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!
Telco managed TV services (i.e. IPTV) had a great deal of issues obtaining content and it struggled terribly. Some thought it would be built on UGC (User Generated Content). However #YouTube stole that crown. Many Telcos bundled it with the Broadband offer and then ticked you off as a TV Subscriber; whether you watched it or not. Unfortunately it offered a lesser experience and needed linear TV to make it palatable to the average consumer. In the main, people just want to be fed TV programmes and not have to be their own ‘channel-line-up’ producer each time they sit in front of the box. We are inherently lazy and Millenials are no different – If anything their attention span kills the theory of sitting down and selecting a nights viewing by App scanning; especially after a hard days work on a screen.
This New Yorker (below) story about bundles growing on Internet or Web TV is fascinating as it looks at the TV Subscription angle. However I felt that the story should have dug much deeper. The author should have looked at the garnered revenue from subscriptions and investigated where that money relates to content: i.e. Explore the way content is funded because this is also an important factor in the business model of TV and the bundle, be it over-the-air, over cable or over the Internet. Here is an article that @TimWu could reference: http://abovethecrowd.com/2010/04/28/affiliate-fees-make-the-world-go-round/
Here is the full New Yorker Article:
“But those who predicted that the Internet would kill the bundle may have spoken too soon. Internet TV, in fact, is now growing its own bundle—the so-called “neo-bundle.” This year, Dish television and Sony have begun selling a version of Internet television that centers on a bundle, albeit one that is smaller and cheaper that the original offered by cable companies. Dish’s Sling is the most exciting and enticing: it offers ESPN and twenty other channels for twenty dollars a month. (You add an extra fifteen dollars if you want HBO). Sony’s Vue has fifty or so channels, for fifty dollars a month, but no ESPN or HBO. Apple, meanwhile, is likely to launch its own version in the fall.
In short, instead of the Internet killing the bundle, the bundle is coming to the Internet; it would not be surprising if, in the next year or two, half a dozen more neo-bundlers join the game. This may come as a surprise to those who expected the television of the future to resemble, say, a smartphone screen, where every channel would be roughly like an app that you subscribe to à la carte. But overestimating change in the television industry is a rookie mistake.”
P.S. By the way, RabbitTV already bundles ‘free-content’ for you for a small fee. Which gives kudos to my theory that we are all lazy when it comes to TV viewing. “I’ll pay 10 bucks to someone to do it for me instead so I can just watch it instead of wasting all that time searching & selecting.”
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.
I have to continually update the LG Smart TV at home (Again last night) – ‘Internet Apps’ on the SmartTV means that I have to follow an upgrade path regardless of whether I use any of the Smarts on the TV or not … When are they going to offer a Monitor App that looks at what you use on a SmartTV then remove the unused items in order to save on Memory and CPU use and therefore reduce ‘updates’? My TV is connected to a PayTV STB with everything I need – I don’t do 3D and Google on TV or any other silly App that expects me to register and pay for content…I already pay for content that I am satisfied with!
Throw out your TV – TV as we know it is dead! There is a flourish of articles on the demise of PayTV with headlines such as ‘The Future of Television – Can Cable Survive?’ which I saw in Forbes online. All you youngsters who claim you dont need a TV subscription because its available cheaper elsewhere will have a shock coming when the money runs out and all you are left with is re-runs of old Films, Programmes and Documentaries….All of you out there that want ‘a la carte’ – That is: ‘what-you-want-when-you-want-where-you-want’, need to know what that will mean in terms of revenue and the financing of the content arm of the media industry. Despite the age of this post it is still relevant today and it is a subject also well covered by Mark Cuban a more famous blogger than I.
