Tag Archive for 'OTT'

Farncombe: Pay-TV shift to two-way networks will mean move away from smartcard-based conditional access systems

Farncombe Consulting Group, which hosts this blog, has just published a new White Paper on how the Digital TV Conditional Access sector will be affected by the shift towards broadband-enabled pay-TV networks.

Written by Farncombe’s own highly-experienced group of in-house video security experts, the White Paper assesses the pros and cons of using smartcard-based and cardless systems in different types of pay-TV set-up, ranging from traditional one-way broadcast TV operations to broadband-enabled two-way IP and connected home networks.

The paper concludes that while smartcards continue to remain the solution of choice for protecting one-way systems, cardless-based solutions are preferable for protecting video content in IPTV, ‘over-the-top’ and home networking contexts.

For one-way networks migrating to broadband connectivity, meanwhile, both types of system have their advantages, depending largely on the availability, reliability and quality of the broadband network.

The White Paper’s authors go on to suggest that since the traditional one-way pay-TV world is slowly but surely changing into a two-way one, it is likely that there will be a gradual shift away from smartcard-based systems in favour of cardless ones - led by the digital cable sector.

A PDF of the new White Paper can be obtained from Farncombe by clicking here and filling in a simple registration form.

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

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.

The trick-mode trigger: a new paradigm for TV advertising in an on-demand world?

As the traditional TV world migrates to an on-demand environment (‘over-the-top’ or otherwise), the evidence so far has been that where viewers are given the opportunity to, they will generally fast-forward through the ad breaks.

Various strategems have been adopted by broadcasters and advertisers to get round consumer resistance to interruptive advertising, generally involving some sort of implied bargain. For instance, the benefit of being able to make up for having missed a popular programme by viewing it in ‘catch-up’ mode is commonly set against the fact that the ads in the catch-up stream can’t be ‘zapped’. Similarly, if you want to watch an on-demand movie without any commercial breaks interrupting the action, it’s often impossible to skip the ‘pre-roll’ ad welded onto the front of it.

Well, on the evidence of three separate exhibitors at last week’s IPTV World Forum, a new paradigm is evolving. It hasn’t got a name, yet, so let’s invent one: ‘trick-mode triggers’ (you heard it here first).

The idea is to exploit the fact that on-demand viewing allows viewers to interrupt their own viewing by using VCR-like ‘trick modes’ such as pause, rewind and (yes) fast-forward - the very feature causing the zapping issue in the first place.

Connected TV has already mentioned the use of the ‘pause’ function in ANT’s Amazon application, which triggers a window showing ‘contextual’ DVDs or books available to purchase at the Amazon store. However, NDS - the private technology firm owned by the Permira Funds and News Corporation - also featured it when demonstrating the latest version of its Infinite TV technology, which Connected TV reviewed after its first showing at last year’s IBC trade-fair in Amsterdam.

Geoff Todd, NDS’s director of sales and new business initiatives, referred to it as ‘on-pause’ advertising. In the example he demonstrated, pressing ‘pause’ during the replay of a cookery programme created a Flash-based wrapper around the video advertising a relevant ingredient. In fact, this type of trick-mode related feature has been implicit in Infinite TV’s targeted advertising platform from inception, although the capability wasn’t emphasised at IBC.

The platform allows the effectiveness of different types of targeted ads (e.g. ‘pre-roll’ versus ‘on-pause’) to be compared, and their subsequent application refined. “[Infinite TV tells you] which kinds of ads have been consumed,” said Todd. “If trick-mode works better, you can pull the pre-roll or mid-roll ad.”

The third example at the show came from set-top box manufacturer ADB, which was showing Stream Group’s Solocoo online TV portal being accessed from one of its hybrid DTT-IP hybrid models.

In the demonstration shown, the trigger wasn’t the result of trick-mode use, but instead arose when the viewer decided to use the familiar left-and-right arrows on the remote control to check what was currently playing on adjacent channels, using the mini-EPG at the bottom of the screen display. At this point, the mini-EPG displayed a YouTube icon, which when the red button was pressed, offered a choice of relevant YouTube video-clips to play back. The relevant factor, however, is that the call-to-action was displayed when the viewer chose to interrupt their own viewing.

As we have noted here before, interruptive advertising may be something of an aberration - one reason viewers dispense with it when they can. But placing advertising or other calls-to-action in the breaks viewers create for themselves as part of their on-demand viewing experience could well prove to be much more acceptable - particularly when the trigger invokes contextual promotional material.

(NB NDS is a sponsor of the Connected TV blog)

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

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.

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

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.