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Keep your eyes peeled It’s been “infinitely deferred” for years. But Jonathan Watson argues that the era of connected TV is finally about to begin. Watch this space...

By Jonathan Watson

Publisher Bradley Scheffer brad@lyonsdown.co.uk Managing editor Lucie Carrington lucie@lyonsdown.co.uk Editor Jonathan Watson Production Editor Amy Dickson amy@lyonsdown.co.uk Production Assistant Fleur Hollett fleur@lyonsdown.co.uk Project Manager Aidan Neville aidan@lyonsdown.co.uk For more information on any of our supplements please contact us: Telephone 020 8349 4363 Email info@lyonsdown.co.uk Online www.lyonsdown.co.uk

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According to the French philosopher Jacques Derrida, words and signs could never fully express what they actually meant, but could only be defined by reference to other words, from which they differ. This meant that meaning was forever “deferred” or postponed indefinitely through an endless chain of signifiers.

It’s a concept that could also apply to connected TV. Heralded by industry experts as the “next big thing” for many years, connected TV’s emergence as

8%

of people own a connected TV a mainstream consumer product always seems to be indefinitely deferred. The big day always seems to be just around the corner, frustratingly out of reach.

The perfect example of this is YouView, the much-delayed internetconnected set-top box backed by the BBC, ITV, Channel 4, Channel 5, Arqiva, TalkTalk and BT. It was expected to launch some time ago and make a big splash in the TV market, but there is still no sign of it.

Connected TV has yet to catch on with the average viewer. Only 20 per cent of those who own a smart TV in the UK bought it to connect to the internet, according to research published last month by YouGov, while 49 per cent said they bought one for the picture quality and the same percentage simply wanted a more up-to-date set.

Only eight per cent of us own a connected TV, YouGov

says, and only seven per cent plan to buy one in the next year. Only three per cent know that BBC iPlayer and YouTube are available on connected TVs. And even when people do buy a connected TV, they are not always aware of what it does. UK research published this month by Kantar Media found that just 40 per cent of connected TV owners had bothered to connect them to the internet.

In addition, today’s connected TV interfaces are not always particularly consumer-friendly. Daniel Danker, who runs the BBC’s iPlayer operation, told an audience at the Digital TV Group summit in London recently that connected TVs need to become less complicated.

Hooking the things up is hard enough, he reckons, and even then “audiences are presented with a list of choices that boggles the mind”.

40%

Inspect a gadget

From radiowaves to fashionista slaves, we look at the apps made for connected TVs. p5

Mind the network gap

The Olympics could be a marker for how broadband infrastructure will cope under high demand. p9

of connected TVs connect to web Does all this mean the success of connected TV will continue to be indefinitely deferred? Far from it. People do not replace their TVs as often as they replace their smartphones, so this was always likely to be a gradual process. Eventually, as the technology settles down, standards are agreed and new applications are brought to market that catch the imagination of consumers, connected TV will have a good chance of becoming a mainstream consumer product.

It may not be a compelling proposition for most viewers just yet, but it soon will be.

Take it from us...

Three industry experts tell us the best ways to grab consumers’ attention – and keep it. p13

Supporters

Contributors Jonathan Watson regularly edits Sue Tabbitt is a prolific business Lyonsdown’s Business Technology technology journalist with over 20 supplements. He is a journalist years’ experience on magazines specialising in law, business, and and as a freelance writer, covering technology. He has worked for a broad range of business and IT Euromoney and Screen Digest. subjects for The Daily Telegraph, 10103 Digital Home Artwork 262x77.6_Layout 1 24/04/2012 15:59 Page 1

Sunday Telegraph and Guardian as well as specialist technology and industry publications.

Paul Bray has written about almost every topic from business and

technology to travel, education and food and drink, for many publications including The Daily Telegraph, The Guardian, The Sunday Times, Britain’s Top Employers, Computing, Director and Nasdaq International.

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Will viewers cut the cord?

The range of services available via connected TV may cause some consumers to question the value of the traditional pay TV model

it wherever you’d like,” said Boxee’s marketing VP Andrew Kippen when the company commercially launched its live TV integration earlier this year. “Meanwhile, cable’s pushing the same boring interface and charging you even more for it...while you’re really only watching 14 per cent of the channels you’re paying for.”

The evidence so far Are TV viewers receptive to this message? It may be too early to tell. One recent report, from the Convergence Consulting Group,

“Internet-based services will be a threat to pay TV operators if they don’t do something about it” – Nightingale estimated that 3.58m people in the US will cut the cord by the end of this year.

The group claims that between 2008 and 2011, 2.65m pay TV subscribers cancelled their subscriptions and replaced them with online streaming services such as Netflix. More than 40 per cent of those

At your fingertips: Boxee delivers a range of content

enables Boxee customers to get both live TV and OTT content.

Boxee actively encourages consumers to cut the cord in its marketing material.

“The web has made it easy and affordable to find what you’re looking for and enjoy

2.65m subscribers dropped their pay TV service in 2011.

Pay TV firms are not mere onlookers to this trend. “Any pay TV operator has an obligation to make its content available to its customers, wherever they are,” says Adam

Nightingale, head of sa les for nor t her n Europe at content security specialist Irdeto.

“Increasingly, those customers are somewhere other than sitting in f ront of a linear TV. So internet-based services will be a threat to pay TV operators if they don’t do something about it.”

Sky is responding by launching a new internet TV service this summer. To be called NowTV, it will enable viewers, who do not have to be Sky subscribers, to access content on a pay-as-you-go or contract basis. The service’s initial offering will be limited to films.

