Liberty Global unveiled its Horizon box In September, and other operators, from Virgin Media, Bouygues and Belgacom to VimpelCom in Russia and SureWest in the US, also recently expanded their service offerings with concepts such as ‘connected television’ and ‘second screen’. TV manufacturers LG and Samsung, as well as set-top box maker Pace, have come out with connected TV systems. Pace, one of the largest STB makers, stood a long time on the sidelines but has now updated its portfolio, which it can use to support operators in their battle against TV manufacturers.
It is clear: operators are looking for innovative services and are being helped by parties such as Pace, but they are in finding fresh competition from TV manufacturers. And then there are the big internet companies. It is quiet around Yahoo (before the storm?), while Google is set to soon come with a new version of its existing Google TV 2.0 software product. Google is also not standing still on the content side. The company is looking to develop its own TV channel on YouTube; it is in talks with Miramax over film rights and the UK will soon see the launch of the YouTube.com/Movies site, where people can rent (stream) films. Meanwhile, new versions of Android (Froyo, Honeycomb) are finding their way to connected devices.
Microsoft recently did good business by positioning the Xbox 360 as the centre of its new TV/video services. The Xbox Live service, available in 35 countries, is crucial because it provides the necessary broadband facilities. The company knew to win a long list of content partners and by the end of the year, the Xbox will offer access to content in more than 20 countries, from several dozen parties. Distribution partners have also reported to Microsoft: Verizon and Comcast. Altogether, more than 40 partners have come forward in various categories, including:
- Operators: AT&T, Verizon, Comcast, Telus, BSkyB, Canal+, Telefónica, Televisa, VimpelCom, Vodafone Portugal;
- Broadcasters en cable channels: ESPN, HBO Go, Syfy, BBC, Channel 4, Channel 5, RTVE, Mediaset, ZDF;
- Internet companies: YouTube, Facebook, Dailymotion, Twitter;
- VOD providers: Lovefilm, CinemaNow (Best Buy).
Microsoft offers not only its games console, but also its accompanying IPTV software, including the Mediaroom IPTV platform for IPTV operators, Skype, search engine Bing and Kinect for gesture command. But above all that, the company offers content. The cooperation with Verizon goes farthest, because it gives not only access to (the US part of) content, but also to linear TV via the box,with the device acting as an STB replacement. Comcast is also very active and will soon offer its VOD service nationwide in the US, also outside its own footprint.
In short, Microsoft offers operators a complete solution, with everything that goes with it, including content. In this way, the company has placed itself as a potential partner for operators, which together with Microsoft will be better able to defend themselves against TV manufacturers in the ‘connected TV’ market. Yahoo has positioned itself so far as the partner for TV manufacturers. In this sense, Google is a bit mixed up because it has a single TV partner (Sony) and a single operator partner (Dish). The company is actually not always seen in a positive light by operators because it could reduce them to the role of "dumb pipes." In terms of content, Microsoft has now passed Google.
There can be no real talk of a clear winner on the connected TV market. Operators will remain strongly connected to their existing customer relationships. Parties such as Pace and now Microsoft are helping here. Some TV manufacturers are moving on the strength of their brand name and Yahoo is looking to the wholesale market with TV makers as customers. Microsoft is putting its trust in the Xbox, which has yielded a host of partners. And now Google, Apple and Amazon are set to bring something new to the market.
