“As streaming TV web sites and video-on-demand grow in popularity, the amount of online video watched by broadband users will grow at an incredible rate,” Orcon.

What’s on the box, under it and able to be connected to it, will undergo a major evolution over the next two years as television converges with the internet heralding a new era of interactivity.

Rather than relying on advertising infiltrated content being beamed in at a scheduled time, consumers will have much greater control over their digital lifestyle.

DVD and hard disk recorders and dedicated boxes like MySky, FreeViewHD or Tivo already afford personal reprogramming options and the catch-up content that can be streamed from the web hints at what’s coming next.

High definition (HD) TV sets and their surround sound systems already connect to games consoles, MP3 players, video cameras, laptops, tablet computers, smartphones, SD cards and other USB devices.

Ahead of the first wave of web-enabled TV sets and peripherals, further extending our ability to mix and match broadcast, stored, downloaded and streamed content, we’re seeing enhancements to the visual experience including LED (light emitting diode) and 3D screen technology.

End of analogue era

This brave new digital world takes on much greater portent with the Government fast forwarding the shut down of analogue broadcasting which will now occur between September 2012 and November 2013. Old school cathode ray tube (CRT) sets will become useless unless they’re connected to a digital set top box or a video or DVD player.

To continue receiving TV1, TV2, TV3, C4, Maori TV and Prime television, viewers will need a Freeview enabled set or set-top box, or a subscription to a digital pay-television service such as Sky Television.

State-owned broadcast infrastructure provider Kordia says the transition to digital will provide economic benefits to the whole country as analogue spectrum is reallocated for other services, including 4G cellular broadband networks and the likes of Sky to provide more channels and services to its 785,000 digital subscribers.

The end of the analogue era will hasten convergence between internet and TV and the rise of interactivity and bring New Zealand into line with other OECD nations; the UK will be fully digital by 2012 and Australia by 2013.

Digital catch up mode

According to Roy Morgan’s 2010 NZ Media Trends report, 48 percent of us still owned analogue TV sets as at March this year; although there have been some enticing offers, sweetened with 48 month interest free deals, accelerating digital uptake since then.

Roy Morgan says the once pervasive VCR is now in only 51 percent of homes and DVD players have plateaued at around 71 percent penetration. DVD recorders, the next big thing only three years ago, have also stalled in favour of hard disk-based personal video recorders (PVRs) including MyFreeview, MySky and TiVo.

Statistics New Zealand says we’re buying about 300,000 new televisions a year, three-quarters of them LCD models, and estimates between 60-70 percent have digital TV access through Sky, Freeview, TelstraClear cable or TiVo.

Sky claims around 48 percent penetration for its digital service and around 190,000 on its high definition MySky HDi service. At the end of June Freeview, which is available in standard definition through its UHF terrestrial and satellite service, was in just over a quarter, or 419,945 households.

Meanwhile the Government is investing $6.3 million to expand Freeview’s high definition coverage to 87 percent of the population ahead of the 2011 Rugby World Cup. Interactive and internet-based services are planned in the near future.

IPTV content challenge

Analyst Frost & Sullivan believes the roll out of the Government’s national broadband network will see 141,000 New Zealanders subscribing to IPTV, television or movie access via the internet, by 2014.

Many TV sets already have Ethernet ports for direct internet access ahead of the next wave of web TV services. The TiVo set-top box, although it got off to a slow start, delivers free content over the internet to Telecom broadband customers and has now been opened to other internet service providers (ISPs).

Sky Television’s new iSky service will also offer content through ISPs including news and sports channels, catch-up programmes and a rotating selection of 200 movies.

Sky has invested about $4m so it can host content on its own computers rather than having to pay for international capacity. Callplus, Orcon and Vodafone have already agreed to flag their data caps to encourage full use of the service and negotiations with other ISPs are ongoing.

This is the same dilemma Telecom is facing with TiVo’s Caspa service but ironically there’s now talk that Telecom may realign itself with Sky by embracing iSky as well.

Online video demand

Meanwhile Orcon and parent company Kordia are building a nationwide content delivery network for high quality internet-based video to support iSky. Orcon says as streaming TV web sites and video-on-demand grow in popularity, the amount of online video watched by broadband users will grow at an incredible rate.

Elements of TV’s evolution are being revealed almost monthly. TVNZ became the first commercial broadcaster in the world to deliver on-demand content to the Playstation 3, using the Adobe Flash platform at the core of its digital content service.

The system already delivers to half a million different web browsers a month. The only problem is that Apple refuses to use Adobe so the system doesn’t work for the iPhone or iPad.

TelstraClear joined the PVR market in September with its T-Box selling into Auckland and Christchurch where it resells Sky channels on its cable TV service.  The T-Box can record 50 hours of HD programming or around 300 hours at standard definition. TelstraClear claims this is just the beginning of an operation that will deliver wider content offerings as it extend through improved broadband coverage.

GoogeTV imminent

Google has has entered into a series of partnerships to bring web and channel surfing together on the TV. The first sets being built by Sony include Google’s Android operating system, Chrome browser and Google TV software.

The system uses Intel’s Atom processor and Logitech’s specialised wireless controller.  Intel claims the smart TV breakthrough is the biggest improvement to television since colour.

Sony's new 24 and 46 inch Google web HDTV sets went on sale in the US in October and are likely to be here next year with customised applications for news and other services and interactivity. Logitec’s new set-top box and Sony’s Blu-ray player also contain the Google technology.  

Samsung has launched its own internet TV sets and content channel in Australia and Vizio and Mitsubishi also are promoting web connected sets and Blu-ray players. Apple has begun delivering a new set-top box for internet access and  Microsoft and Yahoo are also working on internet video and services for the TV.

ABI Research says web-connected TVs are expected to account for about 19 percent of US sales of flat-panel models this year, rising to 46 percent in 2013.

3DTV sets, the Nintendo Wii, Microsoft’s new Kinect gaming technology and plans to bring Skype to the TV for high definition video calling will all help reposition the TV set at the centre of a new wave of on-demand entertainment and communications.

As we move from the current hybrid model where TV catch-up is on the PC, a full range of content will be available on all screens including webTV, smartphones, tablets, netbooks and notebooks.