“By offering content in a more flexible and simple way, a distinct internet TV service enables us to offer more choice in how customers access Sky content,” says Stephen van Rooyen, MD of Sky’s sales and marketing group.

“By innovating in the way we package our content we’re able to give homes without a satellite-based Sky subscription more choice over how they access pay TV, which in turn will open up pay TV to more homes.”

Sky’s excellent results for the first quarter of 2012 underline the company’s strong position in the UK market. This could be because it still has much of the best content. “My kids are keen cricket fans, and Sky has more cricket than anyone else, so we still have Sky,” Nightingale says. “I cannot see an occasion where I would cancel my Sky subscription for as long as it has a dominant position in sport in particular.”

As for Virgin, it has been offering connected TV through the TiVo set-top box since 2011. The company gained 242,000 TiVo subscribers in the first quarter of 2012, taking the total to 677,100. This helped revenue to grow by 2.4 per cent to more than £1 billion, the largest amount Virgin has ever generated in the first three months of the year.

Some of the best experiences on connected TV today come from broadcasters such as the BBC, where the iPlayer sets a standard for others to follow, adds Steve Plunkett, director of technology and innovation at Red Bee Media, a company whose services include content delivery to connected TVs. He notes that Sky have continuously expanded their content offering beyond their set-top boxes and all broadcasters will leverage their existing brands, audience relationships and content line-ups on these new platforms. “The good news for consumers is that they are offered ever more choice and a more on-demand experience with connected TVs,” Plunkett says. “Who they will choose to spend their cash with or direct their eyeballs at remains to be seen.”

5

What’s ‘appening?

A few of the apps already available on, or coming soon to, connected TVs Connect TV

By Jonathan Watson The connection of set-top boxes, games consoles and TVs to the internet is enabling video and other content to be delivered “over the top” (OTT). That means viewers access it over the open internet, rather than via a service provider’s own dedicated network.

While this is good news for consumers, who can now gain access to a much wider range of content, it may turn out to be bad news for traditional pay TV providers, such as Sky and Virgin. This is because it offers viewers the option of “cutting the cord” from their pay TV supplier. For some viewers, the content they can get for free or at low cost from new OTT video providers is enough, and reduces their need for a monthly pay TV subscription.

The pay TV operators, who have controlled the point of delivery and owned the relationship with the customer for years, risk being left behind as manufacturers, new entrants and their content suppliers break into the same point in the value chain.

Devices such as the Boxee box, for example, deliver a range of content over the internet direct to the TV screen. Earlier this year, Boxee carried out a software update and started selling a “Live TV” dongle in the US that allows viewers to connect an HD antenna to their box. This

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Connect TV enables viewers to access channels delivered over the internet directly through the programme guide on any compatible Freeview HD receiver.

It allows channels to offer niche channels on Freeview HD over broadband, as well as providing the potential for video on demand services. Racing UK, for example, previously available only on cable and satellite, has now launched on Freeview through the Connect TV platform, providing horse racing coverage for £20 a month.

BBC Sport

The BBC has just launched its new sport app for connected TVs. Complementing the BBC’s other apps, BBC News and BBC iPlayer, this new service will enable viewers to access the BBC’s interactive coverage of major sporting events via the BBC red button. The app will initially focus on Formula 1, and over the next few months, it will also offer enhanced coverage of Euro 2012, Wimbledon and the London 2012 Olympic Games.

Curzon On Demand

London’s leading art-house cinema chain Curzon Cinemas has just extended its Curzon On Demand service to Samsung Smart TVs. The video-ondemand platform, which will compete with big names like

Win a night

at The

Ritz

Netflix and Lovefilm, includes a feature called “In Cinemas, On Curzon”, whereby the cinema chain makes specially selected f ilms available to view simultaneously in the cinema or in the home.

Marks & Spencer

It’s not just media companies who ware creating apps for connected TV. Earlier this year, M&S became the first retailer to launch a branded content app. The app, which is basically an extension of the retailer’s online M&S TV channel, includes branded M&S video content ranging from advice, trends, how-to tools and buying guides across its food, non-food and fashion offerings.

Radioplayer

R adioplaye r, the inte rnet platform powering all BBC radio content and most of the UK’s commercial stations, is due to launch a Radioplayer app on YouView, the much-delayed internet-connected set-top box backed by the BBC, ITV, Channel 4, Channel 5, Arqiva, TalkTalk and BT. It will then be rolled out to other connected TV platforms.

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7

Coming to screens near you The combination of connected TVs and tablets puts the viewer in charge. Sit back and let the best in technology entertain you Today’s home entertainment knows almost no limits. Connected TVs enhance viewers’ TV enjoyment by providing broadcast services as well as online services such as Hbb.TV, YouView and VuDu. The new technologies have proved a hit with the public faster than experts could have predicted – according to market research firm DisplaySearch, more than 40m connected TVs were shipped in 2010, with unit shipments forecasted to grow to more than 123m in 2014 worldwide.

The other new technology that is taking the world by storm is the tablet. According to research firm Gartner, 118.9m tablets will be sold worldwide in 2012 – a 98 per cent increase over 2011. And Gartner is projecting that by 2016 the sales of tablet technologies will have reached almost 370m worldwide.

With this many tablets being sold, everyone wants to know how people are using these technologies. Research has found that users are viewing web video on their tablets 30 per cent

more than they used to on their computers, and most tablet owners (75 per cent) are accessing video on their tablet while at home.

There is a growing trend in content and video consumption on the devices and an increase in the amount of time people spend watching video and TV overall. According to a recent report by Forrester Research, tablets are replacing PCs and smartphones as the device of choice. It seems 85 per cent of US tablet owners use their tablet while watching TV, and according to Neilson, 30 per cent of total tablet usage is while watching TV. In summary, the tablet is quickly becoming the second screen of choice for consumers. So what does this mean for the future of the “connected home”?

