Yesterday, LG Electronics Inc. unveiled a new line of high-definition TVs at the Consumer Electronics Show in Las Vegas that will include software from Netflix Inc. - the largest U.S. mail-order movie service - to allow users to download movies and television programs directly to their TVs over an Internet connection.

Sony Corp. and Hewlett-Packard Co. have been selling Internet-enabled televisions for a few years now, but users have been reluctant to adopt the technology simply because there wasn't much worth watching.

"They weren't offering much to go with that connection," said James McQuivey, principal analyst at technology research firm Forrester Research Group. "Whereas now LG can walk in and say they will give you Internet connectivity so that they can give you Netflix, and it finally starts to make sense to people."

Also yesterday, Yahoo Inc. announced a deal with Samsung Electronics Co. Ltd. that will see a new line of the South Korean electronics company's televisions come prepackaged with the Internet trailblazer's Widget Engine software, which will allow users to access various services such as the Flickr photo-management application and Yahoo Finance through a launch bar running across the bottom of the screen, similar to a news ticker.

Mr. McQuivey said Internet-connected TVs will have truly arrived when we see a major Web video services like Hulu.com start taking viewers away from cable companies.

Hulu - a joint project of NBC Universal Inc. and News Corp., which is not yet available in Canada - is ad-supported and offers free on-demand videos, allowing users to watch popular U.S. programs at their convenience.

If broadcaster-backed services such as Hulu become the standard content delivery method for Internet-connected televisions, cable and satellite providers, as well as set-top box companies such as TiVo Inc., could lose subscribers.

"[Cable companies] have the most to lose and it's their business model which is at greatest risk of redundancy in this transition," said Carmi Levy, an analyst with AR Communications Inc. "Their consistent revenue stream will come under attack as new offerings come to the market. ... It's similar to what the telephone companies have faced from voice over Internet telephony (VoIP), cellphones and free instant messaging tools."

Analysts say Yahoo's efforts to be a leader in the Internet on television could open up new advertising opportunities for the company in addition to giving it a head start on a growing business before rivals Google Inc. and Microsoft Corp. make the industry a priority.

Yahoo struck a partnership with chip maker Intel Corp. in August to provide the underlying software architecture for Internet-enabled TVs in a move designed to establish a platform for developers to create new applications that run on these televisions.

Intel's ability to handle the spread of the Internet to new platforms such as television has come to dominate the conversations the company is having with electronics companies, said Bill Leszinske, general manager of the company's digital home group.

Buyers want to know the Intel chips destined for set-top boxes and digital TVs will be able to handle high-definition video streams and downloadable content in addition to Internet capabilities, he said.

"The Internet has driven the growth of the PC platform for the last 10 or 12 years, it's driving huge growth in the cellphone space ... and now we see the usages and the connectivity that users are going to demand are going to create this huge churn and opportunity in the living room."

source: www.theglobeandmail.com