It is not only the CE manufacturers but also the wider STB industry that plays a large role in the problems we face today in delivering Advanced Services and Interoperability. The issues are twofold.  First of all, and naturally, they will put whatever the Operator wants in the box…Hence a real fight over Middleware! Secondly in DTT there are problems brought about by the cheap Chinese manufactured Digital TV Zapper STB (Analogue to Digital Converters).  This 2^nd issue led to a business model “spanner in the works” for deployment of Advanced Services.   For example Finland a victim of early adoption in the Interactive DVB-MHP technology saw high receiver prices and found itself caught in a conundrum as non-interactive “Zapper STBs” flooded the market.   Uptake of Interactive waned as it was not compulsory to have the technology in the box so the retail industry went for cheap and cheerful convertors and Countries fell apart at the Broadcasting seams!

Spain is also struggling to move to Advanced Services/Interactive TV due to a lack of coherent planning; all SD and HD Zapper digital receivers deployed (many, many millions) would need to be swapped-out in order to receive any Advanced Interactive Services.  The Government is being confused by the CE industry lobbying despite there being EU Recommendations.

Another example is France, who has not launched Advanced Services/ Interactivity; Should they do so then all receivers in their market for the TNT Network (again many, many Millions), of both SD and HD transmission, would need to be replaced no matter what direction the governing body (CSA) chooses – France in fact wishes to adopt a CE-HTML like variant making it another “SECAM-L type choice in a PAL Europe”. They now want to add PayTV and that means certain STBs do not have the software capability!

You can have as many EU directives as you want it seems but who gives a damn as they are not advocating a mandatory middleware.   Interoperability cannot be achieved in this case.

Part 3:

So let us continue the story and get a little more complex.  The Internet!  It all started with ISPs (Internet Service Providers) who allowed people like me to gain access to servers that held WWW pages and allowed us to transfer files around including Email.   Small ISPs grew up and Internet mania took off.  (ISPs increased from about 1,400 in early 1996 to 3,000 at the beginning of 1997. By mid-1997 there were an estimated 4,000 ISPs in the United States and Canada). Many of them were small operations that served consumers and small businesses in local markets by leasing and reselling the Internet services of larger ISPs. To stay in business smaller ISPs merged with the telephone companies to provide customers with a single source for a range of telecommunications services.  ISP’s had wonderful Acronyms like AOL, MSN and some weird names, particularly Wanadoo;  who was familiar to me in France where I connected via a 128Kbytes dial-up modem and watched in horror as each month I was presented with huge phone bills because I was paying for time connected on-line (metered).  Wanadoo became Orange which became France Telecom.  In fact consolidation in that market saw huge Telecoms Operators become the dominant player in national markets.  There is of course BT in the UK, Deutsche Telecom, Belgacom, Telekom Austria,  and so on and so forth.  Broadband speeds increased, Flat-rate charges came in and then we saw them make a move to deliver TV over the wire.  IPTV arrived and hey guess what?  More choice of TV but more Digital TV fragmentation!

So Internet happened, it continues to develop.  We already know that just physically connecting technology to the Internet is itself a challenge which is leading to “wireless”, connected home, gateways, home networking, DLNA, MOCA and even more ways to distribute signals.  See what I mean about the technology wars!  Incompatibility in equipment, data pipe speeds, power of chipsets, memory constraints in the STBs etc. graphics inability et al caused headaches.  Today it is blurring.  The TV Industry has a long history of unsuccessful attempts to match Broadcast and the World Wide Web functionality on the Television.   It is simply two world’s colliding with inappropriate device functionality.  A TV will never be a PC but a PC can be a TV!  Television programmes over the Internet are a viable route and as highlighted earlier we have seen the Telco’s take advantage of this.  So further to the fragmentation story that has added DRM into the IPTV world and HTML based presentation engine.

Part Two:

In a complex “disruptive technology world” there is an exacerbation of many issues some relevant in business terms starting from choice of technology, which supplier, what business model and how to sustain growth.  Companies and Countries are adding to their own business issues  as they put up the façade of supporting Standardisation work whilst they are all vying to sell proprietary product to the Digital TV industry and thus adding to the problem of fragmentation.  Everyone is trying to become the next “Microsoft” by ensuring that they have a foothold in the market with some sort of unique offering that ties them in to the customer and that will make them margin high, cash positive, revenue strong.   That is certainly what my CFO wants and what most investors want to hear!

