The purpose of the on-screen guide has shifted too. While the main objective is still to provide information on television programming, the EPG has the potential to be a much broader and interactive entertainment portal. The guide interface is only one aspect. A more complicated matter is how the guide ties into content-recommendation engines, interactive applications, advertising platforms, and more. Television service providers and connected-TV device manufacturers all want to use the EPG as an access point for understanding consumers on the one hand and reaching out to or influencing them on the other. In other words, the EPG is a gateway to the living room and a way to own the consumer at home.

This is why, for example, Comcast spent $250 million and entered into a joint venture with Gemstar, the maker of TV Guide, in 2004. It’s also why Microsoft tried for years to establish a Microsoft TV program guide in the cable industry before eventually giving up in favor of pursuing only IP-based television initiatives. Comcast and Microsoft both recognized television’s central role in consumers’ lives. They rightly saw opportunity there and wanted to capitalize on it. But even they couldn’t have predicted how significantly the internet would alter the television landscape or how much the stakes of the TV game would change.

More than anything else, the internet has exposed consumers to what is possible with video and the video-guide interface. The web has whetted appetites for richer graphics, new modes of content discovery, multiscreen access, and interactive applications. Because of the open nature of the internet, it has also attracted more developers to the task of user interface innovation. And with more players on the field, the pace of change has accelerated.

It will take a while to move entirely away from legacy program guides, but with companies converging on the problem from many sides, much of the transition will unfold between 2013 and 2015. Once the transition to web-based, or cloud-based, guides has taken place, more-functional changes will also start to occur. The TV-program guide will be more than just a pretty interface. It will be a front for new channels of entertainment, information, and commerce.

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While content in the living room has traditionally been viewed on different screens and delivered in different forms of media, recently things have changed significantly. The past couple of years have seen a large-scale disruption of the entire TV landscape and its delivery models.

The late ’90s and early 2000s saw the Internet and home networks start to proliferate, and there was talk of a new era, a “digital living room.” Much of it was met with skepticism — and with good reason. The slowness of early Wi-Fi networks, the lack of software standards and clunky initial product offerings from both hardware and service manufacturers more often than not resulted in consumer disappointment.

Over time, however, fundamental technology building blocks matured. Wireless networks became fast enough to handle video streaming. Software protocols such as DLNA and Bonjour began to ease the use of these technologies, while pioneers such as Microsoft (Xbox Live), Netflix and Apple (iOS devices) began to make products that would change consumer-usage behaviors.

As consumers began to look at new ways to shift media over networks in and outside the home over the past decade, slowly but surely distribution models for content began to adapt, eventually upending the content creation and distribution value chain. Physical distributors of content, be they music or video retail and rental, started to get hit hard as more content shifted to online distribution. Content creators saw their distribution windows collapse, and new forms of distribution enabled content creators to begin to sidestep the large studio decision makers. Aggregator players like Netflix and Hulu ascended, showing consumers entirely new ways to bundle and buy content.

All of this has added up to a vastly shifted entertainment business today, which has been reshaped in many ways to fit the new reality of the digital living room. That said, the way forward is going to see just as much, if not more, rapid change. The adoption of tablets, social media, new interfaces, and the changing nature of the TV itself mean the digital living room will continue on its disruptive path.

The goal of this report is to help readers understand the different technologies driving this shift. We asked analysts to identify key trends reshaping their market, to identify the key players driving this change, and to look down the road a bit and help us understand how the market sector will look. In the following pages:

• Mari Silbey breaks down how the set-top box and pay-TV providers will evolve in the age of over the top.
• Consumer tech expert Alfred Poor breaks down how new interfaces, from touchscreens on tablets and phones to the rapidly changing nature of the on-screen interface and user guides, will impact consumer behavior and media models in the future.
• Longtime media analyst Larry Gerbrandt breaks down how the shift toward over-the-top video distribution is impacting the economics of media.
• Patrick Moorhead looks at how different smart TV and app platforms are taking shape.

So enjoy, and learn. Also, let us know, in comments or email, what trends matter most, how you think the digital living room will change, and who will ultimately be counted among the winners.

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