Deutsche Telekom considering cloud TV move

At the OTTtv World Summit recently, Deutsche Telekom confirmed that it’s planning to push ahead with its launch of multi-screen services. With subscriber numbers for its Entertain TV service up 40% this year, offering a multi-screen solution as part of that service is an indicator of an aggressive growth strategy for the future as well.

Most interesting, however, was the statement that Deutsche Telekom would look at becoming an over-the-top (OTT) service provider in its own right.  Deutsche Telekom already plans to offer existing channels as OTT services, as well as having partnerships in place with companies such as Spotify and Deezer, so this isn’t entirely new. However, a bigger move into this area would show it following Sky’s lead in moving from being a network operator towards being a content provider that is more network-agnostic.  This offers some major opportunities for growth, and helps avoid large, upfront capital expenditure such as the need to provide set-top boxes to subscribers.

The way that people watch TV is changing rapidly, and by offering their services on a wide range of devices, network operators such as Deutsche Telekom can reap the benefits of this.

Russia prepares for HbbTV

We’ve seen strong growth in HbbTV over the last year, not least in Central and Eastern Europe. Poland and the Czech Republic have both launched HbbTV services this year, and Russia has just announced that it plans to launch HbbTV in the first quarter of 2013.

Each of these deployments shows a growing trend towards the harmonisation of digital TV markets, especially in free-to-air systems. The fragmentation that has been endemic in the industry finally seems to be abating, with more broadcasters and network operators choosing to follow HbbTV as a common standard.

There is still some fading debate about whether HbbTV is the best choice for interactive TV services because of supposedly “advanced” features that are missing. However, this debate is now largely irrelevant.  HbbTV was always envisioned as a pragmatic solution that offered rapid time to market while meeting the core needs of broadcasters and device manufacturers. The value of this is being recognised in an ever-increasing number of countries.

Ultimately, the best solution is the one that is widely deployed that also provides off-the-shelf products and economies of scale for consumers, service developers and network operators. As more and more countries adopt HbbTV, the value of HbbTV as a common solution becomes more and more evident.

Smart TV Growth but North America Still Slow to Adopt

A recent study from NPD DisplaySearch points towards an encouraging increase in sales of connected TVs, with growth of over 15% predicted for Europe and Asia in 2012.   The picture in North America is slightly less rosy, however, with sales remaining flat at around 20% penetration. These forecasts for Europe and Asia seem reasonable, given that most large-screen TVs sold today are connected TVs.  But what’s happening  in North America?  I suspect that there are several different drivers behind the trend we’re seeing.

One opinion is that content remains king: the issue is one of how that content gets delivered to the end user.  The growth of free catch-up services in Europe helps drive the growth in smart TVs, because these services can easily be built into the TV.  Even support for paid content via the TV is growing: in the UK we’ve seen deployments from LoveFilm and Netflix, and Sky’s strategy of moving its content to other devices via Sky Go will undoubtedly pay off in time. Asia is seeing similar trends, but here, free content from the web is the main driver.  In both cases, though it’s access to free content that’s getting people hooked.

It’s a different story in the US, where you have on-demand services provided by cable operators through their set-top-boxes or through a separate device such as an Apple TV.  This means that these services are less of a differentiator for TV manufacturers, and so people are less likely to upgrade their TVs specifically for the connected TV experience.

Ease of use also plays a part, in a way that’s often overlooked: the need to switch devices.  If I have some services built in to my TV and others in a set-top-box, switching between them is more effort and inserts a mental barrier (albeit a small one) into the process of finding something to watch.  In my case, this reduces my use of iPlayer on a games console – I’m more likely to turn off my Sky box and pick up a book or use iPlayer on an iPad instead. If these services are built in to the set-top-box in American households, why will people spend the mental effort required to use them on the TV instead?

One other factor that may or may not be important is the adoption of HD TV.  Historically, North America has been at the forefront of HD adoption, with sales in Europe lagging behind.  This could mean that more European consumers are in the process of replacing their TV sets as analogue switch-off approaches, while the reasonably long replacement cycles for televisions (and the current economic climate) mean that many US consumers aren’t replacing their existing HD TV yet.  If this is correct, we may see an increase in the sales of connected TVs in North America over the next couple of years.

Spotify moves into connected TV world with Samsung deal

Samsung announced recently that the Spotify music streaming service is now available on their smart TVs.  While Spotify already has a strong presence in the PC, tablet and smartphone markets, this is its first foray into the TV world.  So what does this mean for Spotify and for Samsung?

Both brands are very strong in their respective areas, but it’s unlikely that Spotify on its own will help Samsung to sell more TVs.  As part of an overall “connected entertainment” offering, though, Spotify is potentially a strong addition.  Exactly how strong may well depend on Spotify’s business model.

