Digital Consumer

• 30Mar

  Broadcasting in Turmoil and Online TV Disruption: Analyst Breakfast at the NAB Show

  Connected TV, Broadcasting, User Experience No Comments

  A quick heads-up that we are offering a complimentary analyst breakfast at this year’s NAB Show in Las Vegas on April 13th. With our partners from D. I. S. Consulting we’ll be examining the outlook for the professional and broadcast industry, which has been badly hit by the recession over the past 18 months. We’ll also be presenting new research from our Digital Home Observatory to illustrate how the viewing habits of the next generation of digital consumers are evolving as a result of the proliferation of connected TV devices.

  Pre-registration is advised by visiting here:

  Event details are as follows:

  Breakfast Presentation from Strategy Analytics and D.I.S. Consulting: “Broadcasting in Turmoil: Recession, Recovery and Online Disruption”
  Date: Tuesday, April 13, 2010
  Time: 7:30 am - Breakfast and Registration 8:00 am - Presentation
  Location: Las Vegas Convention Center, Las Vegas; Room S225 South Hall Upper Level

  David Mercer

  Posted by David Mercer @ 2:58 pm

• 22Mar

  Hillcrest’s Kylo Browser Bridges PC-TV Gap

  Connected TV, Digital media, User Experience 2 Comments

  We’ve covered Hillcrest Labs many times, such as here. Today the company introduced its latest offer, a web browser. At first sight it may seem like a new browser is the last thing the market needs, but this one has a key difference: it’s not designed to be used on the PC screen. It’s aimed at that growing band of consumers who connect their PCs to a TV so they can surf and watch web video from the comfort of their couch or armchair. Some browsers can be set for TV display but these options are often unsatisfactory. Hillcrest’s Kylo browser is offered free of charge. From the early demonstration we saw the company seems to have done a good job of presenting web pages more appropriately for the big screen and video consumption.

  As our Digital Home Observatory research has shown that connected TV viewers see the control device as a key impediment to a satisfactory experience. Using a standard PC keyboard and mouse on the couch is inconvenient at best. Onscreen keyboards can be offered for entering URLs but these are often slow and cumbersome compared to the real thing. As we’ve noted before Hillcrest’s Loop pointer deploys an impressive combination of technologies to make pointing at a screen more accurate than other motion controllers.

  Hillcrest’s business model is not changing as a result of the Kylo launch. While it is packaging certain web video services, it is not currently seeking to turn this into a revenue stream, although the company will watch for opportunities. Hillcrest’s primary aim and business model focus is to increase sales of its control devices.

  David Mercer

  Client Reading: Touchscreen Controllers Set to Drive the Connected TV Experience

  

  Posted by David Mercer @ 11:34 pm

• 22Mar

  IPTV World Forum: Can Ericsson Put End To IPTV Speedbump?

  Vendors, Broadband, IPTV No Comments

  As we reported today, the global IPTV subscriber base reached more than 30 million households last year. It’s difficult to imagine that major vendors such as Alcatel were predicting 100 million by this stage a few years ago. That sort of over-optimism is hardly new, but in this case reflected a failure to appreciate the strategic challenges facing telcos as they entered the TV market. My colleague Ben Piper suggests that the IPTV market globally may be hitting a speedbump: perhaps it just never built up much speed in the first place.

  IPTV was supposed to be different. The built-in ability to integrate communications services with content delivery, together with one-to-one targeted delivery, would enable powerful and compelling new features and experiences which would help telcos leapfrog their established competitors in the cable and satellite industry. But instead of changing the game most telcos which offer IPTV today still play to the rules originally fixed by the incumbents. Most could not avoid getting dragged into content rights battles and disputes, and few if any have deployed the sort of exciting advanced capabilities which have been on show at countless exhibitions over the past decade or so.

  Which brings us to this year’s IPTV World Forum, opening tomorrow at London’s Olympia. Ericsson gave us a preview of its announcements this evening, which are encompassed by the new tag-line “End-to-Endless Television”, or “E2E TV” for short. Sure enough they include subjects such as on-demand advertising, new connected IP devices and hybrid solutions. Without doubt what I am most looking forward to seeing is Ericsson’s IPTV Remote. Someone will explain to me one day why a home device with no obvious cellar network implications was launched at Mobile World Congress; in any case now that the mobile phone industry has seen it we await reaction from its core target customer base. Ericsson describes the IPTV Remote as the best thing they have done in a long while.

  The challenge for Ericsson, like its competitors, is that it does not sell these products to consumers, who are the end users, but to service providers and operators, who decide what they think their customers will want and will make them money, before making them available to the likes of you and me. Ericsson carries out a lot of its own consumer research to identify future customer needs, but it still has to persuade its operator customers of the validity of these predictions. Many of these scenarios sound good in a Powerpoint; Ericsson’s own presentation sees the future of TV as “blended services”, “converged interactive communication”, and “your media anywhere, anytime”.

