Web-enabled televisions are on their way to consumers, and telecom carriers need to be ready for the demands these devices will place on their networks. And what Web on TV means is more demand for online HD video and bandwidth-intensive Web applications.
The Journal cited a report from research firm iSuppli, which predicted Web-enabled televisions will account for 40% of the global television market by 2013, with sales of 88 million to 90 million units. But some analysts are skeptical of such rapid growth in the market.
"[That forecast] sounds a little aggressive, mainly because consumers are pretty hard to change in their habits," said Carl Howe, director of consumer research at the Yankee Group. "Somebody needs to work really, really hard on creating a very easy-to-understand and easy-to-use interface that not only the technically savvy could use, but also your grandmother could use."
Web TV shines spotlight on network broadband capacity
Regardless of when Web-enabled TV may take off in the market, it is coming. And it could affect telecom networks in two ways: It will allow users to download online high-definition videos onto their televisions, and it will allow them to integrate Web applications like Facebook into televisions.
"[Cable companies] didn't build their connections with the capacity to download a huge amount of HD videos at one time…. If everybody starts to do that, the cable Internet connections will melt down," said Larry Hettick, a principal analyst at Current Analysis. "It's not just your bandwidth [capacity]. It's how you use the bandwidth."
Telecom providers that are already running their networks on fiber-optic cable and those switching over as much as possible to digital video will fare best if Web on television takes hold, according to Hettick. Those with bandwidth caps are going to find their networks quickly overloaded.
"Phone companies are in better shape, and Verizon is in the best shape of all," he said. "Verizon doesn't care if you watch [a movie] over an Internet connection or a video channel because Verizon FiOS is a non-blocked network with a 200-800 Mbps connection into every home. It has a huge capacity. Cable TV will eventually be able to overcome its capacity issues by switching to all-digital networks and all-digital video, but it's going to take them years to do that."
Users demand interactive features for Internet on television
Verizon has been well-positioned in the market with its use of a two-way set-top box, traditionally used for ordering movies on demand but capable of much more, said Maitreyi Krishnaswamy, product manager of interactive video services at Verizon.
When FiOS launched three years ago, the company introduced a handful of widgets that appeared while users watched television -- features that reported the weather, traffic and sports scores. But demand seemed to be swelling for more interactive features, Krishnaswamy said.
Customers reported that they would be checking their fantasy football league standings on their laptops while watching the game on TV, or following posts on Twitter during popular television shows, she said.
Verizon expanded its widget platform and store, called "Widget Bazaar," to allow third-party developers to contribute applications. This summer, FiOS added Facebook and Twitter applications to its app store. The widgets allow customers to follow their friends' posts while watching TV, as well as post their own updates. Sports-related widgets incorporating fantasy leagues soon followed.
"We have about 30% of our base well-engaged in widgets…. In the first two weeks of launching Facebook, I had some tremendous numbers in terms of millions of hits," Krishnaswamy said. "[We can support it] because in a TV environment, you don't support multiple applications running at the same time. You're always in one channel and one application at a time. That's a big difference [from PC use], and that's something we can absolutely support on our network."
Carriers may not have to suit up networks for Web-enabled TV in the short term
"[Web on TV] won't have any major impact on telcos' networks in the next few years," said Dan Rayburn, a principal analyst at Frost & Sullivan. "Once the TVs are out there, then content providers will start providing content to [them]. You're talking about years down the road."
Rayburn said the iSuppli prediction cited by The Wall Street Journal is "absolutely" over-hyped. Most analysts estimate sales figure will be closer to 3 million units in the next few years, but that figure does not estimate how many people will bypass the Web on TV features.
Rayburn addressed grim adoption rates for other broadband-enabled devices on his blog, BusinessofVideo.com, reporting that Microsoft has sold nearly 16 million Xbox360 consoles in North America, but only 1 million Xbox LIVE Gold members have downloaded and activated an application to stream Netflix video on their consoles. The console comes with a 48-hour free trial.
"There are not going to be a lot of broadband-enabled TVs sold in the next few years," Rayburn said. "We have a long way to go. There's nothing that the telcos, carriers or providers need to be doing today."
Let us know what you think about the story; email: Jessica Scarpati, News Writer