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.

Streamed mobile TV users set to soar

This week, Juniper Research released a survey highlighting the increasing popularity of streaming TV services directly to smartphone devices. Juniper predicts that the number of users will rise to 240m by 2014. The report found that this dramatic growth would arise from a combination of both increased smartphone penetration and, critically, an increase in the usage of live and on-demand Internet TV and IPTV services.

Of course, TV content is no longer confined to a TV screen in the home, and mobile TV adds another exciting dimension to consumers’ viewing experience. Mobile TV allows viewers to access real-time content whenever and wherever they want, meaning consumers can watch events, such as sports or breaking news stories, as they happen, and interact with that content as they watch. As the likes of Sky invest more in mobile access, the TV industry will be encouraged to see the rising mobile TV usage figures. 

Content providers would however, be wise to ensure that in offering consumers a multiscreen experience, each of the devices used are able to interact with each other. At present, devices are all too often treated independently, with mobile devices receiving cut-down services via the cloud. Content providers and device manufacturers need to work together to enable companion devices to ‘connect’ to TVs and STB’s to achieve a fully converged user experience.

The net neutrality debate, with a difference

In a twist on traditional discussions about bandwidth use, Korea Telecom recently restricted internet access for Samsung connected TVs. This isn’t a new discussion: the net neutrality debates in the US over the last couple of years are covering many of the same issues. However, what’s different this time is that it’s about devices rather than applications.

In the US, the discussion was largely about how VOD services such as Netflix were saturating the networks of many large ISPs – Netflix and YouTube between them account for over 40% of peak bandwidth use in the US according to a report last year form Sandvine. In Korea, it’s the devices running those services that are drawing the ire of the telcos. It may not seem like much of a difference, but this is a core shift in the discussion.

Traditionally, PCs have been the main platform for these services, but the action by Korea Telecom has shown that consumer devices are gaining enough market share for telcos to be worried. And it’s the type of IP traffic generated by these devices that’s causing this worry.

Unlike a PC, TVs and consumer devices are almost exclusively used for streaming video and audio. Use of VOD services is growing at a phenomenal rate, and so as consumer devices gain market share they will probably be one of the fastest-growing sources of IP traffic worldwide. The Sandvine report showed that PCs were only accounting for 45% of video traffic by volume in the US, and this is why the focus of the net neutrality debate has started to shift from services to devices.

It’s still not clear how this will play out – bringing the device manufacturers into the net neutrality debate can only complicate it, especially when (like Korea Telecom) a telco has their own IPTV service that could be seen to compete with the OTT services offered by smart TVs. One thing is sure – the issue needs resolving. ISPs and telcos need to find a business model that can cope with the changing way the Internet is being used.

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Update - 3 March 2012

Following up on this post, we see that it’s not just Korean ISPs that are suffering from traffic problems caused by streaming video. Be Broadband, a UK ISP owned by O2, admitted yesterday that demand for iPlayer saturated its available bandwidth and left many users struggling to access web sites and iPlayer content.

What’s different about this case is that the problem wasn’t caused by issues in Be’s network itself: in this case, the culprit was Be’s link to the Akamai content distribution network. The Akamai CDN is intended to accelerate delivery of web content belonging to its partners by transparently mirroring web sites on its own worldwide network of servers and intelligently routing requests for that content. So that end-users access content from servers that are closest to them, rather than always having to access the original version of the content.

The BBC uses Akamai to deliver iPlayer content in an attempt to avoid bandwidth bottlenecks – in this case, the bottleneck was Be’s connection to Akamai, which became saturated when there was heavy demand for iPlayer.

Be have partially resolved the issue by working with other network providers to act as peers for connecting to Akamai, but this is not a permanent solution. With a full fix not due until the end of April, Be customers may be looking at slow access to iPlayer for several weeks.

Connected TV goes global with new industry body

This week saw the launch of the Connected TV Marketing Association (CTVMA), a new marketing body for the worldwide connected TV industry. The CTVMA is an international body, which will bring together the equipment manufacturers, operators, advertisers and broadcasters working to develop connected TV content and services.

It’s a welcome move in the promotion of internet ready TV sets and STBs, and hopefully a significant step towards helping the connected TV market reach its full potential.

With a fifth of TV sets to be connected in five years and the digital switchover upon us, as an industry we need to embark on a programme of significant consumer education in order to boost market performance. Consumers need to have the most up to date technology and be made aware of the innovative services that are actually available to them.

We’ve already seen that marketers are missing a trick by leaving IPTV devices out of their marketing campaigns. It’s a catch 22. As marketers wait for consumers to demonstrate interaction with brands on TV sets, without providing the content, consumers have nothing to interact with. As the CTVMA gets to work, we look forward to seeing the next generation of broadcast content and marketing campaigns across all devices in the connected home.