At PacketVideo, we strongly believe that future of entertainment and media is using TVs and tablets simultaneously to provide a rich, interactive and personal experience. These experiences will develop the ability to interact directly with the internet on the tablet via apps

or browsers, while merging the ever growing interaction of social media. And with the growth in the availability of these types of experiences, phrases such as “augmented TV” and “social TV” will enter the language.

With the increase in availability of augmented and social TV apps and services such as ZeeBox and Yahoo’s IntoNow app, the experience of passively watching TV goes by the wayside.

With a tablet or smartphone and a TV, the app can identify what users are currently watching, even if it is the first time it has aired. These apps and services will open up a community of people to interact with who enjoy watching the same show and possibly have the same interests. They can also make recommendations for other shows users might enjoy. It’s TV that’s tailored to the viewer’s needs.

Imagine watching Arsenal playing Manchester United on your TV, while your tablet intuitively provides you with player updates and statistics.

What if your tablet alerts you that Liverpool just scored and you want to beam the goal to your TV? Imagine deciding which camera you use to view the game, especially when a penalty call was made? It is the ultimate in interactivity.

These new apps can also help users discover exclusive online content developed around the shows they like to watch, or provide the

ability to purchase items seen on screen during a programme. It’s all about a more interactive experience thanks to these new technologies – imagine wirelessly beaming any content (broadcast, online or personal) from a tablet to your big-screen connected TV, no wires or cables required?

The tablet is a great discovery and companion tool. It’s easy to spend hours lost in the internet as you go from one video to another as you find related items or reco≠mmended links, but why should you limit yourself to isolated enjoyment on a small, second-screen device?

New opportunities will continue to emerge, but PacketVideo has already embraced the union of TVs, tablets and smartphones devices. We’ve developed our line of Twonky products to let you beam content discovered on your phone, tablet or PC to a wide variety of devices, including Apple TV and connected TVs with DLNA capability (such as all new models by Sony, Philips and Samsung).

Discovery and enjoyment of media is no longer dependent on a single appliance. A particular operating system, broadcaster or manufacturer doesn’t even get to dictate the terms. Now, it’s driven by you and your demands, your schedule and at your leisure. www.twonky.com

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Media’s next wave is about to break Connected TV is making solid progress in the UK, but there are still several technological – and cultural – hurdles to overcome before it really takes off

By Sue Tabbitt A n yo n e followi n g a n nou nceme n ts f rom t he Consumer Electronics Show (CES) in Las Vegas in January must have thought decades of entrenched viewing habits were to be changed forever as “connected T V ” sweeps the developed world.

Connected TV is the convergence of traditional (“linear”) television prog ra m m ing w it h web apps and content – on a TV rather than a computer screen. That might be catch-up services such as BBC iPlayer, films streamed via Netflix or Lovefilm, online video services including YouTube and Skype, or well-established services such as Facebook, Twitter, email, online gaming and internet shopping.

The experience is generally delivered through “smart” TV sets, set-top boxes, connected Blu-ray players and even games consoles. Samsung, LG, Sony, Sharp, Toshiba, Vizio, Mitsubishi and Panasonic are among those vying for a share of the action – not to mention Google, whose Android-based offering is due to launch in September in Europe through a tie-up with Sony. Apple has so far only dipped a toe in the market with a £99 high definition TV plug-in, but is rumoured to be launching an own-branded TV within a year.

Samsung’s latest TV sets feature voice and motion systems for controlling the TVs and on-screen apps, along with face recognition for activating users’ personal profiles. An “AllShare Play” facility lets viewers access personal

content stored on other connected TVs as well as tablets, cameras, smartphones and PCs. Significantly, the TVs provide an upgrade path, so consumers can be less worried about putting their stake in the ground now.

Do viewers actually want all this?

While the promises are exciting, users are still playing catch-up. It’s getting harder to buy a TV that doesn’t have the enabling technology already built in, so high sales figures don’t necessarily

“The challenge is who can make TV the cheapest and stay alive.

If the manufacturers expect people to buy connected TVs, they need to differentiate them” – Bullwinkle mean there’s been a revolution in consumer behaviour. New research from Kantar Media suggests that, of the British consumers who do have an internet-ready TV set (just 17 per cent), only seven per cent have actually connected them.

According to Freeview, the UK’s main digital terrestrial TV (DTT) platform, mass-market appetite for connected TV centres on a few simple things, most notably an enhanced catch-up

service (such as iPlayer), accessible via the TV. Asked by Freeview to rank eight different TV facilities in order of appeal, 62 per cent of consumers cited catch-up TV as the most appealing service, 59 per cent favoured anytime access to content, and 51 per cent an enhanced programme guide that would allow them to go back and watch earlier episodes of a series.

“The category that came out least popular was accessing apps through the TV,” says Freeview MD Ilse Howling.

“This seems to be a bit too futuristic for the average viewer. At this stage, people still see TV first and foremost as a source of sit-back-and-relax entertainment.”

Market analyst Clive Longbottom of Quocirca agrees but thinks the situation could change as the technology settles down, standards are agreed and new applications are brought to market that fire consumers’ imagination. “Both Samsung and LG, which are driving the market, have app stores where you can download applications directly on to the TV but,

by God, they’re poor,” he says.

Most of them are magazines, with a smattering of games – but even here the experience is akin to that of the old Sinclair ZX Spectrum.

