|Issue:||Asia-Pacific I 2011|
|Topic:||Over the Top TV – challenge or opportunity|
Andrew Burke is CEO of Amino Technologies Plc, an IPTV and hybrid/OTT innovator. Mr Burke is also the Chairman of Crisp Thinking and a non-executive director at the IT Forum Foundation. Previously, Mr Burke was CEO BT Entertainment where he devised and ran the company’s IPTV initiative (BT Vision), chaired their Premium Rate Services activity, pioneered their Digital Media Services and led BT’s relationships with the media world. Andrew Burke has BSc Eng in Electronics and Computer Sciences from Kings College, the University of London.
The way we consume entertainment is changing rapidly. Social media, online video and access to constantly evolving and updated content – via a multiplicity of devices – presents a real challenge to broadcasters, network operators and entertainment service providers. Today, the arrival of ‘Over the Top’ (OTT) Internet-delivered television is re-shaping the media landscape. How can these traditional media players adapt, survive and even prosper in this rapidly moving market; how can they choose between open and closed OTT models?
Over the Top TV – challenge or opportunity by Andrew Burke, CEO, Amino Technologies Plc, The debate about OTT has moved on from whether it will happen or not. When major tier one operators begin rolling out services, as they are doing in Western Europe, it’s safe to assume that clear commercial drivers are now behind this exciting new means of accessing a new kind of personalized entertainment experience. Now the discussions with the industries’ great and good is how ‘open’ OTT should be. This is both a practical and philosophical issue and boils down to whether OTT TV is really just more television or the Internet on a TV screen. So let me first define the parameters of the debate: Closed OTT is where the Internet video experience is managed by the service provider and open web content is chosen and integrated into a ‘walled garden’ of the best, or most lucrative, content -depending on how generous we are being. Open OTT is where the consumer gets to move away from the confines of the service provider’s editorialized experience and ‘surfs’ the open Internet without hindrance – normally using a browser that handles all the different display and encoding formats. The ‘closed’ lobby has some compelling arguments: • People expect TV to be easy and the mass adoption of new technologies is predicated on being ‘easy’. If you allow the uninitiated to go anywhere then chaos ensues and the proposition becomes a support nightmare • Service providers invest a great deal in creating, marketing and supporting a new service and must control all money-making opportunities within that solution • Our customers could access content which is not compatible with our brand which could turn into a public relations disaster The ‘open’ lobby point to the Internet for inspiration: • The success of the Internet has come from the unbridled growth of eclectic content so, no matter how good a walled garden is, a closed system will never be as compelling • True exponential growth of media technology is fuelled by significant content availability • Mobile phones tried to restrict open Internet access but had to give in eventually to consumer pressure • The current lack of OTT regulation will drive faster innovation in content and business models So what are the degrees of ‘openness’? Firstly, the ground floor version of OTT is to persuade a number of heavyweight Internet video partners to allow you to integrate their content into your tightly controlled, electronic programme guide-centred walled garden. Even this has degrees of openness as the content can be stored locally in the service provider’s infrastructure and delivered in a managed way – as with IPTV – or the device, such as a TV or STB, can do an open call to the Internet and pull it in directly. This is the comfortable and low risk approach. The consumer experience is harmonised with a consistent look and feel and traditional television companies sleep soundly in their beds happy that nothing has really changed. Advertising and sponsorship is centrally sold and the opportunity for subscriptions is there, but almost certainly never realised. Comcast and Dish Networks are both looking to OTT to deliver VoD (video on demand) libraries to the viewers’ mobile, PC and TV in a closed system and that looks to be a compelling early consumer proposition. Secondly, the next step on the road to OTT enlightenment is the application store. Here the consumer launches a new environment – much like that offered by the iPhone, MeeGo™ and Android solutions. In the app store, the look and feel can be unique to that application because it is like stepping briefly into another world where the rules are different, but returning to the familiar is only an exit button away. This is the anti-chamber route for OTT – not the open Internet, but it makes more varied content available without significant integration costs. For the service provider it opens up the opportunity for tenancy fees and revenue shares in exchange for test and validation overhead costs. This is a great survival of the fittest approach where the cream rises to the top with viral efficiency. Expect this to be the main route for Flickr, Twitter, Picasa, Facebook, Skype and other social media to hit our TV screens sometime soon. A slight difference on the TV is that we are seeing applications that share screen real estate with tele-visual content – such as Yahoo Widgets – instead of the iPhone approach of hijacking the entire screen. This does present TV user interface designers with the greater challenge of keeping viewers in touch with their chosen video whilst enjoying an alternative application experience. Step three: the fully open approach adds a door to the open Internet. This uncontrolled, wild west of television allows the consumer to visit anywhere, anytime and liberates the best – and the worst of the Internet. Monetising is hard and it takes a real leap of faith to invest in a solution where you lose control of your customer. Not all is lost for the service provider, however, as efficient consumption monitoring gives a great indication of which sites should be integrated into their app stores and ultimately into their main walled garden down the road. Although service providers can help the consumer to find compelling content by offering a good TV-centric search and recommendation engine, remember most sites will still need a pointer device to effectively navigate on the TV screen and there will be many formatting issues. So will we get to step three and, if so, how quickly? Personally I believe we will, but not immediately. Paradoxically, the early adopters of OTT solutions will be more able to grasp step three, but the mass market will need the ‘easy’ option. My view is that competitive pressures over the next 24 months will push service providers to be more and more open – helped by the Internet generation taking more control of the remote control. Then Internet video sites will market both to the TV and PC and true TV innovation will drive exponential adoption. We have seen it with the App Stores on mobile phones and I really look forward to next-generation TV benefiting from the same effect. However, the question of brand integrity and controlling associations will have to be tackled. Today, if unsavoury content in viewed through a PC and browser it does not reflect badly on a major brand. However, in the TV environment that separation between provider and content is less clear. The debate will go on – and continue to be shaped by the lessons learned from commercial deployments and the ever-shifting way in which media is consumed by today’s savvy customers.