Goodbye BBC Television Centre, Hello MediaCityUK

Television Centre, home to the BBC since 1960, closes its doors for the last time on March 31. This week saw the BBC wrap-up its news broadcasting from Wood Lane and the One O'Clock News  on Monday 18 March marked the first domestic TV news programme to go out from the newly redeveloped £1 billion HQ and studios at New Broadcasting House, central London. All other departments from TV Centre, including BBC Breakfast, Children’s, Sport, Radio 5 Live, Learning, and Future Media and Technology are relocating to MediaCityUK, in Salford Quays.

It will be sad to see Television Centre go – the land is due for redevelopment into offices, flats, hotels, a cinema and private TV studios – but although it was state-of-the-art when it was built, it is now not serving its purpose.

MediaCityUK, on the other hand, is a brand new, high-tech development created specifically to attract companies from the media, digital and creative industries.  The area also boasts The Lowry arts centre (Greater Manchester’s most popular cultural tourist attraction), Manchester United’s Old Trafford, Lancashire Cricket Club and the Imperial War Museum North. To date, it has attracted not only the BBC, but ITV, Satellite Information Services (SIS) the University of Salford and over 50 creative companies from composer agencies to independent production houses.

But more important than the buzzing creative environment is the fact that it’s connected to one of the most advanced, high-capacity communications networks in the world and able to satisfy the needs of the media industry.

Today’s world of high definition digital TV was unimaginable back in 1960. Digital processes, new production workflows, delivery of interactive online sites, mobile television and OTT services such as BBC iPlayer are always hungry for more bandwidth. MediaCityUK, with its purpose-built infrastructure, creative village and 20 million plus metres of optical fibre for the high speed transmission of voice, data, high and standard definition video and wireless communications services is excellently set-up to be the home of the new BBC for the digital age.

Tesco hopes you won’t blink and miss the deals

British retailer Tesco has announced that it is to make its range of online films and TV programmes available to its Tesco Clubcard holders free of charge. Tesco bought 80% of Blinkbox in 2011 and will use the streaming service to reward customer loyalty. By uniting Blinkbox with its estimated 15 million Clubcard holders, Tesco is hoping to expand the current two million users of Blinkbox. Dubbed Clubcard TV, the new offer will provide access to family movies including Care Bears, Batman and Superman.

Tesco will have watched with interest as recent viewing figures revealed that House of Cards, the series streamed exclusively on Netflix, was the most watched content online over the Super Bowl weekend. Netflix is clearly gaining traction by making an entire series available exclusively all at once.

Making the most of exclusive premium content

Already in 2013 we are seeing premium online services providers exploring new ways to differentiate their services. If 2012 was all about VoD providers such as LoveFilm and Netflix striving to get viewers connected across an increasing number of devices, then 2013 is about the battle for exclusive content and how best to exploit it.

Netflix has exclusively made an entire new series available to its subscribers featuring Kevin Spacey whilst LoveFilm has agreed a deal to stream 11 original children's and comedy TV test pilots produced by the studios of its parent company, Amazon.

Netflix has come a long way in its first year in the UK, and by making a new series exclusively available all at once, it is changing the way that consumers consume content. Are the days of waiting a week for the next episode of our favourite drama coming to an end?

Holland’s connected TV uptake on the rise

Latest research from the Dutch Bureau for Statistics (CBS) shows that 20% of Dutch homeowners now own a connected TV set, indicating that other European nations are starting to catch on to the growing trend that’s taking hold in Britain. According to a recent YouGov study, 55% of British homeowners have now connected their devices to the internet, demonstrating that UK consumers are embracing the smart TV market.

We reported last year that connected TVs were confusing consumers, with only one third of people actually connecting their devices to the internet. But as these latest figures show, the TV industry has done a great job over the past 12 months to educate consumers on the full potential of a connected TV. So much so, it would seem, that today, viewers are getting excited about how a connected device can enhance their overall TV experience. And as the research from CBS shows, it’s not just the UK that is getting better connected, with Holland’s population getting in on the action.

These figures are very promising for smart TV manufacturers and broadcasters alike, who would be wise to capitalise on this changing consumer behaviour. For smart TV manufacturers, this means bringing affordable OTT services to market. With such a competitive market, innovation is at an all-time high, so it’ll be those offering good quality and cost effective products that enjoy the greatest sales boost. For broadcasters, there is a huge opportunity to develop more content that encourages viewers to engage regularly with their TV sets.

Growing multiscreen viewing trend opens up new opportunities for pay-TV providers

A new report from Pyramid Research has found that as the consumer demand for OTT services increases, pay-TV providers are being forced to adapt and evolve their business proposition to provide multiscreen models to better satisfy their growing customer base. Such huge changes present massive opportunities for the pay-TV industry to introduce multiscreen business models, increase customer loyalty and generate higher revenues.

We’ve already seen significant second screen growth. Last year’s sporting summer provided the perfect opportunity for consumers to get to grips with their new multiscreen TV options to keep up to date with the latest scores and results.