One of the barriers is that each TV manufacturer has its own technology platform for delivering connected content, forcing developers to limit their target audience. “We’re nowhere near a situation where you can get down to 69p an app for something really good,” he says. “If you stick something up in a TV app store today, five people might download it.”

Consumers like technology that enhances current viewing habits Most appealing / useful

Appeal

Usefulness

Players

62%

Anytime

59%

Enhanced EPG

56%

46%

Remote record

53%

25%

3D

Source: Informa Telecoms & Media

60%

51%

Home networking

Mobile TV Least appealing / Smartphone/tablet app useful

63%

31%

19% 12% 6%

16% 15% 8%

Base: Total respondents - 2000 QMDAPP: Considering only these 3 ideas, which one is the most appealing, and which one is least appealing?

QMDUSE: Considering only these 3 ideas, which one is the most useful and which one is least useful?

Longbottom believes the most interesting development to date has been the introduction of Lovefilm and Netflix on to connected TV platforms, giving consumers the ability to view their choice of film on their TV screens without the need for a physical DVD, Blu-ray disc or clumsy laptop hook-up.

Although Samsung claims to have more than 1,400 smart TV apps available for its platform today, the main ones listed on its UK website apart from Lovefilm and Netflix are BBC iPlayer, YouTube, Skype, Facebook and Twitter.

Where will revenues come from?

Ty i ng dow n t he com me rc ia l opportunities around connected TV is one challenge that is still to be overcome. Specialist TV channel Food Network, whose UK digital team was formed less than a year ago, sees the connected TV opportunity first and foremost as a chance to increase its audience and build viewer loyalty.

The global brand, which was added to Freeview last July, now claims to

have the highest audience reach among lifestyle channels in Britain.

The initial aim has been to build a solid resource of content on demand, according to Kate Bradshaw, who heads Food Network’s digital team in the UK. “We wanted to offer a curated selection of our top shows and, alongside them, provide all the recipes featured as well as short clips (about relevant knife skills, for example) as an extension of the experience,” she explains. Food Network has been working with TV App Agency on a connected TV app that should be ready in June.

Ultimately, Food Network’s goal will be to get its content to as wide an audience as possible through a broad range of TVs and equipment. As a freeto-air channel in the UK, it relies on advertising for revenue and must keep pulling new tricks out of the bag to keep clients spending.

This includes creating opportunities to get closer to the viewer, through a more integrated and measurable offering. “Whether our customers are

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using the iPhone, connected TV or accessing the web via a laptop, if you’ve registered with us we’ll know what you’ve watched and when,” Bradshaw says. The consumer will be able to bookmark or save an episode from one device and watch it on another.

Does she think the opportunity justifies the early investment? “I do, yes,” she says. It helps that Food Network’s parent company, Scripps, has negotiated “deep rights” with its content provider partners, saving it the hassle of having to renegotiate each time it wants to tap into new channels.

Education is the main thrust of Food Network’s existing plans but, not forgetting its remit to “entertain”, it is also keeping one eye on the potential for gaming. Longbottom thinks this could be a huge opportunity for connected TV. He points to Samsung’s advances with gesture-recognition technology, which he likens to Microsoft Kinect (developed for the Xbox games console), but built into the TV set.

“Then the connected TV becomes a real gaming environment to the point that you could have multiplayer games paid for at a micro level – say, 99p a game, rather than £30 for something you might get bored of,” he explains.

“When you’ve got a million users on board, it starts to make economic sense for game-writers.”

17%

of British public have an internet-ready TV

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Next steps For connected TV to take off, the industry needs to work harder at getting content to consumers, so that they don’t have to work so hard to find it. Retailers need to play their part in enthusing viewers about what’s available today.

Dixons recently announced its own KnowHow movie streaming service which will be available on smart TVs from the summer – a service it will be heavily promoting in stores, hopefully whetting viewers’ appetites.

TV manufacturers need to get more involved at this level too, if only to protect their own revenue streams. “In the TV industry, it’s a race to zero,” says Richard Bullwinkle, chief evangelist at Rovi, whose technology powers the Dixons service. “The challenge is who can make TV the cheapest and stay alive. If the manufacturers expect people to buy connected TVs, they need to differentiate them.”

This is also a chance for the manufacturers to extend their relationships, Bullwinkle says. “TV is no longer a dumb box on the wall; it’s regularly updated with software and new services, providing opportunities for advertising and a revenue share in the content. The details are still being worked out, but if a TV set is bringing new customers to the likes of Netflix I’m pretty sure they’d be happy to pay something for that.”

Unfortunately, one of the reasons the manufacturers aren’t falling over themselves to open up their platforms is that for the time being, app store lockdown is a way of ensuring market share. That they risk limiting the market in the process seems to be a secondary concern for now.

9

Global, connected device installed base by device, 2011-2016 2011

2016

Connected TV 82.0 m

Connected TV 891.7 m

Games console 179.4 m

Games console 267.6 m

Connected Blu-ray player 35.0 m

Connected Blu-ray player 364.2 m

Hybrid set-top box 34.7 m

Hybrid set-top box 255.1 m

Media streamer 7.4 m

Media streamer 49.2 m

Source: Informa Telecoms & Media

Can the network cope?

The growth of connected TV will place extra demands on the UK’s broadband infrastructure

By Sue Tabbitt and Jonathan Watson There was a bit of a jolt for connected TV enthusiasts in February when Korea Telecom (KT), the largest telecoms firm in Korea, announced that it would be restricting internet access by Samsung’s smart TVs. This removed their ability to download and run apps, and curtailed streaming. The company said that the TVs “use internet networks without permission” and that its decision “was inevitable in order to protect internet users and keep market order”.

