UBER BE SCARED – It appears that you have a new competitor – The wonderful world of HBBTV has delivered its latest ‘App’ and it may rock the Taxi App World of the Smart-Phone … I cannot imagine when you might be watching TV and suddenly think – I will order a Taxi ! … Well the Czech Republic thinks so. Good luck with that!
Once upon a time we switched on the TV and watched a programme or two, in the evening after we had tea, when the kids were in bed and it was time to settle down to relax. TV Time was limited as the TV signal would shut down at night and eight-year-old Carole Hersee would appear (in the UK at least). We had a choice amongst Light Entertainment and Drama, Documentaries, News and Sport all chosen for us and delivered when somebody else thought best.
Life is a little different now because:
Today we want TV at Anytime, Anyplace, Anywhere and we want to watch What We Want, When We Want, Where We Want. We want to watch Live TV, with the use of Pause and Rewind Live TV. And if we miss missed the beginning of something we need Start Over TV so that we can go back to the beginning of the programme that we have joined late. We need Catch-Up TV for shows we have missed. We need to Store Live TV programmes for later viewing on a Hard Drive (Personal Video Recorder) or a Removable Storage device with the possibility of using Series Recording for Binge Watching. We also want to be able to Side Load content onto a Companion Device to consume later when in the garden, or perhaps travelling on a bus or train. We want a Whole Home PVR system or Network PVR so that we can have Follow Me TV that allows us to start watching in one room and then take the content into another room and join it from where we left off in the other room. We want Companion Screen driven TV Everywhere so we can Throw and Fetch programmes from those devices to different screens in the home. We want Over The Top TV so we can have non-Linear content and not be restricted to a Schedule. We want Interactive TV with Applications that allow us access to Weather, or Horoscope or Games and a lot of other stuff all delivered over the Cloud and Home Network. We want to be able to Search for, and Recommend content to other people on Social Media. We don’t want this on a STB or CPE we want all of this on a Smart or Connected TV, in 3D or Ultra HD 4K or perhaps Super Ultra HD 8K. We need it in High Dynamic Range, so that we get the best quality on a Curved OLED, millimetre thick, Flatscreen TV: 24 Hours a Day, 7 Days a Week, 365 Days of the Year completely uninterrupted.
TV Content has however NOT broken the boundaries that technology has. Geo-Blocking, Distribution Rights, Landing Rights, Syndication, Franchising and all that shenanigans is hindering and hampering not helping, other than to further slow the transformation of TV – Perhaps that is a good thing?
About 6 years ago I wrote, “Don’t be fooled by the technology gurus and those who would build a better mousetrap each week, thus disrupting the status quo of Television”. I knew that the TV industry was about to embark on a rough ride into the 2000s. We still see that we don’t always need a fully packed line-up of new TV gadgets, as shown by the recent survey in Poland where they found that users only press approximately seven buttons on the remote control. Unfortunately, in this day and age, we believe that #Millennials are different and that they are the future and what exists is not good enough for them. So we have to continually deliver very sophisticated products year-in-year-out with funky new remotes, with hundreds of Apps right down to Twitter, Google and all that other Social Media access for TV. Whilst all this happens deployments of this new TV tech paradigm struggles to make sense of the new business model requirements. It is easier for to go with the flow of technology leapfrogging of existing TV products before chosen implementations can find their place as a revenue generating business. Next please!
With these aforementioned issues it appears that fragmentation and disruptive technology is the future of television. We are all guilty as we march forward, driven by the desire to keep businesses rolling along ‘positively’, regardless of whether the customer needs new products or not. Fragmentation in the early 2000’s was mainly about the plethora of different transmission systems, especially when IPTV and WebTV appeared. There was, and still is, too much TV middleware diversification, too many content security options, multiple application types and a whole swathe of other technologies that CTO’s are faced with in the market. It is now 2015 and we see fragmentation about the only phrase we hear at conferences, seminars or during interviews with TV tech personalities in the trade press. I remember hearing for years (and still do) that the end of the set-top-box is nigh! No it is NOT. Predictions, predictions – Now it is the death of payTV is nigh because our well educated and well-fed #Millenials are abandoning it for OTT services a go-go. ‘A-La-Carte’ is now happening, and there is apparently a massive cord cutting exercise going on. Blame it all on the #Millenials!
Ummm…Well, it is not quite as simple as that I don’t think. Yes, we have an enormous fragmentation problem but it is now much more multi-faceted. What we have now is both a technology, as well as a business model fragmentation. This industry of ours (Digital TV) runs at a fairly slow pace so most of this fragmentation started before Millenials had paychecks. The fragmentation is mainly due to the technology surge as greater broadcasting bandwidth capabilities emerged i.e. DVB-S2, DVB-T 2, DOCSIS 3, and consumer premise larger Internet bandwidth offerings. Add to this cheaper memory, more powerful chipsets, subsidised Internet TV boxes and content available just about anywhere you can think of; even at Starbucks when getting coffee and you see the issues. Now add an even further complex business model into the mix – The fragmentation at content level via Broadcaster Apps etc. It is getting quite messy out there.
