TV is not Dead. Cable is.

A few years ago we ditched our cable subscription. At the time we were constantly annoyed at how often we missed the shows we wanted to watch, and were uninterested in the shows that we were available to watch. The $60 a month seemed like a waste of money –no one in my house was taking advantage of the service, so we cut it.

It was hard to leave cable behind – we learned to listen to the radio or watch DVDs for entertainment, but it wasn’t the same. Everyone tried to convince us that we should get cable again – we weren’t able to keep up with the social commentary everyone was talking about. House? Lost? Heroes? We were left behind. The only answer seemed to be getting a $200 Tivo box, a subscription, and reinstate cable –something we weren’t willing to do.

And then, when our friends and family had just about given us up as hopeless, Hulu went live. Netflix added instant streaming. NBC offered recent shows online. Boxee went live. Youtube had full episodes playing. Bravo went online. It was a fountain of culture all easily and freely available on our computer. Once again, we could follow the conversations of our peers.

The only problem was that all this great culture was stuck on our computers. We had no real way to transfer it to our 54” RPTV that was sitting unused in front of our couch that we had also abandoned in favor of the office chairs. It wasn’t a comfortable situation.

For a time, we’d hook up a laptop to the TV and get our culture fix that way, but constantly moving the laptop from the office to the living room was annoying. And then the laptop died. The TV and couch went back to being unused.

There are a few solutions that can potentially fix this problem. We could use another laptop with Boxee on it, or a computer like Apple TV . We could even purchase a box like Popcorn Hour. The problem is that other than the computer fix, all the other fixes have limitations. If we buy a set-top box like device to get internet options on our TV, then we’d be limited to whatever networks teamed up with the box. Sometimes that means the only videos available to browse are Youtube videos and maybe NBC.

That’s not what we’re looking for. What we want is a relatively inexpensive box that fits in with our DVD player and allows us to aggregate all the videos that we want to watch. We’d also like to put all our DVDs on a HDD and browse those at the same time. We’re looking for the one box solution that won’t limit us on our choices.

And that’s exactly what Google TV has done. They’ve partnered with Sony and Logitech to allow us two options. Either we can buy a new TV with Google TV integrated, or we can buy an external device that will give us internet access on our TV without the limitations of other devices.

We are not alone in our platform search. In 2009 26.6% of the world’s population had internet connection. North America alone had 259 million users. Over the last two years an estimated 800,000 consumers have abandoned cable and made the internet switch. This number will most likely double over the next year and meanwhile almost 20% of cable subscribers also watch video online.

Potentially this news could be seen as bad for the TV industry. Its not. Instead, the TV industry is adapting. The majority of high-end flat panel TVs this year will be internet ready, with some 2008 and 2009 models also featuring some form of a browser. Semico expects the DTV industry to grow to 289.7 million units by 2014, a 6.3% CAGR from 2010. This is a huge market for vendors who take advantage of this new viewing platform, vendors like Intel, Logitech, and MIPS. Semico’s most recent study, Digital Television: To 2D or 3D? forecasts the growing DTV market including the new features such as 3D. Call Sam Caldwell at 602-214-9697 for more information.

Is Google TV a cable killer? For me, cable has been dead so long, I’d just consider it another nail in the coffin. But with this news I might actually go out and upgrade to a flat screen – one with Google TV.

Michell Prunty, Senior Consumer Analyst