Advanced Television

Little commitment to connected?

November 2, 2010


Transition, disruption, opportunity, threat; all descriptions that can be applied to most digital media developments. Which one you choose will depend on where you, or your company, sit in the current ecosystem and, therefore, your perspective.

Recently we held a video roundtable on OTT Services (available on the site now); a classic major development that flows from the rapid development of deliverability – more bandwidth and better compression. OTT is probably the subject of more SWOT analysis in network owners, ISPs, broadcasters and content brands than any subject before or since. That’s because it is potentially a game changer at a uniquely profound level – at least according to some.

According to proponents network providers, ISPs and pay-TV operators will be ‘disintermediated’ from their subscribers by content brands, broadcasters and/or third party packagers reaching their customers direct. And for some of the ‘displaced’ there’s the added insult of their own infrastructure being used to disrupt their relationship with hard-won customers.

Recently connected TVs have become an emblem of the OTT debate – tomorrow’s customer plugging his vanilla fast broadband connection straight into the flat panel to enjoy a pick and mix of app enabled services via a UI embedded by the manufacturer or a licensed third party provider. It’s the mobile model, except this time the network operator probably doesn’t even get to keep the voice revenue. The departure of the Set Top Box is, in this scenario, indicative  of the incumbent provider losing control of the customer and being relegated to utility provider, if anything at all.

So, you might expect all but the ambitious content owners and providers of OTT ‘management’ platforms, to be pretty gloomy at their prospects. Not so. In our OTT discussion, and in a subsequent one among home network participants, there was no air of panic. A couple of big US cable companies have just announced marginal video subscriber losses but they adamantly blame the recession, not cord-cutting. Even OTT proponents see the low hanging fruit as viewers currently outside the pay market.  As an exec from a major US cableco told our panel, “our channels aren’t going anywhere – they have way too much to lose.”

And on connected TVs there was consensus that traditional CE makers are not going to follow through, “it’s this year’s sticker” said one panellist; makers are just not going to get into supporting upgrades and back office functions. If current providers step up on QoS and providing content everywhere solutions and have the courage to embrace the OTT services their customers do demand, then, while the game will change, it will not be as dramatically as many currently predict.

Categories: Blogs, Connected TV, Nick Snow, OTT