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Sony has approached multiple media companies about the proposal, which would create a bundle of TV channels that would be streamed into consumers’ homes. The idea is to create an Internet-based alternative to pay TV services offered up by existing cable and satellite companies, with potentially lower prices and more flexibility for consumers.

In some ways, the offer would make sense: Sony already has a huge potential customer base, as it would offer the service through various devices such as its Internet-connected TVs, Blu-ray players and the PlayStation 3. The PS3, in particular, is particularly interesting: The device has sold more than 18 million units in the U.S., and already has a huge number of users streaming videos from services like Netflix and Hulu Plus.

Cable, satellite and IPTV providers are already under pressure due to increasing prices and a weak economy. The number of new subscribers in the U.S. has largely been flat over the last few years, as consumers have bought fewer new homes and have been forced to think twice about discretionary spending.

At the same time, over-the-top video services are growing dramatically. Despite a loss of subscribers due to a pricing change earlier this year, Netflix still had 40 percent more subscribers at the end of the third quarter than a year ago. And services like Hulu Plus and Amazon Prime Videos also seem to be taking off.

If history is any guide, however, Sony is unlikely to succeed in its efforts to propose an over-the-top alternative to cable. Multiple device makers over the last few years have attempted to build TV-like bundles of content to be distributed over the Internet, including both Microsoft and Apple. Despite having large numbers of rabid customers, both were unable to convince big media companies to get on board.

The main issue for media companies is the potential of alienating their existing distributors and reducing viewership through traditional distribution models. Digital distribution is providing some incremental dollars to media companies for library or long-tail content, but they’re afraid over-the-top services could cannibalize their existing viewership and revenues. So while Sony — like Microsoft and Apple before it — is most likely interested in a streaming linear TV offering, it wouldn’t be surprising to see it roll out a subscription video-on-demand service like Netflix or Amazon Prime Videos instead.

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Most of its questions so far have been focused on the user experience of the HBO Go product online and on devices like the iPad, iPhone or Android mobile devices. But a recent survey seeks to figure out whether HBO Go is encouraging users to stick with their cable or satellite provider, whether users that also pay for Netflix are likely to cancel their subscription to that streaming service, and which connected devices they’d be interested in using to access the HBO Go service from the TV.

In the first two questions, the survey begins by asking which cable, satellite or IPTV provider a user subscribes to in order to access HBO and HBO Go. Then it asks if HBO Go has influenced the likelihood of sticking with that provider. In other words, does HBO Go make you less likely to be a cord cutter?

Check out the slideshow below for the entire survey. But to us, the most interesting part comes in the last three questions, in which HBO asks users if they’re aware of Netflix’s controversial price increase. Not only does HBO want to know how the price hike changes their opinion of the service (i.e. Do you think “SOMEWHAT WORSE” of Netflix, or “MUCH WORSE”?), but it also is using the survey as a way to measure how likely Netflix users are to quit. (i.e. Are you “somewhat” more likely to cancel or “much” more likely to cancel?)

The survey could be aimed at finding out exactly where HBO stands, in light of Netflix’s recent customer dissatisfaction. At the same time, the way that the questions are phrased could also be a gentle nudge to HBO subscribers who might have been on the fence about quitting the low-priced streaming service if they haven’t already.

Image courtesy of Flickr user soukup

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In a post on the Netflix Tech Blog, device UI engineers Matt McCarthy and Kim Trott shared a presentation that gives a peek behind the curtain in how it’s able to do so. The key is standards-based development using WebKit, JavaScript, HTML5 and CSS3.

Cutting-edge features, dynamic updates and A/B testing

Standardizing on WebKit enables Netflix to deliver nearly identical code to all new Netflix-ready devices. By basing its software development kit (SDK) for consumer electronics manufacturers on WebKit, it can also use “cutting‐edge features like querySelector API, CSS transforms, CSS transitions & animations, localStorage, CORS, getters and setters, etc.”

More importantly, by relying on common web technologies, Netflix doesn’t have to develop individual applications for each device framework it comes across. It also can improve development cycles for user interfaces on connected devices. According to the presentation, Netflix typically updates its connected apps every two weeks. By using web standards, it doesn’t need to rely on CE manufacturers to push firmware updates to fix bugs or change the UI; it can do dynamic updates by itself.

Netflix also can dynamically test user interfaces, to see how users interact with them. With web standards, it can redirect different customers to different web pages, feeding them different experiences. By doing so, it can figure out which interfaces are most effective.

Different classes of devices

There’s a wide range of available processing speed and memory, from CPUs that have 600 MHz to those with 3.2 GHz of processing power, and 88 MB of available memory to 512 MB. As a result, Netflix builds in flexibility to ensure it doesn’t overload lower-powered devices with more advanced features.

