27Apr/160

Connected TV: Accelerating OTT video development

BAJON_Jacques

Jacques Bajon
Director of Media & Digital Content Business Unit, IDATE DigiWorld

The development of connected TV is inextricably bound up with the widespread availability of high-speed Internet access, a shift to more and more individual viewing and the proliferation of smart devices in the home.

 

Together, these three elements are steadily revolutionising how viewers access their TV programmes, and providing them with an array of new functions and features. TV sets can be connected to the Internet in several ways. Using:
a smart or connected TV (direct connection, via Ethernet or Wi-Fi),
a connected set-top box,
a streaming box or stick,a connected game console,
or a smart Blu-ray player.

In 2015, almost three-quarters of the televisions being shipped are Smart TVs, even if their owners may not systematically take advantage of the Internet connection. At the same time, the market for streaming devices – whose main purpose is to play online videos – is progressing rapidly. Within this market that is still populated by a great many solutions and services, several trends are taking shape:
the way users access and employ connected TV services has become more simple, and shifted from Internet-centric to video-centric;
managing connectivity with users’ personal devices has become a key issue, with app systems playing an increasingly central role;
OTT services are moving to the TV and making real strides;
...

More information about main trends

Technological progress in a variety of areas is helping to bolster the market’s development, be it the growing ubiquity of broadband and superfast broadband access in the consumer market, major improvements in video optimisation and compression (HEVC), or the advent of innovative features such as casting which allows users to send video content from a personal device to the television. The main stakeholders in the connected TV ecosystem can be broken down into three categories, based on their original sector of activity: consumer electronics (CE) companies, TV market players and the Internet’s leaders.
CE industry players are working to improve their software interfaces, either through dedicated developments such as Samsung has done with Tizen, or by acquiring another company, as LG has done with WebOS. The aim is to capture the added-value in the marketplace, whether in the arena of services and/or by selling high-end devices.
Players from the TV universe are developing their OTT products, and working to bolster their position on the software side of the equation with more open and hybrid platforms. The connected TV could enable them to renew ties with consumers, and better monetise their plans. Broadcasters and pay-TV providers, especially in the United States, are therefore starting to roll out complete OTT plans which include a live component
Lastly, companies such as Google, Amazon, Facebook and Microsoft that dominate the Internet, are very knowledgeable about software, and changing consumer habits. So they are in the best position to deliver a top-notch user experience, whether in terms of smooth and intuitive interfaces, or providing recommendations based on user data. Their increasingly vertical positioning – covering everything from the content to the device – is also bolstering their potential to capture a growing portion of the video entertainment market.

In this way, many scenarios are emerging for Connected TV to 2025, and will determine which industries are likely to increase their control over this environment:

Impact_scenarios_TV_connectee_2025_IDATE_DigiWorld_OTT_VA

The size of the OTT video market will vary considerably under these scenarios, depending on how the environment evolves and so which industries prevail, and The popularity of the different devices will also evolve along the same lines.

Discover the perspectives,  key trends, and scenarios about the TV market for the next decade through our dedicated report and register to DigiWorld Future 2016 

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12Sep/13Off

Chromecast, the companion screen revisited

Gilles Fontaine

Gilles FONTAINE

Deputy Managing Director
Director of the Business Unit TV & Digital Content Business Unit, IDATE

 

Chromecast, the HDMI dongle that Google rolled out in 2013 allows users to send content from a computer, smartphone or tablet to their TV set via Wi-Fi. The way it works is nothing terribly new: a great many IP boxes, including those supplied by IPTV providers, already allow users to share videos between screens.

But the ease of use, and especially the fact of controlling it through a mobile app, no doubt explain why Chromecast took off so quickly, and has actually sold out in the US. The speed at which content providers are getting behind the system also confirms that Google has probably found its way into the TV universe at last. YouTube, Netflix, Hulu and HBO are already or have announced plans to become Chromecast-compatible.

The device has changed the outlook for smart TV by making the smartphone, and especially the tablet companion devices par excellence. Having failed to impose its OS on the TV itself, Google leveraged its clout on mobile devices – most of which now run on Android – and to a lesser extent the growing market share that its Chrome browser is enjoying on computers.

