1 TV white paper 1/8 FROM IPTV TO TV 3.0 The web has already transformed the ways in which we communicate, do business and entertain ourselves. And it s getting ready to do the same thing on the TV. Every player in the TV ecosystem will be affected: from those who build the equipment to those who create the content and those who consume it. Everyone will have to rethink his or her place in this new environment. At stake is not only an enormous commercial opportunity, but also the viability of businesses in the new TV world. Those who cannot let go of the old TV model will be left behind. Those with the vision to trust the proven and winning principles of the web will survive and thrive in the new era. This white paper describes how TV 3.0 is going to unfold and how your company can benefit from it. THE EVOLUTION OF IPTV IPTV is a much used and even more confused concept. Interpretations of IPTV vary widely: from cable-like private networks operated by telecommunications companies (telcos) to the downloading of video over the Internet from websites such as YouTube. It is possible to identify six or more distinctive methods of providing video to consumers over networks which use the Internet Protocol (IP). For the sake of clarity and brevity, we address them under three primary headings: IPTV, Internet Video and Over-the-Top TV. IPTV IPTV over private telco networks has been commercially available for about 10 years. In that time, it has garnered 15.5 million subscribers 1 as compared to over 700 million cable, satellite and DTT subscribers worldwide. With the exception of Western Europe, where IPTV subscribers are expected to account for 15% of all pay-tv subscribers by the end of 2009, IPTV's share is projected to remain below 5% of the total market. 2 In February 2009, research firm Frost & Sullivan revised its three-year compound annual growth forecast for IPTV from 29% down to below 15% CAGR. Frost & Sullivan analyst Yiru Hong attributed the decline to DEFINITIONS IPTV Live TV channels and on-demand content, delivered via both multicast and unicast to a television set over a private network with managed Quality of Service (QOS). If Internet content is provided at all, it is in a walled garden. Revenue is from subscription, pay-peritem and advertising. Virtually all telco TV services fall into this category. Internet Video This is a wide category, encompassing both user-generated content and professionally-produced video streamed to a PC over the public Internet without managed QOS. Usergenerated content (UGC) is normally free or advertising-supported, while the revenue sources of professional content are subscription and free-withadvertising. YouTube is most prominent example of UGC. Hulu and CBS.com are examples of professional content sites. Included also in this category are Internet TV companies such as Joost and Zattoo. Over-the-Top TV Internet video, both channels and discrete items, delivered to the television over the public Internet without managed QOS. It typically uses intermediary hardware, which could be either a proprietary set-top box (STB) or a consumer electronics device. Many of these services are walled gardens. Consumers typically pay for the proprietary hardware, if used. Other revenue sources are pay-per-use, subscription and free-with-advertising. Examples include Apple TV, Vudu and Netflix with the Roku STB. 1 Point Topic 2 Pyramid Research
2 TV white paper 2/8 "competition combined with a cap in the consumer's willingness to pay for entertainment and communications services, [which have] led to less profitable service bundles." IPTV has failed to make significant inroads against cable and satellite incumbents in virtually every TV market it has entered. The prime reason for that failure is the simple fact that the telcos have not differentiated themselves sufficiently in the market to attract consumers away from their competitors. Telco TV services look like cable services and provide essentially the same content. There is little about them that is new and compelling, and in some respects such as user experience and channel change times they are often inferior to their competitors. While the services are the same, the costs are not. Most telcos are new to the TV business and don't have longestablished business relationships with the content providers. As a result, they tend to pay more for content, which is the major operational cost item for any TV operator. Thus, the telcos have a high cost base in a very competitive market. Consumers are increasingly wary of the prices they pay to TV operators, particularly when compared to what is available for free on the PC. Internet Video The changing end-user consumption patterns referred to by Frost and Sullivan are all happening on the PC. While the telcos are using IP to provide the same old TV, Internet video usage on the PC is exploding. In March 2009 alone, viewers watched 5.9 billion videos on YouTube and other Google websites, 437 million videos on MySpace and other News Corp websites and 380 million videos on Hulu. ABI Research forecasts that more than a billion viewers will be accessing video over the Internet by It is clear that consumers want the abundance and freedom provided by video on the Internet. But it's not only an issue of content choice. The Internet provides advantages that never existed before. Consumers not only view content but interact with other consumers. Content providers get the measurability they need and advertisers get the addressability they always wanted but never had. Video has been enriched by the Internet and will never return to what it was. A huge ecosystem