  I hate to sound like a weary old cynic, but we have heard these promises more than a few times over the years. But I do look forward to seeing the IPTV Remote in action, and maybe, just maybe, this 10” touchscreen “tablet” (definitely not an iAnything) will persuade operators that their customers might value their service over their competitors for the privilege of using a particular device, rather than receiving targeted ads or first run movies. Our own research showed TV viewers are waiting for touch screen controllers, so Ericsson may be on to a good thing.

  David Mercer

  Client Reading: Orange’s IPTV Challenge: Create a Non-Content Differentiator

  

  Posted by David Mercer @ 11:26 pm

• 18Mar

  Technicolor Shows Off 3D Prowess, But Will 2D Conversion Be Spanner In The Works?

  HD and 3DTV No Comments

  We were also with Technicolor today to see its latest capabilities in 3D production and distribution and hear about the company’s strategy. Technicolor is the new name for Thomson. The company is still trying to sell Grass Valley Group, so its strategy as presented today assumes an absence of GVG’s divisions.

  A key question for Technicolor and its competitors in the content production and distribution space will be whether 2D-3D conversion technologies will remove the need for 3D content origination. Sky has reportedly announced that it will refuse to accept any 3D television which has been converted from 2D, which is a good sign for the many vendors hoping to profit from this opportunity. But 2D-3D conversion is still likely to feature in consumer products such as TVs.

  Technicolor’s position is that these technologies will actually help to fuel demand for ‘true’ 3D, which will always provide a better quality experience than the alternatives. This seems like a reasonable position to take at the moment but vendors should watch carefully for progress in 2D-3D conversion technologies which could disrupt the market over time.

  David Mercer

  Client Reading: Global Audiovisual Market Forecast

  

  Posted by David Mercer @ 11:23 pm

• 18Mar

  Google TV: Intel Confirms Potential for Android Support

  Connected TV 1 Comment

  I was with Intel executives by chance today, shortly after the first rumours, based on a New York Times story, that Intel, together with Google, Logitech and Sony, are working on a TV set-top box and service. Intel was demonstrating the capabilities of its Atom platform across a range of CE devices. In particular it was showing how its CE4100 processor combined with the MeeGo middleware joint initiative with Nokia could enable more flexible and more advanced IPTV services in the future.

  Amino, which has sold more than 4 million IPTV set-top boxes worldwide, was on hand to claim that the Intel platform has allowed it to develop new devices much more quickly than traditional processor platforms from ST, TI and Broadcom. And Telecom Italia is set to become the first major telco customer of an Intel-based IPTV platform when it rolls out new boxes in the next few weeks. Intel claims to be in talks with many other telcos, including tier ones, about deploying its solution.

  Intel made it clear today that its new platform could support Android, as well as many other OSs, while refusing to confirm the rumours of a partnership with Google. Our view is that it would be very surprising if Google did not enter the TV market before very long. It is certainly possible that Intel and Sony could be key partners, although unlikely if these prove to be exclusive deals for any player. Intel for one has made it clear it will be friends with anyone, whether in service provider or retail models.

  Intel’s roadmap calls for participation at all levels of the TV market, including entry level devices, but initially its strategy is to drive added value at premium price points. It seems that Intel is finally getting grips with the consumer electronics market after many failed attempts over the years.

  David Mercer

  Client Reading: Connected CE Devices: Global Market Forecast and Outlook

  

  Posted by David Mercer @ 11:18 pm

• 18Mar

  Where can I download the Doodle Jump app for my TV?

  Technology, Connected TV, Digital media No Comments

  The “Three Screen Convergence” concept has been getting buzz for years in the telecom and media industry. While all the three screens are important elements in our daily lives now, the TV screen is still quite different from the other two screens - the mobile phone screen and the computer screen. We’ve all witnessed the abundance of software running on our computers and the exuberance of emerging mobile apps driven by iPhone. But little technological change has happened in the TV industry for decades, merely getting bigger screens and higher resolution.

  But the trend of connecting Laptops to TV sets has been heating up, with some industry researches showing that about 70% - 80% US Internet users would like to connect their computers to the TVs. Now rumors suggest that technology giants, such as Google, Intel and Sony, are gearing up for an early entry in the TV market. As an open platform advocate, Google’s Android OS is getting some momentum and its Chrome OS for computer is supposed to be released this year. So is Google going to launch an OS for TV? It remains unclear whether the platform will work on a set-top-box, on a traditional computer or be embedded in the TV sets, but it is highly likely that Google will do something in the lucrative $378 billion TV market, given the common belief that all TV content will be delivered through IP protocol in the future. I would not be surprised if Google simply modifies Chrome OS to fit in the TV environment, making TV as an extension of your computer at home.

