CES: Consumers want on-demand video, but media companies not delivering

By Cara McCoy

Friday, Jan. 8, 2010 | 2:05 a.m.

The popularity of devices like smartphones, set-top streaming boxes and Internet-capable televisions would seem to indicate consumers have a hunger for on-demand video.

But a disconnect between what people want and what media companies are willing or able to provide continues to exist.

The question is why? Why can’t consumers get exactly what they want, when and where they want it?

Technology publication CNET set out to find some of those answers Thursday during a panel session at the International Consumer Electronics Show.

The discussion focused on Internet Protocol television, or IPTV, which is essentially video streamed over a broadband Internet connection rather than traditional cable or satellite TV.

Some early adopters have abandoned their cable TV subscription in favor of downloading or streaming content from the Internet. Most, however, continue to be cable TV watchers.

Many of those traditional cable consumers are looking for more choice from the companies already providing them service, the panelists said.

“People are getting a lot of great options to consume content on a lot of different platforms,” said Sam Schwartz, executive vice president of Comcast Interactive. “The challenge for companies like us is to continue to innovate and create value for our current subscribers.”

The important thing, Schwartz said, is “putting the consumer in control.”

Terry Denson, vice president of content strategy and acquisition at Verizon, said what’s important is for companies to focus on being multi-platform.

“As consumer behavior evolves, their expectations shift,” he said.

CBS Interactive CEO Quincy Smith said a key to success in the changing video landscape is for companies to be able to package content across platforms and to have a coordinated advertising strategy.

He cited the success CBS has had with Fantasy Football, which has morphed football from being simply a Sunday experience to something consumers interact with throughout the week.

CBS is CNET’s parent company.

Before the session, CNET posted several polls on its Web site to gauge consumer attitudes toward the shift to online video. The biggest obstacle to watching TV online, its tech-savvy readers said, is bandwidth. The selection of content available was the second-biggest obstacle.

A second poll indicated readers felt the movie/TV industry was most at fault for online video’s obstacles. The audience at the panel discussion was also polled via electronic clicker and shared similar sentiments.

Boxee CEO and co-founder Avner Ronen had harsh words for the digital rights management, or DRM, hoops consumers often have to jump through, saying DRM “is annoying and it’s useless.”

Boxee offers downloadable software to stream video and connect with social media.

On Thursday at CES, the company announced a partnership with D-Link to offer a set-top box. It also announced the public launch of its beta software.

“DRM is just the penalty you pay if you are an honest customer,” he said. “We support DRM in Boxee, unfortunately. It’s a necessary evil.”