As streaming TV comes of age, who will win the TV wars? (Feature)

By Andy Goldberg Sep 2, 2010, 3:45 GMT

San Francisco/Berlin - In the heyday of the dot-com boom 10 years ago, one ambitious networking company aired a beautifully filmed ad.

A bored consumer enters a video store and as special effects and dramatic music crash around, the shelves are filled with all the movies and TV shows that have ever been made. The commercial was meant to give viewers an insight into the ultimate potential of what was, still, a very limited internet.

Fast-forward a decade, and from Berlin to San Francisco that utopia seems tantalizingly within reach.

The internet is fast moving from the computer and smartphone to the television. In this new digital living room, shows, films and content are streamed - seamlessly and on demand - to viewers' TVs over regular internet connections.

Two of the strongest names in consumer electronics both made announcements Wednesday of major advances in this race to give viewers what they want, when they want it, on whatever device they want.

Speaking in San Francisco, Apple chief Steve Jobs announced the company's second-generation Apple TV, a palm-sized gadget that uses a Wi-Fi connection to stream a vast collection of shows and films to viewers' television sets or other compatible monitors.

Tech visionary Jobs promised that the new gizmo would revolutionize the digital living room. Price should not be a barrier: the new Apple TV will cost just 99 dollars.

But Apple's battle to control what industry analysts call the 'third screen' - meaning the TV screen, after smartphones and computer screens - will not be easily won.

In Berlin, Sony announced the expansion into Europe of its cloud- based Qriocity service, which uses the internet to stream movies, TV shows and music to Sony televisions, Playstations, Vaio laptops, Blu- ray players and smartphones. The initiative is a direct challenge to iTunes and Apple TV but may have come too late to challenge Apple's commanding position.

Never one to sit out, Google has a formidable presence, too. According to reports this week, its YouTube video site will soon offer pay-per-view movies and TV shows to its hundreds of millions of users.

The web search giant plans to launch a device later this year called Google TV, which will combine digital recording, traditional TV, streaming content and Google's search capabilities. The device will come as a set-top box and can be built into television sets and Blu-ray recorders.

Another major name eyeing the convergence of television and the internet is Amazon. The leading web retailer is in talks with Hollywood's major film and TV studios about a subscription service that would allow users to view a huge variety of streamed content for a simple monthly fee.

There's also hulu.com, a website that streams a large number of popular web TV shows, and video rental service Netflix, whose website has thousands of movies and shows that subscribers can watch instantly.

All these options are bad news for the established cable and satellite TV companies. They have been trying to lock customers in with expansive On Demand offerings over proprietary systems. They want to see the vast troves of internet TV confined to your computer - but those days are disappearing.

Tech analyst Carmi Levy is tipping Apple to win the TV wars as it has two great advantages - its device expertise and 160 million existing iTunes users.

'It's clear the company is as serious about owning the streaming television space with Apple TV as it was when it introduced iTunes to take over the music world,' Levy told the German Press Agency dpa.

'Unfortunately for traditional cable and satellite distributors, the writing is now on the wall: their business model is now threatened, as these new offerings will give consumers more power than ever to control their content.'