Web TV is here ? and it looks set to change the way that consumers think about buying devices that can be used to access the Internet and the Web. And if it succeeds, PC dealers ? particularly those that sell to consumers ? may have to change the way they do business in order to adapt to the new business climate it threatens to create.
This technology is potentially so important that Microsoft has taken a minority stake in the firm that created it, while consumer electronics giants no smaller than Sony and Philips have begun producing devices using Web TV technology.
Web TV Networks, based in Palo Alto, California, is the developer of the Web TV set-top box and Web TV Network service. The service delivers the Internet through television by producing software to enable access through TV sets, and Web TV Networks offers tools that help Web site designers create online content that is optimised for viewing on a TV set. Web TV Networks has licensed its technology to Sony Electronics and Philips Consumer Electronics. Their respective set-top boxes became available at consumer electronics stores nationwide over the past couple of months, along with the Web TV Network online service.
All this from a firm that was only founded in June 1995 by three self-described long-time multimedia experts ? Steve Perlman, Bruce Leak and Phil Goldman. They say Web TV Networks ?is dedicated to bringing high-quality, affordable Net access to television consumers through integrated, easy-to-use, standards-based technologies and services?.
You only have to look at the September announcement with Microsoft to see just how much the company has accomplished in an astonishingly short period of time. It was then that the two companies unveiled the formation of a strategic relationship to co-operate in the development of technologies for delivering Internet content to television. At the same time, Microsoft also announced it had taken a minority equity position in Web TV Networks.
As part of the association, Microsoft and Web TV Networks will collaborate on the development of technologies and related standards for ?delivering high-quality Internet browsing for display over televisions?. Web TV Networks says it intends to integrate elements of Microsoft Internet Explorer technology, adapted for television display by Microsoft for Web TV Networks, into a future release of the Web TV browser system.
The two companies have also said they will work closely together, and with additional third parties and standards organisations, to ?promote the results of the collaboration as accepted extensions to current Internet standards?.
Microsoft was clear in why it wanted to back this particular horse. ?Web TV Networks has clearly established its leadership in delivering Internet content through the television,? says David Cole, VP of the consumer platforms division at MS. ?Microsoft?s relationship with Web TV Networks demonstrates our commitment to adapting Microsoft Internet Explorer to provide consumer access to the Web through a broad range of communication and entertainment devices.
?We are confident that we can combine the advantages of Microsoft Internet Explorer with the innovations of Web TV Networks to deliver a compelling Internet experience over the television.?
The deal means that Web TV can work with ? rather than fight against ? one of the biggest existing players in the market at the moment. ?Web TV Networks is looking forward to a co-operative association with Microsoft,? says Web TV co-founder and president Steve Perlman. ?The results of combining Microsoft?s continual improvements in Web browsing with our leading Internet TV and network technologies should enable millions of consumers to enjoy a high-quality Internet experience through their television sets.?
The biggest question on the lips of everyone who hears about Web TV is whether or not a real demand exists for it. To answer this question, the firm commissioned a study by Yankelovich Partners which seemed to conclude that consumers without Internet access who would prefer to surf the Net on a television outnumber those who would prefer to use a computer by nearly two to one.
The study showed that 52 per cent of respondents would be most likely to use TV Internet access, compared with only 31 per cent who would prefer computer access if given a choice.
?Consumer receptivity to television Net access is surprisingly strong,? says Hal Quinley, a partner at Yankelovich. ?Close to 70 per cent of those surveyed looked favourably upon the emergence of an easier, more affordable alternative to Internet access which is delivered on TV sets.?
The company says a number of factors prevent consumers from deciding to connect their homes to the Internet ? the first being that although about 35 per cent of US homes have a personal computer, only 10 per cent take advantage of online services.
For non-PC users, the research study suggests that the biggest obstacles to going online are the high cost of computers (42 per cent); the question of relevant information (33 per cent); and the complexity of the Internet (30 per cent). Seventy-five per cent of respondents want the Net to be simple and easy to use, lead them on a pursuit of their personal interests and provide good value through a set rate for unlimited usage.
?The Internet needs to find, secure and build its relationship with new users in order to flourish,? says Gary Arlen, an industry analyst and president of Arlen Communications based in Bethesda, Maryland. ?Television access will open up an entirely new audience to the Internet. Those that have been prevented from going online due to cost and intimidation will now benefit from the television?s familiarity, low cost and ease of use.