The Answer to Everything – ‘Roku’ #LOL!
The term ‘A La Carte’ for television programming has been bandied around for many years. Finally in 2015 we see it start to unfold with Netflix, HBO, Amazon, Google, ESPN, YouTube and others trying to be the unique supplier of TV content directly to consumers. Reminds me of a recent Sam Smith song, “Stay with me, your all I need”. OK to date it is not entirely a clear cut ‘A La Carte’ offer but certainly it is not the linear bouquets and payTV bundles as per the payTV providers traditional business model either. It is disruptive to all of us in the TV business and the viewers’ also unless of course you are a pure OTT provider – the picture is clear for them – divide and conquer!
I was at a Connections Europe conference last year where I heard a TV executive espousing that consumers have been asking for, ‘What They Want – When They Want – Where They Want’. And that this desire has seen the abandoning of traditional payTV services because people cannot achieve this with the present systems on offer. I found that old mantra to be very naïve. The reality of delivering ‘What You Want When You Want, Where You Want’ is quite a technical and not in the least a huge business challenge on an operator by operator, market by market basis. This is especially true outside of the USA where ‘local language, broadcast rights and release windows’ are a sport in themselves. The TV executive was from Roku, and he went on to tell the Connections audience that they, Roku, had the answer to our terrible TV fragmentation problem and customer’s needs. It went a little like this: ‘We have addressed the issue of fragmentation with Roku TV, an OTT device, which allows ‘all content’ to run on a ‘single platform’. Dah! Dah! All Sorted! All I could think at the time was that he had clearly never worked in the TV industry for very long or had apparently over swallowed his corporate marketing pitch. Most of the audience, as per all conference audiences this day and age, were rather passive – Nobody challenges his naivety. I was too shocked at this announcement that I just sat there wondering if the young gentleman actually understood the complexities of the TV industry or had just chosen to ignore it for an opportunistic product pitch. I hope it was the latter!
Apple TV got there first with this concept and quite some years ago dear Mr. Roku. However, they failed to solve the ‘common-platform-for-all-content-in-the-world’ issue. Not even with their worldwide iTunes based deployment platform were they able to conquer the planet; but Roku thinks they will. Apple has to default to local language content, no cross border dipping into other iTunes locations and furthermore they are faced with an inability to provide access to a broad range of international TV content because of the very convoluted licensing issues that abound in the very complex European marketplace. Unfortunately iTunes for video is like iTunes for music; most people clamour for the ‘Top Ten’ i.e. most popular films and naturally the most popular or trending TV Shows. Nothing has changed in 2015 on this front therefore I do feel this a sign of things to come for all the new entrants into this OTT market.
Waiting Is Not An Option – Piracy Is!
An interesting, and up until now unexplored issue surrounds the difference between music and video consumption. We know that we can listen to music over and over and even over again, but video content, TV shows, movies this is a different proposition. It is in the main a single viewing experience, rarely repeated. We want NEW, NEW, NEW, and it seems that WE CANNOT WAIT anymore. The masses acting like sheep as they follow the trends around Walking Dead, Game of Thrones to Breaking Bad with their spin-off Let’s Call Saul as if there is nothing else interesting to watch on TV. Well, that is what we are led to believe by the protagonists of this new world of television. I have noticed that business people only mention these recent ‘most popular’ shows during all discussions concerning the future of TV viewing. I have never heard Gardeners World, Living Planet, The Simpsons, The 10 o’clock news ever get a mention, and some of those shows do have very significant audience sizes! It seems that humanity has arrived to the point where we even BINGE voraciously on DVD box-sets (well some tiny percentage do) and then we sit pensively awaiting the next show to come to the market. E.g. Today the announcement of Series 3 of the House of Cards has the populous all of a fluster on Social Media – They cannot wait, and this adds to one of the TV industry’s business issues – that of piracy. The Oscars saw a 317% rise in the piracy of the nominated films this year, which highlights the problems surrounding the management of the new content hype with sophisticated consumer held Full HD cameras, large Internet bandwidth for sharing and easy access to anything you want on-line.
