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PlayJam got its start by providing casual games to pay TV operators as a value-added, interactive TV experience for their customers. Over the past several years, it has seen more than 6 billion game downloads on those platforms. But with the growth of new connected TV platforms from major consumer electronics manufacturers, as well as the massive increase in broadband connectivity, PlayJam no longer needs to strike deals with operators for distribution.

Instead, PlayJam can distribute games on connected TVs and reach consumers directly instead. So far, it has games on TV app stores from major manufacturers like Samsung, LG, Panasonic and Sony. Together, those TV makers account for more than half of all connected TVs sold. And the market is growing: IHS iSupply, for instance, estimates the number of connected TVs, game consoles and Blu-ray players will top 500 million units in 2013, outpacing PC shipments in that year.

That’s a huge potential market for PlayJam, which typically distributes free-to-play games with virtual goods or paid upgrades available in-game. The microtransaction model seems to be working, as PlayJam CEO Jasper Smith told me in an earlier interview that it sees conversion rates above 40 percent, with average transaction of about $1.50 each. And unlike pay TV customers, of which only about 5 percent find or play games through their cable system’s set-top box, Smith said about 40 percent of connected TV owners download games.

As more people buy connected TVs, and actually hook them up, there’s a big opportunity for companies like PlayJam to introduce new experiences on those devices. While it’s not the only company going after this opportunity, there’s surely plenty of money to go around.

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adRise offers up a real-time bidding exchange for video advertising on connected devices, enabling advertisers to serve into a number of different connected devices without having to do the hard work of integrating with various device platforms themselves. The startup has already integrated with Roku, Google TV, Boxee, Samsung, Yahoo Connected TV and other device platforms, with more on the way. adRise does all the device detection, transcoding, insertion of video assets on its end, so advertisers need only feed their existing Flash creative into its system once to have those assets reach a number of different devices.

On the publisher front, adRise provides a software development kit that publishers can use so that videos delivered to the TV through a Roku, Samsung TV or other device can serve up the same advertising. The startup has already teamed up with ad networks Tremor Video and Brightroll, and plans to announce partnerships with other major publishing and ad partners later this fall. According to CEO Farhad Massoudi, adRise has seen its ad inventory double every month over the last three months, and he expects that trend to continue at least through the end of the year.

The startup solves a problem not just on the delivery side of things, but on the reporting side as well. While Nielsen ratings are nice, there’s no substitute for the type of granular, deep-dive analytics that advertisers can get from IP-based delivery. adRise measures a number of unique characteristics, allowing advertisers to drill down into viewership by device, as well as to see how long ads were watched, if viewers clicked through to learn more about a product.

As more viewership happens on connected devices, advertisers will need a way to reach those viewers and publishers will need a way to monetize those views. Platforms like adRise seem well positioned to offer a solution to both.

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The service first became available in late 2009 with a live cable channel and a corresponding website, EpixHD.com, which put more than 3,000 film titles from library partners available online. Since launch, it has expanded both its number of distribution partners and number of subscribers, thanks in part to that value proposition. The channel is now available through Dish Network, Verizon FiOS, Cox, Charter, Mediacom, Suddenlink and the National Cable and Telecommunications Cooperative (NCTC). Together, those distributors have more than 30 million subscribers, of which Epix has managed to sign up 9 million to its network.

Of course, the idea of adding an online component to its linear cable channel has caught on with much of the rest of the cable industry, which is making a big push behind TV Everywhere. That initiative will allows viewers to watch streaming video from their favorite networks online, so long as they’ve logged in with their cable ID. HBO, for instance, is making all of its original programming available to authenticated subscribers, as well as whatever movies it has the rights for at any given time.

No longer the only provider in town with a linear cable and streaming offering, Epix has set out to differentiate itself in other ways. One way it’s doing that is by aggressively building apps for new devices, so subscribers can access its streaming content through connected TVs, Blu-ray players, streaming set-top boxes and mobile devices. The network is already available on more than 100 different devices, and is looking to add more. It already has apps available on Google TV-powered devices, as well as Samsung TV, Roku set-top boxes, the RIM Playbook and Android mobile phones and tablets. And, of course, it’s working to get an iPad app out, which we’ve been told is “coming soon.”

Another way Epix seeks to differentiate itself is with content you can’t find anywhere else. Now that the network has its library online, Epix Head of Digital Emil Rensing told me in a phone interview that the next step in the company’s evolution is in creating more of its own exclusive content. That means both long-form specials and documentaries, as well as bonus programming which it can place alongside films in its streaming library.

So far, its long-form original programming has mostly been comedy specials and concerts, including Louis C.K.’s Hilarious or Bon Jovi’s The Circle Tour. But it has also obtained a few documentaries, including William Shatner’s The Captains.

Those originals have actually proven to be extremely popular amongst Epix users. The Craig Ferguson comedy special Does This Need To Be Said and exclusive documentary Lindsey Vonn: In the Moment are among the site’s top movies, alongside major studio content like Iron Man 2, Kick-Ass, Shutter Island, G.I. Joe: The Rise of Cobra and Star Trek.

Epix is also working to add videos that provide additional value to the films that come from the studios. That includes creating packages of content based on studio stills and additional footage that might not have made it into films. It’s also building more behind-the-scenes type content for newer films released by its studio partners, working with them during filming and in the run-up to release to get interviews with the cast and crew to provide more context.

Finally, Epix is also leveraging partnerships to bring in interesting original video content. For instance, check out this video from IndyMogul’s Eric Beck on how to recreate the Iron Man chest piece for really, really cheap. Rensing expects more of these types of videos in the future.

