NEWS: Winning the Broadband TV War

clipped from: www.businessweek.com

The holy grail of Internet TV is closer to becoming a reality, and the players who are making it happen are not cable TV providers or telecoms

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by Gary Morgenthaler and Herve Utheza

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Similarly, the drivers of the today's Internet TV revolution are coming from a direction the carriers have failed to forsee. They are arriving by stealth in the form of three Trojan horses.

First, Internet connectivity is quietly appearing on most high-end TV sets with the addition of Ethernet jacks by manufacturers such as Matsushita, Sony (SNE), Samsung Hewlett-Packard (HWP), and Philips.

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The second Trojan horse is the emerging hybrid delivery model: free, over-the-air, digital broadcasts combined with on-demand delivery of premium content over a home broadband Internet connection. This model, pioneered in Britain by Freeview, connects TV and computer via a set-top box. It has won over nearly 13 million British households during the past three years, ...

However, it is the third Trojan horse—the video game console—that promises to make the biggest inroad of all. The latest generation of consoles already offers consumers both Internet access and the ability to display digital content on their TVs. At today's rapid rate of adoption, we expect there will be 35 million TV-compatible gaming consoles in American homes by 2010, representing about one-third of all households. That is a market!