Internet May Be Ousted By Advanced TV Technology

The Internet may be gaining popularity faster than a snowball rolling downhill in the Alps, but no guarantee exists that the World Wide Web will continue to be a commanding technology in the future, a report from Strategy Analytics has concluded.

According to the report, "The Interactive Home," the Internet will face a powerful threat in the form of advanced TV technology within the next 10 years.

The report predicts emerging technologies will finally allow broadcasters to offer compelling interactive servic-es, which will drag consumers from their PCs back to the TV set.

Driving the change is what Strategy Analytics calls rapid developments in hard disk drive storage technologies, which will allow broadcasters to build new revenue streams from value-added interactive services. These services will challenge the dominance of today’s Internet based on PCs and telephone wires, the study said.

Start-ups such as TiVo and Replay Networks have pioneered these developments, which are now being supported by leading service providers along with electronics manufacturers like DirecTV and Philips. First deliveries of the new advanced set top boxes (STBs) should take place later this year, the firm says.

David Mercer, Strategy Analytics’ director of interactive home services, said delivering interactive video is the ultimate goal for Internet service providers.

"But," Mercer noted, "the broadcast industry now has the chance to leap-frog current Internet technology in deli-vering compelling interactive video-based applications to the mass market."

The report predicts high-capacity hard disk drives will become a regular feature in next-generation STBs. The hard drives will store massive amounts of data, including high-quality video.

Consumers, Mercer argues, will be offered premium services such as virtual VCRs, video-on-demand and fast access to interactive information and transaction content.

"Broadcasters have two key strengths for the interactive future. First, they control video content; second, they own distribution channels. If they can successfully integrate these new interactive technologies with their existing business models, they will be able to offer attractive alternatives to today’s PC-based Internet," he explained.

Strategy Analytics’ Web site is at http://www.strategyanalytics.com.

(Contact: Kelly Quinn, Strategy Analytics 617-738-1300)