easy games are specific to the Wii demographic).
5. A video distribution service by an ad agency?  Does this show a new era of monetization where you don’t create and pray for money, but create with the money?

And what are the implications?

Bandwidth providers have to change their models.  I’m betting them get out of the entertainment game and end up providing tiered bandwidth along with partner devices…similar to where wireless carriers have been heading.  So, the next generation may decide they want AT&T bandwidth with the entertainment that comes along in a Wii set top box just as today we choose AT&T Wireless with the content and services that come with an iPhone or Blackberry.

One day it’s quite likely you’ll hook a set top box to your TV (or just plug the cable card in) and be able to watch a Hulu-like ranges of shows on demand (with similar advertising).  That day can now be tested with PlayOn.

Thanks to work arounds like PlayOn from The Media Mall (at http://www.themediamall.com), you can try the future of video moving from Web to the TV today.  They are claiming this is perfectly legal as they carry all advertising to the Web thus keeping with the terms of service.

The basic idea of software like PlayOn is that it takes the video feeds from services like Hulu, CBS.com, ESPN, CNN, YouTube and others, retrieves it through your PC and then, acting as a media server, sends it to a media extender connected to your television.  In PlayOn’s case, it connects to an XBox 360, Playstation 3 or HP Mediasmart. 

I tried it out on the Playstation 3 and loved the concept of how it works.  You connect to the server in the video menu then simply go through categories which are translated into folders.  So a flow may go content type (Hulu, CBS, ESPN etc) – shows-alphabet-show name-episode), click and the video runs on the full screen. 

I found their interfact and navigation to be the best of all Web video on TV (e.g., Netflix downloads, Playstation Video store) or cable navigation services I’ve tried.  Sure, the Playstation 3 video store is nicer looking, but this way actually ran faster and was more intuitive.    

This is beta software so their are glitches.  But it truly shows how a all-in-one box like the Playstation 3 can use TV video over IP (let’s just call it IPTV) to either replace the cable box or the service overall.  Now, all we need to do is get more bandwidth, finalize the revenue model, get buy in from the content providers, educate the consumers (oops, maybe not…it’s as easy as starting a video game) and roll it out.

Here’s what they have so far:

• Lord of the Rings: Conquest – E3 2008 interview
• Final Fantasy XIII – E3 2008 Trailer
• Gears of War 2 – E3 2008 Trailer
• Resident Evil 5 – E3 2008 Trailer
• The Last Remnant – E3 2008 Trailer
• Fallout 3 – E3 2008 Perfect Life Trailer

(disclosure: Dailymotion is a client of one of our main sponsors).

Why? Because the browser if perfectly capable showing streaming video and people more and more see the Web in general as video platform.

For this to happen we need to see three basic things:

1. Consumers see the Playstation 3 as an online video device (the video store may address that with a successful launch)
2. Video providers create Web pages designed to be viewed and controlled through a TV screen hooked up to the PS3 (think of a media center web page design with links to high quality embedded flash video).
3. Theses web page based video channels are marketed to the PS3 community which now sees the device as an online video device

 A lot has to happen for this to succeed.  However, the fact that Playstation has both the ability and flexibility to deliver a variety of video (beyond the store) means there’s a lot of potential waiting to be addressed.

Read more on Sony confirming the video downloads at:
http://blog.wired.com/games/2008/06/sony-confirms-v.html

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From what you can read on the blog, paying for each episode also gets you extra content that can range from beta access to demos to levels to other related game content.  Sony’s experience may once again be selling more than a single product (video) at a premium price, but a package of content at a reasonable price.  There are a lot of people out there that would find a few dollars well worth it for the right game demo, beta access, level or other packaged content that comes with Qore.

Nevertheless, I remain skeptical, but mostly because the PR message around Qore has centered on paying several dollars an episode for what sounds like a game show.  Image if G4TV became a subscriber based service.   As with the Playstation 3, Sony may actually be selling a package deal that is worth far more than the price.  But once again, the message that got communicated was an overpriced product that can be had for less elsewhere (there’s plenty of inside insight on the Playstation 3 out there).

As an owner, I say once again – Sony, you may have a great product, but please get the marketing and PR to focus on the great value and not just the shiny object (in this case, downloadable video).