Business Models OTT and HbbTV

It has been a while since I was compelled to write.  In the main I have been busy professionally, but secondly because I actually became bored with all the hype.  I drowned in everyone’s claims that they had the solution to TV, OTT and Internet TV etc.  We all have a solution and there are more and more entering the market each day…HOWEVER, I have reiterate that it is the Business Model which is still the issue for the FTA and DTT market:  Just look at the shocking revelation that the BBC’s iPlayer business i.e. Software and Services to deliver “Yesterdays TV” has cost the License Fee payer some £22.5 Million and probably more yet undisclosed amounts; with an estimated £5.2 Million pounds running costs/annum…and with NO ROI.

Presently all broadcasters are being touted a multi SDO “jigsaw piece” technology called HbbTV which is supposed to allow seamless OTT services (again one of many I might add).  This too needs massive investment and has to have a continual update of content and services to keep it interesting and relevant to the broadcaster.  The costs of Internet Back-Office Infrastructure and Staffing for the delivery of all this “archive” material is quite eye-popping and the BBC have helped identify the previously unknown levels of investment required.

Having analysed the news and hype around HbbTV it is plainly clear that they have totally replicated the early days of the MHP chicken and egg scenario – No devices in the market therefore no investment in the “Content and Services” from the Broadcasters.  No Content and Services from the Broadcasters therefore No HbbTV equipment in the market…Doesn’t that sound slightly familiar?  How long will HbbV have to go before it is considered not the right way?

Before anyone shouts and states that the Back-Office Infrastructure is there and its just a matter of the TV Interface on the device to access existing content on the HTTP servers…think about it logically and in business terms…Differentiation!  Is there an ubiquitous user interface for all DTT Broadcasters – NO; is there one standardised video player with one standardised DRM?  No there is not and maybe never will be…This is because there the desire to have branding, own look and feel etc.  which has been the difficulty in the “Multi-Reception” device since TV went Digital.  Furthermore we do not see simple and easy replication of Broadcaster Websites on the TV…not possible… that has been and gone many, many times.  Its 2010 and yet another #fail example: HbbTV recently demonstrated to the Spanish broadcasters this month a “German Channel Catch-Up TV” service which looked embarassingly basic and hardly befitting the  multimedia services consumers expect today.  This compared to the MHP version of an I”talian Catch-Up TV” service with full video PIP and all the bells and whistles; which was a virtual 100% identical replication of the actual Broadcast Service that is on air.   The point is that we are supposed to be going forwards not backwards.  The STBs have the power to offer Multi-Media, yet we do not see it in HTML only based devices…a turn-off for users.

Furthermore OTT has to pay for itself (it is a detractor from the linear line-up that will need careful business modelling) or it will just be a drain on the bottom line that the CFO may question as to its relevancy to the business.  e.g. MHP was turned off in MTV3 finland because money could be made in selling advertising over the bandwidth taken up by MHP Applications…A simple bottom line business issue not a technology issue!  If you want Catch-Up it may well be you go to the PC and get it there…call me a dinosaur but courses for horses has always been an appropriate motto.

All that has been proven is that the Business Model is the same as it has always been in DTT (dificult to quantify and change).  Operators in the PayTV business get instant remuneration and that is the very reason that they are miles ahead in delivering Compelling TV to millions of people worldwide…

2 thoughts on “Business Models OTT and HbbTV

  1. Anthony,
    From abroad I tout the iPlayer unequivocal success.
    What are the sources of these bad financial figure for iPlayer?
    Looks like I might have to modify the party-line.

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