Netflix currently has three tiers of devices based on their configurations, with the lowest tier having zero animation and small cache sizes. On the top end, devices have animations, large cache sizes and frequent pre-fetching of data. According to the presentation, all devices start in the middle tier and are then throttled up or down based on performance.

Paving the way for other app makers

Netflix’s focus on standards has allowed it to provide dynamically updated user interfaces on devices like the Sony PlayStation 3 and Sony Internet TVs, Nintendo Wii, Logitech Revue and the Boxee Box from D-Link. As more streaming video app makers try to tackle the issue of device fragmentation, Netflix’s approach could provide one way to streamline app creation and maintenance.

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According to the lawsuit, the ADA requires that all “places of entertainment” provide “full and equal enjoyment” for people with disabilities. The NAD seeks to classify Netflix’s streaming website and associated consumer electronics applications under those terms, making it in violation of Title III of the ADA.

The lawsuit was filed despite work Netflix has done over the last several years to add captions to its streaming titles. It first announced the availability of captions on a limited number of streaming titles last spring, but it has been slow going: In February, Netflix announced it had added captions to titles that account for about 30 percent of all streaming, with plans to expand to 80 percent by the end of the year.

In a statement, Arlene Mayerson, Directing Attorney of the Disability Rights Education and Defense Fund said:

“There is no excuse for Netflix to fail to provide captions so that deaf and hard of hearing customers have access to the same movies and TV shows as everyone else… Netflix admits that there is no technological issue. For people who are deaf and hard of hearing, captions are like ramps for people who use wheelchairs.”

Netflix might disagree with the characterization, as it has been pretty vocal about the technological barriers that exist to adding captions. Two years ago Netflix Chief Product Officer Neil Hunt outlined the difficulty it faced in adding Synchronized Accessible Media Interchange (SAMI) files to its video assets, for instance.

Client support is better now, enabling Netflix to reach PCs as well as the Sony PlayStation 3, Nintendo Wii, Google TV-powered TVs, Blu-ray players and set-top boxes and the Boxee Box. But it still has a challenge in adding subtitles to new devices. While Netflix’s iPad and iPhone apps recently added captions, support for other CE devices — like the Microsoft Xbox 360 and Roku box — won’t be available until later this year.

Netflix isn’t the only streaming provider that is being hit with such a lawsuit: Earlier this week, the Greater Los Angeles Agency on Deafness (GLAD) and four individual plaintiffs filed suit against CNN for violating California’s Civil Rights Act by not providing captions. That lawsuit seeks class action status for all deaf and hard of hearing residents in California, and is seeking statutory damages from CNN parent Time Warner.

The Netflix lawsuit was filed on behalf of the 36 million Americans that are either deaf or hard of hearing. In addition to NAD, the Western Massachusetts Association of the Deaf and Hearing Impaired and Lee Nettles, a deaf Massachusetts resident, were also named as plaintiffs in the suit, which was filed in U.S. District Court in the District of Massachusetts, Western Division.

Netflix has declined comment on the lawsuit, saying it doesn’t comment on legal issues.

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In particular, Showyou has added a “watch later” option that will let viewers save videos of interest until they’re actually able to watch them. In particular, “watch later” could become a killer feature for the iPhone app, which many users turn to during their commutes or other downtime, when they might want to scan videos but don’t necessarily have time or bandwidth to stream them.

In conjunction, Showyou is also launching a web destination at Showyou.com, providing all the same functionality as its mobile apps. On the Showyou website, users can check their feeds or catch up on videos that they chose to watch later. They can also “thank” connections for sharing videos in Showyou or comment on them.

The Showyou.com site was built in HTML5, providing support on modern web browsers. By using HTML5, Showyou could have the flexibility to reach a number of connected devices. The Boxee Box, Google TV products and the Sony PlayStation 3  , for instance, all have browsers that should support the site.

There’s just one catch: The Showyou.com website is only for users that have already downloaded and used the mobile apps. Which means you can’t just sign up in the browser; your login will only work if it’s already been validated through one of Showyou’s mobile applications.

Finally, the startup is rolling out a Showyou bookmarklet to simplify the sharing of videos discovered while browsing the web. Showyou is just one product from Remixation; Remixation is also behind the video curation site Vodpod, which offers a similar bookmarklet.

Altogether the new features are designed to extend the platform beyond just the iOS mobile apps that it is available on now. According to Remixation CEO Mark Hall, the nice thing about building its web property in HTML5 is that it’s a cheap and easy way to experiment on new platforms. While connected TVs are of interest, the next stop will be building an Android mobile app.

(Disclosure: Remixation is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.)