The UK also saw social media conversations rocket during popular programmes such as the X Factor, Britain’s Got Talent, and of course, the Olympics, as consumers shared their thoughts on what they were witnessing on TV with their peers. Demonstrating this, a staggering 150 million tweets were posted during London 2012, making last summer’s games the very first social Olympics. This growing trend has brought with it an influx of companion apps being introduced to the market, such as our very own ANT Galio Move. Apps like this extend the TV experience, allowing consumers to interact with their favourite TV shows, follow relevant hashtags on Twitter and discuss their views with friends online, all from a second screen.

Consumers are getting increasingly comfortable using multiple screens and interacting directly with the programmes that they’re watching, and the pay-TV industry is no different. Consumers now want to watch video services on multiple screens, and as a result, pay-TV providers must now evolve to meet their customer bases’ changing requirements. Launching OTT-like video services enables pay-TV providers to extend their reach to a new wave of customers. It’s an exciting time for the industry, with huge opportunities to create new, additional, revenue streams for those prepared to respond to changing consumer viewing behaviour.

What we watch shapes how we watch

Data released by Twitter recently has shown how the type of content we are watching can impact our second screen social media activity. For example, if people are watching a gripping drama like Homeland, they are far less likely to tweet at the same time. On the flip side, if it’s a light entertainment show like X Factor, people will consistently tweet throughout the show with peaks in Twitter activity directly linked to specific contestant performances. Meanwhile investigative shows like Panorama stimulate prolonged Twitter activity with viewers discussing it during the show but also after it has finished.

The report is targeted at advertisers however it also contains valuable information for the wider TV industry; consumers no longer just passively watch TV, Twitter adds a new dimension to the viewing experience. We are likely to see more TV shows actively encouraging viewers to go online whilst the show is on.

Broadcasters already trail hashtags before shows, but this is just the start. They are now using Twitter to evaluate the performance of shows, and it will be fascinating to see how this data is used and impacts programming and additional, associated content in the future.

Second screen apps here to stay

We’ve talked previously on this blog about hardware advances that were showcased at CES  this year. Another significant trend at the show was the second screen apps that are supporting them. The number and range of second screen apps on display this year demonstrated that the second screen is here to stay.

While the CES demonstrations weren’t necessarily showcasing features that we haven’t seen before they did highlight that second screen applications have reached mainstream coverage with TV titles such as Variety now looking at the impact this technology can have on the industry and ultimately the consumer.

With this growing confidence in second screen apps the market is likely to become increasingly crowded. There is already a multitude of apps out there, and this number is only going to grow. The real winners will be the ones that are able to tap into changing consumer behaviour.

CES 2013: Bigger, it seems, is better

For the first time in a few years, the focus for TV manufacturers at CES wasn’t just 3DTV. Instead we saw the top brands competing to bring us the largest screen size possible. Samsung and HiSense stood out by showcasing impressive 110“ displays complete with Ultra-HD whilst LG, Panasonic and Sharp all unveiled new models ranging from 55” to 80”.

Picture quality is of course equally important and visitors to the show were able to see OLED and 4K Ultra HD taking centre stage with four times the pixels of HDTV and twice the resolution. Competing with OLED was Sharp’s IGZO (Indium Gallium Zinc Oxide) image technology which also offered 4K Ultra-HD and superb energy efficiency to its LCD range.

It was encouraging to see both Panasonic and Samsung launching new smart TV interfaces, features included voice and movement recognition, individual recognition to personalise the TV home-screen and split screen capability allowing users to do view things at once.

Prototypes like 8K display and curved TVs also grabbed attention which is no mean feat at the world's biggest gadget show.

85% of flat-panel TVs getting smart

A recent report by Gartner indicates that the production of smart TVs is growing rapidly, with smart TVs predicted to make up nearly 85% of the flatscreen TVs produced in 2016.  On the face of it, this isn’t a big surprise – smart TVs have been dominant in the high-end TV market for the last couple of years and, as always, what starts off as a high-end feature gradually makes its way into all models in the range.  There is also the need to keep the user experience fresh for consumers over the lifetime of the product, and the economics of retail TV sales makes it difficult to justify over-the-air upgrades for TVs.  A one-off payment for a TV doesn’t cover the cost of upgrading that TV to add new features, and so making these new features available via a portal or other online service is attractive to the manufacturers.

Simply selling more smart TVs doesn’t mean that people will connect them, however: as we’ve discussed before on this blog, recent figures have shown the number of smart TVs rising, but the number of TVs being connected remains pretty flat and sales figures may not tell the whole story.  There are two main reasons for this.  The first is that it’s not always easy to get a network connection to the same place as your TV, although this could be solved through the use of Wi-Fi or powerline networking.  The second reason, and the one that is more difficult to solve, is that many people simply don’t see enough value in the services offered by a smart TV to want to use them.

This is often due to a combination of portals that are difficult to use, and apps that customers don’t see value in. It’s not simply about having the most services available on your TV: it’s about having the services that consumers care about, can find easily, and easily use to get what they want.  If manufacturers don’t improve the ease of use of these services, it’s likely that more smart TVs will remain unconnected.

