It was not difficult to read between the lines and divine the attitude of pay TV operators towards TV apps at the recent Connected TV Summit in London. Comcast, Cox Communications and Liberty Global’s German subsidiary UnityMedia were among those speaking up for the longevity of the set top or at least some dedicated gateway that they own, and expressing ambivalence over the app.
It is a different story for Telcos, some of which are betting on apps to deliver functions to smart TVs and other connected devices without a dedicated box, reasoning they can save money that way as well as provide compelling experiences, at least within IPTV services. Deutsche Telekom is currently evaluating a boxless approach, but the problem is not so much that this cannot work given that the Telco owns the whole end to end network, but that it requires the cooperation of smart TVs to work properly. Consumers are proving slow to take to smart TVs for the fundamental reason that they regard the big screen as a display rather than a cherished device that they own and want to replace every year or two.
The big TV on the other hand tends to be replaced only to get a bigger screen or better picture quality, for example a higher grade of HD. Samsung has responded by introducing upgradeability through its Evolution kit, but this is quite expensive, costing around $250, and it remains to be seen how popular it will prove. As for TV apps there is little evidence there is any consumer appetite for downloading them as impulse purchases for weather forecasts or mapping functions at low prices, as people do on smart phones. They will only be interested in apps that deliver significant improvements in the whole user experience, and these could better be delivered automatically as upgrades within a pay TV service rather than through voluntary actions by the user. Subscribers might be willing to pay for apps that upgrade their experience, just as they do at present, although more typically through a box like Liberty Global’s Horizon hybrid platform or the TiVo box.
So the TV app for the big screen looks like being a dead end in the foreseeable future, without much consumer demand. It could be a different matter for the second screen, since we have become used to purchasing apps for those devices anyway, often for small amounts of money and there is scope for innovation around companion mode operation. But even then it is unlikely subscribers will want to pay for apps that revolve around the TV experience ‘ it will be more about ancillary activities on the secondary device.