I spent today at the Microsoft Research facilities in Cambridge at a seminar on the subject of "Content to Mobile and Other Devices". It was an excellent event with good speakers - the only pity was that we were stuck indoors on the first warm day of the year. The Seminar was an interesting contrast to the DTG forum I reported on recently. Here the audience was mobile-focused, so BBC and Channel 4 representatives were lone voices when they pleaded for HD spectrum priority. The buzz from attendees was clearly that mobile services would be the winners, and the first in the pipeline is likely to be WiMax. This confirms the conclusion of our recent report (HDTV and DTT: The Impact Of Platform Evolution Decisions On HDTV Adoption Scenarios) that broadcasters are fighting an uphill battle to get HD on the DTT platform. Ofcom's Jeremy Olivier warned that the EU's new AVMS (Audiovisual Media Services Directive), due for finalisation by the end of 2007, faces severe difficulties in getting the regulation framework right; particularly in regard to establishing a pan-European content market, and in setting regulations that apply appropriately to all relevant platforms. The stumbling block is of course the Internet, but Olivier expressed the belief that Brussels does not believe the Internet can be turned into a broadcast type of environment. I suspect regulators in some other EU countries not a million miles from the UK may wish to disagree. In any case, the full implications of the final AVMS are clearly still to be resolved. BSkyB's Stephen Nuttall confirmed what our own research identified three years ago - that TV viewing is now definitely in decline, particularly with young people who have broadband. No surprise perhaps, but different research data can still be contradictory, and we still frequently read reports, perhaps more from the US than Europe, that TV viewing is continuing to rise rather than fall. Microsoft researchers demonstrated a variety of concept products that might one day feature in the average digital home. My own favourite was the Whereabouts Clock, modelled apparently on a Harry Potter story, which used mobile phone IDs to track and identify family members' locations on a location "dial". Three of the trial families did not want to give up this device - it brought them considerable reassurance as to the location and safety of their relatives and children. Finally, an entertaining speech from MP Derek Wyatt, who clearly has a passion for all things technology. Mr Wyatt made some interesting predictions, including that all UK national newspapers would be free within the M25 within five years. He also suggested (referring to discussions he had had with Rupert Murdoch) that sooner rather than later a Hollywood studio would go straight to the web with a new movie release, bypassing theatrical, DVD and other windows altogether. The theory is that 5 million buyers would pay $30 each to download the film, generating $150m, more than enough to recoup the investment. I'm sure we'll see someone try this within the next couple of years.

That's what the Blu-ray Disc Association's Frank Simonis would have us believe. I assume he doesn't mean that I will be able to buy a BD player for $25 in 2010. And if he does, I hope Philips shareholders aren't listening... Remember when DVD players cost $800? No? It was a long time ago, and it didn't last long. When they were launched in 1997 it seemed impossible that DVD would replace VHS (that's an old tape format your grandmother might have used), well, ever, never mind within 10 years. But then few people, and least of all the device manufacturers, wanted you to know that the price of a player would plummet through $200, $100 and $50 price points like a stone. Can it happen again with Blu-ray? Sony recently announced its BDP-S300 priced at $599, which is essentially the same as a device that recently cost $999, and predicted $500 players before next Christmas. My bet is we'll see them below that level, if not from premium brands. So it seems we are on at least as fast a track as DVD, and by 2010 the $100 Blu-ray player should be with us. Will that be enough to kill DVD by then? Given the huge DVD installed base, I doubt it, but it might well be feeling the first signs of old age.