Streaming audio services on TVs are nothing new – US customers have been able to enjoy the Pandora streaming service on their TVs and set-top boxes for a couple of years already.  Given this, how will Spotify help Samsung? The most obvious answer is that Pandora is only available in the USA, so customers in Europe and elsewhere can’t use it.  Another reason is that Spotify lets you build your own playlists and select exactly which tracks to play. It seems like Spotify should have a major advantage.

As with other services that move to the TV, though, Spotify will face a challenge in building a user interface that works well on a TV screen with a TV remote.  They seem to have been successful with this on Samsung devices, but if Spotify is to become available on other TVs and set-top boxes then a lot of care needs to be taken to minimise the amount of effort needed to support a consistent user interface on many different platforms.  As services like iPlayer have found, this can be a huge challenge given the current level of market fragmentation.

The second challenge will be the business model for Spotify on connected TVs.  While the (ad-supported) PC version is free, the TV version costs £10 per month - the same price as the mobile version.  The question is therefore; how many people will be willing to pay the extra £10 a month to access this service on their TV, when other entertainment services are available for free?

What impact will Amazon’s monthly option on Prime have on the movie rental market?

Amazon is testing a new monthly option for its video-streaming service, Prime.  Prime already offers free two-day shipping, free video streaming and access to Amazon's Kindle e-book lending library. The company is now offering a monthly option for the service on its website, which is more comparable to Netflix's streaming video subscription.

Whilst the move signals Amazon is stepping up the competition against main rival Netflix, it’s also a sure sign that much like the music market, streaming and digital downloads are coming to dominate the movie market. Given Amazon’s strong position in the online media market, it’s not surprising it’s added another string to its bow with its monthly Prime service. It’s thrown down the gauntlet to the likes of Netflix and Hulu and we’re likely to see an influx of similar services as the acceptability of digital rights management to both content owners and consumers grows.

But it’s not just about quantity. Broadcasters looking to capitalise on this digital trend would be wise to take a leaf out of Sky’s book. Content has always been king with Sky, and broadcasters need to do in the movie space what Sky’s done with sports. High quality content that consumers actually want to watch will persuade more viewers to subscribe to these online services. Not only this but it’s important to make them device independent so viewers can enjoy the movie experience on the go, wherever they might be.

UK digital TV switchover signals the end for Ceefax

The final analogue transmission in the UK took place last month. A decade into the new century, Britain’s airwaves are finally a digital domain. Ceefax was switched off as the final analogue signal was turned off in Northern Ireland.

This UK TV landmark highlights how much has changed in the 38 years since Ceefax launched. At its peak Ceefax had 20 million viewers a week and its switch-off will be greeted with some sentimental sadness. Many will fondly remember anxiously waiting for a Ceefax page to change to get the latest football scores for example.

Today’s TV user experience is very different, football updates are available instantly across multiple devices and goals are streamed straight to mobiles and tablets as soon as the football hits the back of the net. Rather than waiting for a match report after 90 minutes, sports fans have access to social media providing minute by minute updates live from grounds around the country. Consumers have the ability to tailor their service to meet their personal needs.

Connected TVs along with tablets and smartphones are undoubtedly improving the way consumers watch and interact with live sports although we’ll miss Ceefax a little bit too!

Moving the EPG to the companion device, a natural evolution

One new development that was commonplace at IBC this year is the use of companion devices such as an iPad or smartphone for navigating the EPG. Over the last year there have been lots of demos of these services, but now it’s becoming a commercial reality. ANT Galio Move, the companion device offering from ANT, is available to consumers today under the View21 brand in the UK and recently won an award at the ConnectedWorld.tv awards for its approach to using a second screen.

This isn’t just a “we won an award” blog entry, though.  What I really want to talk about is how this kind of app has changed my use of the EPG.  

Moving the EPG off the main screen on to a second screen does more than just give me a better way of navigating around a grid-based guide. It changes how the guide gets used as a browsing tool and a content discovery mechanism, and affects the whole dynamic of watching TV. Many tablet owners are already used to multi-tasking while watching TV, and having the EPG on a companion device means that browsing the guide simply becomes another part of that multi-tasking.  Most importantly, it means that it’s not interrupting other people’s TV viewing.

Having the guide on a companion device, with its own connection to the Internet and a richer interaction model also opens up new possibilities for what the guide looks like.  Imagine “zooming in” on a programme to find out more about it, as if the detailed information about the programme is just another part of the main guide grid.  Imagine having that tied in to a recommendation engine, or personal recommendations from friends via Twitter that suggest programmes you’d like.  Imagine having it integrated with catch-up TV services, or VoD services, or the iTunes store so that you can buy the movie or TV series to keep.

With the rich metadata that is now available, the combination of advanced TV services and a companion device with an easy-to-use user interface means that are we now in a position to make the best use of that new data to improve our EPG and help us to more easily find what we want to watch.