has sprung up, encompassing traditional broadcasters (BBC, NBC Universal), established portals (Yahoo, AOL), user-generated content sites (YouTube, Dailymotion), broadband video sites (CinemaNow, LoveFilm), Internet TV providers (Apple, Vudu), content distribution networks, and more. The money is beginning to follow the action. Most of the content viewed on Hulu or the other broadcaster sites is paid for and video advertising (as opposed to static advertising on video websites) is picking up speed. According to a recent report by IDC, Internet video advertising is expected to increase more than sevenfold over the next four years to reach $3.8 billion in 2012 and that in a time of recession. Over-The-Top TV The online video revolution has all happened on the PC. Only in the past two or three years have devices appeared which facilitate the viewing of Internet video on TV. But there is strong evidence to suggest that the TV, rather than the PC, is the preferred viewing device for Internet video. A research paper from In-Stat in April 2009 (entitled "Web-To-TV Video Changes Everything") found that more than 40% of US households under the age of 35 are already viewing online video on their TVs at least once a month even though current methods of doing so are cumbersome and ill-suited to the average TV viewer. Once Web-to-TV video becomes simple and convenient, mass consumer adoption will follow quite rapidly, said Keith Nissen, an In-Stat analyst who participated in the research. Web-to-TV will ultimately force a complete restructuring of today s video services, the report concluded. Currently, almost all Over-The-Top (OTT) TV requires a proprietary hardware device from companies such as Apple, Network Media Tank (Popcorn Hour), Verismo (Vudu) and Roku. These devices, while new in concept, suffer many of the drawbacks of traditional TV set-top boxes, including those used by telcos for their IPTV services. Proprietary devices tie the consumer into one hardware vendor and, often, one service provider. They do not provide an open and unregulated Internet video experience. A good example is Apple TV, which not only restricts the consumer to a single hardware vendor, but also attempts to limit the consumer to Apple's itunes media store and those of selected partners that have agreed to share revenue.
3 TV white paper 3/8 There is no place for a small player and most of the web's most popular video destinations cannot be accessed. By providing access to Internet video on the TV, most current OTT hardware devices are providing a needed and welcome service. But by restricting consumer access to specified venues, they are going against the ethos of the web and the wishes of consumers. BUSINESS MODELS IPTV is typically a closed platform, with both hardware and software customized according to the specifications of the operator. Updating the software on IPTV STBs is invariably a lengthy and expensive undertaking. That closed approach, the purpose of which is to lock the consumer into content and services provided by a single operator, is no longer viable. As more and more web functionality enters the TV domain, operators are finding that the closed model both as regards proprietary technology and user choice does not advance their business interests. Only a model based on open and standardized technologies will enable operators to innovate quickly enough to keep up with market demand and competitive pressures. The TV market is moving inexorably towards retail hardware devices, open software solutions and user choice of content and services. Adapting early to these changes has significant advantages for the telco. Marketing At present, telcos carry all the cost of marketing their IPTV services to consumers. No other entity has a similarly vested interest. Given that they have little programming advantage over the cable or satellite incumbents and often have higher content acquisition costs, telcos are at a distinct disadvantage. By joining the web TV ecosystem, telcos gain partners which are themselves motivated by personal gain and investing in the creation of new customers (similar to the common purpose of mobile operators and handset manufacturers in the mobile space.) Similarly, they will be participating in an ecosystem with content and service providers with a proven track record of innovation on the web and who bring that same creative ethos to the TV. Compelling new applications on the TV will drive the uptake of new and faster broadband connections. Hardware Proprietary IPTV STBs have limited functionality, are unable to evolve in pace with changing consumption habits, invariably load the telco with inventory overheads and, ultimately, are objects of no value to the consumer. They are simply conduits. By switching to an OTT retail box approach, telcos gain several advantages. Retail CE boxes benefit from economies of scale over multiple geographic markets. Given that they rely on open software and nonproprietary builds, the enormous non-recurring expenditure (NRE) normally incurred by the operator is non-existent. Low prices and widely-leveraged builds mean that the operator can keep prices even lower by working with several hardware manufacturers and letting competition drive down prices. Services The new, "blended" TV environment is based to a large degree on industry standards, enabling telcos to eliminate complex and expensive software builds. In addition, the use of web tools on the device ensures the speedy and painless transfer of web applications to the TV, thus creating a continuous stream of innovation with which traditional competitors are unable to keep pace.
