I was speaking on the panel at the OTT 'mashup' eventat Ogilvy's London Docklands headquarters last night, alongside Turner Broadcasting's Casey Harwood and Anthony Rose, CTO at the BBC's Canvas (now YouView) project, amongst others. As a first-time masher-up and intrigued at the possibilities for the format, the event turned out to be organised along relatively familiar panel debate lines. Casey and I began with introductory comments, and were followed by critiques from the other contributors. The session was then opened up to debate, including audience questions. All the time, running on a display behind us, was a Twitter feed of comments from participants in the twittersphere, as well, presumably, as a few of the 100 or so people who joined us in the traditional, physical fashion. The only problem was that the panelists had to turn away from the audience to see if any particularly fascinating Tweets had appeared, and if they ever did, it was noticeable that the physical audience's attention would be diverted to the ominous gap between the panelists and away from the speakers. The one recommendation I would make is that questions and comments from the virtual audience could have been added to the debate; it did rather feel at times as though we were being Tweeted at without right of reply. Nevertheless it was an interesting evening and I hope the audience found the debate valuable. my own contribution centered on a few relevant datapoints from our recent survey of UK TV and online TV viewers. In particular I referenced the fact that 13% of UK people are currently watching TV on the internet at least on a weekly basis. So we needed to bear in mind that the OTT phenomenon is still restricted to a relatively small proportion of the population, and most of that activity is taking place on the PC. The number of people accessing web TV on their TV set is of course even smaller: 6% of people are connecting a PC to a TV, and 4% now claim to use a dedicated internet TV device. Having said that, our work with early connected TV adopters within our Digital Home Observatory suggests that television behaviour can change rapidly once viewers have access to some of these emerging technologies. This segment is motivated by a desire for greater viewing flexibility and access to preferred content. They also still see weaknesses in current connected TV solutions, especially in the field of control devices and interfaces. The panel also touched on the issue of business models, and in response to the question of how things might look in three years I replied that the basic alternatives would not change greatly: television in the UK will still be funded by a combination of public service licence fees, advertising and customer payment of one sort or another. The mix may change slightly, and we may see greater variety in pay business models. But it’s important to remember that customers are very sensitive to their monthly bills. The impression is often given, especially by new entrants, that new payment models can somehow overcome consumer resistance to the size of the overall television bill. The reality is that 80% of UK customers check their bank statements every month, and a similar proportion prefer predictability in their monthly payments. 69% would agree to pay only for the shows they watch, but only if it reduced the overall monthly bill. All in all I agreed with Anthony Rose’s comment that too little emphasis in connected TV discussions has been put on live, scheduled television. The assumption seems to be that this traditional model will break down rapidly as various on-demand options become available, but this trend is likely to happen only slowly over a long period of time. Even for early adopters, scheduled broadcasting remains an important part of the overall mix. The overall message is one of increased fragmentation of delivery models and audiences. Client Reading: Profiling the Connected Media Consumer - UK

Lack of ambition would presumably not be the most obvious failing of a new company which styles itself under the label “Everything Everywhere” (EE for sake of brevity). The name was chosen to represent the combined UK operations of both Orange (France Telecom) and T-Mobile (Deutsche Telekom), which now form a 50-50 joint venture and which announced their first results at an investors meeting in London yesterday. It would be a tad unfair, given the company’s core network technology assets, to assume that EE would be branching out into home pizza delivery any time soon, even though casual observers might assume “everything everywhere” might encompass all manner of exciting goods and services. Nevertheless, it was perhaps a little disappointing to discover from EE’s tagline – “Creating a new mobile champion” - that the network will apparently only serve network-based communications and applications to customers who happen to be moving around at any given time. Taglines are tough to get right, of course, and inevitably cannot please everyone. As the management presentations progressed, it became clear that mobility was not after all an absolute