IAB identifies missed opportunity as marketers find themselves in chicken and egg situation with IPTV

Research from the Internet Advertising Bureau (IAB) has found that a massive 88% of marketers don’t have an IPTV strategy. And, a third of those surveyed, felt that only a budget of £50,000 should be allocated to IPTV campaigns. But with global sales of IPTV devices set to reach 100 million by 2014, this is an opportunity marketers can’t afford to miss.

Connected TV and marketing campaigns is a chicken and egg situation. Marketers are waiting for consumers to demonstrate interaction with brands on TV sets, but without the content, consumers have nothing to interact with. However, consumers are slowly interacting. Take popular TV shows like X-Factor where viewers can vote from their sofas via the red button, interacting with content on the TV like never before.

Marketers have an opportunity to capitalise on this new medium as an innovative way to connect with their audiences. It’s all about social interaction now and as the home becomes more connected, consumers are looking for a complete multiscreen viewing experience. Marketer’s can’t afford to miss a device out of the loop.

The intelligence behind the ‘pane of glass’ that is a TV set, is phenomenal. The next generation of STBs are able to deliver interactive, personalised services enabling brands to interact with consumers whilst they watch their favourite TV shows. Marketers have an opportunity to work with STB device manufacturers to develop killer TV apps as well as mobile and tablet apps to deliver a complete marketing strategy.

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.

IP&TV World Forum 2011

IP&TV World Forum has been and gone again. As usual I spent some time at the show catching up on what’s new. It seems to be a year of consolidation for the industry: most of what I saw was more polished versions of products or demos that I had already seen. This isn’t a bad thing, in fact, it signals a positive shift in the industry.

In my experience, this kind of consolidation tends to indicate a move from “technology push” to “product pull” – shifting from a set of technologies looking for a problem to solve to an industry that has become more consumer-focused, concentrating on delivering products that customers really want. This is a sign of growing maturity in the market, and given the growth in connected TV services and over-the-top services marks an important step towards the mainstream for both.

HbbTV and iPlayer were well-represented at this year’s show, and these really demonstrate the two trends that we’re seeing here at ANT. The uptake of HbbTV as a standard solution for web-based TV services, and the spread of iPlayer as a service that is hugely popular with consumers, could indicate a turning point for the IPTV industry.

BBC Trust Approves Project Canvas

This week the BBC Trust gave final approval for the BBC to participate in Project Canvas.

Project Canvas aims to build an internet-connected TV platform, which will allow users to access on demand content as well as traditional broadcast content from the likes of ITV, Channel 4 and Five. It has also attracted support from ISPs BT and Talk Talk as well as communications infrastructure provider, Arqiva. It has been suggested that it may be marketed as ‘YouView’.

One of the main conditions of the BBC’s participation in the project is that the consortium must publish its ‘open’ technical specification within the next 20 days. Further details of the conditions can be found here.

Pay-TV market share movement

The number of IPTV subscribers in Europe is set to rise by 92% in next five years, according to a report from Analysys Mason. This will more than double the current number of subscribers from 15.4 million to 29.6 million.

These results show that IPTV is set to grow at a fast rate and is shaping up to take a 19% share in the pay-TV market by 2015. Analysys Mason is also expecting to see strong growth with pay-DTT (digital terrestrial television) subscriptions owning up to 11% of the pay-TV market in the next five years.

As these platforms display strong growth, there will of course be platforms that decline in market share, as the report states there will "inevitably be losers as well as winners during the next five years". Cable platforms will continue to dominate, although this is expected to decline to 41% and Satellite TV services are expected to lose out on their share by a 1% decline.

HD on-demand is in demand

Cable and telco IPTV operators are investing in both video on demand and streaming content server capacity in order to support on-demand HD content, according to a recent report from Infonetics. This highlights the increasing importance of ‘must have’ content for both Cable and IPTV operators.

On-demand content is enjoying huge popularity in the UK with the availability of platforms such as BBC iPlayer and 4OD. Between 2008 and 2009 world wide video on demand and streaming content server revenue increased by 60 per cent and is expected to continue to grow over the next year.

IPTV sees its strongest year of growth yet

A recent report by Point Topic has shown that last year IPTV had its strongest year of growth to date, with 10.8mn new users globally subscribing to IPTV services.

Strong growth in the Asia-Pacific region is now thought to account for 32% of the global IPTV market. But the fastest growth was seen in the Americas with 58% more subscribers this year. And, although the Middle East & Africa have only recently adopted IPTV, the number of subscribers shows a significant growth of 11.8% more subscribers in 2009 than 2008.

Here in Europe we are also seeing a keen uptake of IPTV services. France, Germany, Spain, Italy and Russia are all in the top ten countries for IPTV adoption in 2009. Which Point Topic states is down to product bundles and keen competition.

We are pleased to be seeing the number of IPTV subscribers grow year on year, and look forward to the product innovations that will drive continuous growth in 2010.