The move came after months of negotiations between KT and the makers of smart TVs failed to reach agreement concerning the huge demands such TVs can put on the country’s data networks.

The move set alarm bells ringing in many countries. Is the world’s broadband ready for connected TV? Already, online consumer forums are filled with rants about buffering – where capacity-draining video content takes time to load over an internet connection, even mid-way through playback.

Richard Bullwinkle, chief evangelist at connected TV technology specialist Rovi, says that broadband is an issue everywhere, not just in the UK. “If everyone in the US wanted to stream all TV content over broadband internet today, the infrastructure would only have enough capacity to copy with five per cent of homes,” he says.

There’s no easy shortcut. “The London Olympics will be a big test,” Bullwinkle says. “Consumers will hope to get to a service that really delivers – and will pay

to have it. They have a lot of power: if they’re not getting the performance they expect, they’ll soon switch. That’s a great incentive for service providers to get their act together.”

As well as laying down additional fibre to increase capacity, network providers are also investing in technologies enabling them to prioritise capacity for applications such as video that are particularly sensitive to blips in network performance.

Nightingale says. “That means we can all get reasonably good or excellent quality content, depending on the amount of bandwidth available. Although I am sure there are lots of telecoms companies out there who would disagree with me.”

Features such as progressive download and content download also provide a good alternative if there are any bandwidth problems. “If you’re willing to wait a few minutes for your content to start, then

London Olympics: a big test for broadband Adam Nightingale, head of sales for northern Europe at content security specialist Irdeto, does not think this will be an issue in the UK. “Look at the success of BBC iPlayer,” he says. “That hasn’t brought the country’s broadband to a halt.”

The ability to transcode content into reasonably high quality without absorbing an enormous amount of bandwidth is improving, and adaptive bitrates help a lot,

you can be pretty much assured of good quality,” Nightingale says.

This suggests it’s unlikely that BT will prevent UK viewers from streaming films to their connected TVs any time soon. And the latest news from Korea is good: KT has now resumed internet services for Samsung smart TVs after the two companies agreed to settle their differences through negotiations.

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Digital world on display All the major players will be in London to explore the possibilities for the connected home in the world’s leading industry event Digital Home World Summit, the world’s leading connected-home conference, is set to return in 2012 – renamed from The Connected Home World Summit.

Focusing on multiple devices inside the home and how best to connect them for maximised customer experience, this year’s event will be attended by all the top industry players. Telecoms operators, internet service providers, broadcasters, content providers and equipment vendors will all be coming together to provide an insight into the digital home environment.

The event, held from the 19 - 20 June at the Thistle Marble Arch Hotel in central London, will

have more than 50 speakers from the likes of Ucom, BT, PT Telkom Indonesia, Cox Communications, Sony, Belgacom and Beeline.

Opening presentations will come from the likes of Holger Knoepke, vice president of connected home at Deutsche Telekom. Knoepke says: “More and more consumers see the value of energyefficiency solutions. They are attracted by the convenience of home automation solutions such as control of window shutters or lighting, security at home or home monitoring, and health products such as assisted living solutions for elderly people – so they don’t have to move into nursing homes.

In the future we will see a lot of innovation in this

Industry experts will gather at the event

area, as small and large companies capitalise on related opportunities.”

Knoepke will be covering these and other topics in his presentation on the second day of the event, 20 June.

With an array of sponsors already on board including Twonky, Sigma Designs, Smart Design, Access and Jungo, the conference continues to be the most forward-thinking event of its kind in the telecoms industry.

Topics will include both media and non-media services, such as sharing of photos, videos, documents, music and other data as well, as the influence of the cloud services for easier content management and remote access of personal archives. The show will also include breakfast briefings and a pre-conference workshop looking at next generation pay-TV services.

Andrew Ladbrook, senior analyst at Informa Telecoms and Media and host of this workshop, says: “This workshop will examine which operators should be deploying cloud TV services and how quickly this technology should be embraced.” www.digitalhomeworldsummit.com

Setting the standard Joined-up thinking – and the very latest in technology – means the ability to offer customers the exciting entertainment experiences they crave Megatrends are making their mark in the video industry, affecting device manufacturers, content distributors and consumers alike.

These trends include the collision between over-the-top (OTT) content distribution using the internet and pay TV business models, the blossoming of connected TV strategies and the increasing importance of social media in TV. As these shifts occur, consumer electronics manufacturers, operators and media companies look to evolve new business models to profit from these trends, combining ideas to deliver new solutions which contribute to

a mature and rich multiscreen, multiroom experience for consumers.

ACCESS understands and is excited about these megatrends. It will continue to use its experience of providing advanced software technologies for digital devices including mobile phones, games devices, TVs and set-top boxes to deliver solutions that rise to the challenge of these industry shifts.

I n what is u ndoubted ly a n increasingly fragmented digital market, standards to achieve uniformity and consistency in software development are of key importance. The flood of smartphones, digital TVs and tablets on to the high street means that consumers

increasingly want to share the content they have purchased and created.

The Digital Living Network Alliance standard, for example, focuses on allowing customers to easily access, search and share digital content in the home. HbbTV, the new standard for interactivity, is also gaining ground fast throughout Europe and has been developed to provide exciting new TV experiences by merging the worlds of broadcast TV and broadband internet.

Dr Neale Foster, ACCESS vicepresident of Global Sales IA, says: “We believe in the power of standardbased technology and we draw on our experience of shipping our solutions in

over one billion devices worldwide to deliver next-generation technologies.

With these solutions we enable exciting features such as ‘swipe-to-share’, a consumer-friendly method of viewing video from a camcorder straight to your own or a friend’s TV, tablet, PC or smartphone.

