Is the Internet finally killing TV?

By Christian Science Monitor

Is this the summer that the Internet finally kills television as we once knew it?

Most industry observers are stopping short of that prediction, citing some significant hurdles still in the way.

But the growing number of new deals and new devices being announced suggests that a profound change in the way people watch video -- and what video they watch -- is under way.

The line between "television" and video via the Internet already has blurred and may disappear in coming years.

At least one industry analyst has declared "TV is dead" and welcomes Americans to a new age of video everywhere.

Increasingly, Americans are watching video when they want to, and on the screen that suits them at the time. And more programming is from new sources that threaten to unlock Hollywood's domination of content.

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Video is now delivered on displays and devices of every shape and size, from gigantic theater screens and ever-larger home projector screens to flat-screen HDTVs and from desktop and laptop computer monitors to tiny personal screens such as those found on iPods and mobile phones.

Meanwhile, NBC Universal is touting its coverage of the Summer Olympics in Beijing as "the single most ambitious digital event coverage ever." Along with video coverage on several of its cable TV networks, NBC is streaming 2,200 hours of live competition in 25 sports on the NBCOlympics.com Web site.

"The Olympic viewer will be able to define his or her own Olympic experience like never before," said Gary Zenkel, the president of NBC Olympics, in announcing coverage plans last month. Media coverage has speculated that heavy viewing of Olympics on workplace computers would cause systems to bog down or crash.

"NBC is certainly taking the right approach by stepping back and trying to look at (the Olympics) as a holistic suite of (video) offerings and then trying to figure out what pieces best go where," says Kendall Whitehouse, senior director of information technology at the Wharton School of the University of Pennsylvania.

NBC concedes that this unprecedented blanket of coverage across TV, Internet and mobile devices amounts to a giant experiment. "I have no idea how people are going to use this stuff," Alan Wurtzel, the company's research chief, told The Associated Press.

This spring and summer, deals to make video more ubiquitous across screens have popped up with more and more frequency:

• Netflix (NFLX, news, msgs), the video rent-by-mail company, has struck several new agreements to deliver its content online. A new $100 box from Roku the size of a paperback book lets users stream any of about 10,000 movies from Netflix to their TVs (though the vast majority of Netflix's library will still be available only through DVDs by mail). South Korea's LG Electronics announced it will offer a high-definition (HD) disc player that also will be able to access HD-quality movies from Netflix via the Internet. And Microsoft (MSFT, news, msgs) will stream Netflix video to its Xbox 360 videogame consoles. (Microsoft owns and publishes MSN Money.)
• Sony (SNE, news, msgs) says it will offer a movie and TV show download option for its Playstation video-game console.
• Apple (AAPL, news, msgs), which sells millions of videos online through its iTunes store, relaunched its Apple TV player, which can send that content to a TV set.
• Amazon.com (AMZN, news, msgs), the online retailer, is offering Amazon Video on Demand, which will give users immediate streaming access to 40,000 movies and TV shows. This video is now available only on a computer.
• At least a half-dozen TV manufacturers, including Sony, Hewlett-Packard (HPQ, news, msgs) and Samsung, have said they will sell sets that are continuously connected to a broadband Internet network, allowing Web content, including video, to move easily to the biggest screen in the house.
• TiVo (TIVO, news, msgs), the digital video recorder, will supply video from YouTube, the online video site famous for short, often amateur videos.
• Hulu was launched in March as a Web site offering free, ad-supported streaming video of TV shows and movies from NBC, Fox and other networks.

While these new services get video moving to new screens, none is a complete solution on its own, says the Wharton School's Whitehouse. "There are a lot of different companies supporting different file formats," he says. What you don't have is the one device that can "get content from all the major services like Hulu and Netflix and iTunes."

There's a kind of convergence between TV and Internet that's happening, "but not really a friendly one (for consumers), I think," says Bobby Tulsiani, an analyst who tracks developments in internet video for JupiterResearch.

TV networks, he says, have a time-tested model for making money through advertising and the fees cable TV companies pay to carry their programming. Online distribution presents potential new revenue sources, but also the danger that viewers will slide online, where profits are less certain.

Continued: The future in a 'video cocoon'?

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