Over the last few years there have been numerous IPTV conferences and events springing up all over the place, but the IPTV World Forum appears to have become the most important in Europe, and attracts visitors from all over the world. The exhibition features stands from major and smaller vendors alike - enough to more or less fill two floors of London's ancient Olympia venue, and many familiar faces were seen wandering the aisles. I hope the organisers manage to find an alternative venue for next year - visiting Olympia is a bit like emerging from Doctor Who's Tardis some time in the 1950s, and the local hotels are not much better... A few highlights worth mentioning: Vividas is giving an impressive demonstration of HD video streaming over the Internet, showing a 720p clip of Paramount's upcoming Transformers movie streamed at 1.2 Mbps. Vividas' solution involves analysing the user's PC and sending only the player elements necessary to support that particular device. In this way it reduces the payload to a fraction of the typical media player, and claims also to increase content security because there is no trace of the media file on the user's PC. Visiware, the French gaming company, is demonstrating its own solution to multi-platform gaming, so that a subscriber can access the same game on digital TV, broadband and a mobile phone, and even resume playing from the same point of the game on a different device. Visiware began life in the interactive TV space more than 10 years ago, and is one of the few survivors from that era with a global presence. Nortel's deal with NDS made most of the headlines, and Nortel is demoing the usual types of voice/TV application such IM, caller ID and video telephony on the TV screen. It's good to see Nortel positioning itself for these potential IPTV applications, but I can't help thinking it is somewhat late to the party - most of these ideas have been around if not on offer from competing vendors for some years. Industria is an Icelandic company with a focus on IPTV middleware and solutions. It has significant deals with Irish and Bulgarian operators and is planning further expansion as well as partnerships. I expect to see one or more major telco vendors bidding to work with Industria over the coming months. Oregan has built its business with Sony's PlayStation but is now branching out into CE retail through partnerships with Philips, Nokia, Samsung and others. It has high hopes for connected device solutions using its Media Browser software. It is demonstrating accessing CinemaNow and the BBC's video clips on a TV screen. They have had most success so far in Japan, but we expect to see significant movement in European and US markets over the next year or so. Finally we were treated to a demonstration of Ruckus Wireless' WiFi solution. Ruckus has created a stir with its unique antenna technology that guarantees quality of service for video streaming, including HD, over home wireless networks. It has significant deals with PCCW and Belgacom (Strategy Analytics clients will receive a report on Ruckus shortly).

Today's DTG summit was a clarion call to politicians and regulators to ensure that the UK's digital terrestrial platform would carry HDTV signals in the future. Margaret Hodge, Minister of State for Industry and Regions, recognised that HD was a "contentious issue", but left the meeting too soon to hear just how contentious a subject it could be. Speakers suggested the government should take the decision of how to allocate spectrum back from the regulator, Ofcom, but Hodge was "not sure that Parliament is the best place to decide on consumer priorities". Before leaving, she left a glimmer of hope by suggesting that the spectrum decision "is not about maximising money for the Treasury". Personally I would want to get Gordon Brown's confirmation of that opinion before taking it as a matter of policy. The UK's digital TV industry, as represented by the DTG, in fact primarily represents those with an interest in promoting digital terrestrial television, as opposed to alternative digital television platforms such as satellite or cable. Principal supporters are the public service broadcasters, and consumer electronics manufacturers and retailers. This constituency is very concerned, and understandably so, that the DTT platform, so successfully established under the Freeview model, could lose out on the next innovation wave driven by HDTV. Ofcom is currently consulting on the best way to allocate spectrum freed up by the switch-off of analogue broadcasting. There was a distinct feeling at the DTG meeting that the prospect of this capacity being allocated to HDTV was more or less zero unless a significant change in regulatory approach is taken, as richer companies such as mobile operators will always be able to outbid opponents in any spectrum auction. One speaker after another put the case for free-to-air HD on DTT, including Sony, DSG (Dixons Stores Group), Channel Four and the BBC. Dixons' John Clare gave perhaps the strongest argument by citing recent (February) research that showed more than 40% of buyers of HD-Ready TVs plan to watch HDTV on the terrestrial platform. His argument that Ofcom needs to examine the most recent research before coming to a decision is certainly compelling. As we said in our recent report, France has taken the lead in Europe by clarifying the HD DTT direction. As the BBC's Tim Davie put it, the UK is heading for a situation where the 2012 London Olympics will be available to all French viewers, free to view and in HD, but not to UK viewers. This is the sort of argument that is likely to get politicians thinking, if anything will.