So as the DTT Broadcasters hesitate to step up to any true Multi-Media offering the CE manufacturers who were once beholding to the Broadcasters see themselves in 2009/2010 in a dominant market position.  Why is that?  Broadband Speed!  Whilst the Broadcasters hesitate to offer interactive & hybrid systems in order to grow or even just to retain market share they are faced with CE Manufacturers “going it alone” over the Internet.  DTT Broadcasters hear from all and sundry that the TV world is fully moving to Internet access viewing and that they should all go “via the wire” as well as the aerial:  due to old business models at the TV level they should in effect allow CE manufacturers to put out their Broadcaster Content on Connected TV portals into the retail market.  The CE manufacturers are telling the Broadcasters that they will “lose out” if they do not put their content onto those Connected TV portals because nobody watches linear TV anymore!  The Broadcasters do not know if this “On-Line TV” is going to be a success and so some have, and some have not made the step – more fragmentation.  CE manufacturers also offer up their own access to VOD catalogues and are becoming Internet Broadcasters.  The Broadcasters slow to react are worried about take-up of Digital TV are “taken in” by this marketing ploy, are disrupted by the hype.    Of course marketers at the CE manufacturers have understood the market dynamics with all its disruption.  Their standard “selling TV Sets business” can no longer define a “Pan European TV” to obtain economies of scale.  Each country requires different transmission systems or a mix of two or more (analogue, SD, HD & 3D), middleware is different, CA is different and as in Italy different per Broadcaster.  So it is clear that they will either move away from, or go back to being “dumb terminal vendors” and the latter is not in their mindset.  CE manufacturers want to dominate today, believing that they dictate the market direction!  So Content and Portals over the Internet seems like an interesting business model for them to follow and that is where they are heading.  The relevant question here perhaps is this:  In Digital Terrestrial Television What or Who is the real “Market Driver”, is it the DTT Broadcaster who buys and produces the Content or the Consumer Electronics Equipment TV Manufacturer who has the consumers eyeballs?  It is not really the Transmission System or Software but that plays a big part?   It is most certainly not the Consumer who has to follow this ever changing and overly complex scenario.

European Digital Television cannot in any way, especially in today’s modern multimedia market-place, be considered a roaring success.  Why not?  Well for one thing it is a highly fragmented market at both International and National level.   The problem is that we are now in a purely technology led marketplace.  Whilst we wait for the next “gadget” like the iPAD to appear we have fallen into this technology spiral in the TV Software business as well.   An announcement for “Holographic TV”  from Japan this very day is a clear indicator that we are in technology tidalwave.   Tom Thomas at ArqMedia recently left a blog comment here which clearly sums it all up.  He stated, “we are in a market where the technology capabilities have overtaken the actual business demands/models”.  It is plainly evident that we can build it but can we use it all to make a business and sustain a veritable long term business model? As the business models cannot be found we continue not to deploy services whilst inventing new technologies to solve the same Advanced Services needs as the years go by.

A recap shows what a state we have gotten ourselves into.  In Digital TV terms Satellite was the front runner in the move to Digital Broadcasting.  Differentiation for the Operators meant not using the same Conditional Access as your competitor, nor the same Interactive Middleware engine to offer Advanced or Value Added Services.  What we also saw was in the business mix a leaning towards business nationalisation where Scandinavian CA, French CA took up initial residence in its country of origin.  Big satellite Companies chose “local” technologies and built out in their regional market in their national tongue.  Companies like Canal+, OpenTV, Liberate and NDS thrived in the PayTV arena.  It took a while but ROI became paramount.  Many businesses failed or struggled to grow as it got harder and harder to stay competitive.  The market fragmentation was already proving to be an Achilles heel!

With market growth in mind many Companies moved into the Digital Terrestrial Television market and we saw OnDigital in the UK and and Quiero TV in Spain offer up a PayTV service which crashed and burned.  The Business Model just did not work in a market where consumers were getting (FTA) FREE to Air TV!  Unfortunately the DTT sector, many years on, is still suffering badly from waivering business models and too much technology fighting to provide the Advanced Interactive Television Services environment.   At the same time the industry calls out for “Standardisation” and has due to the lack of business model has also become “over-standardised” because whilst no deployments take place of already designated standards engineers need something to do; so they invent or believe they have found new mousetraps to answer the issues.  But technology will not provide the answer!  The business model of Free to Air Broadcast is hard to quantify.  Advertising driven in the main and suffering during economic downturn.  Public Service Broadcasters have no way to create revenue to justify developments.   The BBC hails its Interactive offering a success but fails to mention that it’s driven in a business model that gets “money for nothing and delivers tricks for free”.