‘Recency’, yes ‘Recency’- Once Called Most Popular
In the world of Broadcast TV the linear channels are not helping themselves too much either – programming is becoming unusually dull in some sectors. On certain nights in France, I can watch 4 to 5 same-genre shows transmitted one after the other on the same channel. The average viewing time in France is around 3.5Hrs/day/person. Four NCIS shows in a row you are already close to that … as is four episodes of Bones or perhaps one news, one quiz-show, one movie and possibly another programme added to that line-up makes 4 hours easily reached. In this calculation a film could come off a VOD catalogue or a PVR not from a live broadcast. So little time for all that content but hey such a choice! I am trying to make the point that we cannot consume the over-abundance of channels that carry thousands of hours of shows, films etc. Personal tastes are so diverse that any ‘personal’ line-up will be very different. We also seem to believe that everyone actually KNOWS what they want to watch at all times. What if they have not seen a show or film that has been released? How will they know what it is all about? Marketing still works to drive consumer take-up. Television still advertises forthcoming shows on TV, Magazines also carry promotion and billboards/posters on bus shelters too have their place in awareness campaigns.
I would like to explore what happens if it gets to the point that you ONLY pay for what you watch? I have a feeling thet we will arrive at a situation whereupon content quantity and quality will ultimately suffer. It will be impossible to please 100 million people each evening with their 100 million individual viewing packages and maintain a sufficient panorama of content to be able to satisfy all the tastes of all the people all the time. TV programming is a little like running a restaurant. We need to stock up the kitchen ready to serve a public who choose meals randomly from a LIMITED a la carte menu. Done so that you have some control of the purchasing of ingredients and delivery process. Splitting everything up into individual components is pre-menu and will if left to the consumer to choose quite frankly only lead to a dog’s dinner of a situation for all. How does the restaurant manage the complexity? They choose the ingredients, contol the choice and limited to avoid waste? I think a consumer would soon get fed up if they had to ‘construct their meals’ from a set of individual ingredients day in, day out. We also know that ‘a la carte’ in a Restaurant is much more expensive than a ‘Set Menu’. Imagine that you can only get a full meal by having to go to different restaurants in order gather all the ingredients in order to have a satisfying array of meals. An entrance fee per restaurant – fish from one, meat from the other, dessert elsewhere, cheese in another, wine from elsewhere! You would soon look for someone who could supply you a ‘one-stop-shop’ location offering up a choice from a set menu I would imagine. I know I would! Look at what Rabbit TV is doing with Free-to-View content for 10 dollars per annum. People are lazy…Millenials will also become lazy as they age.
The debate about ‘A La Carte’  and different content suppliers turns around a made up word I heard at Connections Europe for the first time – called ‘recency’ i.e the most recent TV Shows and Movies (Back to my Top Ten argument). Again in all debates on the future of TV is there discussion, mention or consideration regarding other content that is also very heavily consumed such as News, Documentaries, Light Entertainment and many other genres. I believe that we are heading towards disaster as we all clamber for only the ‘Top Ten’. We will see the masses consuming only the ‘Top Ten’ which means all other content will lose funding with – long-tail or back-catalogue dying away.
Conclusion – Let’s Watch it all ‘Unfold’
Of course nobody can tell where this is heading, and I see years of debate ahead. It may be the younger generation who don’t watch TV like their parents, but they eventually become parents and have less time for TV. There is constant scaremongering regarding the new churn-rate which has been christened cord-cutting. The Millennials are the cause of the issue with their refusal to pay for content that they don’t watch; add to this the fact that they don’t want advertising either begs the question – Who will ultimately fund content? The Millenials will of course! But what content? The content that they want, when they want it and where they want it! What is that and how will it be defined? By the Millenials? Who knows?
… A quick aside about a la carte. If the government forced networks and distributors to offer individually priced channels at retail — yes, that could lower the total cost of someone’s bill. But the cost per channel would skyrocket (ESPN could go up to $30 per month, according to one analyst estimate), and consumers would end up paying much more for far less. A broad shift to a la carte would spell doom for many networks.
This is something I learnt at IBC 2013. “DON’T SHOW WE WHAT IT IS MADE OF – SHOW ME WHAT IT CAN DO FOR MY BUSINESS”. So yes at IBC I was awaiting the hype and the buzz of RDK and 4K. Respectively one is a new ‘Middleware’ that is touted as the next big thing for the Cable industry with Open Source and Shared Source being bandied about, the other is a new Transmission level above HD called Ultra HD (4K). Supposedly RDK is to make it cheaper and faster for the operators to deploy STBs. RDK was designed in 2009 and it was a damp squib at IBC. UltraHD needs no explanation it had WOW factor!
On the RDK side the show was so disappointing that I was disappointed myself. There was simply nothing shown as to what these ‘amazing’ RDK components allow you to do or why this particular flavour makes TV any better than it is with similar components of equal or better capability (Open Source or not).
When you try to move Middleware mountains you need to make sure that it doesn’t take all your effort in tuning the engine when at the end the tyres are flat. RDK will potentially be the next middleware ‘White Elephant’ after MHP.