Google's positioning in connected TV

Google and connected TV

Source: IDATE

Having online video services available on the TV set should help further boost their appeal with viewers. American TV networks, which banded together to protect their exclusivity over the home screen, are thus being circumvented, and telcos’ IPTV services now have another rival.

With Chromecast, Google is giving consumers the power to choose what they want to watch on which screen, without the complex interfaces of smart TVs which are struggling to achieve a happy marriage between traditional TV channels and the web.

More interesting still, this latest innovation from Google, which retails for $35, also pushes the tablet up the power ladder, making it the screen of choice for both viewing and remote control.

6Aug/13Off

Next Gen TV: OTT and on-demand services

Gilles Fontaine

Gilles FONTAINE

Deputy Managing Director
Director of the Business Unit TV & Digital Content Business Unit, IDATE

The video distribution chain is evolving. Traditional programming models have been turned on their head (shortened release windows; Netflix releasing all episodes of a series all at once); video consumption on tablets is growing, before connected TVs really take off; and linear TV is relying on social networking faced with the growing strength of Internet platforms with a native specialisation in personalised recommendations.

Evolution in action

The various categories of player are seeing their historical models under threat. Cable and IPTV network operators have had to review their content distribution strategies. Some (Comcast) are strengthening their offerings to compete with OTT services, while others (Telecom Italia) are offering as a minimum a combination of linear television and on-demand services without quality of services guarantees. Television channels, whose core business is aggregation, want to keep their added value in a climate of growing on-demand. On the one hand, the major free channels are looking to promote live events to maintain the link with their mass audience; on the other hand, pay-TV services are introducing VOD to increase their attractiveness and are also investing in exclusive rights.

VOD service revenue worldwide

Fragmentation before convergence?

The growing number of offerings and players coming onto the video market is leading to fragmentation. New players, from the Web and also consumer electronics manufacturers, are coming out with new free or paid services that fi ll market segments ripe for exploitation, such as subscription-based VOD services, which compete with pay-TV, and ad-supported premium programming, which competes with the catch-up TV services of free channels.
The lines between linear services and on-demand services are likely to blur with the advent of mixed services that combine linear (or relinearised) television and directly competing on-demand programming. Fragmentation is also occurring due to the proliferation of proprietary ecosystems that are breaking away from the traditional ‘standardisation’ of television distribution and reception. In an effort to both promote their proprietary devices and to exploit customer loyalty, TV manufacturers and developers of mobile phone, tablet and connected TV operating systems are seeking to create their own ecosystems.
However, this fragmentation should be reversed in the medium term as a few distribution platforms start to dominate, offering the major content services and differentiating themselves by the quality of experience delivered to their customers. We should see the situation return to something like the traditional television model, where the various distributors are generally offering the same services, but packaged differently.

We can therefore identify three opposing visions for the long-term evolution of video content distribution:

  • The traditional model of packaging access and content together: Using an intelligent network equipped with a smart box, telcos and cablecos distribute packages that they have negotiated with content service providers or directly with the producers.
  • The self-supply model: Strong-brand content services use the open Internet to reinforce or re-establish a direct link with consumers.
  • The digital store model: E-commerce sites offer all content and make it available to consumers through recommendation and personalisation engines.

Long-term growth outlook for on demand television services

What impact will we see on the market?

While digitisation will bring more growth to certain developed markets, the next decade will show a marked decline in linear television revenue in the video sector, and a corresponding increase in new on-demand services. For the incumbent audiovisual operators, their capacity to generate revenue from these new services will dictate whether they can sustain their levels of turnover. They will, for all that, only find growth opportunities in emerging markets.

TV: the top on-demand service market in 2022

About the Digiworld Yearbook

While digitisation will bring more growth to certain developed markets, the next decade will show a marked decline in linear television revenue in the video sector, and a corresponding increase in new on-demand services. For the incumbent audiovisual operators, their capacity to generate revenue from these new services will dictate whether they can sustain their levels of turnover. They will, for all that, only find growth opportunities in emerging markets.

digiworld yearbook 2013
197 pages that deliver the finest market insights from IDATE experts who track the changes at work in the globe’s telecom, Internet and media industries throughout the year.

the DigiWorld Yearbook is published in English and French and available in print and PDF format. An iPad edition, developed by Forecomm, is also available.

