Content King, Even at Electronics Show

Jeremy Glaser: For Morningstar, I'm Jeremy Glaser at the 2012 Consumer Electronic Show.

Content truly is king, and it's something that we've seen over and over again over the past couple of days here at CES. Certainly, there have been lots of shiny, new devices, but a lot of the manufacturers are almost more excited to talk to you about the different types of content that you can get on those new screens. Smart TVs, Internet-connected TVs are absolutely everywhere. All of the tablet makers, all of the smartphone makers are talking a lot about the different applications and the different ways that you can get streaming content on to those.

We've heard from the normal players, the NetFlixes of the world, Hulu+, Vudu, CinemaNow. These services that have been around for a while, generally in the PC world, have been migrated into streaming and into other devices. Those are all here, that's not a big surprise.

But one of the bigger stories has been that some of the cable companies are now getting in on the act and creating streaming content that can go on these various devices.

Before, there were some concern among some cable investors that they were going to get disintermediated, that they were just going to provide the dumb pipe of Internet into the house, that you were going to buy your different content à la carte.

But it's really difficult to count Comcast or Verizon FiOS out. Really, they want to be there, and they're now creating apps that will let you subscribe to cable, and ... then get your on-demand shows and even get some of your Live TV in a very limited way on your Xbox, on your Internet-connected TV, on your tablet. Wherever you want their shows, you can get it.

So cable really goes from being just this box that sits on your TV that provides this different content to a content provider like Netflix, that then provides it across a bunch of different devices.

We talked to the chief economist at the Consumer Electronics Association, and he really compared this to the crisis or so-called crisis where people were afraid that DVRs were going to kill the cable industry.

Shawn DuBravac: There was a lot of concern that DVRs were going to put traditional television or traditional cable out of business, and instead cable companies adopted that innovation very quickly, launched it, brought it to market, made it a subscription service, and began to lease DVRs, as opposed to sell DVRs. So they took advantage of those use-case scenarios that were emerging very early on.

I think you'll see the same thing from cable companies and other telcos, they will take a look at some of the trends that are emerging and try to take advantage of them.

Jeremy Glaser: We also had a chance to talk to Morningstar's Rick Summer about the importance of content across all of these devices.

Rick Summer: If we look at any consumer electronics device, any TV, it's really just a box of glass at the end of the day, until content is being pushed across that.

We're seeing a lot of the same services on a lot of the same devices, and we're noticing that even more this year. Some of these people have played catch-up to a great degree, launching Netflix, launching Vudu. They are not all supporting the same services, which is interesting, number one. I think understanding that there is some "coopetition" that's out there, where Amazon may be unwilling to participate in Xbox LIVE, as an example.

What we're looking at is a couple of things that are critically important. Like we talk about in the smartphone market. On the content market we're looking at, Microsoft's Xbox LIVE being very interesting in terms of a platform. They're really pushing that forward.

Looking at Google, this has all been about Google TV here, at the show, as we're seeing. Does it have a lot of legs? Not real sure still. But we know it's got a lot of momentum in terms of market penetration. Owning that operating system is critically important, we think, not only in the PC and laptop, netbook, tab, and smartphone market, but they ultimately could be important in that television market at the same time. So very interesting to figure how that evolves. The one wildcard is out there as we all know, Apple TV, what does it look like, when will it launch?