  No matter how the TV OS is going to be structured, it is vital for the success of the TV OS to have robust apps supporting it. There is no doubt that TV apps will take off quickly once an open TV platform is out in the market, as evidence can be found from the skyrocketing of iPhone apps. “Three Screen Convergence” would be more realistic after we have similar experience on all the three screens.

  I can’t envision how Google will play out in the TV market given so many uncertainties, but if they can successfully implement their strategy, the extended search presence in TV market would lead Google to a rejuvenation of explosive growth. Meanwhile, the new TV platform could be a disruptive force for the traditional cable industry who merely serves as a pipe for delivering TV content.

  I’m pretty sure that a new TV era is dawning very soon, and my next question will be - Where can I download the Doodle Jump app to my TV?

  Jia Wu

  Client Reading: Global Audiovisual Market Forecast

  Posted by Jia Wu @ 10:19 pm

• 10Mar

  Cisco’s Wireless HD Investment Hides Behind “New Internet” Hype

  Connected TV, HD and 3DTV, Wireless No Comments

  Cisco built up yesterday’s big news announcement as something “that will forever change the Internet and its impact on consumers, businesses and governments”. The chances are slim that more than a tiny fraction of consumers, businesses and governments will ever actually encounter the catalyst for this revolution, namely the new CRS-3 router, which will help service providers deliver the vast quantities of video that people will expect to consume over the internet in the coming years. So in that sense, the announcement was a slight disappointment, if none the less significant.

  Shortly beforehand, the news arrived that Cisco had also became a strategic investor in SiBeam, Inc. Also currently unknown to most consumers, perhaps, but SiBeam’s wireless video technology could become ubiquitous over the coming decade. We’ve covered it many times, most recently here.

  For some years SiBeam has been in a race with various other technology developers, and primarily Amimon, to bring wireless distribution of high-definition video to the digital home. While early consumer products have reached the market in limited numbers using both SiBeam and Amimon solutions, sales performance has been restricted by high prices. We are also hearing that Amimon’s technology has not proved as reliable as it needs to be, and as we predicted before, we believe the momentum is in the direction of WirelessHD, if there is indeed going to be a single de facto standard.

  Cisco joins other major consumer technology investors Samsung, Panasonic and others in backing the WirelessHD 60 GHz technology. So as well as investing in the future of internet video distribution, Cisco is counting on tomorrow’s in-home video networking technologies to build its vision of a world of networked video.

  David Mercer

  Client Reading: Wireless High Definition Appearing Soon at a Home Cinema Near You

  

  Posted by David Mercer @ 3:31 pm

• 10Mar

  Cable’s Differentiation Challenge

  Connected TV, Broadcasting No Comments

  “Life used to be easy,” says Duco Sickinghe, CEO of Belgian Cable operator TelenetOnce upon a time, the company had only to worry about keeping its television customers happy. Today it faces a new competitive reality; one where the triple play bundle of voice, video and data has become table stakes, and effective differentiation is paramount.

  Indeed, the entry of Telco companies into the television arena has been disruptive to the industry, putting satellite and cable companies on the defensive, while at the same time opening new points of entry into the subscriber’s household.

  In short, all bets are off.

  Increasingly complex  product offerings have catapulted many consumers into a state of perpetual confusion. While Cable as an industry has burnished its image in many Western European markets, in others it does not have the same history or credibility. And research suggests that it would be unwise for any operator to take its customer’s loyalty for granted.

  A survey fielded by Strategy Analytics in Q2’09 shows that stated satisfaction among Western European Digital Television customers is quite high, with 63% reporting to be either “somewhat” or “very satisfied” with their current service. However, when presented a competing offer, 20% cheaper, a full 45% said they would make the switch.

  Cable’s competitive positioning varies by country, though historically it has been portrayed as a “value offer,” competing largely on price. While there is much talk of evolving cable into a premium offering, Strategy Analytics’ research confirms that consumers are still relatively price-sensitive.

  The same survey showed that, irrespective of platform, Western European digital television consumers have a low perceived “value for money” from their provider, with only 21% saying it “exceeded” or “greatly exceeded” expectations.

  Even lower-rated was customer and technical support—with only 12% finding their provider to exceed expectations.

  The challenge facing operators, then, is to simultaneously and consistently demonstrate value for money and service excellence.

  Nobody said it was going to be easy.