?Bringing the Internet to television must be part of the mix if the Internet is to grow into a true consumer resource.?
While this survey may well suggest couch potatoes would rather stay on the couch than surf the Net, it seems a little suspect to ask a bunch of people who haven?t used the Internet what they think it will do for them. If they have never used it, you have to wonder how they would know whether or not a TV set or a computer would be the best way to receive it.
It would be like asking a bunch of people who had only ever taken the bus to work if they wanted to drive a car or sit in a new bus with individual bucket seats. While many might think they would prefer to ride the bus, a short test drive might yield a much different result.
The real problem for WebTV ? and the many other would-be participants in the ?Web for TV? bonanza ? is that users may simply not get it or want it.
Consider the story of the company that organized a ?focus group? to show off its new system for accessing the Web through a television set. One by one, people were brought in to see the system and shown how to use the remote control to surf from page to page.
Smooth-talking advertising types ushered in one New York construction worker and showed him a Web page containing all kinds of sports information, explained how it worked and then retreated behind a two-way mirror to watch how he used the system.
They waited and waited as the construction worker just sat in front of the screen, staring at it blankly. After 10 minutes, one of them went into the room and asked why he wasn?t doing anything. His reply was: ?I was waiting for the movie to start.?
This response is a classic case of how this kind of technology has to be accompanied by strong messages to users about exactly what it is the technology will deliver. The user, had no idea he was not dealing with a passive medium like TV ? after all, it was being delivered via a TV set.
It is against this backdrop that converged devices like the $329 Philips Magnavox version of the Web TV set-top box hit the US market this autumn. In this incarnation, the Web TV hardware is designed to be an easy and cheap way for people to use the Internet and the Web using a small device hooked up to a standard TV. It comes from a consumer electronics company that carries the pedigree of having successfully co-introduced (with Sony) the compact disc to the world.
The Philips Magnavox Web TV box looks like a small desktop machine without a monitor, and plugs directly into a standard television set. According to PCED senior vice president Ed Volkwein, there is considerable demand for an easy way to access the Internet through any television receiver and standard telephone line.
?Our research shows while consumers in the US have a general awareness of the Internet, the cost of hardware is perceived to be prohibitive,? he says. ?Consumers want accessibility to the Internet without investing in a home computer or want to experience the Internet in the living room at an affordable cost.?
Volkwein also notes that the research shows parents think Net access would be a great way for their children to complete research for homework. But there is some concern about access to content they feel might be inappropriate.
He says that Philips has built in a ?parental control feature? in Web TV that is supposed to limit access to Web pages that are inappropriate for children. The Philips Magnavox Web TV also features something called a ?Kids? icon, which children can use to ?take interactive field trips, access reference resources, and other youth-oriented features?.
The Philips Web TV implementation will mark the first real test of the whole, low-cost Internet computer concept from a major consumer electronics company and will undoubtedly be watched closely by competitors.
What makes it significantly different from the Oracle-backed network computer is the way the software access is packaged. Web TV Networks has attempted to guide its users to sites that use its software to optimise the look for Web sites for viewing on TV, while shepherding users to those sites in preference over those that might not look so great when viewed on TV.
In addition, the Philips Magnavox device also encourages each family member to have their own user name and password, so that Mum and Dad?s record favourite sites and personal email don?t get read by the kids. It also helps ensure that the wrong people don?t get access to anticipated features such as home banking.
At this early stage, it is really unclear what the impact of Web TV is likely to be for dealers or anyone else. While it is likely that there will be a significant constituency for people who want to browse the Web from their television, what real difference will most people see from the Teletext ventures of the mid-1980s?
Using a Teletext-equipped TV set, even in 1988, it was possible to find out plane departure times, look at TV schedules and even find out sports scores. While the Web is a far more comprehensive and global effort, it is by no means certain this is how people want to use their televisions.
Another salient issue is the question of who wants to overburden the television set with yet another device? Already TVs put up with connections to cable television, satellite dishes, videotape recorders and dedicated video game machines. Is it realistic to ask consumers to buy yet another device that depends on this single, all-purpose (and technologically inferior) device to also hand Web browsing, email and more high-end tasks such as home banking and shopping?
So at this stage, the best advice for dealers would seem to be that they should keep a close eye on Web TV developments and ensure that whatever they are doing adds more value than they will get out the actual device. Dealers would have a tough time competing with consumer electronics outlets if they allow themselves to be ?boxed in'.
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