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Tag Archive for 'online video'

IMS Research: 65m homes worldwide able to watch Internet video on TV sets last year

May 13, 2009 by Barry Flynn

Some interesting stats and predictions from Texas-based IMS Research in their new study Market Opportunities for Internet Video to the TV.

IMS reckons that an estimated 65 million households worldwide had the capability of viewing Internet video on their television set at the end of 2008, up 134% on 2007. The ‘vast majority’ of these were doing so via a game console or ‘proprietary device’, notes IMS, but expects that to change in the future: “it is expected that households using a PC to deliver Internet video to the TV set via a media centre PC and a media extender (or digital media adapter) will see an 85% CAGR through 2013 reaching nearly 60 million households by that time,” says the research firm.

Shane Walker, research manager and author of the study, puts that down to projected price-falls in Windows Media Centre devices, media centres in general, and extenders, with media centre costs falling by as much as 15% annually during the next five years.

After 2013, however, the story changes, as more advanced Internet TV functionality is delivered by digital TV set-top boxes. This will cause a drop in demand for media extenders, although IMS believes that for one category - media centres connected to the TV via a device other than an extender - demand will continue to grow, and they will slowly replace DVRs.

On the whole, Connected TV thinks these are reasonable scenarios, although perhaps the role of the hybrid, IP-connected set-top box is not accorded enough importance given current developments in Europe and elsewhere. Hybrid DTT STBs should arrive in the UK in quantity next year, and there are already substantial numbers of STBs in the UK with at least theoretical broadband capability - namely the later BSkyB PVRs and current Freesat boxes.

It is true, however, that the notion of offering the full panoply of Internet-based, over-the-top video services to the TV through a set-top box is fraught with practical and technical difficulties, so if IMS is talking about that type of advanced capability (rather than a walled garden that might, for example, only offer one or two services such as the BBC’s iPlayer), a 2013 timeline may not be that unreasonable.

Also, the idea that the TV-connected media centre might eventually replace the PVR in this type of environment is not that implausible. By the time you have added a hard drive, IP capability and home networking features to a set-top box, what you have is pretty close to a PC-derived media centre - so why reinvent the wheel? That is likely to be one of the central battlegrounds between traditional pay-TV operators and the ‘over-the-top’ video providers in the coming years.

Posted in Broadband, Digital Satellite, Digital Terrestrial, Research and TV-over-Internet. 0 Comments

TDG: network-connected video platforms in virtually all broadband homes by 2020

March 17, 2009 by Barry Flynn

A new report from Dallas-based research firm The Diffusion Group (TDG) concludes that it is ‘inevitable’ that by 2020, virtually every broadband-enabled home will have a multitude of network-connected video platforms.

By that date, TDG predicts that the total number of ‘non-portable network-enabled video nodes’ within global homes will reach 3.6 billion.

TDG bases its assertion on its estimates for global broadband penetration, which predict that the number of global broadband households will near 440 million by 2010 and top 1.2 billion by 2030. During that time, the number of broadband-enabled home networks will grow from 150 million in 2010 (34% of broadband homes) to more than 1.0 billion in 2030 (83% of broadband homes).

According to author Dr. Predrag Filipovic, video delivery over the Internet is a primary part of this future. In the short term, Filipovic says these trends will be driven by two major shifts in industry behavior:

  • Consumer electronic vendors will embed Internet support and IP video sub-systems into their mainstream platforms, meaning even average consumers will be buying new CE platforms with native Internet support, and
  • Incumbent TV providers will incorporate walled-garden broadband video applications and services into their Pay TV experience, meaning set-top boxes will be required to support broadband connectivity.

Filipovic also notes that by 2020, more than 1.6 billion households around the world will have access to some form of home video service, with Asia enjoying the most rapid growth. These service additions will in many cases be broadband-based or hybrid in nature. Given these factors, TDG expects the number of ‘non-portable network-enabled video nodes’ within global homes will reach 3.6 billion by 2020 and top five billion by 2030.