  Posted by bpiper @ 12:57 am

• 05Mar

  Sony’s PS3 to Win Current Games Console Battle; SA Forecasts 47.5 Million Global Console Market in 2010

  Games 37 Comments

  As promised, a quick preview of our games console forecast which will be published early next week. No surprise that Nintendo’s Wii stands in the lead at the moment, within the current generation of systems, in terms of global installed base. We estimate that there will be nearly 76 million Wiis in use worldwide by the end of 2010.

  But the signs are that the Wii has peaked in terms of console sales, and its installed base will begin to decline after 2011. Meanwhile, Sony’s PS3 and Microsoft’s Xbox 360 will continue to grow, so that the PS3 will become the largest platform globally by 2013. In terms of cumulative lifetime sales we expect the PS3 to hit 127 million units, compared to 103 million Wiis.

  These estimates are derived from our core forecast scenario, but we have developed various scenarios for each platform. Uncertainties clearly surround each of the major platforms, particularly relating to the new services and upgrades planned by Sony and Microsoft. Natal on the Xbox could be more beneficial to 360 sales than expected, and Sony’s own motion controller, together with its plans to upgrade all PS3s to 3D capabilitiy, also represent potential for upside to our core forecasts.

  This year’s global market for consoles is likely to fall again, after a 6% decline last year. For 2010 we are predicting global console sales of 47.5 million, a 9% decline.The Wii will account for most of that decline: sales of the PS3 and Xbox 360 are predicted to increase.

  David Mercer

  Client Reading: Global Video Game Market Forecast

  

  Posted by David Mercer @ 8:38 pm

• 04Mar

  Should Every TV Content Owner Take a Stake in Hulu?

  Connected TV, Digital media No Comments

  Viacom is not happy. It is not happy sharing ad revenues with Hulu for their hottest TV shows. It believes the shows should worth more than Hulu can offer now. So Hulu has to remove Comedy Central’s The Colbert Report and The Daily Show With Jon Stewart. Here is Hulu’s blog post about the issue with Viacom.

  This is clearly bad for consumers, who want to have their content access all at one place rather than going to different sites. As Internet is playing a more important role in TV and video content distribution, consumers benefit from the openness of Internet, where they can search for specific content they want. Meanwhile, they also have to live with the pain that content distribution is so fragmented online that they have to jump around a bunch of video websites to watch different content.

  Some media executives say that media industry is a convenience industry. What it means is that one of media companies’ major value propositions is to provide convenience to consumers to purchase and to enjoy media content. It is apparently true. If a media company creates great content, but makes it hard or unaffordable for consumers to access, it would end up for consumers either pirating the content or looking for something else to entertain themselves. This might not be the case for the two Viacom’s show, as consumers can still watch the show at TheDailyShow.com and ColbertNation.com, but it at least suggests that Viacom hasn’t found its ideal content distribution practice online.

  Hulu, founded by NBC and FOX in 2007, provides consumers an single gateway to access content from NBC and FOX as well ABC now. Its owners like Hulu, as it is their own distribution channel online that is fully controlled by them. 100% of the revenues generated by Hulu goes to the shareholders proportionally, after subtracting the costs. However, for an outsider like Viacom who does not have a stake in Hulu, the video aggregator is merely like another YouTube with more targeted audience, as Hulu will take a cut of the revenues generated by Viacom content.

  We at Strategy Analytics have been long positive at Hulu’s business model than at YouTube’s, given that Hulu is not required to pay upfront minimum guarantee to its owners, while for YouTube, the upfront payment is usually needed. But in Viacom’s case, Hulu has no difference from YouTube for them.

  I believe it is a loss for both parties to remove the show from Hulu, as Hulu loses great content whereas Viacom loses audience, despite Viacom believes that its own loss is not as big as Hulu’s. So is there a solution for the issue? Probably. Viacom could join ABC, NBC and FOX’s club to own a stake in Hulu, which could let them enjoy Hulu’s long-term growth in stead of caring about short-term money. Hulu would also benefit from Viacom’s high quality programs enhancing its current competitiveness. Consumers will love it since they don’t need to jump to different websites to watch the videos they like.

  Certainly, there are several barriers that need to be tackled in order for this to happen. First, it is unclear if ABC, NBC and FOX are willing to let their competitor to own a part of Hulu. Even they are, conflicts on the control of the site among these large media companies could be an issue in the future. Second, Hulu would be declared as a monoply if they gain investment from most of the big media firms. A similar online video service proposed by BBC, ITV and Channel 4, Project Kangaroo, has already been blocked by the UK Competition Commission. 

  Stay in the status quo or go to buy a stake of Hulu? Now it’s up to Viacom to decide.

  Jia Wu

  Client Reading: Online Video: YouTube vs. Hulu - Let the Battle Commence!

  Technorati Tags: Online Video

  Posted by Jia Wu @ 10:00 pm

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