The most re-assuring statement that we heard at the IPTV World Forum in London this week was that Over The Top (OTT) services are not enough, not on their own. This statement was heard at least three times, and the first person to say it was Andrew Burke, CEO of Amino, addressing the conference audience on the first morning.
But the theme was repeated, perhaps like a mantra, to calm the nerves of an IPTV vendor community that has had more than its fair share of invasions from outsiders. Now there is a threatened invasion from both Apple and last week, from Google. The IPTV World Forum has developed into a ‘cozy’ conference/exhibition and only the most ardent fan, and most focused vendor, attends ‘ this is hardcore IPTV at its best, and there is a sense of old marketing friends greeting one another, without having to spread themselves thin across the stands of NAB, CES or IBC.
The second time we heard that statement repeated was when we talked to most conditional access firms, in particular Verimatrix, as well as newcomers like Israeli’s GooMe, itself focused on UI and video experience and working primarily for telcos. But just how true is it? Is OTT really not enough on its own?
We analogize this to the cartoon the ‘Simpsons’ from the US. When it first came out it was a bit disrespectful, not that funny, the characters had yet to be fully developed, the writers had yet to stretch their wings and imaginations. It could fill a half hour slot, but not an hour, it could fill a room full of kids, but not an entire TV channel. Those who watched it were the irreverent and young. But it must be remembered that the irreverent young end up ruling pretty much everything and next thing you know, you are mimicking favorite episodes of the ‘Simpsons’ down the pub, and reciting ‘homer’ experiences which erupt into your daily life.
If Google TV and other OTT services are not enough ‘ as Joost, Babelgum and others, were not enough – then in ten or fifteen years time they may come to be enough, with work, dedication and insight and the arrival of the current ‘University’ generation into the 18 to 34 age groups.
Our favored Simpson’s comment is from Bart, when he sighs, looks up from the TV and says, ‘Ah, TV. It offers so much and asks so little.’
It is perhaps that observation, that TV only requires you to lie, receptive and passive, as it saps your brain cells, that we are relying on here. TV in fact does the opposite, it offers very little and asks too much. Linear TV is really a bit rubbish and unsatisfactory as an experience, and very little has come along since its invention to improve it. That has to change.
Advertising interrupts it, and interrupts it too often. There are too many channels, and zapping through 300 TV channels is the most pointless and depressing experience possible. Timeshifting is the most significant improvement since TV began, the EPG comes a close second, and it is only working with the two together that we can reduce our viewing time, and actually watch more programs that we like and less dross.
TV should not be complacent in shrugging off the challenge from the Google’s of this world. What exactly is it that Google plans to bring the world, once it gets its Android set top act together?
The announcement is low on detail but talks about a partnership with Intel, Sony and Logitech. The firms will work together to create a software framework for web-enabled TV, including a hardware design for a set-top box that brings many internet video services, like Google’s own YouTube, directly to the TV screen. Technically this appears to be nothing more adventurous than the BBC’s Project Canvas or European broadcasters’ HbbTV. But when you did under the bonnet, you find that it is very ambitious.
The idea is to spread TV everywhere, to the PC, phone, TV set and car ‘ with many other device screens supposed to follow. If Google can create the type of excitement with Google TV that Apple created with the iPhone, then even if it offers little more than a brand to this equation, it may come to be something of a success.
Intel supplies the silicon, Sony will put Android into TVs and set tops, and Logitech will make the remote controls and keyboards (though in future we might expect the phone to double as the remote, as it already can on some quad play services). The Google TV platform will allow for watching web TV but also using the television as a monitor and Android will be customized to suit this purpose.
The key thing here is that success for Google does not have to replace conventional TV with OTT. It just has to replace SOME of it, for some people ‘ at first, in order to become a long term threat.
But it will have a worse effect than that straight away. All major technology vendors will think it’s alright to launch their own TV services. This will not be just Google and Apple launching global OTT services, but it will be everyone who competes with them. Already Sony has its own VoD services on the PlaySation network, as does Microsoft with its Xbox Live network. Nokia already has a video archive on Ovi, so what does it take for these to suddenly become a TV service? It has to stream, not download, it has to target multiple screen sizes and broadband delivery networks.
