Silicon Valley News

Friday, October 29, 2010

Netflix at center of Web TV battle

The emergence of internet television has spawned a battle between Apple, Google and several smaller companies trying to design a product that captures the consumers' attention. Though the convergence of the web and TV is just now beginning in earnest, there is already at least one clear winner. The Netflix streaming app is arguably the key feature of all the devices coming to market. The streaming of Netflix videos in a plethora of popular devices is the most mature and accepted technology in the dawning of this new internet TV era.

As a result, Netflix stock has skyrocketed during the last year, outperforming all other stocks with a market value over $5 billion listed on the Nasdaq exchange during this period.

NFLX has shot up 228 percent over past 12 months.

With the exception of the Google TV platform, all of the web TV products are basically devices that allow users to stream Netflix videos on a TV set, with differing bonus features.

Google TV also has a Netflix app.  A search feature is what sets the Google TV system apart. However, the major TV networks are blocking access to their content, so a true internet TV experience is still lacking.

The Google TV initiative is run by Google's YouTube division. The top bonus feature for Google TV is an enhancement of YouTube, dubbed Leanback. YouTube contains online display ads. Google says display advertisement will be a $50 billion market by 2015. The big studios' fear that Google TV will eventually tap into their lucrative ad market, estimated to be $83 billion, is the reason for the current standoff.

Google TV's integration with Sony television is another distinguishing feature.

Beyond its Netflix app, what stands out for Apple TV is the bling factor and its integration with iTunes. The sleek design of the Apple TV unit will attract many consumers.

Apple TV is often compared to Roku, the first device to stream Netflix movies. The Roku set-top box was designed by Anthony Wood, who worked for Netflix at the time. When Netflix CEO Reed Hastings decided against owning a dedicated Netflix player, Roku was spun-off. Hastings preferred to license the Netflix streaming service to Roku, and later to popular devices such as Microsoft's Xbox and Sony's Playstation.

Ironically, Roku recently announced that it would license its software. Netgear will market the first set-top box embedded with the Roku software. The $89 Netgear Roku Player offers 1080p HD video and content from Netflix, Amazon Video on Demand and Pandora radio. Premium pay content includes a major league baseball MLB.TV app.  Later this year, Roku will get Hulu Plus, which offers programming from ABC, NBC and Fox for $10 a month.

The attractive $99 Apple TV box is small enough to fit into the palm of your hand. It does not have a storage hard drive. Unlike competing devices, the Apple TV unit does not support full HD 1080p video. The Apple device allows WiFi streaming of content from Netflix, YouTube and $.99 rentals from ABC, Disney, Fox and the BBC.

Airplay, the most innovative Apple TV feature,  is scheduled to be released in November. The technology will allow users to transfer a video being viewed on an iPhone, iPod Touch or iPad to an Apple TV unit.

D-Link's Boxee Box is another web TV competitor. D-Link recently announced that Boxee Box, which will be available in stores November 10, will offer Walmart's Vudu online movie rental service. Boxee CEO Avner Ronen, in comparing the $200 Boxee Box to Apple TV, points out that the web TV player also offers storage.

Another more expensive streaming media player featuring storage was also recently announced by hard drive maker Western Digital. The $200 WD TV Live Hub features a one terabyte hard drive, along with content from Netflix, Pandora, YouTube and Blockbuster video on demand.

Sony also has a web TV netbox which streams videos from Netflix and Amazon. The $130 Sony unit supports 1080p full HD video, has a USB storage connection and can be controlled with its iPhone and Android apps.