The 2012 edition can be downloaded for free
The 2013 edition is available for purchase. Print: €99.99, incl. VAT; PDF and iPad: €54.99, incl. VAT

 

  • You can have a look at the digiworld yearbook 2013, purchase it or even download the 2012 version for free at : www.digiworld.org/yearbook/
19Jul/13Off

Connected TV: Key partnerships

Jacques BajonJacques Bajon

Head of "Video Distribution" Practice

Towards consolidation of the fragmented connected TV platform market

Securing partnerships:
content – device, device – broadcaster, software platform – device.

Inside television’s new environment, veteran TV players and new entrants alike are working to secure a slew of cooperation agreements: content – device, device – broadcaster, software platform – device. The momentum created by partnerships initiated by content providers is picking up, devices are an increasingly integrated part of service plans, and we expect to start seeing a consolidation of today’s fragmented connected TV platform market.

Content meets devices: OTT gathering steam

Although we have seen a string of agreements between TV broadcasters and device suppliers over the past several months, it is OTT video providers that are the most likely to move viewers beyond the confines of watching videos on a computer, by taking their solutions to the TV set and, more widely, to all of the screens in the home. We are nonetheless seeing regional differences emerge, along with some examples that could be worth emulating. In Asia, for instance, TV broadcasters are managing to join forces on aggregated OTT platforms: in South Korea with Pooq TV and in Japan with Motto TV. On a smaller scale, this type of partnership also exists in the United States with Hulu (Plus) and in the UK with the BBC’s iPlayer.

Also worth mentioning is the presence of two of the leading viral video sites, Dailymotion and YouTube, on smart (i.e. connected) devices the world over.
American giants continue to make inroads into international markets – and especially Netflix which operates in 40 countries, including North America, Europe (the UK, Ireland, Scandinavia) and Latin America – while newcomer HBO Nordics has set up shop in Norway, Denmark, Finland and Sweden.
Meanwhile Amazon, which operates in North America under its own brand, and in Germany and the UK through its more than 2 million LOVEFILM subscribers, recently pulled out of the Scandinavian market.

A selection of smart TV alliances and standardization initiatives

Smart TV alliances

Source: IDATE, July 2013

Devices an increasingly integral part of pay-TV providers’ service line-up

We are entering a new era of smart TV – also referred to as connected TV – one where devices are an increasingly integral part of pay-TV providers’ solutions.
The first partnerships that allow users to do away with a set-top box have come on the market. These are helping boost the concept of the “Operator as an App” that emerged with smart TV hardware for secondary TV sets in the home. Pay-TV providers are moving their distribution to the cloud to deliver more flexible solutions in an increasingly multi-screen environment.
Meanwhile, hybrid devices are allowing specialists from the world of broadcast TV to enhance their offering with complementary OTT services, and so acting to some degree as the return path that broadcasting networks lack.

Is it merger & acquisition time for smart TV platforms?

The battle for control of the user interface will only accelerate. Device makers, pay-TV providers and the top software companies will move increasingly into some form of coopetition.
Straight-up competition between proprietary platforms will be the norm at first, but players will move gradually towards a more cooperative approach, and no doubt a series of agreements as mergers begin to occur.
The top software companies, which are more apt to focus their R&D efforts on their core business and able to leverage their app stores, are also expected to make real inroads into this market. Though still rather marginal players, the Android TV, iOS TV and Microsoft Windows TV systems could become central components in the future ecosystem.

This is an excerpt of our insight Connected TV: key partnerships being a part of our ongoing monitoring service Connected TV distribution Watch

10Jul/13Off

Smart Home

MICHAUD LaurentLaurent Michaud
Head of Consumer Electronics & Digital Entertainment Practice at IDATE


Challenges of Consumer Electronics of Entertainment and Home automation

Despite tough economic times, the consumer electronics sector continues to deliver innovations, both technological and in the realm of usage, which have caught on with consumers. They have demonstrated, if not that value could shift to services and software, at the very least that the sector can rely on a new set of market dynamics in the medium term.

