 | Issue: | Asia-Pacific I 2007 |
| Article no.: | 15 | |
| Topic: | On-demand, interactive TV | |
| Author: | Graham Cradock | |
| Title: | Executive Vice President and General Manager, Asia-Pacific | |
| Organisation: | Tandberg Television | |
| PDF size: | 276KB |
About author
Graham Cradock is the Executive Vice President and General Manager of Tandberg Television Asia-Pacific, responsible for all of Tandberg Television’s commercial operations in the region. He is also part of Tandberg Television’s global executive management team, responsible for developing advanced compression systems, on-demand solutions and interactive television technologies. During Mr Cradock’s career at Tandberg Television, he has also served as the Director of Business Development for Asia-Pacific, and worked at Tandberg Television’s global management HQ in the UK. Prior to Tandberg, Mr Cradock led the team at NTL that created the first digital terrestrial receiver and worked as New Business Development Manager at NDS Ltd. He started his career with Mitsubishi Electric in Japan. Graham Cradock has a Master of Engineering degree in Electronics.
Article abstract
Digital television is changing dramatically due to the growing availability of Video-on-Demand and interactivity, and service providers are excited by the revenue streams this will bring. Technology for interactive and on-demand services is here. Service providers, however, cannot let what happened in the music industry – when they ignored MP3 and let smart, motivated entrepreneurs take over the market – happen to them. Interactive games, interaction with popular TV quizzes and other novelties can increase customer satisfaction and reduce churn.
Full Article
It is now almost universally accepted that our industry is entering the most wide-reaching and fundamental period of change since the invention of television. I believe there are two key driving forces behind this change: the first is technology, with ADSL2 making IPTV a commercial reality and advances in such encoding standards as MPEG-4 AVC and VC-1 delivering more channels than ever before and crystal clear, high-definition images to the home; the second force behind this phenomenal change is the emergence of a smart, technology savvy consumer, schooled in the on-demand, online environment, who is willing to embrace all that these technological advances have to offer. As the modern consumer becomes more familiar with searching for, and instantly downloading, the content they want from the Internet, and Tivo-like time shifting devices continue to proliferate, we will increasingly see the current model of scheduled, linear television services for consumption by a passive user, challenged by video-on-demand and interactive services. There is a time, not so very far in the future, when for many viewers these services will not be seen as bonuses, but as expectations. While this new breed of consumer is sophisticated, they are not complicated – they simply want high-quality, unique programmeming that they can view at a time that is convenient to them. They like fresh content that is updated on a regular basis and they respond positively to regional programmeming. In every commercial deployment of VoD, video on demand, services, regardless of where in the world they have occurred, we have seen that the most successful operators are those that offer the most compelling on-demand content. Once quality content has been obtained, VoD offers multiple revenue streams, even among younger viewers who have become accustomed to obtaining their content, legally or illegally, for free on the Internet. The latest Hollywood blockbusters can be downloaded for a one-off payment and high-quality, niche content can be offered on a monthly subscription basis, teenagers can watch the latest music videos on demand on a subscription or pay-as-you-watch tariff. Free on-demand content, meanwhile, can help to drive subscriptions, increase customer loyalty, reduce churn and familiarize less technically aware consumers with the on-demand environment. No matter how VoD is used to generate income, we know it will become an essential part of any operator’s offering. Figures from Kagan research indicate that revenue from on-demand services will top US$6 billion by 2014. We also know that VoD’s future is safeguarded with pop music videos and children’s programmeming driving public uptake of the technology. Last year in the United States, Comcast, which reported over 1.5 billion on-demand views, said that 1.3 million viewers had watched an on-demand episode of Spongebob Squarepants, while 3.2 million downloaded a video by singer Ciara on demand. What makes this revenue generating potential more appealing is the relative ease with which an on-demand service can be launched. Whether content is ‘pushed’ onto the viewer’s set-top box by the operator or ‘pulled’ from the head-end via network-based VoD, providing that a persistent return path is available, fledgling video-on-demand offerings can be scaled-up over time. VoD, launched as a basic service with a small amount of content and developing into a more comprehensive offering as customer loyalty and satisfaction grows, can generate sufficient revenues to allow operators to invest in more higher quality programmeming and a more advanced infrastructure. Perhaps the greatest evidence of the industry’s belief in the potential financial benefits of on-demand services is the move by satellite operators to acquire or enter into partnership