One of our first concerns about all this was Intel’s involvement. What does the announcement bring it? It already has the logical landing place for anyone considering building a new type of IP set top ‘ it’s MeeGo operating system and its CE4100 Atom processing chip. Amino has just won an award this week for picking those two in its new set top range.
Now Intel has issued confusing messages to everyone out there. It seems to be saying that Android is also Okay. So what development platform is it that developers should target. Intel can neatly sidestep that. The CE4100 has to win its fans in the marketplace. There were at least three companies on show who had the 4100 on their stand and claimed to have a set top using it.
‘It’s easy to put those numbers on the stand, but it’s a lot of hard work integrating all the software layers and making the thing work slickly,’ said Andrew Burke of Amino, the only company that has landed a tier one contract, thought to be with Telecom Italia, using the chip. The only other set top company that we know was working on this back when it was announced is Conceptronic and it has a reference platform that others can borrow from. ‘It takes a long time, to get this all together,’ added Burke, ‘and it doesn’t matter how many people you throw at it, the Google initiative will not be in launch position until into 2011, and by then the opportunity may have passed.’
We don’t think it will. This is not a race to produce a solution for telcos, but a race to produce something completely different for consumers ‘ TV over the internet, without a TV operator in the mix anywhere. When companies like Akimbo and Disney tried it in the US, the technology just wasn’t there, and later as companies like Netflix have tried it they have not introduced something to replace TV, but something to add movies to TV.
Apple and Google TV components will arrive and they don’t care if they replace cable or DTH pay TV. They just want to establish a base of customers that will allow Apple to charge people to buy its devices and for Google to force people to watch its adverts. And that can be just as much in partnership with existing pay TV services as in rivalry to them.
It’s hard to imagine Google cutting a deal with News Corp to run side by side with one of its satellite DTH services, or with Comcast, but this first attack is about establishing a bridgehead. If a handful of people use Google TV as their main viewing, and a reasonably chunk of them use it as their second string TV viewing, then Google will have the leverage to knock on those doors.
But we think Google will have it tough here. Why would anyone go out and pay what is likely to be $250 for a device to watch an unproven TV service? No, Google will have to subsidize its offering with advertising, and potentially GIVE Google TV away. Apple can say Apple or iTunes TV is free (or a lot cheaper than cable), as long as you have an Apple device, and make its money on devices and take the service to 300 million existing Apple or more devices overnight ‘ be they ipods, iPhones, the Apple TV device, the iPad and every Mac and PC with iTunes on. It would be a good platform for Apple to use to add its own televisions too.
But if you see OTT services coming from big brands as being on the outside, and pay TV services from major operators on the inside track, then, at least for the current generation of big brand OTT, these services must live alongside existing Pay TV operators as just one option. They don’t have to be connected ‘ we don’t think you’ll see a Google TV app on your IPTV service ‘ they can oppose one another, but between them, rather in the manner that YouTube works for some people now ‘ they can fulfill all your video requirements.
In that sense Intel is perhaps backing two horses ‘ one its own MeeGo, preferably on the CE4100 ‘ complete with its ability to run the same code base on ARM based devices ‘ smartbooks and smartphones ‘ as well as PC devices, tablets and netbooks. In this way (we argued last week) MeeGo can bridge the divide between plugged in and portable devices.
But on the pure OTT side it sees its only hope as backing Google, the same or similar Atom class chip, supporting Android. Operators and traditional set top makers will be Intel’s supporters in the operator provided entertainment space, while Google and Android offer the same duality ‘ set top and smartphone, plugged in device and portable device ‘ in the pure OTT world.
This is a bit of a contradiction for Google anyway. It has preached that Chrome, not Android is the way to go for devices with large storage, and for that we would include DVR and home networks. But here we see it opting for Android in the set top? This will be for two clear reasons. Android is with us now and the OTT market is taking off now. And because Google sees the Cloud as being the source of TV, not large in-home storage devices.
And that brings us to the dual phase strategy of virtually every player at IPTV World Forum. The logic is simple. Adaptive streaming is now advanced enough and there are a variety of versions in the hands of plenty of technology players so that everyone can find a streaming partner. And that means that OTT services will quickly bypass the progressive download stage (some IPTV World Forum stands offered progressive downloads for now, and adaptive streaming later). So OTT services will exist in the cloud, if you can find them.
