The Emergence of IPTV

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1 POINT POINT OF OF view view The Emergence of IPTV By: Herbert Baumberger, Technology Specialist, and Roger Lay, Consulting Manager IPTV (Internet Protocol Television) has become a major business for telecommunications companies (Telcos) around the world and is on its way to mainstream adoption. However, the Telco business has barriers. Some of the challenges we see are the overall market satisfaction for core services (e.g., broadband, mobile, fixed line), limited possibilities to expand geographically, additional demands from consumers (e.g., more integrated services, better user experiences), and competition within the market. So far, Telcos are constrained in many areas and haven t had much success gaining ground. But, with IPTV, growth for Telcos is a real possibility. To do so requires focus on the right customers, focus on the right technologies, enhanced consumer relations, and the creation of a superior and continuous user experience. WHAT IS IPTV? The SapientNitro definition: IPTV is much more than traditional TV; it is enabling the multi-channel TV experience through technology and enriching it with new web-based contents and functionalities. And not just in the field of entertainment. There are a lot of things we can do to integrate commerce and communication too. Why does IPTV seem to be such a promising opportunity for Telcos all over the world? And why are Telcos putting so much effort into providing a great IPTV experience? These questions can be answered from different angles, and there are many viewpoints on the market. One thing everyone can agree on is that Telcos are defining how we communicate with each other and how we interact with the things we like. They have been collecting loads of information from products and services they provide, and with that competitive advantage, Telcos have the opportunity to build up new and more innovative propositions for entertainment. In addition, we must realize that we as human beings in the ways we think, act, and feel long for entertainment. We long to watch, share, and socialize with the people around us, and Telcos can build new offerings around IPTV that would perfectly supplement their network services, portals, and communication products range. THE HISTORY (AND FUTURE) OF TV People have always sought entertainment, but where did IPTV come from? As early as the 1700s, we had the opera. This was the primary way to lean back (a term that describes one way we interact with entertainment channels) and to connect with a human story and experience. In the 1900s, the movie theater came into being. A few decades later, the television emerged; now the whole family could gather to watch a show or movie together.

2 But how do we watch TV today? It s a different story. It s less common to come together in social settings to watch a program; instead, we enjoy television much more on an individual basis, whenever we want, wherever we want, with any device we want. In the future, it s clear that the one-to-one, on-demand, online environment will continue to take over. And instead of lean back entertainment, people around the world enabled by technology may lean forward, be more engaged with what they consume, and increasingly interact within the complex networks of social media. There are many visionaries who are trying to define the ways we will consume entertainment and watch TV in the future. But there are several aspects that aren t working as the technology stands today. Regarding web-based content on the TV screen, traditional web surfing and complex user interfaces are often too complicated for the user. Only a few things, like apps and advertisements, are doing well. Additional types of content that are working are lean back experiences like YouTube channels or other clip rolls, which take into account the fact that people on the couch are typically in a relaxed state. But how do we react to the lean forward behavior of other consumers? Let s see who s in the game. WHO S IN THE GAME? There are several types of businesses vying for prime real estate within IPTV. Web 2.0 giants. Google, Apple, and Boxee want to extend their presence and claim their stake in the apps and advertising market. They are considered to be innovators and leaders by the consumer. But, Google TV s multi-channel integration strategy (i.e., TV, Video-on-Demand (VoD), web, and home networks) via search and apps wasn t successful. The user base is not growing, and it failed to position itself in the market. Facing adoption and acceptance issues, Logitech dropped out. Now, Google TV is getting ready to launch Android for TV, hoping for success at last. Apple TV has not been a success story either. The original DMA (digital media adapter) idea did not appeal to consumers. Currently, it is being reduced to an itunes player that is just another user interface (UI) managed via Apple. Both examples show that the one-box-does-it-all approach is not compelling enough in a world dominated by masses of apps that concentrate on a single, but mostly simple, use case. IPTV and Pay TV providers. These providers seek to differentiate themselves within the market, and are poised to do so due to full access to context and user profiles. They both have the opportunity to integrate established and trusted payment solutions. Pay TV s challenge is in fighting off VoD and web video threats, possibly through the delinearization of content. IPTV is seeking to extend their services (through content from the web and home networks, apps, and targeted advertising) and offer rich multi-channel applications (by data supplementing the live stream, combining multiple live streams, or integrating social networks). Broadcasters and consortiums. We know that in order to establish open standards, the time to market is poor. If you look at Hybrid Broadcast Broadband TV (HbbTV), the context is very channelspecific (which can be a strength or a weakness), so it s not much different than a traditional TV perspective. In addition, no widget or app provider has been established. Broadcasters and consortiums are still struggling, and while they have a lot of money, trying to set themselves apart from the market has not been easy. HbbTV also uses HTML-based content and support video, but they need to find a different scope within their television channels to extend the experience. And, they are looking to replace Teletext a very old, yet popular, technology. There is also a potential for paid content, but no solution is in place as of yet.

