Home Asia-Pacific III 2008 Internet services via TV

Internet services via TV

by david.nunes
Author's PictureIssue:Asia-Pacific III 2008
Article no.:17
Topic:Internet services via TV
Author:Michael Lantz
Organisation:Accedo Broadband
PDF size:255KB

About author

Michael Lantz is the CEO of Accedo Broadband, a provider of interactive and long tail on-demand services for IPTV and online consumer electronics. Mr Lantz has more than ten years’ experience in emerging broadband, telecom service and TV technology markets and, as well, with telecom and media industry convergence. Prior to founding Accedo, Mr Lantz was a senior management consultant responsible for broadband services at Nordic telecom and media consultancy Digiscope. Michael Lantz holds a Master of Science in Engineering Physics from Lund Institute of Technology, and a Bachelor of Science in Business Administration from Lund University.

Article abstract

The Internet is an interactive, rich-media environment that can now deliver the high-quality experience that TV users demand. In parallel, higher quality, lower cost TV displays and set-top boxes now make it possible to deliver attractive Internet services to the TV. The differences between the passive TV experience and the interactive PC experiences are disappearing. TV viewers will be able to interact with and control their viewing, as well as access on-demand content, games, photo-sharing, voting, opinion and e-commerce services.

Full Article

Maturing technology and market During the past five years, Internet services have changed rapidly from a pure text and image medium to a truly interactive, rich-media environment. Internet technologies, both on the network and the client side, have evolved to deliver the rich, high-quality experience that TV users demand. Historically, broadcast technologies have been the only way to deliver a high-quality TV experience. In the last 24 months, the high-quality broadband technologies rolled out in many parts of the world suddenly make it technically possible to deliver the required quality. In parallel, higher quality, lower cost TV displays and set-top boxes now make it possible to deliver attractive Internet services to the TV. In 2008, such early initiatives as PCCW’s IPTV offering have been joined by a number of IPTV operators and consumer electronics manufacturers. The number of online TV devices will pass 25 million in 2008 and we forecast a quadrupling of the market in three years; there will be more than 100 million online TV devices by 2011. Europe currently has the most end users, but Asia-Pacific is quickly gaining ground. A slow transformation The TV media is significantly different from the Internet, with a different user experience and different players in the market. The TV being a lean-back, content consumption experience, while the traditional Internet is a lean-forward, fully interactive experience. This will gradually change as TV becomes more interactive and PC-centric Internet will offer more rich media content services, but the underlying TV paradigm will remain for the foreseeable future. The coming years will see a number of convergence initiatives, where interactivity and choice will be added to the TV experience and more lean-back content offerings will be added to the Internet experience. The winners of this converging industry will be service providers who understand how to use the powers of the Internet in the context of TV. The traditional TV experience will not disappear in the coming ten years, but will gradually change, gradually incorporating more of the choice and richness in interactivity we have all come to appreciate with the Internet. Closed versus open services One of the major differences between TV and the Internet is the possibility for the user to choose which services to use. Traditionally, TV operators have had complete control over the content offering and service available to the user, often through exclusive content deals and very closed, secure service offerings, so called walled gardens. On the Internet, although the service provider (ISP) can control access, they normally allow access to any service or content. Consumers are accustomed to having access to any service or content on the Internet or any piece of content, and cannot be expected to accept operator restrictions in the future. To stay competitive and retain customers, TV operators need to expand their content offering and create a richer experience with more choice for the consumer. Operators will need a wide range of services, preferably customizable by the viewer, to remain competitive in the future. Examples What Internet services are currently available on TV? There are many interesting services, and casual gaming and photo-sharing services are among the most promising. Gaming has proved to be phenomenally popular, regardless of the device used – including the TV; interactive TV gaming has been growing in popularity for years. Casual games for TV need to be simple to use and easy to understand. Board games, arcade games, puzzles and quizzes work well with TV, but more advanced concepts work better with PCs or game consoles. Internet connectivity makes it possible to offer interactive gaming on a television platform. The direct connection between the TV and the game servers provides the scope to run somewhat more advanced games and allows for multi-player gaming. Photo-sharing sites like Flickr are growing in popularity on the Internet and fit naturally into the TV environment. People increasingly display their photos on TV screens by using ‘media centre’ solutions, SD cards and the like. Of course, it would be more efficient to access the Internet photo-sharing services directly on the TV. This would make it easy to share photos with friends, who can display the photos on their TV and interact online through the service. Internet TV services In the future, with all TV sets connected to the Internet, which services will viewers use? The main difference between the TV and the PC is the nature of the interaction. PC users typically interact, with mouse and keyboard, once every second, whereas TV viewers might interact, on average, once every 30 seconds using their infrared remote controls. On the other hand, TVs have large high-quality screens and occupy a prominent place in the home, but PCs have smaller screens and are usually in the bedroom or study. Services that are attractive despite these underlying differences, will be the most successful. TV will count on a range of attractive on-demand video services, casual gaming, photo-sharing services, voting and opinion services, and a good number of relevant e-commerce services. The big TV Internet service winners, though, will be the broadcasters’ own programme extension services. Most broadcasters are currently creating Web and mobile sites based upon their popular programmes to add revenue-generating features to their expensive programming. These services will be made available while the programme is being broadcast. Content providers and content owners will add their own extended services to their TV content, hoping to generate new revenue streams and create loyal users. Internet TV services in Asia-Pacific The development of TV-based Internet services is quite different in each region of the world. Compared to Europe and the US, Asia’s pay-TV market is small; although it is growing rapidly, it will not compare to the major incumbent pay-TV operators in the western countries. On the other hand, the Asian Internet services market is very vibrant with new services and business models constantly appearing throughout the region. It seems likely that the Asian IPTV offerings will have a larger proportion of Internet service content than traditional pay-TV. By integrating IPTV initiatives with Internet services, service providers will be able to attract new customers by providing huge value. In addition to operator marketing initiatives, the region’s high economic growth tends to drive demand for consumer electronics. TV sets, Blu-ray players and PVRs (personal video recorders) will all have online connections and be able to access Internet services, creating new opportunities for service and content providers. All in all, we believe Asia-Pacific will be the leading region in terms of TV-based Internet service users by 2011. Forecasts for the future Given the rapidly growing market, we will see numerous initiatives to bring online services to the TV, many of which will fail. The convergence between the TV and the PC will continue but, for now, the differences between the two media industries will continue to be greater than the similarities. The satellite, cable and terrestrial TV markets will continue to evolve in parallel with the online TV market, and although these distribution technologies will add online features, they will continue to focus on a traditional TV experience in the near future. It seems that the transformation of the TV to a fully online experience will take at least 15 to 20 years. However, the media companies that survive until 2030 will be those that adapt their services to the possibilities offered by Internet services on the TV.

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