“ACCESS offers device manufacturers,

middleware companies and operators a tool kit of solutions in connected home, connected TV and OTT which they can use to fuel innovation and revenue by creating the funky experiences that consumers now demand.” +49 208 8290 6464 www.access-company.com

The new must attend event shaping the future of digital entertainment and consumer electronics.

Conference sessions include:

• Meeting the Consumer’s Changing Entertainment Needs

• Can the Networks Deliver?

• The Communications Review • Building an Entertainment Ecosystem • Maximising Opportunities for the Second Screen

Speakers:

• UltraViolet Under the Spotlight • Show Me the Money • Futuresource Analysis: Understanding the Market Dynamics

• The European Digital Single Market • The Consumer Unwrapped • Making the Consumer Connection

Hear from leading executives from BBC, British Video Association, BSkyB, Government, ITV, Nectar, PayPal, Red Bee Media, Rovi, Samsung, Tesco, zeebox and more.

Join us in London on 20 June and play your part in redefining the digital entertainment landscape.

Download your event brochure www.fes2012.com

Business Reporter · June 2012

an independent report from lyonsdown, distributed with the INDEPENDENT

Like us: facebook.com/business-reporter

Connected TV

Find us online: business-reporter.co.uk

11

‘It’s a funny thing being in a business that you know will eventually die’ Business Reporter asked Jim Buckle, MD of Lovefilm UK for his views on the UK’s nascent connected TV market

By Jonathan Watson

Buying a TV seems complex, even for someone who works in the industry. For the average consumer, it’s hard to know what you’re getting for your money

How is the UK’s connected TV market coming along?

Connected TV will become a mainstream TV product regardless of whether it is used or not.

This year we’ll see an evolution towards that with more and more products and services becoming available. The more services there are, the more people will connect, and the more people connect, the more companies will want to deliver services to them.

It’s quite a contrast with 3DTV, which started to come to market at about the same time. 3D is a fantastic cinema experience but watching 3D content in the home is quite a strange activity.

I don’t see it becoming a mainstream feature of TV viewing.

The TV industry is starting to resemble the PC industry. The processing power that people get on PCs, tablets and laptops grows exponentially all the time as a way for manufacturers to define and maintain their price points, but the actual potential of the features to get used or even understood by consumers decreases over time.

Connected TV offers viewers a lot of options.

How can any particular service stand out from the others?

It’s all about placement and brand recognition. If your app is placed near the top left-hand corner of the main menu that viewers get when they switch on their connected TV service, next to BBC iPlayer or [Channel 4’s] 4oD or other services that people would recognise, then that helps. If at the same time you are already a recognised brand, then that helps even more. As well as this, you need to promote your service outside of the TV environment.

How has Lovefilm managed the transition from being primarily a DVD-by-post company to being primarily a media streaming company?

It’s a funny thing being in a business where you know that eventually it will die! In the second half of last year, we realised that we had to step off the fence and decide whether we wanted to promote ourselves to the consumer as a streaming business or as a DVD rental business or as a combination of the two. We felt that the time had come to lead on streaming as our simple message for the future.

It’s been quite difficult over the years to know when exactly to invest in internet delivery. We didn’t want to invest heavily too much in advance of when consumer demand was going to be there.

But we’ve sensed over the last 12 to 18 months that there has been a gradual build-up in consumer demand. BBC iPlayer has really started to make people aware of the idea of watching content over the internet, and that has blazed a trail that the likes of us can follow.

The step-up in demand is really driven by how much good content you have available

the more it reinforces their behaviour to do that.

The other thing we must do is take away the effort for people. It’s not just about having great content, it’s a question of when viewers go into those services, do they provide things for you that viewers actually want to watch? They might like to know that Lovefilm has 10,000 films that they could watch, but actually they’d quite like them to present 10 things that they really do want to watch. So it’s not just about quality but about personalisation as well.

to people so there’s actually something there that people really want to make the effort to go and watch; by what major devices are you on; and by how heavily you promote your service. Each time we add a new device or a new studio deal or extra content, we see a step-up in usage.

If you were thinking about launching a service that’s going to be available on connected TVs right now, you wouldn’t want to limit yourself to connected TVs as it’s still quite a small market.You Visionary: Jim Buckle

wou ld w a nt to make your service available on PCs, laptops, tablet computers and mobiles as well.

How important is content quality in driving connected TV take-up?

If viewers know that the internet is coming through their TV, and that it’s more likely to give them something they want to watch than what they’re going to find on their electronic programme guide (EPG), then that will become something they will do more regularly. Rather than scrolling through to page 96 of the Sky EPG, they might immediately go to what’s on Lovefilm or what’s on BBC iPlayer.

The more that becomes a positive experience,

Lovefilm facing a future of tough competition Lovefilm, a subsidiary of Amazon.com, is a UKbased provider of home video and video game rental through DVDby-post and streaming video on demand in the UK, Germany and Scandinavia.

Subscribers can access the Lovefilm Instant digital service through a range of devices i n c l u d i n g c o n n e c t e d T V, PlayStation, Xbox, iPad and a number of other internet-enabled devices. It is available on Sony, Samsung and LG connected TVs.

In January 2012, Lovefilm announced that it had reached 2m subscribers, driven by a record number of sign-ups in the fourth quarter of 2011. In February, for the first time, Lovefilm members streamed more films and TV series instantly over the internet via Lovefilm Instant than rented DVDs, Blu-rays and games.

The company said that the number of films and TV episodes streamed online through internetconnected devices exceeded the number of DVDs, Blu-rays and Games rented by over 20 per cent

– a rise of 400 per cent compared to February 2012. Titles are also available on a pay-per-view basis via Lovefilm Box Office.

