Andrew Walmsley on Digital: Screen grab
A view from Andrew Walmsley

Andrew Walmsley on Digital: Screen grab

Google and Apple are set to slug it out over a web TV market that has barely got off the ground.

Across the land, the creaking of sofas has been heard over the past week as 60m bottoms nestled back into familiar depressions in their furniture.

The cushions might have regained a little of their original shape over the past month, as consumers were distracted by holidays and (to a lesser extent) nice weather. Yet, as we march through September and the evenings start to draw in, it's the box that attracts their attention and that of advertisers, even if they don't give as big a share of their money to it as they used to.

The dizzying success of web media, particularly search, in luring budgets away has not sated digital players' appetite, though. They might have changed the media landscape by adding a new channel, but the prize they are eyeing now is that of TV - worth $70bn in the US alone last year.

Apple's updated TV device was launched at the start of this month. Moving the centre of gravity from the cabinet to the cloud, Apple TV is less a scaled-down computer than an iPhone without a screen. However, contrary to expectations, it doesn't run the iOS operating system common to the iPhone and iPad - an omission that makes it something short of a game-changer.

Observers had expected the introduction of the app to the TV market through Apple - a business model that drove the success of the iPhone. Ultimately, Apple may yet have little choice but to do this, as Android apps will be available on Google TV when it launches later this year.

Apple has cut deals with YouTube, movie-streaming service Netflix and, of course, the iTunes store to provide access to TV shows and HD movies, and are selling the box for £99. The price tag is still likely to be a problem, as consumers have, for the most part, got used to getting their set-top boxes for 'free', along with a subscription service that funds it. In any normal market this might be an introduction strategy, exploiting early adopters' price elasticity, but here, it could slow penetration dangerously. From virtually zero a few months ago, so many big guns are now aimed at this sector that it could transform within the next two years.

The landgrab that the iPhone enabled, stole Apple a three-year lead in smartphones before Android started to take serious chunks out of the market. Yet, Cupertino's finest simply don't have the technological lead in TV that they had in mobile, and the competition is coming to market far faster.

Google TV is slated for US launch in Q4 this year, and, according to chief executive Eric Schmidt, will roll out globally in 2011. It will give developers access to the Android market from early next year, bringing independently developed apps to TV for the first time, and adding search as a driver of TV content consumption.

Google's strategy is informed by its initial failure in mobile, as the focus will be on delivering a software platform and user interface, leaving hardware design, distribution and sales to the manufacturers. Sony will be first to market with a Google TV-enabled set, as well as a Blu-ray DVD player with the Google TV set-top box built in.

A variety of games consoles and £100 DVD players with online services built in, as well as incumbent operators such as Sky offering streaming services, are causing the market to become confused and complex before it even gets off the ground.

The battle about to be played out between Apple and Google will define the next era of TV. As millions of consumer buttocks remain firmly on the sofa, it's going to be the next big battle for digital, too.

Andrew Walmsley is a digital pluralist

30 SECONDS ON ... NETFLIX

- Founded in 1997, Netflix is a US online rental service offering movies and TV episodes (including some from current seasons) via streaming or DVDs by mail.

- Users pay a flat monthly fee to receive unlimited DVDs - $8.99 (£5.80) to receive one at a time, up to $47.99 (£31) for eight at a time ($2 more a month for Blu-Ray discs) - or unlimited titles streamed to their PC, Mac, or 'Netflix-ready devices'. These include internet-enabled consoles such as the XBox 360, PS3 or Nintendo Wii; internet-enabled TVs; and devices including Apple iPhone, iPad and iPod Touch.

- At the end of June, Netflix had 15m members. It claims to be the world's biggest subscription service in its market.

- The site carries more than 3bn ratings from members, who rate, on average, about 4m movies a day.

- Netflix had plans to enter the UK market in 2004, but abandoned them to focus on the US. It now intends to make its service available in Canada this autumn.