July 13, 2009 17:07 dmercer
Niklas Rönnblom, analyst at Ericsson’s ConsumerLab, recently blogged about the company’s white paper called “What Consumers Want from TV/Video Solutions”. This document discusses how television and video consumption is changing and the challenges this brings for service providers. The background assumption in the paper is, not surprisingly for Ericsson, the concern that the “managed” TV/video industry will suffer because of changes in consumption habits. A key conclusion is that this industry will not be able to respond effectively until regulations are changed to create a “level playing field” so that traditional providers can compete fairly with emerging content and service providers. Finally, the report’s recommendation is that “The goal should be to offer user-centered high-quality services that motivate consumers to stay legal; not a system or service that “forces” them to stay legal”. The paper offers a series of logical arguments to support the notion that managed video/TV services should play an important role in keeping illegal content distribution to a minimum. It even attempts to quantify the relative value of countermeasures such as “fear of getting caught” as factors in consumer decisions over which content to consume. Thus far the paper does a good job of analysing the impact of illegal content distribution on the traditional, ie legal, industry. One or two observations should be challenged, however – first, the assumption that “traditional TV distributors, as well as telecom service and content providers, are failing to satisfy consumer demand for TV/video services”. This statement will come as a surprise to successful “traditional TV distributors” such as BSkyB, which continues to report customer and revenue growth quarter on quarter during the toughest economic environment in living memory. There certainly are some traditional TV distributors which are not performing as well as others, but there are different reasons in every case, and it is certainly not always because they are not offering their customers clips from Youtube or movie sharing services. Secondly, the paper’s motivation analysis is surely flawed: the main reason people watch TV/video is to be entertained, above and beyond every other reason. Instead, Ericsson positions this as a secondary factor behind the social role of content; people discuss TV shows, and feel socially excluded if they haven’t watched them; or they make copies of these shows and give them to their friends. While these social functions clearly have some relevance for many people, they are surely secondary, even for so-called “digital natives”. Would anyone really watch a boring TV show just because they thought everyone else was watching it? Ratings data would suggest otherwise. There is no doubt that managed service providers need to continue to roll out new services such as on-demand, personal content storage (DVR), integrated communications, HDTV and 3D. But it is a mistake to think that successful providers are not already doing this. The paper’s real contention is that these firms will not be able to compete when the same content is available illegally (and free of charge) from non-managed services. The paper does not have the space to go into wider issues such as the disaggregation of access and content, and the impact of emerging advertising business models (see my recent entries from the Future of Broadcasting content for further discussion). These questions will ultimately have a greater impact on the success or failure of managed TV service providers than unauthorised distribution of content. Twitter: twitter.com/DavidMercer_SA Client Reading: Global Digital Media Growth Slows to 2.7% in Q4 2008 Add to Technorati Favorites

March 30, 2009 10:03 dmercer
Better late than never, I should summarise the main discussion points from last week’s IPTV World Forum in London. In general “IPTV” in the context of this event means “managed TV services over broadband”, and indeed, “managed by broadband service providers”, as opposed to “managed by over-the-top providers”. It’s easy to spot this because the interest of the major sponsors – Ericsson, Alcatel-Lucent, Cisco etc – has historically been to support BSPs rather than their competition. But in spite of this natural bias, much of the debate in the conference and on the show floor revolved around how BSPs could counter the impact of emerging OTT competitors such as Hulu and the BBC’s iPlayer. While anecdotes are always a dangerous foundation for analysis, it is not unprecedented to hear of people in the US claiming to have cancelled their cable subscription (ie TV) because they can now “get all their shows” on Hulu and other internet-based services. However much they pretend to dismiss these claims as isolated or atypical, such stories strike fear into the hearts of operators, and their technology vendor partners, around the world. The general impression from IPTV World Forum debates is that the BSP response will be to “embrace” OTT content, encouraging providers to join their managed services and packages so that customers are guaranteed quality of experience for their Youtube videos. Before accepting these overtures, OTT providers themselves should consider whether this embrace will resemble a loving couple gazing at the sunset, or a grizzly bear hugging its newly captured prey. Broadband providers have little choice but to offer content in some form or other, and that’s really what IPTV is about. As we are seeing in France, bundling content (TV) with broadband access can be a highly successful, if controversial, strategy. And the regulators have barely begun with this issue, let alone completed their assessment. As Christophe Forax, a Member of EU Media Commissioner Viviane Reding’s Office, informed the conference on day one, all broadband service providers would be expected to embrace “platform neutrality”. Quite what this means to the bundling of access and content, however, is a topic for further very heated and lengthy debate. The key question, as Juniper’s EMEA Director Paul Gainham put it, is “what is the role of service providers in a few years’ time?” For now, a number of them are placing their bets on content, either as partners and distributors or as fully fledged owners and developers. The other main strategic option in a mature market is often described disparagingly as becoming “bit pipe providers”, and incumbent telcos in particular are reluctant to admit to this possibility: it would inevitably mean considerable downsizing, and that’s something that’s tough to sell to any investor. Twitter: twitter.com/DavidMercer_SA Client Reading: Global Media & Entertainment Market Forecast, 2004-2012 Add to Technorati Favorites submit to reddit