What is notable about the report, in Connected TV’s view, is its lengthy time-scale, reflecting a healthy scepticism about how long the IP-related video trends we are currently seeing bubbling to the surface will take to become main-stream.

It is interesting to read it in conjunction with an entirely different piece of UK-based research commissioned by the UK regulator Ofcom last year from consultants Analysys Mason, which has only just been published.

This sought to look at the impact network congestion could have on the ability to provide high-quality video services over the Internet in the UK, and what regulatory measures might be required to alleviate such problems.

Analysys Mason’s most extreme future demand scenario, which assumes that almost all TV is online and on-demand, sees total broadband traffic per household per month in the UK growing from 5.6GBytes to about 260GBytes by 2018. It adds that “the majority of this growth will come from online video services that are streamed directly to the consumer.”

More conservative (and more likely) scenarios put traffic per household per month at around 140GBytes by 2018, but still an eye-watering increase.

Analysys Mason appears to be confident that next-generation access deployment in the UK will keep step with this increase, and does not recommend that Ofcom take any immediate action.

But Connected TV wonders whether this may not be a bit optimistic, given the onward march of HDTV and the likelihood that by 2018 future broadband video homes might well require multiple simultaneous HD streams to different TVs in the home.

Posted in Broadband, IPTV and TV-over-Internet. 1 Comment

Strategy Analytics: TV media browsing demand to rise with Internet video as default TV feature

January 8, 2009 by Barry Flynn

Right on the heels of our post about LG Electronics adding Netflix Watch Instantly capability to its HDTV ranges, comes brand-new research commissioned by Internet TV software company Oregan Networks and semiconductor company Micronas, about consumer expectations of HDTV purchase drivers.

The study was carried out by Strategy Analytics, home of occasional Connected TV blogger David Mercer, so it’s worth taking note of its findings, which relate to the issue of ‘TV media browsing’ via the Internet.

Bearing out what we suggested in our LG/Netflix post, it turns out that the ability to access Video on Demand services without the need for a PC or any other equipment was considered to be the most valuable feature of a TV media browser, for all user segments. The second most valuable feature was considered to be the ability to search the home network for media and content stored on other devices. Ability to access user-generated content such as YouTube videos was ranked third on average overall.

In addition, 87% of respondents said they would select a TV with a media browser (if the option were available) because it would offer them more entertainment choices, while 71% of all respondents said they would prefer a default media browser to be installed.

Another interesting finding (which relates to our post on online video advertising) is that 51% of all respondents would prefer to watch movies for free with advertising. Of the remaining 49%, half (25%) would only pay to watch movies if they were still in theatres (this is pretty much a deal-breaker at present, it should be said - the studios are nowhere near releasing movies for VOD, on the Internet or otherwise, while they’re still showing in cinemas!). The other half (24%) were prepared to pay for movies with no ads.

Finally, the study also investigated key consumer concerns about browsing Internet media on TV, and found that the largest proportion of comments related to the perceived ability to download or stream media at a sufficiently high speed to provide an acceptable quality of audiovisual experience. 17% of respondents also had concerns about how user-friendly the browser would be, while 12% had concerns about the TV being more expensive to fix if it were to break. Only 6% of respondents were concerned how much the television would cost to buy - which is just as well considering LG’s reported $200-300 premium!

Implicit in the use of a term ‘browser’ is the ability to access different services, although the research did find that gated services such as Netflix were amongst those perceived as “adding most value to the regular TV feature set” (others included You Tube and Hulu). Nevertheless, insofar as the study provides evidence about consumer willingness to use their TVs to access Internet media material, it is clear that their enthusiasm relates to an open Internet model, rather than a walled garden. The jury is out on how much adding, say, only Netflix ‘browsing’ capability, would depress these findings.

Posted in Research and TV-over-Internet. 0 Comments

Online video advertising - does it work or doesn’t it?

