Connected TV – 2011

I recently attended the two day Connected TV Summit on the 18th and 19th May, to learn more about this emerging technology.The summit was useful as it covered all angles from the manufacture of televisions applying this technology, examples of software and advertising platforms right through to expert views on how broadcast and the content delivery model will change along with consumer expectations.

This article provides a summary of what I learned from the various sides of the media industry based on presentations, debates and speaking to subject matter experts over the two days.

Broadcasters

The general feeling that came across was that broadcasters have to engage with and embrace this technology or they will be left behind. There were some comments made about the fact that this new technology was not yet proven and might not survive in the current form. The biggest concern was the large cost of enabling this technology and as yet there is no way of knowing how to make enough money from it. Advertising is still new and ways of the consumer digesting advertising in an acceptable way still has to be found. Anyone who has a PAYTV model showed concern that if the internet consumer and TV come together, expectations over charging levels will clash and cause issues even if they try to sell on the idea of premium content.

The real concern is that many more companies will move into providing content over connected TVs; bringing huge competition from the likes of companies such as Microsoft and Google to name just two. No one is suggesting that traditional linear broadcasting will die as audiences still want to be fed content rather than having to try and find it. However, the drive will be for new providers to get close to this model by identifying viewing patterns and making suggestions or building a personal viewing schedule.

Youview was mentioned a great deal at the conference as a representation of what the future might hold, where Freeview channels and Internet content are provided via a Set Top Box (STB). This service is probably closest to BT Vision, but will work using any internet provider and on any TV. All the UK terrestrial channels are involved in this development including the BBC, ITV, Channel 4 and 5. BSKYB is developing their own technology and Sky anytime+ is the early versions of this. Telephone networks are creating their own versions.

Over The Top (OTT) TV was discussed quite a lot and the possible damage this will do to the broadcast and network content providers. It is a technology that enables you to receive content on your TV without using a network operator such as broadcaster or network content provider directly over the internet. I would have to say the arguments are balanced and time will tell what the true damage is, but there are a lot of companies investing huge amounts of money in this approach.

Content providers

Connected TV is another channel for content providers to sell or rent their content and as such it is a very exciting option. Potentially not just for premium content, but a good way of getting money for low end specialised content. There is a feeling that this new format will give content providers an avenue to new customers other than typical broadcast methods, internet and mobile.

The main concern raised by content providers was the issue of DRM (Digital Rights Management) and protecting their assets. This is a very difficult area and complex as content is provided in different countries and on different devices. Content providers are very careful about this aspect and as such, it can take some time for a service to persuade the content owner that their assets are safe with their technology on different devices/platforms.

Everyone agreed throughout that the quality and type of content was key to the success of the industry and whatever channel is used to reach the consumer, their loyalty and drive to watch a particular format will be determined by the content available.

An interesting statistic was given that looking at VOD over two years, rentals were only 20% of the overall viewing market and last year reached 46%.

TV and Set Top Box Manufacturers

Nearly all TV manufacturers of a decent size have connections to the internet available or in progress. They are all using different frameworks and technology to provide the UI functions and applications, which does not help towards standardisation and causes an issue of cost in trying to support these different standards. Various common standards are being discussed, but the obvious one as far as I can see is HTML5 and browser based technology, but there seems a real reluctance to embrace an internet based standard in the TV world.

I believe manufacturers may want to differentiate due to the debate of whether connection to the internet is a PC monitor becoming a TV or a TV becoming a PC monitor and to enable a higher price for access to content than is expected on the internet. From an outsider point of view having no standards on the TV device and STB leaves the door open for an independent STB that becomes the standard leading the way.

Many homes now have more than one television, so there was a lot of technology on show demonstrating how easy it could be to share the functionality of a STB around the house. This includes the ability to drive the STB from any remote in the house and to view separate channels from everyone else. There are standards available for remote User Interface Technology, which are supported by different technology companies, but the Samsung offering on show uses the RVU protocol.

Application developers

There is no doubt that being able to write one piece of software for any device is the optimum and most cost efficient way of servicing and delivering software solutions. However, this is not possible today and with the multitude of connected TV manufacturers providing different platforms and application environments, the problem has just got worse. Most application providers will focus on the major platforms and devices with the bigger potential audience as priority, which is understandable, but this a shame for the consumer. However, we have seen the same pattern with mobile platforms and it is generally accepted.

There are already many applications available, but the feeling is that a connected TV device will not replace the use of a PC or mobile devices and surveys have suggested that the preference is to have a separate personal device like a mobile or tablet and to interact with TV whilst watching content. As such, many technology companies are working on how to make this seamless and have the TV or STB be able to talk to remote mobile devices. I saw some clever examples of this and can really see this being an interesting direction.

Further to this there are two schools of thought about the remote control. One is that the simpler the better and you should not stray from the up and down buttons so that the consumer stays engaged with the new technology and is not scared of a multitude of options. The other direction is to enable mobiles or tablets to become remote controls of the TV and STB so that you can have a richer UI and integration to data over the internet. You can see an argument for both which probably means both will survive to support the different types of users.

The key theme throughout was who would generate the next killer application for the connected TV platform. No one believes it is there yet and some feel it will be a next generation Electronic Program Guide (EPG). Time to get your thinking caps on.

Consumers

There are a growing number of smart (connected) TVs in circulation at the moment and it is expected that by 2015 that 50% of the worlds TVs will be connected to the internet. This means choice for the consumer will grow exponentially as new providers come to market and the technology carries on evolving. The problem that has already been identified is how do you find the content amongst all this choice. The traditional EPG that exists today is time-based for scheduled programming and everyone is aware that a new UI has to be created that solves the problem. There is an opportunity here as no one feels a next generation UI for content selection exists today!

The integration of traditional broadcast and internet-based content will be key to the consumer experience. There were some good examples discussed such as the ability to select back episodes or see suggestions for other content you might like based on the program you are currently watching. Doing this so it is not annoying is the challenge. One neat suggested feature of the EPG on Youview is to be able to go backwards in time and select a program you have missed.

Summary

There is no doubt that this technology is still in its infancy and there is an opportunity for all to make serious money out of it over time. Whichever way the consumer views connected TV in the future, the possibilities of making this a richer and more personalised experience are immense. No one seems to have grasped the advertising nettle at the moment, as the only suggestions being put forward are for an internet-based approach. My feeling as that this will work to a degree, but new approaches will be found that fit more neatly into how the consumer interacts with the new devices and evolving technology.

Fragmentation of any potential audience is an issue due to the lack of standards and the suppliers ability to support all available platforms, but hopefully over time this will go away or at least improve. Many industry experts have suggested this is the most disruptive technology to enter the TV space for years and based on what I have seen I would have to agree, although I have every confidence that the consumer experience and choice available will be increase enthusiasm for that box sitting in the corner of the lounge. The key aspect is that It will also keep the TV relevant for the new generations to come.

This is by no means an exhaustive coverage of this topic and I am sure many will disagree with some of my points. However, it touches on some of the key areas to generate a discussion. I am always happy for comments – positive or negative – to gain other peoples’ perspectives and to educate me more on this area. I am also always willing to discuss matters on the phone.

Telephone: +44 (0)20 7193 6879

Email: chris.humphries@adworldit.com


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