March 6, 2009 12:03 dmercer
While Facebook, MySpace and Twitter grab the fast growth headlines in English-speaking markets, in France it is video sharing, rather than just blogging or messaging, sites, which are leading the way. The leader in the field is DailyMotion, and Strategy Analytics research indicates that four million people in France are uploading videos to video sharing websites on a weekly basis. There are still more people in France - 5.3 million – who are checking social network sites such as Facebook at least weekly. And 7.7 million people are using social network sites at least a few times a year. But the overall user base is higher for video sharing sites at 10.8 million. The contrast with the UK is stark. Here there are 15 million people – three times the number in France, with a similar population – checking social network sites at least weekly. And while 10.6 million people in the UK claim to upload videos to video sharing websites like Youtube at least a few times a year – similar to France - only 1.3m people in the UK do so at least weekly, a third of the level of activity in France. The early entry (in 2005) of Dailymotion to the French market is one obvious explanation for this difference. But I can’t help wondering if broadband connection speeds are also part of the story. Any UK broadband user who has tried to upload video will be familiar with the frustrations of slow upload speeds, which are typically well below 500Kbps. In France Free offers upload speeds of 1Mbps, which may not seem like a big difference but can halve the time spent uploading videos. Twitter: twitter.com/DavidMercer_SA Client Reading: Digital Media Survey: France Country Profile Add to Technorati Favorites submit to reddit

January 8, 2009 08:01 dmercer
LG kicked us off this morning with a bullish presentation after announcing 16% US revenue growth in 2008. A variety of new technologies were confirmed, including 60GHz WirelessHD connectivity, 3D processing chips that will be ready for future 3D formats, TruMotion 240Hz (which combines 120Hz with backlight switching to create a 240Hz effect), LED backlighting (which gives a 2,000,000:1 contrast ratio), and 25mm thin LCD TVs. The hot LG story is around its deals with internet content providers. Netflix, Youtube, Yahoo and other providers will appear as menu options on a range of connected devices, including TVs. LG also introduced an 802.11n BD player, one of the few integrated wireless enabled BD players on the market. Netgear also gave a strong performance, centered around its ITV2000 internet TV player, launching in summer 2009 at $199. This is a compact, pocket-sized set-top box which will give access to web content, including the inevitable Youtube, without the need for PC connectivity. Netgear also introduced its Digital Entertainer Elite, priced at $399 and available in February. This device incorporates a 500GB HDD and plays HD video at “up to Blu-ray quality”. I suppose that means something close to Blu-ray if the wind is blowing in the right direction. Toshiba, rather strangely, began their press conference by highlighting their leadership in “TV combos”, ie combined TV/DVD players. Not exactly technology innovation, but I suppose they had to find a market leadership story to start with. The new stuff focused on the introduction of internet widgets in TVs and other devices from the likes of Intel, Yahoo and Microsoft. Toshiba highlighted a number of content service providers on their presentation material, including Myspace, CinemaNow, Yahoo and CBS, but the fine print indicated that these names were shown “for demonstration purposes only”, suggesting that partnership deals are still at the negotiation stage. Toshiba’s approach to internet content is based on Microsoft platforms such as the Media Center PC, which is not surprising given its stronghold in the PC market. In the TV space, Toshiba announced the introduction of Dolby Volume, which balances volume levels across different TV channels so that viewers don’t have to keep adjusting volume levels. Dolby told me the technology has been a success in Japan for the past year and is now making its way to the US and Europe. Toshiba also indicated that the long-awaited Cell TV is on the horizon. Using the Cell processor at the heart of the PS3, this will be launched in 2009. Cell TV could allow 6 simultaneous HD streams to be recorded, support the next generation of 4k x 2k panels and allow for 3D graphical interfaces. Client Reading: IFA 2008: Internet and 3D Offer Hope During Europe's CE Recession Add to Technorati Favorites

January 9, 2007 23:01 dmercer
Vista is a big part of the show of course. One interesting aspect of the new OS is the Sideshow feature. This extends selected capabilities of the PC to a variety of connected devices by adding what Microsoft calls "gadgets" (add-in programs) to the PC. These programs update the relevant device with information and allow it to access the computer whether or not it is switched on. This concept raises the possibility that, as long as a PC user has access to the Internet, he can always access media or information stored on that PC. This is yet another example of the extension of the network to the individual - the connected consumer.

Hitachi gave some interesting perspectives on the ongoing plasma/LCD debate. The company claims to be independent of the debate, although in reality it has more invested in plasma than LCD. It sells both technologies, and positions plasma as preferable above 37" and LCD below. Even with the increase in LCD sizes Hitachi believes plasma will win the large screen battle because of the inherent benefits of the technology. One of the clearest of these, reduced blurring in high motion content, is being shown at Hitachi's booth in a side-by-side demonstration. LCD proponents of course will tell a different story...

Every major brand needs a world first at CES and Hitachi's was the 1TB (terabyte) hard drive. So expect to see these in PCs later this year.

Sling Media is the TiVo of the late 2000's. From a standing start in early 2005, the company's name has come to represent everything about the emerging connected entertainment world. It doesn't reveal sales numbers, but many international road warriers (shouldn't that be Sky Warriers?) confined to business hotel rooms are already familiar with the Slingbox's ability to banish the restriction to local television in unfamiliar languages to the history books. The size of the company's booth at the emerging technology exhibits at the Sands give testament to its growth and profitability.

Sling continues to shake up the media world with the launch of new devices. Highlight at CES is probably the SlingProjector, which mirrors whatever content is displayed on a PC screen on another display. This is Sling's answer to the problem of getting web content such as Youtube videos onto the TV; many other solutions are offered elsewhere at CES.

I'll be posting photos from the Show as soon as I can.