IPTV World Forum comes to a close

The last few days have provided us with a great opportunity to chat with others in the industry.

Speaking to Graham Pomphrey from Digital TV Europe this afternoon, an interesting point was raised about how exhibitors have been more realistic in their approach this year, moving from technologies that look attractive but will take a while before the market is ready for them to concentrating on showcasing technologies that are soon to be released.

This is something we were excited to do with HbbTV this year. As HbbTV has now gone to market in Germany and is used by consumers, we were able to showcase a live demonstration in the UK.

As IPTV World Forum 2010 has come to a close we look forward to seeing what technology innovations IPTV World Forum 2011 will bring.

Ben Lawrence

Marketing Communications Manager

IPTV services set to reach 70 million homes by 2014

The latest subscriber forecast for the IPTV market has been released by Informa Telecoms & Media group. It predicts that 70 million homes globally will be receiving IPTV services by the end of 2014. Whilst, this is only five per cent of homes with TV sets, this is a massive increase on the 26 million subscribers recorded at the close of 2009.

28 million of the 70 million is expected to occur in Asia-Pacific which is forecasted to become the largest region in terms of IPTV subscribers by 2011.

For more information click here.

HbbTV, a true hybrid solution

If you have a spare few minutes and are interested in learning a little more about the HbbTV initiative there’s an article in the latest edition of Cable & Satellite International that’s certainly worth a read. The article is written by Steve Morris, Systems Architect here at ANT who has contributed extensively to MHP, Open IPTV Forum and HbbTV. Steve is also the author of “Interactive TV Standards: A Guide to MHP, OCAP and JavaTV.

HbbTV Marches On

IRT has just announced that it hosted the first HbbTV interoperability workshop last week and that version 1.1.1 of the specification has been submitted to ETSI.

Representatives from ANT attended the event and have commented that it was extremely successful. Live satellite feeds containing HbbTV signals, plus test feeds generated by IRT provided the framework for interoperability testing against 17 different applications.

The speed at which HbbTV has grown is great to see, especially as we have seen strong interest in our own ANT Galio HbbTV Platform. The submission of the specification into ETSI is another important milestone and demonstrates how well the group is working together.

Wikipedia on the TV

Vudu has announced that it has integrated Wikipedia into its service, meaning movie buffs can select the Wikipedia item from a menu to find out what the website has to say about the movie. They can then navigate through the website as they would on a computer.

It’s another example of how digital TV is being used to aggregate content from a variety of sources. OTT widgets and applications are paving the way for fully integrated TV services delivered over broadcast and broadband.

As more digital media content becomes available to consumers the user interface and user experience become increasingly important, understanding the different ways in which a consumer interacts with a PC and a TV for example is essential.

Sky moves into the mobile market

Following the recent launch of Sky Player for the Xbox, BSKYB has also been busy targeting the mobile market with the launch of the Sky Mobile TV service. The app is available on both the iPhone and the iPod Touch and will allow users to stream live TV through a wifi connection.

Sky says there has been 2 million downloads to date, so the service is proving to be popular. So far they have targeted live events with a selection of news and sports channels available. Will this open the way for further mobile TV apps?

It will be interesting to see what the long term impact of this service will be on SKY’s traditional subscription model and if the new service will drive new subscribers to Sky or will current customers opt for the cheaper Mobile TV subscription instead?

Giving IPTV the X factor

This series of the X Factor has generated a huge buzz online. Facebook launched an app for each finalist, whilst Twitter enables users to add a ribbon to their profile to show their support for their favourite finalist.

ITV has been busy too, launching a dedicated website to aggregate the show’s content, such as photos, videos and comments about each performer. However, much of the progress to combine the online buzz with the TV programme has been focused on tapping into people that tune into their favourite programmes via the web.

The question is, when will broadcasters bring social media to the TV screen? The technology is already in place. IPTV can facilitate Twitter conversations into live programmes via OTT widgets, which would allow viewers to have conversations and interact with each other.

One concern about hosting online content through the TV is the effect public conversations could have on the brand. If this move is to happen, broadcasters will need to be careful how they publish viewer comments and what filters if any, they put in place.

Whilst the industry debates how to make this a reality, can we now put rest to the claim that watching TV isn’t sociable?

Chatting With Sky Player

After a rocky start, Sky Player is now live on the Xbox 360. Sky Player will enable consumers to use their Xbox live service to access movies, sport and entertainment on demand and stream a selection of channels live.

In addition to live streaming and VoD services, some interesting social features have been added, which allow consumers to interact with their friends using avatars in a virtual living room. When in the room you can text and chat using the Xbox headset in a similar way to what we’ve seen when playing games online using Xbox live.

Such social applications and widgets are set to be popular for both TV viewers and gamers alike. But, with most consumers opting to view VoD services through iDTV’s and set-top boxes, will chat applications struggle to reach the masses through a games console?