(Repeats for wider distribution)
By Lisa Richwine and Jessica Toonkel
Dec 11 (Reuters) - Hulu, Dish Network Corp's Sling and other streaming services battling for customers who are ditching cable are working to make new live TV services more personalized for each user, an effort to help viewers navigate a sea of movies, news and television shows.
Butting heads with AT&T and Sony Corp, which also have started to provide live TV over the internet from channels found on cable television, the upstarts are culling up-to-the-minute data on viewing habits, device usage and even current events to show viewers what they want - maybe before they know themselves.
The company that creates the most user-friendly and personalized service will have a vital edge in the race to win millions of viewers who are dropping cable and satellite packages and their often clunky channel guides, analysts said.
"Given the amount of choice you have today, it is amazing that no one has built a better recommendation engine for (traditional) TV," said Michael Nathanson, an analyst with MoffettNathanson.
The stakes are high. Over the past six years, the amount of time people aged 18 to 24, part of advertisers' most coveted demographic, spent watching traditional TV declined 42 percent, according to a presentation earlier this month by Business Insider Chief Executive Henry Blodget at the Ignition 2016 Conference.
On-demand services from companies such as Netflix Inc and Hulu already mine troves of user data to suggest movies and TV shows based on a customer's preferences, but the new live streaming options can respond to real-time viewing habits.
For the live service it will launch next year, Hulu plans to tap into the general "zeitgeist" around specific topics to provide recommendations, said Ben Smith, a senior vice president at Hulu, which is owned by media companies Walt Disney Co , Comcast Corp, 21st Century Fox, and Time Warner Inc.
A viewer who has watched a steady flow of news about politics, for example, may see recommendations for related yet escapist content like political action movie "Air Force One," Smith said.
"We think there is something really interesting about capturing viewers' moods," Smith told Reuters.
There is evidence that recommendations play a large role in audiences' decision-making. Seventy-five percent of all viewing on Hulu's on-demand service is driven by recommended programming, Barclays analysts said in a research note.
Dish's Sling TV will focus next year on making sure what a viewer sees is contextually relevant to the device they use, said Ben Weinberger, Sling's chief product officer.
For example, a viewer who watches news in the mornings on a tablet would see news content recommendations at that time on that device. But that same viewer may catch up on the previous night's episode of a favorite series on their mobile phone in the afternoon, where Sling will direct them.
"It means giving you the right content at the right time of day on the right device," Weinberger said.
AT&T, which launched its DirectTV Now service in November, is also using data to customize content recommendations for each user as well as the advertisements they see, executives told Reuters.
Next year, DirecTV Now will have the technology to insert targeted ads into TV networks' streams that are designed to be more relevant to viewers, said Rick Welday, president of AT&T's AdWorks.
Traditional pay TV providers also have revamped channel guides. Comcast Cable's X1 operating system, for example, responds to voice commands such as "what should I watch?," which provides personalized recommendations.
A smooth viewing experience is especially key for streaming providers because viewers can cancel and switch to competitors in a few minutes online.
One advantage for online services is they can tweak their features remotely. Sony is working to add a voice command to reach its PlayStation Vue live TV package from the gaming console and on further personalizing search capabilities, executives said.
"There are several updates for consumers every year for every device," said PlayStation Vue product head Dan Myers said.
(Reporting by Lisa Richwine in Los Angeles and Jessica Toonkel in New York, additional reporting by Tim Baysinger in New York; Editing by Bernard Orr)