Consumers’ love of mobile devices, smartphones and tablets has not waned. According to IDATE, more than 1.5 billion smartphones and 470 million tablets will be sold in 2017, compared to just over 640 million and 114 million, respectively, in 2012. This popularity can be attributed to several factors:


These devices allow users to make calls and send text messages anywhere, anytime. So they satisfy the needs of that portion of the population that wants to be connected at all times, and even have the potential to create that need;


They give access to a huge selection of varied, simple, affordable and entertaining applications. Games are especially popular, so much so that the makers of handheld gaming devices are being hammered by this new competition. In the coming months and years gateways with other devices, and especially TV, will open up new opportunities – if not at the industrial level, most certainly in terms of fostering innovation;


They are easy to use, in particular thanks to touchscreen technology and the efforts being made by engineers, designers, developers and programmers – all of whom are aware that the user experience is key to coming out on top. Never before has it been so vital to gaining a competitive edge.


Computer vs. tablet sales, 2013-2017 (milion units)

Evolution of computer and tablet sales throughout 2017

Source: IDATE, 2013

So tablets are taking hold as central devices in the digital home. Poised to replace the personal computer, the tablet is expected to continue its rise in 2013 at a rate that was already being underestimated a few months ago. In the coming years, its popularity will be ensured by an expanded product line that includes “phablets” (phone tablets). The aim of this hybrid device is to target the larger, less wealthy section of the population. IDATE estimates that close to 2 billion tablets or phablets will have been sold between 2009 and 2017.

Companion devices, be it a tablet, a smartphone or phablet, act as second screens, or complements to users’ main screens. This relationship paves the way for a tremendous range of applications associated with television. Internet companies, media content providers, TV networks and other pay-TV package vendors will no doubt capitalise on these opportunities, if not to win back a portion of viewers who have moved to the Web, at least to deepen viewers’ relationship with their programmes.

As a result, the connected TV will be one of the cornerstones of the digital home. Like applications sold through app stores, managed and OTT interactive services could prove enough of a drawing card to persuade households to replace their old set ahead of schedule. This would be an ideal opportunity for manufacturers to have their OLED and Ultra HD technological breakthroughs adopted en masse, thanks to the appeal of having an internet-ready set. IDATE forecasts that standalone connected television sales will rise from 22 million in 2012 to 550 million in 2017.

Typical lifecyle of a television incorporating a new technology

Adoptance cycle of a television incorporating a new technology

Source : IDATE, Smart Home market insight, June 2013>

This fiercely competitive landscape provides the battleground for global dominance in the consumer electronics, telecommunications and internet sectors. Thanks to the programme begun in 2006, China is now a serious up-and-comer, moving in on American giants like Google, Apple, Amazon and Microsoft, as well as Japanese and South Korean CE titans.

The technological innovations fuelling the consumer electronics market both serve and inspire the home automation sector. A host of innovations were on display at the Consumer Electronics Show 2013 earlier this year. Although there was no lack of original ideas, it nevertheless remains that a new paradigm is taking hold and enabling the emergence of a segment long awaited by the housing industry, energy companies and users alike. Combining fixed electronic devices (IP boxes, set-top boxes and integrated technologies) with sensors, OLED displays, recognition tools, augmented reality, an internet connection, a WYSIWYG software interface, and more economical home security, energy management and personal home services solutions (for now). Management and remote control features using a mobile device provide increased flexibility and the ability to supply a tracking system that could be monetised.

This is an excerpt of our insight "Smart Home"

11Feb/13Off

World TV Market

Florence Le Borgne-Bachschmidt

Head of the TV & Digital Content Practice

More than 1.5 billion TV households worldwide in 2017

The TV market is a sector on the precipice of unprecedented upheaval. IDATE publishes every six months an observatory of the traditional TV market and our study reveals the chief forces driving the industry’s growth and transformation – exploring key market trends and supplying volume and revenue forecasts up to 2017.

Accessing TV

According to IDATE, the number of TV households worldwide will reach 1.544 billion in 2017 (+9.1% in 5 years).

Cable will the remain the chief access channel (554.0 million households in 2017) but will gradually lose ground to satellite and IPTV which will account for 32.1% and 8.6% of TV households, respectively, at the end of 2017.