3 CE manufacturers. Consumer electronics manufacturers (from Samsung to Sony to Philips) are doing a lot in interactive and digital TV, but they all have their own ways of implementing the services. Some partner with Google, some partner with others, and at this point it s not very streamlined or standardized. But, consumers love it. In fact, 45% of owners use Internet features on their TVs. In addition, 57% of users report being very satisfied due to add-on services and customizable programming that goes far beyond the normal TV experience. Also, 57% use Netflix or VoD, 45% use YouTube, and 54% consume multimedia content from home network resources. If you look at Samsung s Internet@TV solution, they provide apps via Flash, HTML with libraries, and SDL/Lua. They offer hardware decoding for H.264 (a format for a totally different browsing experience, similar to Silverlight) and MP3. Samsung has also developed an Interactive Smart Remote app for ios and Android that lets the user bypass slow browsing and difficult-to-view catalogs on TV by browsing through interactive catalogs on an iphone or ipad instead. This makes it easier and quicker to select something to watch or buy. By 2014, over 10 million of Samsung s devices are estimated to be on the market; two million were sold by June 2010 alone. THE NEXT GENERATION Due to the human desire to be entertained, TVs are always evolving from color to widescreen to flat screen to 3-D to mobile. But today, the Telco world is all about building multi-channel dimensions and new technologies to achieve a superior user experience. This is where the market stands today. How do we accomplish building these dimensions? The following are key points that need to be considered: Smart filtering: When the consumer isn t sure what content to consume, the TV can guide him or her through content to avoid an overload of information and choices. Social attraction: The TV can make it easier to share content among social circles (e.g., pictures and video). Backstage passes: Consumers can have access to exclusive extras and special offers. Addictive fun: Content can engage, entertain, and surprise the consumer. The ultimate goal should be to create an experience that makes him or her engage with IPTV again. Mobile moments: Give users a unified experience whenever and wherever they are, whether at home, at work, or on the move. Usability: IPTV needs to be just plain intuitive and simple so users will have the best encounter possible. Consider this likely future scenario that illustrates the next generation dimension: Meet Daphne. She is hanging out on the couch watching TV. She s browsing on her IPTV set top box.

4 The home screen includes information like My Favorites, Recorded Shows, Trending Shows, and Friends & Lists the social aspect of IPTV. Daphne selects Friends & Lists and can instantly see what her friends like and what they re watching. In addition, Daphne has also created lists of celebrities, brands, places, and other interests that will provide Daphne with custom content specific to her. One of her interests is Stella McCartney. In one click, Daphne can see the latest collection on the runway at Fashion Week. At the same time, Daphne opens her laptop and logs into her portal. The Telco recognizes her preferences and sends her additional information regarding Stella McCartney, like stores that sell the clothing, exclusive behind the scenes images, articles from news feeds or Wikipedia, the latest YouTube videos, social media threads, special offers, and much more. What she sees is personalized and contextual to what she s doing and what she likes.

5 When Daphne browses through the clothing, a camera presents an augmented reality mirror on the TV screen so Daphne can try on her favorite Stella McCartney dress. And while she s wearing this dress, she can add the garment to her wish list, save a photo, or share live with friends, who can then weigh in via different platforms. When Daphne leaves her home, her mobile device automatically shows her a list of songs from the runway show she can listen to, or shares new albums from the show she can directly purchase. Later, when Daphne walks by Nordstrom, her phone displays a QR code with a special offer for 30% off any Stella McCartney item.

6 BUILDING THE DIMENSIONS IPTV offers content that is easy to access with any device, and contains lots of interactive information that can be used to build dimensions around the user experience. These dimensions must be: Personalized: By watching behavior patterns, the user s TV can record or recommend content. Location-based: Products, services, and connections nearby will always be more relevant than those that aren t as accessible. Serendipitous: Customers who are feeling lucky can choose a program at random based on lateral interests. In addition, recommendations can be based on a current mood. Social: Each user can decide how he or she will socialize, depending on relationships with friends (e.g., text, IM, tweet, voice, video). It will also offer the ability to share items and track friends favorite programs. Tool-oriented: Remotes, gesture interactions, and voice controls will all be options for an optimized experience. Eventful: IPTV should include a unified calendar with TV schedules and suggested events of interest (e.g., upcoming shows, friends birthdays). The bottom line? IPTV is here. And though there are current challenges to overcome and hurdles to jump, growth within the Telco sector is a real possibility and a thrilling one at that. ABOUT THE Authors Herbert Baumberger is a Technology Specialist at SapientNitro in Munich, Germany with a focus on user-centric presentation layers and requirements engineering. During his professional life he has defined, designed, and implemented solutions in all tiers of multi-tier applications including database, business logic, web interfaces, desktop applications, IPTV based applications, rich media, digital signage, and kiosk. Herbert Baumberger Herbert Baumberger Roger Lay is a Business Consulting Manager located in Switzerland. In the past years, Roger focused on projects in the field of IPTV, VoD, and digital content management for moving images. He has also led projects for corporate customers in various industries. In his earlier career, Roger worked as a managing partner with an ICT system integration company, where he was in charge of the division s multimedia, collaboration, and communication. Roger Lay

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