Your.TV is planning to launch by the end of 2010 digital TV over broadband, an 'over-the-top' service. The plan to resell analogue cable TV was dropped due to the high wholesale prices, and the Dutch start-up is now choosing a new strategy. The OTT market is accelerating, with upcoming launches such as Apple TV (reportedly to be known as iTV) and Google TV to start in the autumn in the US. Furthermore, it's a complex segment, where the consequences for existing providers are far from clear yet. Opportunities and threats look to go hand in hand (see our Research Briefs on OTT and connected TV).
We welcome heartily a new player on the Dutch TV market, but some skepticism is appropriate. The opportunities depend on various issues, but especially three: technology, content and distribution.
For the technology, Your.TV is choosing a relatively simple option. It's using existing didigtal channels, rather than a variety of internet and interactive services. That reduces the chance of failure, but at the same time suggests the barrier for entry may be low. The question is whether Your.TV has unique technology and how long (in terms of months) of a jump it has on competing developers. Many manufacturers of the new generation of set-top boxes are facing technical problems, on issues such as plug & play, image quality and especially sensitivity to disruptions. In may cases, the boxes don't work, or are very slow, and experience problems resulting in the need to spend several minutes resetting the device. Your.TV is not using an Intel or Broadcom processor, which suggests some caution for the technology. Demos and trials will need to show how robust Your.TV's box is.
The second potential obstacle is content. 'Content is king', so much depends on the company's negotiating skills. In theory Your.TV has the benefit of an open platform, which is attractive for everyone to offer content on. However, just as important is the DRM (digital rights management). Without a good solution, Hollywood stays far away from this kind of agreement, which is important for its VoD portfolio. We have seen recently that various competitors only agree a DRM platform after their product announcement, such as earlier this week the US-based Boxee. It's worth recommending to sort this from the beginning. And if Your.TV is clever, they'll pick a supplier participating in the DECE (Digital Entertainment Content Ecosystem) consortium. This consortium, which is working on the virtual successor to the Blu-ray player, (see our commentary 'UltraViolet: the virtual successor to Blu-ray') has approved five solutions, including the one selected by Boxee, Widevine.
The third obstacle is distribution. Without partners, and only using a website, it will be difficult to bring the box to the consumer. Moreover, Your.TV is going up against existing providers, so an eventual distribution deal outside the TV sector is needed. In this respect, the product differs radically from Google TV, which is focused on partnering and for which a linear TV signal is more or less essential. Your.TV should be able to work with partners such as Media Markt or Wehkamp.
Ahead of the planned launch in late 2010 we plan to follow Your.TV closely. If the company succeeds in avoiding the cited obstacles, then in the coming months we can expect agreements on DRM, content and distribution. IBC, the major media conference, takes place from 9 to 14 September in Amsterdam. For Your.TV, the hope is that it can attract some attention there or in the following period.