Those who saw the Nagra OpenTV 5 Ultra HD demo at IBC will concur that they most certainly have have pole-position.
There has been quite a few initiatives around the Open Source aspect for Software in the Digital TV domain. Open Source is not Standardisation but in effect it is, if it becomes ubiquitous.
The lowest common denominator for the software is a decent OS stack and Engine. Canonical has the foundation upon which to build an Open Source model for the TV industry. Will ‘people’ allow that to happen? That all depends on the age old problem of ‘politics’.
How difficult is the business of Digital STB/iTV middleware? How many attempts have there been to create a long-term sustainable business in this field, only for it to fail? Middleware is expensive, requires huge engineering resources, long implementation cycles, onerous testing and in-field evaluation. This makes middleware a difficult sell into the market because apart from any technical requirements there are many other players in the value chain that need to align beforefore there is any deployment and ultimately a middleware success.
Whilst this is the case, since TV went Digital, it has not stopped companies trying to make big business in this market segment. Since the 90’s many companies reached a certain maturity; their Middleware tenacity paid dividends and they seemed to be on the crest of a wave – then Kaboom! It was all over. This has been due to, in the main, a technology or market requirement change. In fact the Television Middleware market has seen a lot of these changes over the years with a plethora of new technologies appearing every few years. Embedded technologies such as MHEG5, PowerTV, Liberate, MicrosoftTV, OpenTV, Mediahighway, MHP, OCAP, ACAP, GINGA, EBIF, On-RAMP, Tivo, Moxi, GEM, HbbTV, Flash, HTML5 and others have all been put through their paces, struggled and have either failed or have been ousted by another. The Broadcast/Operator Markets get bored with middleware after a few years. Naturally new software and services evolve, new companies emerge in the form of young, hungry and agile businesses that are able to distract those middleware customers. The latest is SECOND SCREEN/COMPANION SCREEN and the CLOUD interactivity which is a cheaper ‘non-embedded’ solution much more favourable in terms of CAPEX & OPEX considering many Broadcasters and Operators already have On-Line services as part of their business today. However, once again alignment of many players is going to be the key to its success.
For those Middleware Companies who have not invested and merely followed the trends see their failure to innovate shrink back their business opportunities quickly. They fall behind by selling their Slideware. The answer is really quite simple and that is to have an innovation team in place, but this rarely happens if there is weak management in place. A significant disruptive issue is that the cost level of new-software royalties demanded by new players is radically changed downward and the middleware business teams start to feel the pressure. As the Business Development manager presents this market issue to a bemused Senior Management team he is told that He and Sales must sell what they have and stop complaining about the company portfolio! The deals actually slow down then the actual customers you have play with this market phenomena working you harder for less money. It is brutal! I have lived it twice now! The following is a list of things that happen when weak management fails to innovate…
- Management starts to bury its head in the sand, blaming the workers on the coal-face for lack of sales
- You are forced to focus on short-term results which drives out all ideas that take longer to mature.
- Changing a new technology direction evokes fear of cannibalisation of current business and this fundamentally prevents investment in new areas.
- Most of your resources are devoted to ‘day-to-day’ business so that few if none exist for innovative prospects.
- Innovation becomes someone else’s job and not part of everyone’s responsibility.
- Ideas are often quashed as outlandish and there is a retrenching by the old guard of the company.
- An efficiency focus eliminates free time for any fresh thinking.
- There is an avoidance of responsibility and therefore no process to nurture the development of new ideas.
- We look internally as we panic rather than starting with the market changes and customers’ needs and problems
- Try to sell people technology that you have, which is not what the customer wants so they go to your competitor.
- All incentives are geared towards maximizing the present business and reducing risk although it is not possible.
- Senior managers immediately look for the flaws in new ideas rather than teasing out their potential
- Budgets are squeezed, marketing is reduced, cost cutting is the answer.
- You start to sell what the customers want to hear; it become Slideware selling.
- You can excite the market but cannot deliver the technology in the time-frame required.
- Competitors overtake you, squeezing you out of new deals.
- When you do finally have the technology it is too late as the market has already chosen.
- The managers that speak up and highlight the inneficiencies are quashed and replaced with yes-men.
- The company struggles and the inevitable happens.
In 2005 I wrote a book with, an ex colleague, around interactive standards in Digital Television. Last week I participated in the putting to bed of a number of regimes that concerned the principal SDO specification featured in the aforementioned book. In parallel a Patent Pool associated with the technology was also closed as they were unable to make any headway in the licensing of the intellectual property. I have evangelized this technology for years and many of you will know how effervescent I was when it came to the subject…sadly all things come to an end or are replaced by new technology. Over many years Interactive TV has had many ‘endings’ but also many new beginnings…I still believe in the future of TV as a less passive more active experience…so please just watch this space…There is a second coming.