Digital TV Anarchy: Why the Internet Will Make Us Crave Simplicity

Monday September 28, 2009 – Myra Moore

The future of TV, with the promise of unfettered access to any and all programming through increasingly sophisticated TV receivers, has a kind of utopian ring to it (if utopian and TV can be used in the same sentence) . Fewer and fewer gatekeepers, a lineup of programming choices that will make current multichannel offerings look stingy, cheap production and distribution for aspiring film/TV producers, and greater access to programming unencumbered by security measures.

Sounds downright idyllic, doesn’t it? Maybe my glass is half empty, but it seems more anarchic to me. Untested business models, unfiltered programming choices, uncertainty (or disregard) of copy rights, and a lack of order or organization. At the very least, it’s going to be messy.

All the big TV suppliers have trotted out “connected” TVs and the limited Web access they provide suggests a step toward organization, but the limited access really has more to do with the partners they’re working with than a desire to provide consumers with a seamless and rich experience. Access to Netflix and Amazon online services, Yahoo widgets, and select photo-sharing sites, for example, doesn’t exactly harness the power and promise of delivering programming and other data over IP. It seems that there should be a middle ground somewhere between this narrow access and the senseless TV Web browsing that was kicked to the curb in the early 1990s. Remember Web TV?

After spending some time at the IFA electronics fair and the IBC trade show earlier this month, it is clear that middleware suppliers, conditional access companies, and software developers working within interactive TV standards see their futures in developing more sophisticated programming guides, search engine wizardry, and remote control platforms for these connected TVs. Companies like Rovi (formerly Macrovision), Open TV, Nagravision, and Alticast showed off their latest wares designed to tame the Internet TV beast without locking it in a cage.

It’s too early to say which of these efforts will do the most to harness and simplify video, data and graphic programming delivered over the Internet to the TV, but one thing is pretty certain. There are some who will welcome unrestricted and unfiltered access to Internet video programming viewed on the TV, but most of us just want to watch TV. So please make it easy.

Will Internet and Mobile Video Usage Growth Stunt TV Viewing?

Monday September 21, 2009 – Antonette Goroch

Consumers of new media are apparently the old dogs who are learning new tricks. Now that mainstream content providers are starting to loosen their death grips on their content, new viewer habits are emerging. The folks who distribute that content via old pipelines are hopefully paying close attention because viewers are changing the rules of what it means to watch TV.

Audience measurement research from Nielson revealed audience size growth of 47% for Internet video content and 70% for mobile video content from 2008 to 2009.

That this will affect television viewing is unavoidable--the question is how.

By all accounts mobile and Internet viewing are broadening the broadcast audience overall, not cannibalizing TV viewing. Indeed, Nielsen reports that TV viewing also grew by 2h 2 min per month. This also comes as no surprise, since media technology advances typically add to, rather than take away from the audience (such as the case of the VCR and packaged video media).

What’s changing is how people are watching. One of the most significant bits of data in Nielsen’s reporting is that an average of 28% of home Internet usage is simultaneous with TV viewing. The impact of this behavior on advertising revenues is unclear. If viewers are on the Internet and watching TV simultaneously, they are undoubtedly focused more on surfing during the TV ad spots. Are viewers absorbing both inputs? Does the distraction of the Internet mean that viewers watching a program from a PVR aren’t bothering to fast forward through the ads?

What is clear is that broadcasters (of all platforms) and content providers must retool old business models to conform to this new reality. Business models need to reflect this changing dynamic in viewing audiences. Taking these changes into consideration will be the key to taking advantage of growing consumption, rather than being rendered obsolete in a changing landscape.

PCs Pushed Aside (For Now)

Monday September 14, 2009 – Shelby Cunningham

Advanced Video Optical Disc PC sales have suffered during the recession. Instead of opting for the traditional PC with an internal Blu-ray Disc (BD) drive, consumers are favoring netbooks. Netbooks ship sans internal optical disc drive, allowing for a smaller form and lower price tag. Perfect for the current economic storm we are weathering.

But don’t fret if you are a fan of the traditional PC experience, DTC expects shipments of BD PCs to gain traction starting in 2010. DTC estimates about 4 million units to ship by the end of 2009 with a 226% year-over-year growth rate expected between 2009 and 2010 translating to over 13 million units shipping in 2010. DTC expects triple digit year-over-year growth between 2010 and 2011 as well with nearly 52 million units expected to ship in the latter.

Source: DTC

While netbooks are certainly noteworthy machines that have done much to keep the PC business afloat during the rough economy, they do come with drawbacks that leave some consumers wanting more. For that demographic of consumers upgrading to a traditional PC is just around the corner and the change from just being able to do simple internet and word processing functions will feel quite nice.

DTAs: Friend or Foe to Advanced Cable Services?

Tuesday September 8, 2009 – Antonette Goroch

There’s been a lot of controversy in recent months over DtA STBs, but is it really much ado about nothing?

Cable operators, led by Comcast, are looking to DtAs (Digital-to-Analog adaptors) as a low cost way to transition networks to all digital, thereby reusing spectrum currently allocated to bandwidth hogging analog channels for more standard and HD digital channels. A key element of this cost savings is the lack of separable security in DtAs, eliminating costly CableCards and pushing prices below $50 per unit.

Of course, this is in direct contradiction to the 2007 FCC mandate requiring separable security in all digital STBs. Comcast has so far skirted this requirement by including no security at all---although reportedly an integrated security can be implemented by a software upgrade should Comcast decide to do so. Several vendors, however, sensing the enormous opportunity at hand, have applied to the FCC for temporary waivers from this requirement, saying DtAs are a transitional technology that will not impact the larger FCC goal of stimulating competition and a retail market for STBs. Such waivers would eliminate the need of operators to obtain waivers of their own, since the actual STBs would already be covered under the vendor waivers. Evolution Broadband, a supplier to several small rural operators, was the first to obtain a waiver in June, with the major players such as Motorola, Cisco and Pace soon following suit with their own applications.

The CEA, joined by several public interest groups, is crying foul, opposing these applications on the grounds that they will inhibit the adoption of both retail STB sales (since operators will favor the low cost DtAs over more expensive models), as well as tru2way products.

There are merits to both arguments. Should the FCC grant these waivers, the CEA argues that cable operators will favor these over more expensive models for quick digital upgrades argues. Indeed, DTC estimates more than 5 million DtAs shipped during 2008—almost a third of all U.S. shipments—and this will jump past 10 million in 2009.

But will this really inhibit the move to retail and advanced STBs?

In the short term, perhaps it will. In the long term, however, that’s not at all clear. DTC estimates that the market for DtA’s will be short-lived, perhaps three to five years, because they are a transitional technology. Now that the analog broadcast shift has occurred, new TVs will be all digital and won’t require a DtA to work with all digital networks. All digital networks, meanwhile will make it easier for cable operators to implement advanced services—which is in their interest to do. Advanced services, which will require both separable security and tru2way, are both more profitable and more competitive for ops. DtAs won’t likely inhibit cable ops from pushing these advanced services.. Rather, all digital networks will make it far easier for cable ops to offer them. And this will be a rising tide for all boats.