Digital Consumer

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.

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Client Reading: Digital Media Devices Global Market Report

We have had a number of discussions with ActiveVideo Networks recently, before and during IBC. ActiveVideo offers network-based processing to bring rich media, ie interactive TV, to consumer devices over MPEG streams using the internet. The only requirement in the end user device is a software module, and a high speed internet connection.

Naturally enough the IBC discussions focused on issues relating to managed service providers and operators, which is a key customer base at IBC. On its IBC stand ActiveVideo was demonstrating a proof of concept for delivering IP video streams to a CI+ module connected to a Sony flat panel TV. Neotion, one of the firms behind CI+, and Ziggo, the Dutch cable operator, were partners in the demonstration. ActiveVideo’s current customers include PCCW in Hong Kong and Time Warner’s Oceanic cable network in Hawaii. Other customers are expected to be announced in the coming months.

But ActiveVideo’s recently announced partnership with Videon Central to target connected CE devices confirms that the company is also positioning itself for online video services which bypass managed service providers. The Videon deal plans for availability of connected TVs and Blu-ray players by the end of 2010.

ActiveVideo’s IBC demonstrations were certainly impressive, and unlike many were running off a live internet connection. President and CEO Jeff Miller told us that ActiveVideo technology allowed cable and IPTV operators “to move at the speed of the internet, not the speed of TV”. A TV-like service over IP could be upgraded and added to very quickly, and once the RSS feeds were established the service could run with minimal intervention.

ActiveVideo is certainly planning for a world where higher broadband speeds are the norm. The company claims that movies need between 3 and 5Mbps, while a multi-window video mosaic could require 10Mbps. These speeds are slowly becoming more widely available but are by no means universal in the US and Europe.

I can’t help thinking ActiveVideo’s cloud video model sounds like something Cisco should be doing in order to fill some of the gaps in its consumer video portfolio. In fact, ActiveVideo’s vision statement – “we put the application and video processing load in the network” – could come straight from a Cisco strategy piece. I’ll just add in the observations that: Cisco is intending to make acquisitions; has the budget available; is targeting consumer and video as strategic priorities; is only a 10 minute drive away from the ActiveVideo offices; and that ActiveVideo has around 100 people – John Chambers’ ideal acquisition profile; and leave it at that.

Twitter: twitter.com/DavidMercer_SA

Client Reading: Digital Media Devices Global Market Report

As the doors close on another IBC the general feeling is that things could have been a whole lot worse. The organisers have just confirmed attendance at 45,547, including exhibitors, which is 7% lower than 2008. If exhibitors are excluded the figure fell by only 5%. This is considerably “less bad” than pre-show predictions, which understandably were based on other major 2009 events where attendance had fallen by 20% or more.

Certainly the feeling walking the show floors was that it was just as easy, literally, to “bump” into old colleagues as in previous years. More importantly, feedback from exhibitors was generally positive.

As our own research indicates, the full year outcome for the broadcast and professional media sector in 2009 is expected to be an overall 14% decline in sales. Even with a stabilisation at this stage there is nothing much that can be done to offset the severe downturn which began late last year and continued into the first half of 09.

But it does now seem as though we have hit the bottom, and as several exhibitors pointed out to us, deals are being signed and customers continue to plan for the future. It may not be a comfortable economy just yet, but life goes on. Overall we are expecting this to translate to an upturn of nearly 5% sales growth in 2010.

Client Reading: Media Storage Offers Hope During Economic Gloom

If 3D TV is to become a reality the question of programme guides and other data overlays needs to be resolved. Today’s interfaces are designed for the old world of 2D video, and as soon as they are overlaid on 3D video something starts to look very wrong.

NDS demonstrated a couple of solutions to this problem at IBC today. The first used the firm’s “Snowflake” programme guide. During playback of a 3D movie, if the guide is selected, the movie switches to 2D mode and the guide is presented in the foreground, so appearing to “float” in front of the TV screen. Another example illustrated a VOD selection menu in the foreground, against a 2D movie background, with certain titles “raised” above others.

NDS also demonstrated a method of integrating subtitles over 3D video, so that each subtitle was linked to the appropriate depth of the relevant content. For example, if a character was moving “towards” the viewer, the subtitle can be linked to the correct depth.

The more advanced demonstration actually overlaid a 3D EPG on top of a 3D movie. This clearly takes some careful planning, because any mixing of the guide data with the depth of the movie would create confusion. So the guide is allocated a certain depth in front of the screen, while the movie is positioned behind, with a clear “depth boundary” between the two. The guide must also feature only solid graphics, since any transparency again would lead to visual distortion.

NDS was running this last demonstration from a PC, and it featured upscaled 2*1080p 3D video: today’s set-top boxes are not powerful enough for these data processing requirements. But NDS believes that next generation chips from Intel will support these capabilities.

