Germany’s Deutsche Telekom stole the show at the IFA electronics event in Berlin this week, making a batch of announcements including a deal with Fox to boost its EntertainTV service, plus a new UHD set top, and a couple of new virtual and augmented reality features. This slew of press releases shows DT flexing its muscles in the run up to the bigger IBC trade show in Amsterdam next week, where its main competitors will be preparing to return fire.
Meanwhile on the vendor scene at IFA, a few next generation TV technology announcements caught our eye, including OLED wallpaper panel products which surprisingly did not come from LG – competition which is around four years too late.
To the incumbent German operator first and its newly forged deal with US broadcaster Fox, which will see Deustche Telekom add the Fox+ VoD offering to EntertainTV, available free to pay TV subscribers, including content from 20th Century Fox, fox21 television studios and its programming segment FNG (Fox Networks Group) Global.
Local media outlet DWDL reported prior to the IFA show that DT was preparing to launch an aggressive attack on Netflix territory with exclusive German content. If by this it means the scripted content deal it signed with German production company UFA for German movies, we can’t help but be disappointed.
As 21st Century Fox prepares to acquire Sky, therefore inheriting Sky Deutschland, it may seem peculiar to partner its entertainment arm with a soon to be rival in video and broadband in Germany. Yet Sky and Deutsche Telekom are on relatively friendly terms compared to the fiercer battleground with Vodafone and Liberty Global’s Unitymedia, particularly in OTT video and mobile. Vodafone holds 7.7 million video customers, Unitymedia has 6.4 million, while DT has picked up 2.7 million IPTV customers in Germany but growth has slowed, and Sky recently passed the 5 million milestone.
While the operator side of Sky might feel slightly aggrieved by this new partnership, the content side will not lose sleep, as DT already carries most of its channels including the Sky Sports suite with Bundesliga matches – a priority growth area for the group.
However, in April last year, Sky Deutschland’s dominance of sports broadcasting took a blow as the Federal Cartel Office, Bundeskartellamt, approved a new sales model for the Bundesliga rights for the 2017/18 season – in which a “no single buyer rule” was imposed for the first time. This means Sky Deutschland, or any other pay TV operator, cannot hold the rights for all Bundesliga live games on cable, satellite, IPTV and OTT – something which is sure to see its OTT ARPU fall somewhat.
The partnership comes soon after another US media major, Viacom, plowed into OTT video in Europe via a similar operator partnership agreement with three Nordic players, just last week. The difference is that Fox+ is building on an existing overseas experience which it has pushed aggressively this year, having launched in the Nordic region in February, where it is branded as Fox Play in partnership with Viaplay, followed by France in June via Canal+, and it also recently entered Asia Pacific in March.
Key to the licensing agreement though is DT’s presence outside of Germany, spreading far into Central and Eastern Europe where the markets are less saturated than the West and big investments in OTT are taking place. The partnership between Fox and DT begins in Germany for now, but could certainly expand to Hungary or Czech Republic, for example, in the future. Outside of Germany DT has around 4 million pay TV subscribers.
Seven seasons of hit series The Walking Dead, two seasons of Empire and two seasons of Wayward Pines will be among the new on demand lineup from Fox on EntertainTV.
Diego Londono, COO of FNG Europe and Africa, said, “Our strategy to extend the Fox brand into the nonlinear space and deliver a premium, on demand entertainment service with world class content is resonating with both our affiliate partners and consumers. As we bring Fox+ to another key territory, the results we are seeing from the product are surpassing our expectations.”
In a further bid to re-energize interest in EntertainTV, DT unveiled a new UHD set top, the MR 401, which will provide access to UHD content from third party sources including Netflix, Sky and its own struggling VoD service Videoload, all via the EntertainTV platform. For years DT has been trying to eliminate set top hardware, a strategy it furthered back in July when it announced a new skinny pay TV bundle costing €0 for the first year then €2 a month thereafter, on top of €2.94 a month for the set top, suggesting a low end Roku type device.
No manufacturer for the new UHD set top has been named, but it is likely to be Huawei, while Swedish software firm Zenterio confirmed to Faultline Online Reporter that the MR 401 is running a Zenterio OS. Verimatrix is probably the security provider, while DT’s set top silicon supplier remains a well-kept secret but given that it handles UHD we would not be surprised to see it is the market leader in Broadcom – first to launch in that market.
DT also continued playing its hand in emerging video formats as it rolled out two new free VR and AR services, as the operator strives to drive next generation viewing and attract younger audiences. Its Magenta Virtual Reality app has been upgraded with additional and exclusive VR material, and it has also launched Telekom Message+, an automatic emotion recognition feature with Snapchat’s AR elements for video calls.
Subscribers to any mobile provider in Germany can access the VR, AR and 360-degree services on Android smartphones, supporting basic VR headsets or the higher end devices Samsung Gear VR and Google Daydream.
Also at IFA, OLED screen technology pioneer LG found itself up against some additional competition in the wafer thin screen sector, as German TV maker Metz, owned by China’s Skyworth, launched the 3.6mm thin Wallpaper OLED TV, and Toshiba showcased its 65-inch Poster TV concept in partnership with Turkish electronics firm Vestel. Neither Metz or Toshiba have given anything away in terms of pricing or launch dates, but LG’s own OLED wallpaper screens range from $8,000 to $20,000.
OLED displays are capable of switching pixels completely on or off, to display images and especially blacks, which LCD displays cannot produce, and by making these thinner and thinner, they can show the same pattern as your existing wallpaper or even combined to become a unified, wall sized screen.
Back in 2013, Faultline Online Reporter raised question marks about what placing eight or ten 30 inch panels on a wall could mean for the future of TV manufacturers – and to what extent this will replace the 50 to 80 inch screens and whether or not these devices can bring enough profit to keep TV makers alive.
Today that threat is greater given the products coming out of IFA, but the technology itself is not new and we expected more wallpaper type OLED displays to be in homes today and eventually become the future of 4K delivery. The obvious reality is that smartphone viewing has hemorrhaged the TV set industry more so than any other type of screen.
One final piece of DT news from this week is that the operator is claiming to have turned on Europe’s first 5G connection on a commercial network, in a demonstration with Huawei. The connection, on DT’s network in central Berlin, delivered downstream speeds of over 2Gbps and latency of 3ms, in the 3.7 GHz band.
The German operator was using pre-standard ‘non-standalone 5G NR’, the strand of the 3GPP specs which is being fast-tracked for completion in early 2018 – but still requires an LTE anchor network.
“With this real world achievement, Deutsche Telekom is making its first important step towards a 5G network launch,” said Bruno Jacobfeuerborn, the operator’s CTO. “When the standard is defined, we will trial it in 2018 to prepare the ground for a wider deployment of commercial sites and the offering of devices for the mass market as they become available.”