requirement for any future products and services which EE may choose to emphasise. Indeed, although they remain well hidden beneath the inevitable deluge of mobile phone and wireless network-centric commentary, fixed broadband and IPTV (for big screens) are very much alive and kicking as key elements in EE’s strategy. Executives even went as far as to designate IPTV as a “key part of a converged play” and that fixed broadband was “strategically hugely important”. This should come as a relief, perhaps even a surprise, given that fixed networks have played no part in T-Mobile’s UK business to date, and have been losing money (£80m in 2009) from the few customers Orange alone had managed to acquire. Given this performance the new venture might have been forgiven for abandoning fixed network businesses altogether as a lost cause. Instead we were assured that Orange’s broadband profitability was “already improving”, and that the recently announced deal to outsource network, IT and customer service to BT will have the desired impact of returning “Home” EBITDA to positive territory by 2012. Specifically EE will increase targeting of home broadband to its existing Orange mobile customers initially, and also introduce it to T-Home customers during 2011. Marketing will also encourage take-up of fixed voice by Orange and T-Home customers, since EE claims that the BT deal means that acquiring fixed voice customers would no longer have a negative margin impact on overall performance as was previously the case. The company is planning for 80% of new broadband customers to include fixed voice as part of their package. Potentially even more significant will be EE’s plans for IPTV, once they are finally confirmed. The company announced that it is looking at IPTV opportunities, including Canvas, the BBC-led over-the-top initiative. It would not join Canvas as a shareholder, but is considering affiliate membership. Whatever decision is eventually made on IPTV, EE will not become a major content player, which will come as a relief to shareholders and a disappointment to content rights holders looking for new competitors in the distribution market in order to boost values. EE even has the UK’s long-awaited fibre rollout on its radar. Its agreement with BT allows for access to the new fiber network by EE, although no specific plans have been agreed. Other emerging opportunities on EE’s radar include M2M (machine-to-machine), in which the company includes connected home devices and home automation as specific “high growth” verticals. M2M is a broad concept which may certainly one day lead to services and applications which approach “everything everywhere” capability. In the meantime, EE has probably has enough on its plate just to meet its growth and profitability targets in its core mobile and broadband businesses. Client Reading: Global Broadband Forecast 1H2010

Lots of excitement in the press over the weekend about the availability of Canvas set-top boxes in the UK by Christmas 2010. For non-UK readers, Canvas is the BBC’s initiative to bring television over the internet to big screens, ie TV sets. The BBC Trust’s consultation on Canvas is here. The Christmas 2010 “announcement” was made by Richard Halton, the BBC’s IPTV project director. BT, ITV and (channel) Five are also partners in the project. Halton was quoted as saying that set-top boxes built to Canvas specifications would be available to UK homes by Christmas 2010. We should be careful not to read too much into any such precise prediction of events more than 12 months in advance, especially when they are made by an organisation that has little control over when they will happen. The BBC is of course the driving force behind Canvas, but as well as having to overcome the BBC Trust’s objections to the project, it also has to win the technical and marketing support of device manufacturers. The latter have been extremely frustrated at the Canvas delays and several have found other ways to get iPlayer onto TVs. As we have often said the games console is likely to be a key platform for online TV. iPlayer has been available on both the Wii and the PS3 for a year or so but only with limited capabilities and effectiveness. The BBC has now upgraded its PS3 iPlayer application and since its launch it has already become the second most popular way to watch iPlayer after Virgin Media's VOD service. According to Anthony Rose, the BBC’s Controller, Online Media Group and Vision, PS3 was catapulted to 10% of all iPlayer viewing in the week following the update. Early reports confirm that PS3 owners using a 1.5Mbps iPlayer stream are now seeing close to SDTV quality on large screen TVs. Since the PS3's price drop to £250 (€299 in rest of Europe) it is one of the cheapest and easiest ways of watching online TV from the BBC on the TV. Even though they will offer additional channels the possible arrival of Canvas set-top boxes late next year is unlikely to dent enthusiasm for the many alternatives which are sure to emerge in the meantime. Twitter: twitter.com/DavidMercer_SA Client Reading: Digital Media Devices Global Market Report