4 TV white paper 4/8 WHAT NEXT? TV 3.0 For the past decade-and-a-half, the web has been an astounding hotbed of creativity, utterly transforming the world by its open borders and limitless horizons. The advances in TV technology (such as On-Demand and time-shifting) during the same period are dwarfed in comparison. While video viewing on the PC has increased extraordinarily, research indicates that most viewers prefer to watch video on the large TV screen. The true revolution will happen when web creativity is married with high quality video viewed on the TV screen, in a format that is optimized for the TV experience, conducive to innovation and financially rewarding for those willing to take the plunge. Achieving a true synthesis of the web and the TV requires more than a purely technical solution. The web is more than technology: it is a means of communication and commerce that differs radically from everything that preceded it. The web has its own paradigms and principles which often have little in common with pre-web modes of behavior. These include: An open, non-restrictive environment in which innovation can flourish; Standard, non-proprietary tools which enable unhindered creativity and collaboration; A democratic ecosystem, in which all participants are equal and no one entity dominates. The convergence of the web and TV will only be fully realized when these principles are respected and implemented. We call it TV 3.0, the marriage of web principles with television. Most of the current OTT TV systems are purely technical solutions and none embodies the values of the web to a significant degree. Those which are hardware-dependent (Apple TV, Popcorn Hour, XBOX) tie the consumer to a single, proprietary hardware vendor. Even the supposedly open software solutions that are currently available (such as Yahoo TV Widgets) place gatekeepers between the service provider and the consumer. None of them provide the unconditional transparency of the web. Only a hybrid of traditional TV and OTT functionality in a democratic and unmediated environment will spark the innovation necessary to transform the TV industry. BENEFITS OF TV 3.0 TV 3.0 brings the power of the web to the TV without the mediation of a PC or a single service provider who is unable to keep up with the pace of web evolution. It supplements regular broadcast TV with different modes of video (e.g., on demand, unicast streaming, user-generated, etc.) as well as with the mass-market communication and social networking applications that have transformed the web in recent years. To be successful, the convergence of the web and the TV has to be a seamless hybrid experience that satisfies the needs of all participants in the value chain. The Consumer Consumers get a personalized TV experience ("my TV"), unrestricted access to an enormous resource of content and services, communications and social interaction and, of course, lean-back video on the large screen. Web on the TV benefits all consumers, from those who don't have a PC to those who multi-task in front of the TV. Family photographs, kids' content, communication services and a lot more are available in an easy-tonavigate format (i.e., optimized for remote control) with which everyone is familiar, including the elderly and the non-pc literate. The Hardware Manufacturer TV 3.0 is compatible with a wide range of hardware devices, each of which offers its own specific features and value. The hardware is a Consumer Electronics (CE) device. As such, it differs radically from the highlyconstrained traditional TV STB with its limited shelf-life. CE devices (think of the PC) are used by a mass market. As a consequence, they are constantly evolving products, continually on the cutting edge. They are invariably more advanced than proprietary STBs.
5 TV white paper 5/8 The advantages to the hardware vendor are that the product has far wider market potential than the standard STB and is responsive to both consumer requirements and market demand. The vendor's market is potentially every consumer around the globe, rather than a single TV operator. The Telco TV 3.0 gives the telco an alternative to the failed IPTV model of walled garden services, barriers to entry, content deals with limited appeal and sluggish response to market demand. It enables the telco to focus on its core strengths, increase revenue from its network and infrastructure, and benefit from an ecosystem in which others also have a vested interest in success. WHY NOW? Web technologies and tools have been in existence for a long time. So why hasn't TV 3.0 happened until now? The answer is simple. TV 3.0 is more than just technology. It is an approach and a state of mind. It requires not only the appropriate tools, but the appropriate environment as well. TV 3.0 requires innovation and circumstances in which innovation can flourish. Until now, there has not been a holistic TV 3.0 solution. Media consumption habits are changing, as Frost & Sullivan pointed out. Consumers aren't asking for more of the same but something entirely different the freedom, depth and innovation of the web on their TV screens. Giving it to them will require high quality, redundant and secure delivery networks. The telco will benefit most by continuing to improve service quality, extending coverage and distribution and creating the infrastructure for innovative services. The Content and/or Service Provider It is the content and service providers the creators who have made the web the global success that it is. They are the real innovators, the ones whose innovation and creativity motivate consumers to subscribe to broadband connections. TV 3.0 taps into this same pool of extraordinary brainpower, enthusiasm and success. TV 3.0 developers use common web tools to extend their existing web businesses to the TV screen. It enables them to leverage brands and assets that already exist on the PC and mobile for creating an entirely new market and reaching a new user base on the TV.