It’s difficult to launch any new cable network — just ask Oprah how her venture is doing — but it’s incredibly hard to launch a new network that cable subscribers have to pay for, especially when you’re going up against HBO and Showtime. That said, Epix seems to be doing well so far. The network is already profitable, due in part to a deal it did with Netflix to make its content available as part of that subscription streaming service. According to CEO Mark Greenberg, that hasn’t stopped Epix from signing up more traditional distributors, and the network is in talks to add even more pay TV partners in the near future.

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But when it comes to Google TV, you have to wonder if Google went too big too soon.

Compared to the playbooks of Apple and Roku, it would seem so. Devices from those two companies had a more modest intention, which was to gradually become the key user interface for over-the-top entertainment, slowly growing more essential as consumers increased their consumption of Internet-delivered content. Google TV, on the other hand, wanted it all from the start: It essentially aimed to be the key interface for all TV entertainment right away. It was, as Michael Gartenberg has aptly stated, aiming for input one out of the gate.

Was Google completely wrong to try to own the TV interface? No. In fact, I think that’s where Google should be aiming . . . eventually. As I write in my weekly update at GigaOM Pro (subscription required), the future of the living room interface, and of devices themselves, is one where consumers won’t be able to tell whether content is delivered through a pay-TV network or over the top. In time all content will be managed through one interface and one remote.

The hardware itself will also become more integrated, meaning fewer external boxes. But that will take a long time, as the installed base of HDTVs is very big and will take years to turn over. Logitech, who provided the hardware for Google TV, saw the power of Google’s vision, but it didn’t realize that going so big so early in the game was essentially a high-stakes gamble. That gamble didn’t pay off, and Logitech, not Google, took the biggest hit. Hardware miscues are infinitely more costly than software ones from a product perspective, as evidence by the $34 million charge the company just took.

Google, on the other hand, will be fine, as it can refashion its platform and iterate, much like it has done with Android. The company needs to think about the long game, understanding that the market wasn’t ready for the winner-take-all strategy with its disappointing 1.0 edition. It needs to focus on working with hardware partners on highly integrated — but perhaps more simplified — efforts (like Apple TV) for this next go-around (and by simplified, we don’t mean QWERTY keyboards as the primary remote). Google also needs to lock down more over-the-top content — perhaps the arrival of Android Market (and content-as-apps) will do so — because clearly the shelves on the first go-around were a bit bare.

Recent announcements at Google I/O show that Google has at least learned some lessons from this first attempt and that it is on the path to simplification, which is good. The only question is, Next time around, will Google be able to find hardware partners who are as eager for its big-play mentality as they were in the first round?

For more of my thoughts on Google TV and the future of living room integration, see my weekly update at GigaOM Pro (subscription required).

Image courtesy of flickr user Jason Edward Scott Bain

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While other consumer electronics manufacturers are betting big on Internet-connected TVs, Best Buy is treading a little more cautiously. It will sell 32-inch and 42-inch models of the new Insignia-brand TVs, which will retail for $499 and $699, respectively. According to Best Buy VP of Product Management Patrick McGinnis, for its exclusive brands, the retailer decided to go with those model sizes, at least initially, because they were its best-selling TV models.

The new Insignia TVs are equipped with a TiVo-powered user interface (UI), the result of a partnership first announced a year ago. The look-and-feel will be familiar to anyone who’s ever used one of TiVo’s DVRs. In addition to a simplified way to navigate a series of different types of streaming video, music and other apps, the TiVo UI also provides suggested content based on what a user has watched in the past. That said, it’s important to note that the TVs won’t have built-in DVR functionality, nor will they have the kind of universal search functionality that TiVo DVRs have.

Best Buy was clearly focused on building a TV first, with an impressive group of TV features. The LED screens feature 1080p video quality with a 120Hz refresh rate. They also come with enhanced SRS audio built-in and are ready to be integrated with its Rocketboost wireless digital audio system.

According to McGinnis, Best Buy wanted to ensure its Insignia models would be easy to use, and that they wouldn’t suffer from some of the same setbacks that other devices have seen as the market has grown up. It wanted to make sure its apps wouldn’t crash, for instance, and that any firmware updates or new apps and content would be loaded seamlessly in the background, rather than asking users to download and reboot their TVs.

By doing so, Best Buy hopes to avoid some of the customer service calls or returns that other manufacturers have dealt with, while also providing a better customer experience. But by simplifying things, Best Buy is also taking away some of the actual reason to buy a connected TV. The Insignia products being released have pretty limited access to the types of online services that make such a purchase worthwhile.

On the video side, Insignia TVs only have access to Netflix, Best Buy’s CinemaNow, YouTube and Insignia On Demand (a Flingo-powered video service). It can also connect to Pandora and Napster for music streaming. That might be good for some entry-level TV buyers, but the lack of comparable services like Hulu Plus or Amazon Instant Videos (which CinemaNow replaces) could be a big disappointment to those looking for a more robust set of online services. While Best Buy hopes to add more video services, it’s not clear how soon they will appear.

Rather than introducing a whole new application development platform to the market or use a platform like Google TV for app developers, Best Buy’s TVs rely on Chumby apps for additional widgets and functionality. That might give users access to some additional widgets for social networking, news, traffic or weather, but there are very few additional video apps that are available on the nascent Chumby platform.

Relying on an open platform like Chumby could make it easier for developers to make apps for the devices. However, since these two Insignia models are some of the first to actually use the platform, developers could choose to hold out until other CE manufacturers also integrate it into their own devices.

For Best Buy, the introduction of connected TVs is clearly a big deal, especially since it spent so much time trying to make the end product foolproof and easy to use. For entry-level users, that could be a big selling point as they try to choose between connected TVs. But the dearth of streaming content and apps actually available through the new products could end up being a disappointment for users who are looking for a more advanced connected TV.

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