with Internet service providers in order to obtain a DSL return path for VoD services. Over the coming years, terrestrial operators will have to follow suit in order to compete and we will see a marked growth in the availability of hybrid set-top boxes, which combine the spectrum availability of digital terrestrial and satellite for linear broadcasts with the two-way network architecture necessary to provide on-demand programmeming. As television enters its next phase of development, revenue from video-on-demand can be supplemented by the benefits of interactive services. While the increased use of PVRs, personal video recorders, to ‘ad skip’ has threatened advertising revenue, innovative use of interactive and on-demand advertising offers the potential for highly lucrative business models. Dynamic, geographically targeted advertising and so-called telescoping, which allows viewers to use ‘red button’ functionality to launch immediately an interactive infomercial about a product or service they are watching at the moment on a ‘regular’ broadcast programme, can help operators safeguard advertising income from the ad-skipping power of the PVR. Access to interactive games, and the ability to play along with popular quizzes and game shows, will all contribute to differentiating operators from their competition – in what will become an increasingly crowded marketplace; it will also increase customer satisfaction and reduce churn. For any operator planning to launch a video-on-demand service an open architecture is essential. New entrants to the on-demand arena cannot afford to be held hostage to a single vendor or platform. As on-demand services become widespread, competition between vendors, components and technology providers will serve to reduce operators’ costs and drive the innovation that will provide an infrastructure for advanced digital services beyond VoD. Operators who select an open network architecture today will quickly discover that an open system offers them not only compatibility with established video services, but also the flexibility to launch next-generation services in the future. Equipment manufacturers are working closely with broadcasters, network operators and content owners to overcome the technology challenges that the on-demand era presents. In addition, in the rapidly evolving digital media landscape, platform operators and content providers are striving to support different distribution paths, end points and content formats, in both linear and on-demand interactive environments. They are faced with an ever-increasing volume of content and a proliferation of consumer devices accessing and interacting with that content. While these developments present significant new revenue opportunities, managing the creation and the distribution of digital video, and the associated metadata, can be a complicated process. Cable, satellite, IPTV, Internet and wireless networks are now evolving open, flexible workflows to enable the introduction of enhanced digital video services to a wide range of devices. These devices include digital TVs, set-top boxes, DVRs, PCs, home-networking hubs, PDAs, mobile handsets, as well as the next-generation of hybrid, broadband-enabled consumer premises equipment, CPE. Today’s best-in-class solutions for advanced compression, on-demand and interactive television deliver the technology and expertise that is moving digital video forward. The new technology will enable the world’s leading network operators, broadcasters and content owners to deliver new viewer experiences and advertising opportunities. It is now essential that the whole industry embrace these extraordinary advances in technology with the same enthusiasm that the new breed of tech-savvy consumers will. Technologies that can enable an interactive, on-demand future are here now, they are viable and they are ready to deploy. Service providers cannot make the same mistake as those in the music industry, who closed their eyes when MP3 brought about their revolution. The music industry’s target market became impatient while waiting for them to deploy technology that would let them share or purchase audio files. Smart, motivated entrepreneurs happily filled the gap in the market. The ability to distribute content in new ways may be exciting, but on its own will not guarantee profitability. The lesson to be learnt from the music industry is that there is a crucial need to have robust back-office systems in place. This will enable the financial success of the new video distribution models and, at the same time, will give consumers the best and easiest way to get the content they seek. New advertising, asset management and interactive solutions and video business systems are needed to control and manage VoD and other, new video distribution models. To ensure that instead of cannibalising existing business models new video distribution projects will provide incremental revenues, content owners and video distributors need to: • roll-out new advertising models; • enable innovation in content packaging and consumer billing; • enhance the relationships between consumers, the operator and content owners; and, • increase the reach of content and distribution brands by enabling cross-marketing activities between traditional and new distribution methods. As Internet 2.0 makes platform owners of us all, it is essential that operators secure the content and open-architecture technology that will allow them to compete in an on-demand, interactive world.