6 TV white paper 6/8 THE TVBLOB SOLUTION FOR TV 3.0 TVBLOB is the glue that combines all of the components of the web and TV value chains into a radically new TV ecosystem. A software solution with both home and backend service components, TVBLOB is the first, comprehensive TV 3.0 platform that brings the full power of the web to the TV on any CE device. TVBLOB technology and approach benefit all the participants in the web TV value chain. Consumers get web video, interactivity, communications and social interaction, in addition to their linear TV, without walled gardens or artificial restrictions. Hardware vendors get an open software platform that out-competes proprietary hardware competitors and will create business opportunities for years to come. Telcos get an over-the-top solution that differentiates them in competitive markets and frees them to focus on their core strengths, while also experimenting with new revenue streams. Content and/or Service providers get tools they know and an environment that encourages innovation, without gatekeepers or restrictive practices. More than simply a technology solution, the TVBLOB model implements four core principles, which, together, revolutionize the TV experience: Converged TV: Devices, media and services seamless integrate multiple functionalities and blend traditional TV with the web, while retaining the ease-of-use and management expected in from the television experience. Personalized TV: Consumers can do what they want and when they want with their TV from the start: from saving favorites and subscribing to podcasts to viewing photos and accessing social networks. Participatory TV: Full, two-way participation in programming, networking and communication is enabled. In the beginning, this is evidenced in TV screen interaction and interoperability with PC-based services, but ultimately it will evolve contextual TV-to-TV video communication. Democratic TV: Any individual or company can distribute and receive TV content and services on a personal or commercial basis without restriction. TVBLOB TECHNOLOGY The principles of openness and choice guided the technology decisions during the initial design and development phases of TVBLOB. The essential decisions were: Create an open platform based on web technologies. Base the platform on Linux. Use Java as the middleware and application language. Incorporate a full-featured browser. Create a backend services infrastructure. Make the software platform port easily to different systems-on-chip (SOC.) As a consequence of these decisions, TVBLOB is a modular platform, built in abstraction layers, that is able to port efficiently to a variety of chipsets and technologies, as well as evolve with market demand. Furthermore, it encourages the unhindered creation of third-party TV applications, using standard web development tools, and is the optimal platform for new TV services, including social networking, content sharing, TV video communications and local content access.
7 TV white paper 7/8 TVBLOB partners with third-party companies to continually expand feature and service potential. Integration examples include: APRICO, a Philips venture Global EPG DivX High Quality Video Format Neptuny Content Recommendations Engine Neodata Behavior-based Advertising Engine SecureMedia Digital Rights Management Skelmir Java Virtual Machine Zenterio Advanced DVB stack The TVBLOB model is made up of three parts: software for CE devices, integrated backend services, and developer tools. SYSTEM COMPONENTS BLOBbox BLOBbox is the generic term, or product concept, used to embody all hybrid CE devices built by any manufacturer that incorporate the TVBLOB software. The exact feature set of a BLOBbox depends on the manufacturer's requirements, but all are likely to share the following functionalities: Multimedia: linear and non-linear streaming features including DVB-T, WebTV, Podcasts, and BitTorrent Internet services: continually expanding range such as YouTube, Google services, Miro podcasts, Picasa photos, SHOUTcast music, and Games4TV Social networking: Facebook, Twitter, blogs, and even virtual couch sharing Backend Services Integrated backend services are a key feature of the TVBLOB platform. These services can be leveraged by the telco to manage individual devices, as well as clusters or communities of devices. They facilitate a wide range of management, communications and content distribution services, including: Device authentication User authentication Single sign-on based on Open ID Events notification (e.g., free, busy, online, content viewing status, social networking activities) Call management NAT server Centralized event recording Message queuing STB inventory Software updates Development Resources - BLOBforge and the BLOBkit To enable and encourage the development of new TV applications and services, TVBLOB has opened up key components of the platform. It regularly updates a free SDK called BLOBkit, and supports an open source TV development community called BLOBforge. Web developers can use standard web development tools to create and manage high-quality, branded TV experiences that extend existing web publishing platforms to the television screen. Combined, the resources enable web-based applications to take full control of the hardware and the middleware (e.g., tuner, podcast engine, BitTorrent engine, remote control, advertising), essentially making it My Box, while the consumer navigates inside the developer s TV portal.
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Mobile TV Technology and Information of the Future "Finding the right business model to make Mobile TV a success story! Bosco Eduardo Fernandes Joint UMTS Forum/GSMA Working Group Chair 1 Content Empowered
Optimizing Payment Infrastructure to Maximize Subscriber Yield Transforming the payment chain By T. DeWitt Introduction If service providers are to extract the highest value from their subscriber base,
The New Frontier: DRM, Consumer Choice and New Business Models x Dean Marks Select one: Why DRM? Digital rights management allows for secure differentiation between offerings that consumers might choose
Brochure More information from http://www.researchandmarkets.com/reports/344789/ Online Content Aggregators-AOL, Google, Yahoo!, MSN, Apple-Slowly Defining The Future of Television Description: The big
Expert Reference Series of White Papers Cloud Computing: What It Is and What It Can Do for You email@example.com www.globalknowledge.net Cloud Computing: What It Is and What It Can Do for You Steve
CASE STUDY Bell Aliant Case Study GROWING AT THE SPEED OF LIGHT ABOUT BELL ALIANT Bell Aliant was purchased by Bell in 2014. Bell is Canada s largest communications company, providing a comprehensive and
What digital means for entertainment and media and why the network is key to success. The digital future for entertainment and media. Time to press play Few sectors have been so radically transformed by