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Netflix has been hard at work adding subtitles to its streaming library, ever since first announcing their availability about a year ago. But it has struggled to do so, mainly due to a lack of standards. Still, Netflix is making some headway. In February, Chief Product Officer Neil Hunt announced subtitles were available for 3,500 TV and movie titles, which make up about 30 percent of all streaming. (A complete list of assets with subtitles can be found at movies.netflix.com/Subtitles.) By the end of the year, Netflix hopes to increase that to titles that 80 percent of all streaming.

Getting subtitles onto the video assets is one thing, but getting them onto consumer electronics devices is a whole other struggle. In addition to Apple iOS devices, Netflix subtitles are also available on the Sony PlayStation 3, Nintendo Wii, Google TV-powered TVs, Blu-ray players and set-top boxes and the Boxee Box. According to Hunt’s earlier blog post, support for the Roku Player and Microsoft Xbox 360 would come later this year.

But adding more devices could become difficult, particularly as Netflix has to update applications across multiple devices and app platforms individually. Not to mention, the limited processing power and overhead on some CE devices could limit its ability to add new features, such as streaming. Netflix has been trying to standardize as much of its app development as possible on HTML5 as a way to more quickly update the backend and user interface without having to rebuild CE apps from scratch. Even so, with the Netflix service available on more than 250 devices, some will benefit from new features like subtitles more quickly than others.

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That is, until now. Vudu announced that it will now provide Flash-based video streaming through its website at Vudu.com. The website will have all the same titles as can be found on the digital storefront used for connected devices, allowing users to access content from the browser when they are unable to watch streams on their connected TV, Blu-ray players, game consoles or broadband set-top boxes. Users will also be able to purchase a title on one device, and view it later through the Vudu website.

Vudu’s browser-based streaming will open up new possibilities for viewership, but there is a downside: in contrast to the ultra-high quality video that it serves to TVs, Blu-ray players and other devices, its website streams are only available in standard definition. That could hinder consumer adoption of the service, at least in the short term, or until the quality of the video streams improves.

It might seem counterintuitive for Vudu not to have streamed through its website before now, but it’s important to note that Vudu’s background is firmly entrenched in hardware. Even before Vudu started striking deals to embed its digital storefront on connected TVs from vendors like LG, it sold a dedicated set-top box with peer-to-peer based delivery technology.

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Customs officers in the Netherlands have seized the shipment — said to add up to thousands of units — as part of an ongoing patent dispute between Sony and LG.

Why? Because, essentially, the two companies are accusing each other — in almost every jurisdiction possible — of infringing each others’ intellectual property. LG says Sony is using its technology for Blu-ray playback, and recently won an injunction to prevent the PS3s entering the European market. Sony has countered by launching its own lawsuit, accusing LG of using Sony technology in its mobile handsets.

However the case turns out, the short-term impact of this ban could be serious. Right now, most retailers still have a week or two of PS3 units in stores. If the ban lasts beyond that, however, stock could start to run low. That’s got to hurt.

But this isn’t just about a conflict between one Japanese electronics giant and a Korean rival. Even though it’s one of the most extreme cases of patent warfare we’ve seen, it’s also indicative of the increasingly destructive influence of the tit-for-tat patent battles that take place across the technology industry.

Just look at a few of the two-way duels taking place between the largest players around the world: Apple and Nokia; Microsoft and HTC; Motorola and Apple; Oracle and Google.

Who really wins from all this?

Certainly not users. At best, consumers are the innocent bystanders in these fights; at worst, they are held hostage with threats to starve them of their gadgets.

This isn’t to say companies don’t have a case, of course. As the legal system stands, these companies have legitimate grievances against each other — and working out who’s right is exactly why they go to court. The rights and wrongs of IP disputes are notoriously hard to navigate at the best of times, and the amount of money and investment that goes into a technology can be very precious to the business that owns it. But Sony and LG have made it obvious that in the horse-trading over who owns what, the last people on the minds of the corporate lawyers are ordinary buyers.

The truth is that at any point, most large technology companies have a range of lawsuits-in-waiting. With hundreds or thousands of patents in their files — patents that often cover similar territory to their rivals — it seems as if it’s almost impossible not to infringe somewhere along the line. And so they trade lawsuits, fire attacks at each other and eventually argue a settlement.

The trouble is, the system doesn’t speed this process up, and, especially in the increasingly internationalized market, it can have important ramifications. LG’s main case against Sony is in the U.S., for example, but it has ended up being European consumers who are taking the hit. It is as if we’re heading towards some corporate equivalent to mutually assured destruction — each multinational company sitting with its finger hovering over a huge red button that, once pressed, mobilizes an army of lawyers and launches a salvo of patent missiles at the target. They shoot back, if there’s enough firepower. Somebody wins.

How do you fix it?

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