Google TV
The future of TV (maybe)
June 8, 2012: 5:00 AM ETOutfits like NimbleTV and Aereo want to finally fulfill the promise of web TV. But disrupting the massive home-entertainment industry won't be easy.
FORTUNE -- Since the advent of the Internet, web TV has perpetually lingered over the horizon. Years after major cable companies unveiled "TV everywhere" initiatives and giants Apple (AAPL), Google (GOOG), and Microsoft (MSFT) began peddling hardware to beam the Internet to televisions, the merging of the Net and the tube is incomplete. Consumers face a mess of discordant devices and services, not to mention spotty availability, as cable providers, networks, and tech companies squabble over turf. Now a new crop of services may finally make good on the promise of ubiquitous TV.
The latest entrant is NimbleTV, which lets viewers watch and record anything, anytime via its website. With backing from the Tribune Co., among others, the New York City-based service streams the package of TV channels a customer buys from a cable provider online. Instead of paying the world's Comcasts, customers pay NimbleTV. How much exactly hasn't been determined, though the fee will be slightly more than a typical cable bill. The startup acts as a broker, managing a subscriber's relationship with providers, passing on most of the fee to providers and keeping a small percentage.
More: Can Apple fix what's wrong with television?
Sound familiar? It's the same technology used in Sling Media's Slingbox. That set-top device allows consumers to watch TV channels remotely using a phone or laptop. Cablevision (CVC) and Time Warner Cable (TWC) offer apps that replicate all or part of subscribers' live-TV lineup on mobile devices. And Comcast's (CMSCA) Xfinity allows access to shows online, but only after they have aired. NimbleTV aims to improve on all those by doing away with bulky hardware, providing a better picture, and offering a virtual video recorder that can save thousands of hours of programming. Founder and chief executive Anand Subramanian says he doesn't need cable providers to sanction him in order for the business to work.
Should NimbleTV catch on, it could break the geographic monopolies cable providers enjoy. If, for instance, a small Omaha-based cable provider offers better prices than a local cable firm, a NimbleTV customer could switch. That might pit cable companies from different parts of the country against one another.
For now, NimbleTV hopes to avoid the fate of startup Aereo. Backed by Barry Diller's IAC (IACI), Aereo streams and records basic broadcast channels to web-enabled devices for $12 a month in the greater New York City area. It does so by storing antennas -- high-end versions of bunny ears -- in a Brooklyn warehouse; customers essentially rent them. Even before its March launch, virtually all of the city's broadcasters banded together to file two suits, citing copyright infringements. The cases are pending, and Aereo is still operating.
Both services suggest that web TV has finally arrived -- in New York at least. But the $150 billion-a-year home-entertainment industry is not easily disrupted. As much as consumers may be clamoring to watch on the go, the question of who will pay for it -- and who will get paid -- remains wide open.
This story is from the June 11, 2012 issue of Fortune.
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