You can forget about better TVNovember 1, 2012: 11:15 AM ET
There's a good reason television tech is a confusing jumble.
By John Patrick Pullen, contributor
FORTUNE -- Pet sitters must be some of the tech-savviest people around. Take mine, for example. She spends, on average, five nights a week overnighting away from home, navigating a stranger's entertainment center, watching someone else's television, or flipping through a myriad of online content options. In my living room alone there's easily a half-dozen tech pitfalls to fall into. What if the AV receiver misses the signal from the remote? Heaven forbid she bump the wrong button on my Google TV!
Once upon a time, it was "Here's the remote." Now it is "Here is my TiVo, Netflix (NFLX), and Xfinity -- I hope it works out for you." If the chatter surrounding the mythical, eventual release of the true Apple TV (AAPL) is any indicator, consumers are dying for a bit of simplicity with their streaming video options. When will they get it? Not any time soon, says a chorus of online media makers, ranging from content creators to set-top box makers.
"There's no agreed upon standard format, bit-rate, codec, aspect ratio, player, protocol, or content protection technology," explains Daniel Rayburn, principal analyst for digital media at Frost & Sullivan and the executive vice president at Streamingmedia.com. According to Rayburn, because industry players like Amazon (AMZN), Apple, Google (GOOG) and Microsoft (MSFT) all want their technologies to be the standard, no one is working together to bring cohesion to the online video world. It's like Betamax versus VHS all over again, only with a dozen more types of trapezoidal and rhombus-shaped cassettes vying for supremacy. "It's only going to continue fragmentation in the market," says Rayburn, "and it's only going to get worse over time."
As a result, content creators aren't uploading their episodes everywhere; they're cherry-picking devices to get in front of the best -- not most -- eyeballs possible. Getting one piece of content onto a bunch of devices would mean it has to be transcoded between 10 or 15 different ways just to reach them all, says Rayburn. Multiplying that times the 10,000 pieces of content a media company would be streaming could mean more than 100,000 files, serving million of viewers. "How do you ingest, store, manage, track, monetize, protect, and distribute video?" asks Rayburn. "That's the big problem that content owners are having -- it's the ecosystem. It's the most expensive part; it's the most complex part."
For example, London-based FremantleMedia, the producer of television content ranging from The X Factor to The Price Is Right, airs more than 300 shows across at least 40 countries, and is no stranger to placing television content online, either. In 2008, the company began releasing episodes of American Idol on iTunes the day after the show aired on television.
But today, if you want to watch one of Fremantle's dramas, Merlin, online be prepared to embark on a voyage of non-discovery. Searching Google for "watch Merlin online" returns 9.66 million results, the first six of which aren't even viewable episodes. The seventh, Hulu, offers only two of the current five seasons. Netflix, which has three seasons, is the 20th result, despite the fact that its page's title is "Watch Merlin Online." Xfinity streams the first two seasons, and is the 22nd result. iTunes, meanwhile, boasts the most (four) seasons for viewing -- but didn't even crack the top 200 Google-served results. (Bing's results were similarly disappointing, only with Netflix finishing well out of the top 100.)
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According to Boxee founder Avner Ronan, while experienced web viewers know to hit Hulu for a show's recent episode, Netflix to catch up on previous seasons, and iTunes for a new movie, "that still remains, in the grand scheme of things, an inconsistent experience," he says. The reality is that most consumers are not aware of the networks carried by Hulu, which shows those networks produce, or what the DVD release window looks like (or why that even matters these days). "So, we're not perfect yet," says Ronan. Not perfect by a long-shot. As the line between original online content and television shows continues to blur, it's easy to see consumers want an ecosystem that's clear to navigate.
A look at how Boxee has evolved over the last four years shows this shift taking place. Starting off as an aggregation software, the company wanted to allow users to watch any file format they wanted on their media-PC connected TVs. Next, with the release of the Boxee Box and the maturation of their software, they added social functions that delivered video recommendations from Facebook and Twitter friends. Now, with its newest product, Boxee TV, the company is using over-the-air HD signals to feed a watch-anywhere DVR that pairs with Internet apps. From file formats, to friends, to apps the company's goal has remained the same: to help viewers find and watch content easily. (How novel.) And with 3,000 Walmarts (WMT) stocking their new product, you could argue this once-niche product may have finally gone mainstream.
Meanwhile, content creators like Fremantle are relying on social media to shepherd viewers. "Discovery has definitely become a major issue, to be honest," says Claire Tavernier, global head of FremantleMedia Cross Platforms. As cable channels and online outlets have multiplied over the last ten years, the problem been growing. "[Social media] has become the most efficient discovery mechanism, which is not ideal," she says.
One reason they have become so bullish on social media for content discovery is that they are one of the major players in Google's YouTube Original Channel initiative, a program that pays content creators an advance on royalties to produce new content for the streaming video site. With more than 500 videos, Fremantle's YouTube channel The Pet Collective has ranked consistently in the top 30 YouTube channels since its launch in April, airing popular, low-cost, episodic content such as the "Kitten on a Keyboard." With 75,000 subscribers and almost 16 million views, The Pet Collective's success has attracted Purina as a sponsor.
Meanwhile, one of Fremantle's most high-profile properties, Family Feud, cannot be watched online. The company uses a dedicated YouTube channel to generate living room interest with funny clips and outtakes, but does not post full episodes of the popular game show online, saying there isn't enough demand for the content. The Family Feud channel has 70,000 subscribers and 63 million video views. "Some of our content is more appropriate to be distributed on different platforms than others," says Richard Vargas, senior vice president of development and production, FremantleMedia Cross Platforms. "The Pet Collective isn't on television, and isn't really designed to be on television in its current form."
But through web-connected set-top boxes and so-called smart TVs, The Pet Collective is on television -- at least it's on mine. And as consumers continue to cut their cable cord and go with internet-fed video in their living rooms, it will be on theirs as well. But until content creators, web distributors, and device manufacturers band together to streamline the process of finding content—whether its Merlin, Family Feud, or Kitten on a Keyboard -- they'll be gambling against viewers pushing the one button everyone understands: Power off.