Television heads over the top

Yet more evidence consumers are driving change in the way broadcasting works comes in the latest Infonetics research reports that claim Pay TV incumbents are losing subscribers to new IPTV services in Brazil, Russia and Europe, even while Apple now offers the world’s most popular streaming TV solution, Apple TV.

Channel surfing

“We continue to see strong growth among telco IPTV upstarts, like Rostelecom in Russia, GVT in Brazil, KPN in the Netherlands and providers in Eastern Europe where competition for new pay TV subscribers is particularly fierce,” said Infonetics analyst, Jeff Heynen.

Transition in consumer choices for TV access provision isn’t entirely unexpected. Carriers and OTT service providers (iTunes, Lovefilm, Netflix, Hulu) are teaming up to provide mobile television offerings, leveraging their own mobile and existing fixed line broadband networks as they do. Consumers are migrating to these services in greater numbers as word of mouth concerning their relative affordability in contrast to monthly Pay TV contracts proliferates.

That’s a situation that favours technologists, who hope to take a deeper dig at the TV markets. Samsung’s recent Boxee acquisition; Google’s continued attempts to woo content producers to support the fragmented Android platform and Apple’s successful Apple TV product confirm the depth of interest with which Silicon Valley regards the sector. Indeed, Apple CEO Tim Cook recently described television as “an area of great interest to us,” confessing his firm has a “vision” for TV.

Incumbents in this space are protected from any wholesale Valley attack by their existing relationships with content providers and their solid relationships with advertisers. The strength of these advantages suggest strong new business models and solid partnerships between new entrants and existing Pay TV incumbents will be required in order to secure the industry while delivering the kind of convenience 21st century users demand at a price they can afford.

Apple seems to be engaged in developing such partnerships. It’s recent moves to add channel access apps to existing Apple TV deployments prove it continues talks with content providers.

More recently, the company is said to have been in discussion with cable and satellite networks in order to introduce ad-skipping technologies in exchange for a fee, implying ad-free premium television access models are part of its future offering via iTunes. In conjunction with the company’s existing a la carte TV and movie download services, paid access to ad-free television could form part of the future business plan with the iPhone company is offering to sweeten the deal.

Where’s the money?

Delivering a viable and sustainable business plan with which to support incumbents in the space is essential to success. A recent Needham & Co report warned that unbundling would cost around 50% of total TV ecosystem revenue.

Apple’s advantage in its talks with the TV industry is the scale with which existing Apple TV boxes are already deployed. Frost & Sullivan report the device already accounts for 56 percent of all streaming devices sold worldwide, with Roku (21.5%) and TiVo (6.5%) the other dominant brands. While these figures don’t include games consoles, which are the devices most frequently used to stream online video content to TV, they do show those most likely to merit a seat at the meeting table.

“The television industry fundamentally has a subsidised business model that gives everyone a set top box for free or for ten dollars a month,” noted Apple’s Steve Jobs in 2008. “That pretty much kills the opportunity for innovation, because no one is willing to buy another box….the TV is going to lose until there is a viable go to market strategy.”

The next piece in the jigsaw will be the codecs used to transport video data. These are improving. Operators currently use Apple’s HTTP Live Streaming codecs to move OTT video, with HTML 5 also a top choice, according to Infonetics.

Analyst Jeff Heynen says:

“We expect HTML5 adoption to grow, especially if the W3C adds new security features (a top concern among content owners), as it can scale quickly across multiple platforms and has already gained the support of Apple, Google, Samsung, Microsoft, Netflix, Amazon, Facebook and LinkedIn.”

“In our talks with carriers, we’re also seeing growing interest in MPEG-DASH, a new standard for video codecs. Backed by companies like Microsoft, Netflix and Adobe, it’s gaining traction in North America and Europe, and we expect it to get more support from vendors in coming years.”

There’s a chance those who currently lack fixed line broadband connections will be able to join the fray in future. The ITU this week approved a new broadband standard it believes will enable delivery of fibre-based performance over copper wires. G.fast. can deliver up to 1Gbps performance at up to 250 metres, the ITU says.

Advertisements

Tags: , , , , , , , , , ,

One response to “Television heads over the top”

  1. google plus age limit says :

    I go to see everyday some web pages and blogs to read posts, but this weblog presents feature
    based content.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: