Net video comes to TV

LAS VEGAS -- A slew of new devices to be released this year will pipe the Internet directly to the family television, transforming software and gadget companies into potential cable challengers.

Online content, ranging from grainy videos on YouTube.com to popular shows posted on network websites, has exploded over the past year, and big and small companies at the annual Consumer Electronics Show are rolling out new set-top boxes that seek to change how people tune in.

"This is what CES is going to be about for me, and I think it's going to be the big story; there are a class of devices that are about to be available that will bring Internet video to television sets," said Josh Bernoff , an analyst at Forrester Research who recently authored a report on the technologies.

One out of every 10 online consumers watches television on the Web, according to the Consumer Internet Barometer, which provides Internet research to business executives. But no one thinks the new devices will mean the end of subscription TV services soon.

A Forrester survey of 5,000 US households found that 80 percent of respondents were not interested in Internet video on their living rooms, and Bernoff predicts it will take five years before Internet TV will be competitive with cable.

But that isn't stopping traditional electronics companies from plunging ahead, with new offerings that seem to blur the boundary between hardware company and content provider.

"Consumer electronics without compelling content is rubbish," said Sony Electronics president Stan Glasgow , who revealed that a majority of Sony's new televisions will be compatible with a device that streams broadband content from partners like AOL, Yahoo, and the user-generated video website Grouper.

Hewlett-Packard Co. disclosed a new MediaSmart TV available this summer that will allow people to watch online slideshows, download movies from the Internet, and listen to music on their TVs. Microsoft Corp. stepped up its efforts to make the gaming console into the set-top box with its announcement that by holiday season this year, the Xbox 360 will offer Internet TV channels.

In February, a new set-top box made by Netgear Inc. will stream movies, news, weather, radio, and YouTube videos onto high-definition TVs from the Internet. Addlogix displayed EchoView FM , a wireless adapter that sends content -- like "Desperate Housewives" -- from a PC directly to the TV.

TiVo released its Series 3 box last fall, and now allows users to access broadband content through their TVs, including video content from sources like The New York Times and videos that friends and relatives make and share on personal TiVo channels.

Meanwhile, rumors are rampant that today at Macworld, Apple will officially launch its iTV device.

The companies all face a difficult task: They will have to educate consumers, ensure that the video that streams to the set looks good on the big screen, and make the menus easy to navigate. Past attempts to merge the TV and PC screen have never caught on.

But many think that just as Apple provided the iPods that catalyzed the digital music player industry, the company may have the clout, brand-recognition, and user-friendly experience to bring Internet video to TV.

"If Apple really made a device like the video equivalent of the iPod -- it looked good and proved to be very popular -- that's potentially very threatening to people who distribute video in the more traditional way like a cable company," said Jim Penhune , an analyst at Strategy Analytics in Newton.

The services have the potential to let consumers bypass the cable, satellite, or telephone providers that currently provide their video service. But with fairly limited offerings, many are now adding content in niche areas. Still, it may take time to create a viable business model: The Forrester report predicted that no more than 5 percent of households will use Internet television by 2011.

"I don't believe all the major content holders and the studios are going to go direct to consumers to compete with the cable companies or the telephone companies or satellite," said Keith Kocho , founder of ExtendMedia in Newton, which is working with Microsoft to deliver Showtime programming on Windows Media Center. "What the challenge for cable providers and satellite providers will be is to try to upgrade their ability to deliver this experience to the consumer to make sure they don't just turn into a pipe."

Already, subscription TV services are increasing their offerings. Late last year, Comcast began a trial in Pittsburgh and Denver, releasing new movies On Demand the same day they hit the DVD market. Yesterday, DirecTV unveiled plans to offer On Demand services by the middle of this year. On the eve of the gadget tradeshow, Verizon disclosed enhancements to come this year to its FiOS TV, including Internet radio and video content, and homemade content like videos on Revver.

But some think that Internet video will be a true disruption, allowing new services to get a foot in the door.

"Today, the gatekeepers are satellite companies, cable companies," said Joe Miller , senior vice president of sales and affiliate marketing for TiVo, Inc. "Consumers are beginning to find content on their own" on the Web. "We want to be the device in the living room that unlocks that content."

Carolyn Y. Johnson can be reached at cjohnson@globe.com.