• Nobody has compared FILM to PHOTO and looked at the evolution and take-up of 3D Photography (which remains a niche and curiosity market). 3D Pictures were available to the Victorians and 3D Photos have been available in the market ever since – I do not see 3D Photos being demanded or 3D Picture Frames or 3D albums or 3D graphics novels … Why is that? Probably because it is not the way the brain was intented to view…Perhaps it is because we have sight that functions very, very well and now we have high resolution graphics it is possibly enough. We have sight that is OK except that 3D TV is trying to rearrange it?

In Europe the CE Manufacturers are placing thousands upon thousands of TVs into retail…the Broadcasters are trying to target those TVs.  They will try to do 3D because there is nowhere left to go…I say nowhere left to go because we are caught in a technology driven business right now not a Content Driven business…Like many have said the Broadcasters have been producing Reality TV rubbish and there is hardly any decent, good quality programmes to watch.   For technology we went this route: B&W-Colour-Digital SD-HD-we can even have super HD and now its 3D…The TV Manufacturers want to sell more Flat screens…now they have latched onto the Internet and are trying to become Broadcasters by offering their own portals and content…Its a scrappy-dappy-do mess in TV at the moment as we cannot settle down to creating one good format and make the best quality TV programmes for it without someone telling us that the “next best thing” is going to be “the next big thing”….The Broadcasters are being drawn into OTT, 3D and Catch-Up because they never saw it coming and its a knee jerk response business plan for having sat on their hands for so long they are responding to the hype…But as we have learnt so often – Hype and Reality never or hardly ever go together…I went to a local store yesterday to buy a fan for the office and in the shop they had the latest Panasonic 3D TV showing Volleyball…I gave it 15 minutes to see how I would react.  It was a horrendous, nauseating, brain overload…and irrelevant to most peoples viewing needs.  So as you can see I am not a fan – of Volleyball yes but not 3D TV. 😉

Most Companies have a great deal of “Self Interest” as do most Bloggers…So here is no exception from both sides: The CEO of Espial recently wrote a very short but woeful discussion point in the Espial Newsletter giving opinion on MHP or WEB…In that article he attempted to present the argument that MHP is a 15 year old technology and thet the WEB has developed faster and better…As a long term Digital TV Businessman, advocate of the DVB-MHP technology and Chairman of the DVB-MHP Commercial Module I think that I have the right of rebuttal:

If MHP (an interactive TV middleware) (Java based) had NOT developed then I would have agreed with Mr. Dolvane…however the DVB (in 2010) elevated the DVB-GEM Framework to a principal specification that points to market driven solutions and derivitives (MHP, Tru2way, ACAP, BML, BD-J). The work at the DVB on GEM is ongoing and is a Global framework that encompasses many SDO’s work and input. It is modern and up-to-date! The JavaTV product specifically designed for TV and embedded devices is also an ongoing body of work under the JSR scheme. Millions of JavaTV Developers worldwide contribute, work on and are involved withthe growth of JavaTV for TV yes specifically for TV. The web based Presentation Engine using HTML has once again (for the 3rd time after massive failures) re-entered the world of TV due to the fact that Broadband speeds can now accomodate these large Video files and we want to use that Internet infrastructure to deploy Video. The incumbent software on the Internet is Web Based technology…Yes it has evolved and yes millions of developers are available worldwide: Mostly designing Webpages for Websites…not TV Specific Products or interactive Applications. Those specialist few are but a few!

The claim that MHP is driven by “slow moving operators” shows a lack of understanding about the market Espial and the many others move in: It is by nature an industry that does not move all that quickly. The choice of a Middleware is/was taken and then rolled out for good or bad and those who dipped their toes into an alternative to “NDS and OpenTV” chose MHP…where else were they to have gone at the time? The choice was other competing proprietary offers like Liberate who were based on the WEB…and they went bankrupt…remember the many failures – WebTV, AppleTV, ATVEF, Liberate…Even NDS touts a GEM compatible Middleware today…

The fact is that Internet “Managed Services” a.k.a. IPTV appeared and naturally went down the WEB path – Not too great a success either in reality. Now the Internet allows “Unmanaged Services” or Open Internet Connected Devices to access Video Servers…Broadcasters spending Millions upon Millions (Look at my BBC commentary) to deliver for free – VIDEO ONLY via a graphic user interface based on WEB Technology. Hardly innovative and interactive!

The right technology to ride out Mr Dolvane’s Perfect Storm (Broadcast, IPTV, InternetTV, OTT etc.) is a software that does not drag Broadcasters and Operators down an expensive blind alley such as happened in the PC World; where the Software requires that you upgrade your PC each 18 months (Consumers will not accept the STB and iDTV in the same manner)…where constant OTW (Over the Wire) upgrades, security issues, Spam and other driver related headaches require you to be a Stay At Home WEB Administrator…

The Perfect Storm requires the Perfect Software which is BOTH an “Execution Engine AND a Presentation Engine” to cleverly marry both worlds. It is not “MHP OR WEB” but “MHP or Tru2way or ACAP or ARIB or BD-J and WEB” (which by the way was already available in 2006 for MHP)…If you are a member of the DVB and paid attention you would know this.

