Much of the innovation in the telecom sector at the moment is taking place in the TV domain. Smart TV, Hybrid TV, Connected TV, IPTV 2.0, next-generation TV – whatever you call it, it’s an important development that, as often occurs in the sector, presents opportunities as well as risks for operators. How to handle new services? Leave it to 'over-the-top' players, such as Skype, Google, Netflix and Lovefilm, or join in themselves?
To make it even more difficult, operators are seeing in this already complex market a whole new type of player: the CE (consumer electronics) manufacturers, such as Philips, Samsung, Sony, Panasonic and LG. They already have a direct-to-consumer strategy, which significantly shortens the TV value chain. They buy content in themselves, putting the aggregators (broadcasters, VoD providers) and operators on the sidelines. They only need retail outlets to sell their equipment to the public.
There are already numerous players in the Connected TV area for some years. Here is some more recent news in this area:
o Roku: this American producer of a set-top box that delivers web content and VoD over broadband to the TV has made an iPad app that functions as a remote control.
o Elgato: the new Tivizen is a mobile TV tuner for the computer or tablet that makes it possible to receive free-to-air channels via digital terrestrial TV.
o Sonos: this maker of equipment from wireless multi-room audio streaming now supports AirPlay (Apple). It takes little imagination for this functionality to be expanded to video, such as Signo offers with the Pogoplug Video.
o Warpia launched equipment for PC to TV streaming, based on a USB dongle and receiver.
One can ask how successful they will be. It’s likely only a small group of users who will buy such equipment. Rights holders allow them leeway as the impact is small. Only when the big players offer this kind of functionality (such as recently Time Warner Cable in the US) do they kick up a fuss and claim their distribution deals don’t cover streaming video to other devices: content destined for the TV cannot be simply passed on to an iPad, and the same is true for web content delivered to the TV.
More impact can be expected from the big CE manufacturers, which with their direct-to-consumer strategies form a threat for operators. Some more recent developments:
o Apple: Rumours of a TV, with associated streaming video service, are getting increasingly louder.
o Sony: has a new line of connected Bravia TVs, Blu-ray players and a streaming player in the US. These offer access to, among others, Netflix, the Yahoo! Connected TV Store (around 100 apps for access to for example CBS, Showtime, Yahoo! Finance, Facebook and Twitter), Hulu Plus and Crackle (free films and TV series).
o Samsung: working on the integration of smart TVs and smartphones, notably with the new Galaxy S II.
o Lenovo: rumoured to be planning its own smart TV.
o Microsoft: reportedly working on content deals for the Xbox 360.
In short, operators have some difficult choices to make. How can they best take advantage of the opportunities Connected TV offers? And how should they deal with OTT players and CE manufacturers? Cooperation is clearly the best strategy. It’s still an immature market, where the dust is far from settled.
Telecompaper is organising on 27 April the Connected TV conference in Utrecht, the Netherlands.