January 7, 2009 by Barry Flynn

Two sharply differing views about how advertising might help online video take off:

  • Over at VideoNuze, Will Richmond is arguing that JP Morgan’s recently released Internet Investment Guide for 2009 is too pessimistic about the prospects for online video, in part because it underestimates brands’ interest in shifting their ad dollars to the new medium. He concludes: “Far from being the uninteresting medium that the Morgan report depicts, online video has already become a bright spot for many established content providers whose traditional models are under pressure. It is also opening up new opportunities for new ad-supported entrants. And it is threatening to completely up-end the paid part of the market through improvements in “over-the-top” technologies and consumer services.”
  • On the other hand, according to Advanced-Television.com, “a survey of 2,023 people for Deloitte’s Media Democracy report suggests TV advertising is twice as effective as online ads”. Apparently, 84% of consumers said TV ads would influence them to buy a product - against just 45% for online. Indeed, around 64% of respondents said any kind of Internet ad was more intrusive than newspaper ads and 26% said they would be prepared to pay for Web content just to avoid online ads.

Of course, the alleged disadvantage online ads suffer versus the TV-based variety might be outweighed by cost-cutting advertisers seeking more accurately to measure the performance of their adspend. Faced with allocating a million dollars to a conventional broadcast TV campaign with questionable impact instead of a tenth that amount against an online video equivalent with poor conversion rates (but feedback on every view and click), who’s to say today’s hard-pressed media buyer wouldn’t choose the latter over the former?

Posted in TV-over-Internet. 1 Comment

Netflix and LG Electronics link up for ‘broadband HDTVs’: but will a walled-garden approach succeed?

January 6, 2009 by Barry Flynn

HDTV sets made by LG Electronics are to become the latest device to be linked to the Netflix Watch Instantly service (see here for our previous post on the Netflix/Xbox360 tie-up).

What should we make of this?

In fact, LG is not the first TV set manufacturer to have come up with the idea of broadband-enabling its receivers to receive Internet content, so obviating the need for a separate device such as a games console or set-top box. Sony announced a module called the Bravia Internet Video Link at CES in 2007 for streamed video, and both Samsung and Sharp showed Ethernet-enabled receivers at CES a year later.

There are clear advantages to playing back disintermediated OTT services seamlessly on a TV set. Linking a laptop playing back OTT video material to a TV set works, but it is clumsy, depends on having the right connectors, and requires the viewer to control the experience via a keyboard rather than a remote control.

Significantly, the LG deal represents the first time a TV set maker has tied such technologies to an Internet service backed by a substantial amount of relatively high-quality content (although early-release blockbuster films still elude Netflix). According to the press release, Netflix members pay “as little as $8.99 per month for unlimited instant streaming and unlimited DVDs from a catalogue of more than 100,000 DVD titles in more than 200 genres.”

Although LG will embed the Netflix streaming software in some of its TVs, it does not appear to have gone as far as also including an Internet browser. Thus, viewers will have to use the Netflix website to add movies and TV episodes to their individual ‘Instant Queues’ before these appear as options on the TV screen. This is therefore a classic ‘walled garden’ service - no content will be viewable that is not available to the Netflix user base.

There are pros and cons to such an approach : judging by the plaudits the Netflix Watch Instantly service has garnered so far, its progressive download model appears to work well, so there is an implied quality of service associated with it. On the other hand, buyers of LG’s ‘broadband HDTVs’ , who are likely to be familiar with what the OTT universe has to offer on a PC or laptop (Netflix is an online service, after all) may wonder why that same experience is not available on their TV.

The interesting question is whether or not it will be in the TV set manufacturers’ interests to move to a paradigm in which their broadband-enabled TVs will come with an Internet browser enabling their customers to access any video content they like. It is difficult for them to earn any ongoing revenue streams from such a model, whereas they can from a ‘closed’ deal like the LG/Netflix one - through bundling subscriptions with TV set purchases and/or agreeing subscription or pay-per-view revenue splits.

Of course, this should make a ‘proprietary’ TV set less expensive rather than more, since such revenues can subsidise the cost. Surprising, then, to see reports that the LG broadband HDTVs are going to cost an extra $200-300 - especially since, on Connected TV’s reckoning, the bill of materials for the upgrade should only add a few tens of dollars to the price.

Posted in TV-over-Internet. 2 Comments