Event: Next steps for Connected TV

written by: Richard Kastelein

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The Connected TV Summit starts next Wednesday and will provide the most important update of the year for what the key stakeholders in this new market – CE manufacturers, Pay TV operators, broadcasters and online content owners – are thinking. We predict that from the CE industry, major themes are going to be more cooperation with traditional platform operators, who can harness connected TVs to introduce multi-room TV with minimal expense, and the advent of multi-screen Connected TV, where CE vendors look to make their connected TV services available on tablets that can sync with the main connected TV.

Multi-screen Connected TV is a natural evolution given that leading Pay TV operators want to create a unified and integrated multi-screen offer that covers all screens in their homes. It also increases pressure on any Pay TV operators who are not moving quickly towards a multi-screen offering.

For the Pay TV world, this is the year of the big fight back. Nobody really expected major content aggregators, with millions of subscribers, to let someone else serenade their customers with interesting premium content additions, niche long-tail offers that appeal to important minority consumer groups, enjoyable apps and enhanced content discovery without offering an alternative. Now they are.

Putting unified multi-screen TV services aside, which are an important way to dampen the temptations of Connected TV anyway, and focusing on the main television set, the plan seems to be to open up the walled garden to at least some complementary OTT content, provide great new User Interfaces with neat apps of their own, and make it much easier to find content and communicate with friends in relation to that content (social TV). Next-generation TV platforms, based on completely new middleware/software or at least new UIs, are already rolling out.

The enduring impact of Connected TV could be the way it changes the way all television is eventually distributed. We are probably at the start of a very long migration towards all video becoming ‘OTT’ video (Internet delivered), albeit with that Internet delivery becoming more heavily managed. Many commentators expect some Pay TV pioneers to ‘cap-and-grow’ their on-demand services, keeping the existing managed network offer but starting to expand the long-tail (at least) using Internet delivery technologies – which means adaptive bit rate streaming and CDN type infrastructure. Connected TV devices make this migration possible because for the first time, Internet video is reaching people where they most want it – on the main TV.

Related to this, another big question we like to focus on is whether Connected TV is a replacement for ‘classic’ (managed closed network) IPTV. Telstra in Australia has skipped classic IPTV and offers its video services OTT to connected TV devices and TalkTalk said last year it was no longer actively marketing full IPTV and was throwing its weight into the UK’s YouView hybrid broadcast broadband (HBB) platform. Yet for Telecom Italia it is very much the case of Connected TV (via the Cubovision offer) complementing IPTV. We think the conference will provide some more clues as to where telcos go next.

For the broadcasters, Connected TV is a gift. In the traditional TV world they have to keep running faster to stand still. They had to find the additional spectrum and production budgets to simulcast HD alongside standard-definition, and many are fighting to avoid having to simulcast 3D on top of that by ensuring 2D/3D production/transmission can be integrated.

For years, major channel owners lost their pre-eminence and became sub-brands inside the Pay TV platforms, although far-sighted broadcasters fought back on the Internet. Now the broadcast industry can strengthen its position with its own HBB platform brands (in cooperation with other broadcasters where they are allowed) and use next-generation interactive TV and catch-up TV to engage viewers for longer. This is a chance to become innovators, with consumers going to channel owners for additional information and apps where once they generally just watched.

For the broadcast industry and for the interactive TV and apps communities, the question of standards is starting to become more pressing now. The mass-market awaits and the time for experimentation is drawing to a close. We expect a good discussion about whether the broadcast industry can compete with the CE world if they adopt multiple national standards, and whether the industry is willing to make the compromises needed to enable a ‘write once, use everywhere’ environment for interactive TV apps development.

One quick statistic to set the scene. According to research firm Parks Associates, nearly 350 million Internet-connectable TV devices will be sold in 2015. There will be plenty more forecasts and also important feedback from existing usage of connected TV devices at the conference next week. You can find out more here.

And don’t forget the Connected TV Awards 2011, which are being presented at the close of Day One. From 80 entries, three companies have been selected to receive an ‘Outstanding Connected TV Service’ award and three will be presented with an ‘Outstanding Technology Innovation’ award. One of these has been chosen to receive the ‘Outstanding Achievement in Connected TV Award 2011’. More awards details here.

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