I am really both bored and tired of the “Methodology War” in interactivity for TV and am DEFINITELY an advocate for a “Coming Together” of minds on this tiresome subject as all Software has its weaknesses – None moreso than HTML – Finally the weakest of all is the the BUSINESS MODEL it all seeks to answer!

To Our horses…

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…

Anga Cable show once again highlighted the conundrum of connected TV where Companies are filling the screens with unrelated applications. Unrelated that is to the TV Shows or Advertising. The NDS Facebook app (like all the other Facebook offers everywhere else) took over the entire screen thus negating the TV aspect. These Apps simply convert your TV into a PC Monitor in effect… It will certainly irk the broadcasters and advertisers knowing that their precious content is lowered to “uninteresting” if application distraction is that simple. And then whose Facebook account, Mum, Dads, Kids…The Dogs? Clutter and more Clutter!

I am still of the belief that TV is for Entertainment and PC or Smartphone is for Communication of which Facebook is in my opinion categorised as. Monetising it still remains a mooted point.

There were some nice widget use on many TVs but the overall fragmentation of these offers remains a key inhibitor in many of the attempts at attracting buyers. After all it is TV that is actually for sale and where the CE profits lay.

HbbTV had a smattering of airtime but it is clearly handicapped by its use of old technology in modern day STBs. Why in 2010 would you put a single instance application presentation engine (no better than MHEG5 or DVB-HTML) in a hightech sophisticated fast STB Multimedia environment. Running video is fine from a browser or link but that is an HTTP connection and that is just not rocket science. Interactivity is moving on but not in Connected TV and HbbTV is touting itself as “Web on the TV”….quite simply what the industry has being and should avoid mixing with TV. Clever use of Internet in a TV environment is best served with TV Shows as the enabler to value added services…with advertising having its pride of place. Its business that we are in!

The overall ANGA show was OK but there seems to be a plateau reached in all possible services now from Analogue to 3D and anything in-between…Where next? Perhaps after the hype of widgets and the connected clutter we will see the age old quedtion returning – How do you monetise it and manage to create a positive ROI.

The Recent announcement of Connected TVs is quite an interesting view into the TV business of today. The CE manufacturers are packing computer-like features into their TVs with the hope to boost TV sales. If you were to rationalise and reflect on past CE exploits in this field, you would realise that it would make more sense for them to offer a “Media Centre” bundled with a Flat screen. Secondary TVs ( the multi-room route) would be connected by WiFi or Powerline as slave devices. The sensible aspect to this strategy would be that the upgrade, addition of memory and external hard drives/peripherals etc. would then be possible. The cost of technical support of such packed Connected TVs is an interesting discussion never broached. who do you call when you no longer have access to the things you want?

An android powered TV has been shown in the press with Googlemaps etc. Googlemaps or any other (they are not exclusive in this application) is only useful if you can then print to a wireless printer as 90% of map searches results in a paper map so you can take it in the car. No not everyone has a GPS for coordinate input before all you tekkies shout out.

Granted, video related applications are good and give choice. But what if your Internet goes down (and it does) do you still get TV? Do you still get good content available? There seems to be a blinkered view that we all have always on, sufficient bandwidth Internet. This is not a given. Many people have given up on Open Internet connected sites such as YouTube because like the Internet of old they don’t accept waiting in front of a blank screen that announces “buffering, buffering”. If you have no issues you are a member of the privileged few.

IPTV is only 6% of all PayTV subscriptions whereas Satellite, Cable and Terrestrial make up other the 96%. We should see by this that Broadcast is still a dominant force in the delivery of TV programming. No matter what the CE manufacturers believe TVs will not be IP only devices for decades. A STB or Media Centre allows you to have much more effective management of your home network. This also allows for upgrade and innovation. One camp heads for Home Gateway the other for Connected TV.

Those of use who are not drugged by the Connected TV hype realise that the Gartner Hype Curve “Trough of Dissillusionment” has yet to be reached by this technology as all technology devices before it. Dont get me wrong Connected Internet devices will be part of the mix but they will need to be futureproof and a CE manufacturer wants TV sales. Software and Apps always outgrows hardware (a PC is Memory stuffed so has lots of margin) so when an Application gets too big for your TV to handle will you go out and replace it. Not likely. A connected Media Centre gets my vote as it is merely an extended STB which is already mature, future proof but Broadcast focused.