Global Pay-TV will reach 907m in 2013

The global pay TV market saw strong growth in 2012, with nearly 47 million new subscribers taking the total size of the market to an estimated 864 million households. Over the same period, growth in digital terrestrial markets was relatively flat, indicating that even in tough economic conditions people are willing to pay to be entertained.

As always, content is king, and it’s likely that high-quality content and access to the most recent movie releases are what’s driving the growth of pay TV services.  However, as over-the-top service providers such as Netflix start to bid for this content as well, pay TV operators may need to revisit their strategy to look at how they can improve their offerings in order to remain competitive. While there’s no danger of pay TV services losing their dominant place in the industry just yet, the rapid growth of ITPV and over-the-top services is not something that pay TV operators can ignore.

Consumers are getting more demanding, and with increasing innovation from public service broadcasters and smart TV manufacturers, the pay TV operators will need to keep up with these trends.  Many pay TV operators are in a good place to do this, as we see in the UK with both Sky and Virgin launching major new features this year. Predictions that cable TV operators face growing pressure from IPTV mean that some operators may need to innovate more than others, though. Whether they are able to do that well enough remains to be seen.

Real time second screen viewing analysis arrives

We’ve been saying it for some time now but it seems that the popularity of second screen viewing is now so popular that media companies and brands now want to measure its relationship with other services. This week Twitter and ratings company Nielson announced a partnership which will monitor the amount of social media activity directly related to content being broadcast on the main screen.

It’s hoped the new tool will allow networks and advertisers to access real-time metrics for understanding TV audiences and social activity. With tablets set to be the number one present this Christmas, the entire tablet market is expected to shoot up 112% compared to last year. It means more people will have a screen sitting on their lap whilst settling down to watch their favourite shows, leading to more interaction with the content they will be watching.

With this trend now clearly established, the digital TV market must adapt to changing viewing behaviour to ensure it meets consumers’ needs. The link between social media and TV viewing highlights the benefits of linking tablets and smartphones directly to TV devices to provide relevant information based on what the consumer is watching.  

Twitter spikes demonstrate links between TV and social media

After a year of sport which saw the Olympics come to the UK, a Brit win a tennis major,  Chelsea win the European Champions League and a Briton claim cycling’s Yellow Jersey Twitter has revealed that seven of the top ten trending stories in 2012 were related to sport.

As the nation was glued to their screens by a compelling year of sport, 2012 also became the year when viewers truly interacted with the content they were witnessing. At one point, fans were tweeting so much while watching a sports event it even impacted the coverage carried by the BBC.

For the connected TV market, 2012 has shown the potential for companion device applications. It’s something we’ve believed in for a long time, and that we’ve continued to develop in our own product range by adding new features such as Twitter integration to ANT Galio Move. New viewing behaviour is driving the development of new TV applications that will enhance the overall experience, which can only be good news for consumers.

Would Twitter be 'poorer' without TV?

Twitter’s sales director, Bruce Daisely, recently said that Twitter would be “poorer” without TV.  Up to sixty per cent of Twitter users in the UK use it while watching TV, with 40% of peak-time twitter use being related to TV. These figures reinforce the view that social media can coexist with TV and add value to it.  Mr. Daisley is right to say that Twitter complements TV, rather than competes with it, but his claim that Twitter has become an EPG is a little far-fetched.  While Twitter may be good at spreading word-of-mouth recommendations about certain shows, this is very different to the social media network actually acting as an EPG.

Despite that, there is a point to be made here, and it’s one I’ve made on this blog before: while content is still king, finding the right content is becoming more difficult as the number of channels and sources of media grow. Traditional recommendation engines can only help this to a limited degree, because they are typically designed to cope with the viewing habits of one individual and not a household of people with different tastes and demographics.

Social media services like Twitter offer the potential to give real-time recommendations from a group of people that you trust, although there are still limitations to this: of the people in your Twitter feed, how many do you really care about in terms of their TV-watching habits? There are ways of addressing this by having circles of friends, in the way that Google+ does, but the current social media services don’t really handle this well.  There is potential here, but that potential hasn’t been realised yet.

Smartphone growth provides Connected TV and second screen opportunities

Nearly half of the UK now owns a smartphone. What’s interesting about the smartphone adoption rate is the pace at which it has accelerated (31 per cent in 2012). An increasing number of us are using these devices to access online content and we’re using them more often. This increase also represents an opportunity for the Connected TV market.

One of the longstanding criticisms of the Connected TV market is that these devices are often purchased and then not used to their fullest extent. Connection rates of TVs are slowly increasing although this remains an industry challenge, better consumer awareness, improved OTT content and better user interfaces are all needed. The growth of the smartphone market also presents opportunities for the Connected TV market; second screen applications can significantly enhance the Connected TV experience.

Touchscreen Smartphones are ideal for searching TV listings, scheduling recordings and managing the main TV without disrupting what’s being viewed. Live and recorded content can also be streamed to these devices as we’ve shown with our own ANT Galio Move.  

At this year’s IBC we demonstrated a range of new ANT Galio Move features that enable consumers to interact with social media and access additional associated online content such as iTunes, YouTube and Wikipedia based on what the consumer is watching. As smartphone and tablet adoption rates continue to grow so does the second screen opportunity for the connected TV Market.

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!