We're attending this leading IPTV event at London's Olympia today. The conference kicked off with presentations from Orange and the BBC, amongst others. Orange's Eric Abensur suggested that quadruple play services are already gaining a significant foothold across Europe, with 16% of homes now "equipped" to receive such services. He also emphasised Orange's view that it is necessary for any operator to "control the mobile and broadband infrastructure in order to control the customer experience". This suggests a disregard of competition from any web-based service such as Joost (see here). Indeed, Mr Abensur seemed bemused by an audience question on the threat from Joost - it was not clear if he had heard of the service or whether there was something lost in the question - but in any case he dismissed the idea that Joost and similar services are a real challenge to managed IPTV services, arguing that they had no clear revenue model and that TV ultimately always has to be paid for. I suspect he may need to read up on what Joost and others are planning... The BBC's Ashley Highfield as always gave an interesting perspective from the UK's leading public service broadcaster. It contrasted with Orange's approach in discussing IPTV as a web-delivered service that should not be targeted to compete directly with the UK's existing digital TV services from Sky and Virgin Media. Instead, IPTV should be seen as changing TV by offering improvements in engagement, amplification, distribution, discovery, innovation and navigation. The BBC's iPlayer is of course the foundation of the BBC's strategy in IPTV. The BBC is still learning how its users want to search the vast archives of TV and video content that may one day become available, but it believes that the discovery element of IPTV is likely to prove one of its critical USPs. Mr Highfield also touched on the controversy over the BBC's choice of Microsoft's Windows DRM platform. He suggested that they would be "happy to work with Apple if they supported time-based DRM". The BBC sees it as critical that its solution can support 7-day online access to broadcast programming that is now a standard part of its rights contracts. We also look forward to hearing more about the BBC's plans for a hybrid DTT/IP set-top box. As I suggested recently, this is a further sign that the DTT platform in the UK is fragmenting, and I hope to hear more from Ofcom on this subject at this afternoon's DTG meeting.

Much of the turmoil we are seeing today in the media and communications industry can be attributed to the emergence of hypercompetition, where companies that were previously partners, and for technical or other reasons isolated from each other's core business, are now crossing value chain chasms and targeting their partners' customers. Apple, a computer company, moves into online media. AT&T, a network operator, offers television. Sky, a TV company, offers broadband. For the owners of each company these initiatives create growth opportunities, but for the industry as a whole there is a cumulative disruptive effect. My colleague, Martin Olausson, has just published a White Paper on Media Hypercompetition that discusses these issues in more depth. It's available for complimentary download here.

Good job I'm not a gambling man... Virgin Media's cable subscribers lost access to Sky's News, Sports News, Sky One and Sky Two channels this morning. Sky is banking on 10s of thousands of them cancelling their cable deals and installing dishes as a result. Virgin Media is hoping it can reinvigorate its VOD service (Virgin Central) by putting it on the same channel as the one vacated by Sky One. The good news for outside observers is that this heavyweight battle is likely to continue for many more months, if not years. Sky has taken a markedly more aggressive stance on a whole set of competitive issues in recent months, presumably as the threat of competition has increased. Virgin Media is clearly a major opponent, and has strong positions in broadband, telephony and mobile to fall back on. Its weakness lies in being restricted to its cable network for TV services, although that is likely to change as it rolls out "off-net" TV using IPTV. FreeView, BT Vision and other providers are also putting pressure on Sky. It's tempting to want to call an outcome to the whole saga, but there really doesn't seem to be one. The UK's competitive environment is likely to encourage increased polarisation between vertical providers looking to bundle their customers into multi-service broadband/TV/mobile deals. Assuming the regulators stand back and let it happen, the battle to win and retain customers is only likely to get more intense.

Today, March 1st 2007 is a key date on the digital calendar in the US: all TVs and related devices (video recorders) must include a digital ATSC tuner from today. The fine detail is that retailers and distributors still have stock of analogue sets that must feed through the system, but manufacturers can no longer ship analogue-only devices. They can also sell TVs without any tuner (monitors), but it seems the market in general is prepared to accept the increased costs of digital tuners. It's been a long hard road for ATSC digital terrestrial broadcasting. Even with the impact of mandates, only a small minority of US homes makes use of these tuners, relying instead on digital and HD services from cable and satellite providers. There has been little promotion of the impending analogue switch-off, and politicians will start to notice very soon that a small minority of their constituents - those that rely exclusively on analogue terrestrial TV today - might be without any TV at all after February 17 2009. It's a rush now to ensure those homes have alternatives in place. Subsidised set-top boxes may help, but I'm sure we'll also see satellite and cable companies (and maybe telcos) making as much mileage as possible out of the digital transition, although they won't want to subsidise new customers with loss-making deals. Strategy Analytics clients can find more detailed analysis here.