Despite the development of hybrid TV solutions, terrestrial TV will continue its decline and drop down to number three spot by 2017, with a roughly 23% share of the global market.

The development of hybrid solutions that combine live programming on broadcast networks (terrestrial and DTH) and OTT video services over the open Web is a key variable in the future development of the various TV access modes.

IDATE's take on current industry moves

"The current acquisition of Virgin Media by Liberty Global underlines the strategy of internationalisation in the Pay-TV Market. More globally, the United States continue to set the trends and consolidate their leadership in this market," says Florence Le Borgne-Bachschmidt, head of the TV & Digital Content Practice at IDATE. She insists: "Pay-TV is nearing saturation in the world’s more developed TV markets. The emergence of new OTT video services on televisions and other connected devices increases the threat of cord-cutting. For a great many pay-TV providers in the West, emerging markets therefore represent vital sources of future growth."

Spotlight on the breakdown of Pay-TV: TV access and premium pay-services

In some of cable TV’s traditional strongholds, access services still account for the bulk of pay-TV subscriptions with e.g. 57.1% of pay-TV households in Japan & 74.6% of pay-TV households in Germany.

In France, the development of multi-play services including access to a basic IPTV package tends to increase the share of households subscribing to an access only service.

In contrast, in the United Kingdom or Italy, this type of offer tends to be disappearing, which is in the UK visible by stopping to sell the Virgin Media M package.



Florence Le Borgne-Bachschmidt,
Head of the TV & Digital Content Practice

More information on our regulary published World TV Observatory available here

About Florence Le Borgne: She joined IDATE in July 1998 and is now head of our TV & Digital content Practice. Florence’s prime area of focus is the development of digital media technologies (terrestrial, cable and satellite TV, digital cinema, video and TV on the web) and specifically the economic, strategic and micro-economic aspects of these sectors. Her analyses also cover media company strategies in general. Before coming to IDATE, Florence worked as the Head of Research in the Nord-Pas-de-Calais Regional Development Agency's Economic Observation department, where she devoted herself primarily to issues relating to the Information Society, the development of telework and the mastery of key technologies. Florence is a graduate of the Lille school of management EDHEC (Ecole of Hautes Etudes Commerciales).


11Feb/13Off

Cord Cutting


Jacques Bajon

Head of "Video Distribution" Practice

Cordcutting: Is Europe ready?

 

Cord-cutting, which describes the phenomenon of traditional television services' customer drain, is at the heart of the new competence in the audiovisual landscape. IDATE recently published an in-depth market report dealing with this topic and it proposes a complete benchmark of new video offers in the United States and analyses the best practices. The study provides also conclusions on potential impacts of this phenomenon in Europe.

The phenomenon of cord-cutting can be regarded in a broader perspective of evolution in access to television and video services. This threat to the established MVPDs1 is in fact symptomatic of a broader set of upheavals in the television industry. Various factors contribute to these changes: the economic crisis, which fuels tensions surrounding the primary income of the established players (advertising and subscription); an underlying trend of on-demand video consumption and changing usage habits that threaten to shatter lucrative TV packaging schemes; the entry of Internet players who master these new usage habits and are a step ahead when it comes to user interfaces, a key element in the future.

The traditional television players – channels and distributors – are thus facing a scissor effect. TV channels are seeking alternative growth models that include enhanced B2B with distributors and entry into the online market to serve as a springboard for advertising growth. For their part, distributors are seeing Internet players encroach onto their networks, while rights holders and TV channels continually weigh the benefits of partnering with them. The instability is constant. For Jacques Bajon, report’s project manager: “The key issue at stake is this process of disintermediation, and the TV industry's inability to team up only reinforces the trend.”

In the United States, players' strategies are thus primarily defensive:

Rights holders and TV channels still hesitate between choosing traditional distributors and the new ones (i.e. Internet-based);

Distributors are attempting to retain their subscribers with multi-screen offerings and by focusing on the Internet access growth engine (itself a vehicle for disintermediation!) and – in a new trend – by working together.

