European standardises on connected TVs

Internet-connected televisions are set to become a standard feature of European living rooms according to German trade association BITKOM.

More than 10 million television sets with integrated internet connection will be sold in the European Union in 2011, rising to 13 million sets in 2012.

Sales in France, Germany and the UK are roughly doubling year-on-year according to a report in Telecom Paper.

You don’t need to look very hard to see where the growth is coming from; each week brings a fresh announcement from a regional teleco operator signing up new customers or building out in its network to support IPTV services.

Dutch telco KPN announced this week that it signed up 56,000 connected TV subscribers in the last three months to reach a total of 416,000 subscribers.

In Ireland Eircom has announced that it will spend €100m on the first phase of a roll-out of fibre technology to 100,000 homes and businesses before rolling out IPTV by mid-2012.

IPTV – ready for take-off?

As a company with its roots in IPTV, we’ve seen a lot of predictions in the past about how IPTV will grow rapidly in the future – and it’s often been “in the next couple of years”. However, Digital TV Research’s recent prediction that homes paying for IPTV will more than quadruple to 155 million by the end of 2016 is rather more likely to come true due to to changes in the market and in the growth of IP connectivity.

As expected, it’s the Asia-Pacific region, home of ubiquitous high-bandwidth Internet, that’s likely to drive this growth. But Asia-Pacific is no longer alone in deploying this kind of bandwidth; more and more operators are deploying gigabit networks to the home, with a large amount of this reserved for media services. This trend plays a large part in the growth of pay services, as the viewing experience improves to the point where more people will pay for it.

While we here in Europe are seeing over-the-top content as the most popular driver for connected TVs, in the USA pay-TV services dominate. A recent report by Sandvine indicated that, at its peak, Netflix accounted for almost 30% of internet traffic in the USA, with real-time entertainment as a whole making up almost 50% of the Internet traffic. Not all of this is paid for, of course, but as more and more companies offer their content online there will be more attempts to monetize this. We’re already seeing Apple offering streaming TV shows to Apple TV devices, and Google offering movie rental services to Android devices.

This isn’t “traditional” IPTV, but that’s not a bad thing. The growth in Connected TVs, broadcast digital TV services, and independent media services such as Netflix has meant a move away from the subscription-based IPTV service offered by telcos. IPTV is now less of a substitute for broadcast TV and more of an additional service alongside traditional TV services, pay-TV or otherwise. A recent DisplaySearch forecast indicated that half a billion connected TV sets would be shipped by 2015, indicating that this trend will only continue. People are having ever more choice in the content they consume, and where they get it from. We may finally have found a business model that enables IPTV to reach its true potential.

Connected TVs set to disrupt ad market

In the discussion about the future of connected TVs it’s the revenue opportunity that most broadcasters and CE device vendors have in their sights. But to date it has been too early to take bets on the size of the market opportunity.

Until last week that is when GigaOm published an upbeat article about the future of the TV ad market. It claimed that connected TVs are set to disrupt the $160 million global TV advertising market, by combining the reach of TV with web-style engagement and analytics.

According to GigaOm advertising for video content on mobile devices is going to grow significantly in the coming year but will be dwarfed by the opportunity that emerges as the connected TV market takes off.

Ad networks have the opportunity in their sights.

3D TV proves that content is still king

Although I’m not a tennis fan, I did spend some time following the Wimbledon Championships this year – mostly to see how well the live 3D broadcasts worked. The conclusion seems to be that it was not as successful as it could have been. Technically the BBC did a great job of broadcasting 3D at Wimbledon but as is often the case, the issue is not the technology so much as the content.

Content is still king, and 3D doesn’t change that. 3D hasn’t been successful in the past because it was often used as a gimmick rather than as a tool to drive compelling stories, and there is still a risk that this will continue to be the case. While we can now convert movies filmed in 2D to provide a 3D experience, that doesn’t mean the results (or the movies) are any good. John Cassy, channel director for Sky 3D pointed this out at the recent Intellect Consumer Electronics 2011 event:

"It's very easy to make bad 3D … At Sky we only make native 3D programmes, and our first stage of production is always to forget about the 3D altogether. Because first and foremost, it's a TV programme - and if the story isn't right or it doesn't make any sense or it's not compelling, it's not good enough and we won't buy it."

Andrew Denham from Panasonic agrees: "Hollywood damaged 3D by rushing so many badly converted films out in the Avatar's wake."

It’s easy to get caught up in the technology and forget what the end user wants. 3D is still “appointment viewing” for most people – you’ll watch a special event in 3D, but not your regular evening’s TV. A glut of poor (or poorly-converted) content, coupled with the continuing expense and inconvenience of 3D glasses, could stop this being special enough for people to justify it. It still remains to be seen if the industry has learned the lessons of previous 3D fads.

Connected TV sales show strong trend worldwide

Sales of connected TVs are set to boom. That’s not just our view but it’s an opinion shared by analysts at DisplaySearch in a new report published this week.

According to the DisplaySearch Quarterly TV Design and Features Report a quarter of all flat panel TVs shipped this year are expected to be internet ready. That number is set to grow to 138 million units by 2015. DisplaySearch predicts that within four years connected TVs will account for almost half of all flat panel TVs shipped.

It’s a trend that is common to both developed markets as consumers upgrade their televisions, and emerging markets, which typically have good broadband services. The common motivation for consumers is a drive to access the best content and services.



Source: DisplaySearch Quarterly TV Design and Features Report

Cloud and the Connected Home World Summit 2011

At the Connected Home World Summit last week there were some interesting discussions on what comes under the heading ‘connected home’. We tend to think of digital media sharing. But there are more features out there that can be added to the chains of connectivity in the home, such as: automated lighting and power control, security and heating control and even some aspects of health care such as panic alarms and other monitoring.

The issue of wireless around the house was discussed in depth, during one of the early morning briefing sessions. An example of where the construction industry needs to meet the connected home industry, as homes are still being built with aluminium backed plaster board, meaning WiFi doesn't stand a chance between one room and another. A prime example of inertia and how many things simply do not move in "Internet time".

Cloud computing was one of the hot topics at the summit this year, especially as Apple has now announced iCloud. There were many discussions around how the cloud relates to the connected home. Is data stored in the cloud, the home network, or both? Should each device try and stream from the cloud or some form of p2p network around the house, as one audience member provocatively suggested? I can see tremendous amounts of data from the home moving to cloud storage and cloud processing in the long term (10 years – maybe 5 years at best), but I just don't see this as realistic over the next few years. Why?

• Users are being asked to place absolute faith in the reliability, security and privacy of cloud storage – but not even Apple is making remotely strong enoughttp://www.blogger.com/img/blank.gifh statements to convince me that this area is adequately addressed to be considered appropriate for 95% of Internet users. Could I have absolute confidence telling my parents' that it is sensible, safe and fast enough to have the only of all their photos in the cloud today? Simply put - no

• Upload bandwidths are still not comparable to download bandwidths. Even though it may only be comparatively short term pain, I don't think the vast majority of users are at the point where uploading 100 GB (say their music and photo collection) is going to be viewed as trivial. On top of this there would be a distinct absence of "instant gratification" that the Internet services are generally promoted as. If home video is included, 100 GB can easily become 1 TB or more

So what are the implications? Data originating in the house will tend to stay in the house – at least as far as the master copy is concerned. Data (video) that originates outside the house (broadcast and other content owners) can move to the cloud much easier. Music collections, a la iCloud, are probably the hybrid for the next few years.

By David Fell, CTO, ANT