Hewlett-Packard on June 10 unveiled a $349 digital receiver that brings video and audio content from the PC or Internet to any high-definition television set. One month earlier, Netflix had unveiled a $99 set-top box that directs movies and TV shows from the Internet to its subscribers' TVs. Meanwhile, Apple has been building out the services connected to its Apple TV product, inking a deal with HBO in May to bring shows like "The Sopranos" from its iTunes store to widescreen televisions. The common thread: All these companies are building a bridge from the computer to the television.
What's unclear is whether any of these efforts will ultimately be successful. The technology -- wireless connections and broadband access -- is there to connect the Internet to traditional television sets, but the effort to deliver entertainment to any device is fraught with uncertainty, say experts at Wharton. The biggest hurdle for these newfangled set-top boxes is that consumers have to change their behavior to accept interactive television. Do consumers really want to watch a YouTube clip on the widescreen?
In addition, the efforts of Netflix, Apple and HP are all based on closed systems. Apple TV, which starts at $229, connects with iTunes. Netflix's box offers only films from the service's "Watch Instantly" selections and requires a Windows-based PC. And while HP's digital receiver -- called the HP MediaSmart Connect -- supports a number of different PC-based video and audio formats, it is built on Microsoft's Windows and supports only the CinemaNow service for purchase or rental of feature films. In other words, there isn't a perfect digital media convergence box.
"A lot of content is available for on-demand viewing," says Kendall Whitehouse, senior director of information technology at Wharton. Citing the selection of movies and television programs available online through Hulu.com, a web site recently launched through a partnership of NBC Universal and News Corp.
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