Quarterly changes in video subscribers (net additions) of US MVPDs, Q1 2010 –
Q2 2012 (thousands subscribers)

Europe, with a subscription TV market that still has its growth drivers, may think that it is preserved from the tension across the pond, but its dependency on the US industry is twofold. Europe lags behind in many ways in terms of content and technology. It is dependent on US audiovisual products, and the entrants in the Internet market that master technology and interfaces come from the United States.

What is the solution? Risky changes.

Rights holders must make the release windows and network-centric agreements model suppler to make content available. In Europe, the production industry must structure itself without further delay. In Europe, and to a lesser extent in the United States, TV channels fund audiovisual production and thus play a video library management role that must be strengthened, as in the film industry.

TV packagers must do away with their lucrative but ossifying model of packaging channels and instead offer consumers what they want.

Distributors must distribute, whether over managed networks or the Internet, and they should be paid for this service (and not the contrary, which is currently the case for wireline operators).

OTT video services will continue to grow and influence the TV access market because this is what users are demanding: flexibility and richness of content offerings, prices (a monthly subscription to Netflix equals the purchase price of a DVD), "anywhere, any terminal" usage habits – unlike operators' segmented offerings, and user-friendliness (these new entrants usually offer much more accomplished consumption interfaces).


Jacques BAJON,
Head of  "Video Distribution" Practice

More information on our website about the in-depth market report dealing with this topic

About Jacques: He joined lDATE in November 2000, working as a Director of Studies. His assignments primarily involve strategic and sector-specific examination of the television/video and its distribution modes, from broadcast to telecoms/IP. He more specifically addresses digital delivery ecosystems and linked services. Jacques’s previous experience includes freelance analyst for the Eurostaf / Les Echos group, carrying out market research and analysis of media and telecommunications industry companies, in addition to gaining experience in market analysis working for Ericsson. Jacques holds a post-graduate research degree (DEA) in International Economics (Université Paris X Nanterre) , a Master in Strategic Management of Innovation (Toulouse Graduate School of Management), and followed a training session in Investments in Telecom Networks from Télécom ParisTech.

4Oct/12Off

World Television Market

LEBORGNE-Florence

Florence LE BORGNE-BACHSCHMIDT

Head of the TV & Digital content Practice, DigiWorld by IDATE

 

The penetration of digital television in TV households passes the 50% mark

 
Publication of the twenty-fifth edition of the “World Television Market” report, is an opportunity for IDATE’s Media team to put into perspective the fundamental changes in the audiovisual industry, in France, in Europe and worldwide. For Florence Le Borgne-Bachschmidt, "It is particularly important to put into context the transformational movements in television, which have never been greater than they are today, in order to measure the revolution taking place”. This report, founded on a very detailed database, provides key information (terrestrial TV, satellite, cable, IPTV, pay-TV etc.), for nearly 40 countries and 5 geographical areas.

TV access modes
According to IDATE, the number of TV households worldwide will reach 1.502 billion in 2016 (+9.4% in 5 years).

  • Cable will the remain the chief access channel but will gradually lose ground to satellite and IPTV which will account for 30.0% and 7.3% of TV households, respectively, at the end of 2016.
  • Despite the development of hybrid TV solutions, terrestrial TV will continue its decline and drop down to number three spot by 2016, with a roughly 26% share of the global market.
  • The development of hybrid solutions that combine live programming on broadcast networks (terrestrial and DTH) and OTT video services over the open Web is a key variable in the future development of the various TV access modes.

Digital inroads
According to IDATE, the penetration of digital TV households worldwide will come to 77.6% of TV households in 2016. Three factors in particular will shape the development of digital TV:

  • Governments’ ability to steer the digital switchover of national terrestrial broadcasting networks
  • Cable companies’ investments in upgrading their infrastructure
  • How popular IPTV and satellite pay-TV services are with TV households.

TV revenue
According to IDATE, the global TV industry’s revenue will come to €340.1 billion in 2012:

  • Pay-TV revenue will grow by 12.1% between 2012 and 2016, or by an average 2.9% annually.
  • Ad revenue will enjoy even stronger growth of 21.2% between 2012 and 2016.
  • Public financing/licensing fees will continue to increase significantly (+7% in 5 years).