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Client Reading: US IPTV Market Sizing: 15.5 Million Subscribers by 2013

In spite of the downturn in the broadcast industry this year, we are taking our largest ever team to IBC in Amsterdam this weekend. During a rare gap between back-to-back meetings we’ll be offering complimentary coffee and croissants on Sunday morning, followed by some of our latest research.

This year we are focusing on emerging trends in consumer media consumption, as well exploring the state of the professional broadcast and video industry. We still have a few places left so sign up urgently if you us to reserve you a badge.

Further details and registration: Strategy Analytics and D. I. S. Consulting: Analyst Presentations at IBC 2009

Just arrived in Amsterdam for this year’s IBC. Doors open in a couple of hours and then it’s straight into press conferences and company briefings.

Key themes this year will obviously be 3D. After the hype generated at IFA in Berlin last week for consumer 3D devices it will be interesting to see whether the broadcasters and service providers are gearing up to support the desperate need for 3D content. One thing seems clear – Disney movies alone will not be enough to sustain a home 3D market.
We expect to see many examples of 3D user interfaces and guides – this is one of the major challenges if the TV industry is to transition even partially to 3D delivery over the coming years.

Other technology trends in the professional space will be the continued penetration of HD in the production and distribution chain; the related trend towards 3Gig capability in the workflow, which is required to support future moves towards 1080p broadcasting; and trends in camcorder formats, or the decline of the format as it could be described.

In general it will be good to test the mood of the industry after a period of severe downturn. During the last IBC http://www.strategyanalytics.com/blogs/326/ a year ago the financial world was entering crisis mode as Lehman Brothers collapsed, and shortly after the show many purchase orders were put on hold or abandoned. While the worst may now be over, the industry is still reeling from this blow and will take some time to recover. It will be surprising if the show floors are not easier to negotiate this year.

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Client Reading: US IPTV Market Sizing: 15.5 Million Subscribers by 2013

Nokia’s annual development showcase is taking place this week in Stuttgart, conveniently placed, for the 2000+ international visitors, adjacent to Stuttgart airport, which is not nearly as bad as it sounds. After a day of analyst meetings we spent today listening to senior executives outline the company’s future plans and examining its latest device and service offerings.

A major highlight was the unveiling of the recently announced Booklet 3G, Nokia’s first foray into non-handheld devices. Actually that’s not quite true, but you have to be an industry veteran of at least 20 years’ standing to remember when Nokia last manufactured PCs, or indeed the myriad of other products it used to be known for. It abandoned most of its traditional businesses as part of its rationalisation response to the Russian economic crisis of the early 1990s, and after it identifed mobile phones as the next technology wave the company has never looked back.

Nokia’s explanation for (re)entering the PC space is that convergence is happening and is here to stay. In other words, it sees computing competitors (read Apple, Google) eating into its phone business, as phone handsets take on more and more of the capabilities associated with the PC. The logic is that Nokia can counter these threats by bringing its communications expertise to the PC space.

The Booklet 3G is Nokia’s first response. I hope it is not their last. We could waste many hours discussing the finer points of English vocabulary, but this is indeed a “netbook”, at least as far as anyone can point to a clear definition of that word, and that may not be very far. It could also be a “laptop”, which is how John Hwang, who heads this new Nokia business, described it yesterday. Or to be precise, “a high end mini laptop”. So take your pick. It is, without doubt, a computer.

From the various videos and demonstrations it seems that Nokia is trying to position the Booklet as a handheld device aimed clearly at portable applications. Promotional videos featured young, attractive (inevitably) people holding their Booklets in one hand while walking along streets, chatting idly with friends and surfing the web in attractive (inevitably) locations like ski resorts and wine bars. Actually I made that up, but you get the picture.

For the record, the key features are Windows 7, 1.6GHz Intel Atom Z530 processor, 1GB RAM, 120GB HDD, claimed 12 hours battery life, 10.1” display, HDMI, GPS, accelerometer, Bluetooth, webcam. You may have spotted a couple of items which mark the device out from the usual netbook crowd. With GPS, accelerometer and 3G the Booklet is clearly designed to further strengthen Nokia’s position in the navigation and mobility applications segment.

Retail price will be €575 plus tax. Nokia is confident (you can assume the deals are more or less done) that the Booklet will be heavily subsidised by mobile operators in return for the user’s long-term commitment to big fat monthly mobile data fees.

The booklet is a nice-looking, well designed and high quality device. The to-ing and fro-ing around its categorisation is not coincidental, since its specification probably comes close to some low end notebooks/laptops. But prices for those start at €300 or less, while top end netbooks struggle to reach Nokia’s price point. As with Nokia’s phone business, it seems that close cooperation with operators will be necessary to ensure that Nokia’s return to the PC business is not a short-lived affair.

Twitter: twitter.com/DavidMercer_SA

Client Reading: Digital Media Devices Global Market Report