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Weekend Tech Scan: What are Microsoft, Amazon doing to keep up with TV changes?

Microsoft has been upgrading Xbox with tiles and other improvements positioning the popular device for the changing TV/video market. Credit: Skip Ferderber

“Something’s happening here . . .

“What it is ain’t exactly clear . . .”

— Bufffalo Springfield,  November 1966

Television as we know it is undergoing a remarkable transformation.  Several events. announcements, and rumors this past week, especially from hometown favorites Microsoft and Amazon, made it crystal clear that no one has a clue about what precisely is going on — only that this is no time to be doing nothing.

Let’s start with a factoid. Television viewing is down slightly for the second straight year, according to a Nielsen study.  Some of it is due to changes in the U.S. population, but according to Media Daily News, some is due to “changes in the media technology composition of U.S. homes.” It’s just not clear how much is due to tech. 

“We continue to see increased media use proliferation, fueled by consumers able to watch professional, long-form video delivered traditionally and over the Internet by a number of devices, such as game consoles, computers, smartphones, tablets and over-the-top streaming like Apple TV,” said a Nielsen spokesman.

Someone needs to understand it better: The same report says that TV penetration in American homes will be 95.8 percent by next January.

Microsoft’s Xbox division has been reading the same set of tea leaves. Over the last two years, it’s been attempting to expand the role of the Xbox from just a gaming console (although it’s clearly the world’s most popular game unit) to a home media center embracing live TV, TV cable channels, on-demand movies, and shows and music. 

This week, the rumor mill suggested that Microsoft was about to launch a cell phone plan-like service for the Xbox:  An Xbox 360 with 4GB of memory and a Kinect motion controller for $99 — and a two-year contract costing $15 monthly.  At Best Buy, the same package retails for $299.99 without some of the services that Microsoft may offer such as Xbox Live membership that retails for about $60.

At $99, the Xbox would be directly price-competitive with TV set top boxes like Apple TV, Roku, Google TV, and Boxee. Microsoft potentially has an enormous advantage because of its well-known Xbox brand, and its presumed availablity at a significantly reduced price point.

It gets complicated, however, once you delve into the content available on set top boxes.  Microsoft currently has the usual garden variety of on-demand or pay per view TV services — subscription-based Netflix, HBO Go, Hulu Plus, as well as Best Buy’s CinemaNow and its own Zune store—and the free Crackle movie service.  And there’s no forgetting Xbox’s broad range of games.

But set-top box content has undergone its own revolution, with content Microsoft may or may not be interested in acquiring.  If Microsoft sticks only to the tried and true and believes the public will want the box because of its technology, and not feel the need to explore the wide range of available content, it may miss the boat it’s trying to urge people to board.

Of particular interest is the Roku box: originally designed for bringing Netflix to your home TV, and now with a strange but vibrant life of its own.  With an entry point price of $59.99 (and prices up to $99 for more full featured units), Roku offers most of the same content as the current Xbox but with 450 channels: a wide variety of free and paid channels that stretch the definition of “TV.”  

On the “pay” side are Netflix, Hulu Plus, Amazon on Demand, and  HBO Go; radio stations such as Pandora, TuneIn Radio, Radio Paradise,  Shoutcast Radio and Live365. Among other channels, I’m particularly fond of  “Drama Fever,” featuring subtitled Korean and Chinese TV series; CNN International, BBC World News, Wall Street Journal TV, Al Jazeera English, independent film channels such as Vanguard, and TV channels including the UK’s Acorn TV.

There are even more specialized channels covering religion, foreign-language shows, food, science and technology, fitness, plus I just discovered “Angie’s List TV’ and Glenn Beck under the specialized channel category: an impressive range of content.

Its $99 box also offers the ability for you to play “Angry Birds” as well as other less distinguished games.  A harbinger of the future? A gaming competitor to Microsoft and/or others? Roku isn’t saying.

Other set top boxes have distinguishing features that Microsoft has no answer for as yet.

Apple TV has a new version of its $99 box that plays video in 1080p high definition TV — not that too many people can spot the difference between TV shows in 720p, the highest quality available in the old box, and 1080p.  But what makes Apple TV unique is its ability to take programming available from your iPhone or iPad and link it directly to your TV. 

The gizmo that makes it work is called AirPlay. Say you like watching HBO Go or Smithsonian TV on your iPad, and want to share it on your big screen TV. On Apple TV, go to the AirPlay mode in your Settings menu, then open an app on your iPad. If there’s a little graphic at the bottom of the app that looks like a tiny TV screen with a triangle in it, the app is AirPlay-compatible. Click on the icon, and magically, the show appears on your big screen TV. Note: Both Apple TV and your Apple device must be on the same WiFi network. 

(While rumors of an Apple set top box TV have been rampant, there is little evidence that the company plans to bring an Apple set to the market anytime soon. But Apple is always full of surprises.)

Could Microsoft's most distinguishing feature be wrapped up in its Kinectic motion control device? Does being able to control your TV by voice or hand motions add a compelling difference to Microsoft's game-console-as-set-top-box solution?  Only time and new developments based on the Kinect will tell the story.  

The redefinition of TV hasn’t escaped Amazon.com, but Amazon’s efforts have largely been confined to strengthening the depth of programming on its Amazon Instant Video service, and finding its audience principally among owners of the Amazon Kindle Fire tablet, the Roku box and, as of last month, the Sony Play Station 3.

Much of that programming is available on a subscription basis through Amazon Prime: a $79 annual fee that also guarantees free second-day delivery of all Amazon packages and a free lending service to Amazon Kindle devices.

Amazon hasn’t stopped in its quest to add programming content. In March, it added video from Discovery Communications (the Discovery Channel, et al.).  It already has large libraries from PBS, Viacom, Fox, and others.

And just this week, Amazon announced that its Amazon Studios production arm is soliciting ideas for original comedies and children’s programming. If you have some ideas, here’s a link to get you started. You could receive $55,000, and up to 5 percent of Amazon's net receipts from toy and T-shirt licensing, and other royalties and bonuses.

And this is just this week’s TV news. Stay tuned.

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