The service faces competition from Netflix, a media streaming service that has more than 25m members in the US. Netflix launched in the UK and Ireland in January, offering viewers unlimited access to content for £5.99 a month. Lovefilm offers a variety of packages starting at £4.89 a month. Both services will soon face competition from Sky’s new internet-based offering NowTV.

What else could be done to move connected TV forward?

The process of buying a TV could be a lot easier.

When I bought a Sony Bravia connected TV recently, I expected it to have an in-built wireless receiver, it took me a little while to figure out that I needed to spend another £50 or £60 buying a wireless dongle to plug into the TV. Buying a TV seems like a complex thing. The choice is somewhat bewildering, even for someone like me who works in the industry. For the average consumer, it’s quite hard to know what you’re getting for your money.

Can the UK’s broadband infrastructure cope with increased demand for TV via the internet?

It’s hard to tell. I find my broadband doesn’t deliver a great experience for me if I’m trying to watch something on a connected TV and another member of my family is using a games console at the same time. There is a really noticeable degradation in quality at peak weekend times if you and your neighbours are making heavy use of services.

There’s a huge exponential growth in the use of internet and video still ahead of us. Obviously there’s a huge upgrade of the internet going on at the same time, so provided those two things go hand in hand, everything should be fine. If one goes slightly ahead of the other, then I don’t think it will be.

Visual Unity: Na Hrebenech II 1718/8, Prague 4, 147 00, Czech Republic +420 271 742 111 | +420 271 742 112 | info@visualunity.com Š 2012 Visual Unity. All Rights Reserved.

www.visualunity.com

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Business Reporter · June 2012

an independent report from lyonsdown, distributed with the INDEPENDENT

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Connected TV

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13

Will gadget fatigue be a turn-off for viewers?

Connected TV offers a dizzying array of new services. But how easy is it for the consumer to make sense of getting access to content, especially when many did not ask for it?

By Paul Bray Here’s a riddle for you. When is a connected TV not a connected TV? The answer, strangely enough, is most of the time.

UK research published this month by Kantar Media found that, although one in six of the people surveyed owned a connected TV, just 40 per cent of them had bothered to connect it to the internet.

Almost a third of Kantar’s guinea pigs said they didn’t know how to connect their TV or lacked the right equipment, such as an adaptor.

And 13 per cent were unsure of the potential cost (conditioned, presumably, by the idea that anything worth having on TV these days can’t be free).

A complex business Technophobes have certainly found things a chore. “Families have been spending a lot more time together around the TV – not necessarily to watch programmes but to set it up!” says Philip Ely, a visiting researcher at the University of Surrey’s digital world research centre, who studies families’ approach to home technology.

“People have so many home gadgets they’re reluctant to have to configure another one, and connected TV makes too many assumptions about what infrastructure people have in their homes,” he says.

Even those consumers who have taken the plunge and connected their TVs aren’t necessarily cock-a-hoop about the experience, says Kantar Media director Trevor Vagg. Not only do they find it clunky, they also think it’s unreliable: internet users may accept the occasional delay or glitch, but TV viewers expect perfection.

On a practical level, things are improving. The latest connected TV sets are easier to set up and connect – especially with the advent of wireless home networks – and feature more “natural” interfaces, including voice control, motion control and even face recognition. As the connected TV industry matures, technology is becoming faster, more reliable and more standardised.

Not compelling enough However, the most common

reasons for non-connection discovered by Kantar Media are more fundamental. More than half (53 per cent) said they simply “hadn’t needed” to get connected.

“The main reason connected TV is so unappealing is that the TV is competing for experience and attention against the tablet, smartphone, console and laptop in the living room,” says Mo Syed, head of user experience at interactive media specialist Amplience.

“Until the connected aspect of TV can provide something compelling in the face of that competition, consumers will largely ignore it and pick up the device they spend countless hours using already.”

For Bob Hannent, an R&D manager at set-top box manufacturer Humax, the “critical mass

“Families have been spending a lot more time together around the TV – not necessarily to watch programmes, but to set it up!” – Ely driver” will be catch-up services such as BBC iPlayer. Next year we can expect to see catch-up services integrated into the electronic programme guide (EPG) so that we can easily find and watch items we’ve missed, Hannent believes. “The more access points people have to discover content, the more they’ll use connected services,” he says.

The watchwords will be relevance and simplicity. “Even the most complete geek sometimes just wants to veg out and not have to work to find something to watch,” says Bill Scott, chief operating and commercial officer at connected TV specialist easeltv.

“We think a combination of editorial, algorithmic (recommendations based on previous consumption) and community-driven (what are my friends or other people like me watching?)

suggestions will offer a relevant, personalised experience,” he says. “Delivered as a ‘channel’ which starts by playing something that may be relevant and allows consumers to easily skip to the next suggestion or to navigate if they want to, this supplements the EPG and could eventually replace it.”

The latest connected TVs can already share viewing recommendations with users based on their viewing habits, says Stephen Mitchell, general manager for TV marketing at set-maker Samsung UK. The second screen Social media will be an important part of the mix, adds Ely, with apps like Zeebox able to tell groups of friends what the others are watching. Zeebox runs on the viewer’s laptop, tablet or phone, and the general feeling is that that’s where apps like that belong. Barely a quarter (24 per cent) of Kantar’s connected TV users had ever used an app on their TVs. What the internet can do is enhance the viewing experience. This is already happening today through what’s called the “second screen” model, where we tap a laptop, tablet or phone while watching the TV. By creating a direct link between the TV and the personal device, you enhance the power of both, believes Simon Woodward, CEO of digital TV specialist ANT Software. “Tablets and TVs will be joined up, so the tablet will be able to control the TV and be used as a real second screen for the TV,” he says.