Pay-TV providers going international

  • Pay-TV is nearing saturation in the world’s more developed TV markets. The emergence of new OTT video services on televisions and other connected devices increases the threat of cord-cutting.
  • For a great many pay-TV providers in the West, emerging markets therefore represent vital sources of future growth.

Florence LE BORGNE-BACHSCHMIDT
Head of the TV & Digital content Practice
f.leborgne@idate.org

> Executive seminar "Content in the Cloud" within the frame of the DigiWorld Summit 2012 – 14 November 2012

> More information about this study available on our website

2Oct/12Off

Google TV must prove its worth

Jacques Bajon
Jacques Bajon
Head of the Video distribution practice at IDATE
 
Sony has been marketing a Google TV Box in France since end-September, providing access to Web content, music & video entertainment and apps on its TV sets. This bid follows the first launches mid-year in the USA and roll-outs in the United Kingdom, Netherlands and Germany.

Google TV is adopting an original stance with a value proposition that focuses on Internet access and applications (few still available for TV) on the television set, within what is heralded as a seamless interface. Yet early feedback from the USA seems rather ambivalent on this latter point.

In terms of entertainment services, and despite the combined content offered by Google and Sony, the resistance of TV channels to give access to their content could be a burden. Unfortunately for Google, it cannot fully lean on its basic DNA, that of being a search engine, for exploitation on all video streams. Web/TV content indexing (linear or not) in unison with a transverse search engine would indeed change our consumption patterns. This is rather the revolution that is now anticipated, although such change does not depend on Google alone. Google TV's open approach is both its strength and its weakness. By nudging open the door to a world of convergence and unprecedented modes of consumption, it is also, for these very same reasons, warding off content rights holders.

Costing 200 EUR, twice as much as Apple TV and more within the price range of the XBOX 360 or PS3 game consoles, Google TV's current value proposition will be a real challenge to overcome, particularly in France where more than 10 million households subscribe to digital cable and IPTV.

Consumers will be the frontline judges, either endorsing or not endorsing Google's promise to deliver a revolutionary and user-friendly browsing system. This wide-scale endorsement will either open or close future windows of opportunity for incorporating TV channel content in the service, and even opportunities for forming integration partnerships with triple-play operators. This is where the future market really lies.

Jacques Bajon
Head of the Video distribution practice
j.bajon@idate.org

> To learn more about the Connected TV Watch Service : www.idate.org

3Jul/12Off

Next Gen TV 2020

Gilles Fontaine

Gilles FONTAINE

Deputy CEO, IDATE

 

Still up for grabs

 
IDATE has published a report that draws on our various works on new forms of TV. It provides readers with a more in-depth analysis of what the future likely holds for television markets between now and 2020, and allows them to identify the core disruptions and innovations that will alter the TV/video market as we know it.

“We will see three distribution models emerge: that of packager (like what cable and satellite do today), the digital store (an open platform that makes all content available to viewers) and self-supply (thanks to the destruction of the exclusive link between the access network and the TV set),” says Gilles Fontaine, IDATE’s Deputy CEO and Project Manager for this report.

He adds that, “New on-demand services will increase their share of the global video market from 3% in 2011 to 12% in 2020 – enjoying an especially high share in developed countries. By 2020, connected TV will be a significant market and will account for 63% of the new OTT services market, with viewing on the PC taking a backseat. The upshot, then, is that managed networks’ share of the new services market will be in decline”.

Between 2011 and 2020, the global videos services market will grow by an average 4.7% a year

According to our modelling, the global TV services market will total €355 billion in 2020, compared to €233 billion in 2011, which translates into an average annual growth rate of 4.7%.

Growth will vary from region to region: the top five European markets, along with Japan and the United States together represented 80% of the global video services market in 2011, but their share will drop to 60% by 2020.

Growth rates in developed countries will also vary:
In the United States (CAGR for 2011-2020 of 0.3%), the maturity of the pay-TV market and fierce competition between OTT services will weigh on the sector’s revenue.

In Europe, we believe that Italy and Spain’s live TV markets still have more room to grow than the French and British markets. We also posit that the structure of Germany’s cable market will continue to hinder the development of a national pay-TV market there.

Gilles FONTAINE
Deputy CEO, IDATE
g.fontaine@idate.org

> Visit our website for more information about this study.