Finding them brings us to recommendation and search services, and that was the other great series of OTT innovations throughout the show. We saw TV Genius, with mostly UK clients, pushing its recommendations; UI companies like GooMe saying that it can plug in any recommendation software to its service; Gravity Technologies came all the way from Budapest to push a pure recommendation system. Few of them will play a major part, we fear, in the long term future of OTT TV.
France Telecom (see separate story) finally bit the bullet and took on the Compass technology from Orca (which it owns via Viaccess) and will roll that out throughout its IPTV operation across Europe. Compass is a combination of UI, recommendations and favorites lists. Naturally almost all of these systems rely on some kind of profile being passed from the home to a server in the cloud, where a massive job of metadata aggregation goes on, the basis for recommendation systems and for video search.
We know already that TiVo collects the viewing habits of 3 million people in the US. From here it can say that people in your income bracket, in this part of the US, which also liked the program you watched last night, also wanted to watch this. Dominating this activity becomes the most important thing in TV for the next decade or so. TiVo is already working with Virgin Media on such a system and with Scandinavian conditional access firm Conax, to bring the technology to the rest of Europe.
If we had to find things on the internet without a search engine we’d stick to a handful of pages that we had found out about by luck, so Google search came along and this was the new standard.
There is a war on (see separate piece from CTIA) to establish the leader in local search on mobile devices, so that when you are searching for real world experiences – like pizza restaurants when your phone just happens to be in Argentina, you want local results. And this is a flat out fight with Nokia’s Navteq providing it with the edge, and Google and Bing in the race. The winner can charge every business on the planet a fee for elevating them in local search, a little like Google elevates commercial searches on its search engine.
So as we shift to OTT the war is NOT about providing the best OTT video service, no. It’s about providing the ratings engine that tells the right consumers where to find relevant content and channels. So it is an amalgam of remote control clickstream, demographic data ‘ perhaps all merged with viewing habits taken by indexing the video on your PCs and home servers’ hard drives, as well as linking to social networks to find out what your friends and favorite celebrities have viewed.
In the same way that the world has ended up with one dominant PC operating system, one dominant MP3 player, one dominant generic search engine and will end up with one dominant local search engine ‘ we will end up with one dominant TV ratings and recommendation system.
Ask yourself, which would you rather do ‘ create a rival to the largest cable operator in the world, Comcast, offering pay TV? Which we suspect is what is in Steve Job’s mind, or create the de facto TV ratings engine? Which appears to be Google’s aim.
Right now every business in the world has to create a web site, and to get people to view it, it hires SEO experts to get it a better position on Google. The TV version of that war is creating a TV channel that will receive a higher number of recommendations to view it than a rival channel. And at the same time, as you generate more global channel views, you should be able to sell more advertising and make more money. The owner of a single unified ‘in cloud’ recommendation system, will allow consumers to navigate content, but more importantly allow consumers to make sense of internet video. And they will control the entire OTT universe.
Before that happens, pay TV operators will each have their own version of such a video ratings engine. And in the near future there will be mini-ranking universes which result in tiered TV offerings, ultimate hybrids if you like.
They will have free to air channels, paid channels, on screen widgets to push the services and TV applications of players who are prepared to pay TV operators tenancy fees to live on their home screen. Then there will be an open to all TV App Store on which developers and other broadcasters can place TV channels, games, genuine applications and services for sale. The cloud based ratings engines will not only track which channels are viewed, but also which applications are downloaded, which music and games are played. For some operators there will also be open access to the internet on the TV and their set tops will track which sites they go to, and what video is downloaded and use this data to shift video offerings up and down the rankings, and allow TV operators to invite those with higher rankings to become part of their privileged partners, living on their TV User Interface.
It is this dream that everyone at IPTV World Forum was talking about solidly for three days, all chasing their piece of it, for now, without perhaps realizing that one company will eventually emerge as the ‘de facto’ leader in such services ‘ and it’s just as likely to be a TiVo or an Orca, as a Google or an Apple. It could even be an operator or a tiny start up.
In such an environment all the talk about the BBC’s Canvas, a kind of specialized pre-defined DVB-T broadcasters only club version of this, seemed rather silly and the consensus was that it would never see the light of day. What are consumers going to buy, a Google set top, a BBC iPlayer set top or iTunes TV? Or are they going to stick with Sky or Comcast or France Telecom and use whatever set top box they are given to allow them to explore the internet?