If you have a burning desire to read more about the actor you’re watching or discover what the background music is, instead of disturbing the rest of the family by bringing it up on the TV screen, you’ll be able to look it up on your iPad. And if you nip out to the kitchen to make a cuppa, the tablet will let you take the TV programme with you.

To get the best out of connected TV, it looks as though viewers will need more technology in their homes, not less.

What makes a good TV app?

Make it a sit-back experience

Remember the TV is a very different device from a phone or website, so don’t just re-purpose existing apps. You need to make it a “sit-back” experience relevant to the sitting room. Save “sit forward” interaction for the PC or tablet as a companion service, and focus on video as the communication medium because that’s what TV does well.

This means making sure the app can be navigated easily using a remote control. Avoid data input, because the remote control is hard to use for text.

And remember people will be 10 feet from the screen and won’t be able to read easily, so steer clear of text and small images.

Don’t ask people to register or manage an account: it’s too complex with the interfaces available. Instead, re-use existing website customer accounts.

– Tom Cape, chief executive of connected TV development agency Capablue

Keep on innovating

Don’t make an app designed for interaction via a TV because it’s a waste of time. And don’t force users into an environment that’s less user-friendly than other points of interaction in their lives (for example, YouTube’s connected TV search feature). If you can’t nail the user experience, don’t include it.

Instead, think primarily about how the user will interact, and whether that point of interaction is the best possible method of execution. Above all, continue to innovate and don’t assume that apps are the be-all and end-all of connected TV. – Daniel Ruch, VP of Tremor Video and chair of the Internet Advertising Bureau’s Video Council

Look beyond IT for design inspiration

Don’t assume everyone is like you or understands the same interfaces. There are viewers who’ve never used an interactive service or the internet. Do look outside the information technology world for interface design and ways to present information – to gaming and gesture-based interfaces, for example.

And surprise us. If we shout at the TV or walk away in disgust, why shouldn’t it turn itself off?

– Philip Ely, digital world research centre, University of Surrey

Quality Assurance for the Self-Install A Faster, Better Self-Installation

MyVu.marinerpartners.eu to find out more.

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Business Reporter · June 2012

an independent report from lyonsdown, distributed with the INDEPENDENT

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15

Engines powered, ready for lift off Connected TV may be the next big thing in media, but why has it taken so long to get off the ground?

Jasper Smith

Rob Green

CEO PlayJam

CEO Renesas Electronics Europe

playjam.com

renesas.com

I don’t think it has. Look at video on-demand (VOD) services such as the BBC iPlayer and you’ll see connected TV represents the fastest growing platform over the past 12 months.

In January this equated to approximately 50m views.

Smartphones and tablets have proven there is demand for content on consumer electronic devices. However, the success of any content platform

relies on its ability to provide a commercially viable ecosystem in which developers can make money.

Standardisation of technologies across all platforms will be key to fostering a TV ecosystem. This is true for nonVOD services such as the games PlayJam powers, ensuring a vibrant, profitable environment for developers to create great titles people want to play.

Expensive hardware, poorly designed user interfaces and the complexity of home networking have resulted in a disappointing user experience and take-up.

Content protection concerns around the merging of broadcast and internet worlds, combined with service monetisation challenges also delay operator deployments.

At Renesas Electronics we have years of experience in

set-top box, Blu-ray and mobile. Using this knowledge we provide manufacturers and software providers with high performance secure media processors. These run feature-rich applications desired by service providers to increase revenue.

The new R-Home devices from Renesas are enabling a new breed of cost-effective and easy to use products that unify broadcast and OTT content.

Yang Cai

Heather Martin

Chris Gorell Barnes

CEO VisualOn

Director of interaction design Smart Design

CEO and founder Adjust Your Set

visualon.com

smartdesignworldwide.com

adjustyourset.tv

Fragmentation of connected devices is a key factor in the delayed adoption of connected TV. As additional devices are introduced – including tablets, smartphones and in-home consoles – there is a growing opportunity for industry players to create their own connected TV offering. However, user experience is hampered by a myriad of device platforms, capabilities and media delivery variables,

namely varying video, audio and file formats, and streaming protocols. Connected TVs need to deliver a consistent, seamless consumer experience within a multiscreen environment in order to gain mass traction.

VisualOn is at the epicentre of this challenge, helping content providers increase revenue and overcome fragmentation at device level, while enabling revenue-generating services.

The user experience is one of the biggest roadblocks to adoption.

Most connected TV experiences seem to be stuck in the “search and browse” paradigm associated with the internet.

This might seem like a logical approach due to the amount of content available, but it results in a fractured experience.

It forces people to hunt for content and creates a dip-in, dip-out experience that is not

relaxing, and certainly not entertaining. It is the antithesis of the sit-back-and-relax feeling people seek from a TV experience.

What we need is a smarter TV experience – one that automatically recognises the viewer, then aggregates content from multiple sources based on their preferences, and creates a unique set of curated content channels for them.

While 2012 is certainly the yea r con nec ted T Vs a re becoming more prevalent, perhaps “taking off” is a little premature.

As with any revolution you need a number of factors in place and we’re still at the start of this uprising. As internet connectivity within TVs become the norm and audiences increasingly learn to “switch on”, the media and advertising

world must come together with technology providers to create an integrated TV ecosystem.

However, it is no less exciting and we have huge ambitions in this space.

Brands will see a sharp change in how they engage with audiences and therefore will require a new kind of agency to guide them in shaping the future.