39 Billion Dollars in 2010 and probably higher around 50 Billion Dollars today feeds the Content Creation industry. If you talk about the demise of traditional PayTV you should also, in the same breath, talk about the demise of the Content industry. Please check out this very good discussion on the subject: How TV Content is Funded
This is one of the best articles I have read on the trials and tribulations of the 2nd Screen-Companion Screen and their role in Television interactivity. As you might know I am a confirmed Interactive TV enthusiast, having been in this industry sector since its very early days. The main dificulty in Interactive TV has always been the ROI. How do you make money at it? For the Broadcaster and Operator it is fast becoming more and more clear, but they have to change their thinking with respect to this area of Television and embrace a change in direction. Why? Cost Saving without cutting head-count, service reduction can be achieved and an actual revenue generating service can be implemented. This makes sense for the long term financial health of teh Broadcasters & Operators. Companion Screen Interactivity (SaaS based) is a natural CAPEX/OPEX ‘cost-saving’ exercise. We know that Embedded Middleware in STBs and TVs is a very costly exercise for advanced services and interactivity. It is costly to License – Implement – Test – Run a Back Office and Pay to have Applications developed. It needs constant Software Support and there are, in the main, run-time costs associated with most Middleware systems. It is fragmented! For the Broadcaster/Operator Interactive TV OPEX (SaaS model) can be amortised against the TV-Everywhere/Catch-Up Services Infrastructure already in place. It makes sense to move to a SaaS based service as the Companion Screens are bought by the Consumer not by the Broadcaster/Operator. STBs and TVs can also be cost reduced as they will require less intelligence. Apps are/can be/will be downloaded for free. Advertisers, Programme makers and the Channels can exploit this synchronised, always connected 2nd Screen in the home. There may well be dedicated TV+Companion Screen sales at CE level in the future. Although this will take time to evolve as a market I believe it is a natural path for Interactive Services. Please read the Article linked below to get a good overview of the already fragmented market, the dificult marriage of many players and the reluctance of the Broadcasters/Operators who have not seen the obvious route they should be taking.
When you don’t go to a Trade Show that you have been regularly visiting for the past 8-10 years it is a slightly uncomfortable feeling. It sort of feels like you are missing out on something…but are you really? CES is after all a gadget show and do we need to go if we are not Retailers of Consumer Electronics? What a lot of people do not know is that there is a lot going on behind the scenes in more of a Business-2-Business nature; especially in the Television world that I move in. A lot of networking takes place, and a lot of ‘private suites’ allow for plenty of businessmen to gather, show of their wares in private, discuss and potentially deal-make!
However as a ‘tech journalist’ you might think that things have a different allure. Certainly the BBC’s writer David Pogue has just publishd a very poignant article from his perspective. It can be found in full here: http://www.bbc.com/future/story/20130104-does-ces-have-a-future
His outlook is that there is mostly years of repetition of technology along with what I call ‘catch-up’ Companies there ‘en-masse’ with cheaper but the same gadgets from the year before and therefore swamping the floors, the industry and the news with old stuff in effect. There is also a decline in the Big Companies with Microsoft having pulled out! Apple is not there either and if Apple is not there how can it truly be called THE Consumer Electronic Show? Qualcomm even did the keynote speech this year – Qualcomm?
Another journalist from our immediate industry Leslie Ellis pointed out that the the trending products were waterpoofing gadgets for your smartphones and tablets. I suspect the Hunting Knife Company and the Mini Flying Helicopters will still be there in the South Hall and that Spearmint Rhino will still get its CES clientele. Ummm, so what is it I miss?
Well in all honestly I do miss it as it kicks off the business year with a hectic, manic traipse around Vegas! Therefore life without an early dose of CES certainly makes for a less-tired more calculated start to 2013.
On a recent trip to Chicago I dropped into Starbucks for a coffee just an Espresso – In front of me was someone that ordered a Grande Cinammon Dolce Latte with Sugar free Buttery Brown flavoured syrup, non-fatwhipped cream and sprinkles…arghhh, ONLY IN AMERICA!
Anyhow that is not the point of this article. As I was queuing I noticed some leaflets and picked one up. I was drawn to the Starbucks Digital Networks with the offer of FREE Premium Content – In partnership with Yahoo! A Cafeteria that offers expensive flamboyant coffee mixtures, cakes and sandwiches is now offering Digital Entertainment! In Norway its the Pizza chain, and so it goes. What once was the premise of the Broadcasters and Operators is now being fragmented, spread and diluted. Is this the right way to go? Only Time will tell