Evolution of Hybrid TV, Over The Top (Internet) TV and TV Everywhere Issue 2 Tables of Contents and...

© ALAN QUAYLE BUSINESS AND SERVICE DEVELOPMENT 2012

TV DELIVERY EVOLUTION: HYBRID TV,

OVER THE TOP (INTERNET) TV,

AND TV EVERYWHERE (MULTI-SCREEN TV) .

STATUS REPORT AND PROJECTIONS 2012-2017

A L A N Q U A Y L E B U S I N E S S A N D S E R V I C E D E V E L O P M E N T


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CONTENTS

INTRODUCTION ....................................................................................................................... 13

EXECUTIVE SUMMARY ......................................................................................................... 16

SCOPE OF THIS REPORT .............................................................................................................. 16 DEFINING HYBRID TV, TV EVERYWHERE (MULTI-SCREEN TV) AND INTERNET (OVER THE

TOP) TV ........................................................................................................................................ 17 SIZING THE TV MARKET AND COUNTRY SPECIFIC ANALYSIS ................................................ 20 TECHNOLOGIES AND STANDARDS ............................................................................................... 24 STB MARKET IN TRANSITION TO A FOCUS ON SOFTWARE ...................................................... 26 IMPACT OF TECHNOLOGY ACROSS THE TV ECOSYSTEM ......................................................... 28 FUTURE SCENARIOS 2009 AND 2012 ........................................................................................... 29 LEARNING FROM HYBRID TV DEPLOYMENT CASE STUDIES ................................................... 31 LEARNING FROM TV EVERYWHERE DEPLOYMENT CASE STUDIES ......................................... 33 LEARNING FROM THE HYBRID TV SURVEY .............................................................................. 34 LEARNING FROM TV EVERYWHERE SURVEY ............................................................................ 36 MAPPING THE OTT LANDSCAPE ................................................................................................ 37 BATTLE ACROSS THE TV LANDSCAPE ....................................................................................... 39 PERSONAL EXPERIENCE OF CUTTING THE CORD: THE LAUNCH AND INITIAL EXPERIENCES

....................................................................................................................................................... 41 LOOKING INTO THE LONG TERM ON INTERNET TV ................................................................. 41 KEY POINTS FROM THE VIEWER SURVEY ................................................................................. 44 RECOMMENDATIONS ................................................................................................................... 45 RECOMMENDATIONS FOR PAYTV PROVIDERS ............................................................................. 45 RECOMMENDATIONS FOR SUPPLIERS ............................................................................................ 47 RECOMMENDATION FOR APPLICATION DEVELOPERS ................................................................... 48 RECOMMENDATIONS FOR INVESTORS ........................................................................................... 48 A FINAL NOTE .............................................................................................................................. 49

DEFINITIONS AND TV MARKET SIZES AND PROJECTIONS ...................................... 51

DEFINITIONS OF HYBRID TV, TV EVERYWHERE AND INTERNET TV ...................................... 51 SIZING THE TV MARKET .............................................................................................................. 54 COUNTRY SPECIFIC TV DELIVERY MARKET REVIEW ............................................................. 57 US MARKET REVIEW: THE MOST PROFITABLE TV MARKET IN THE WORLD .............................. 57 TURKEY: ARCHETYPE OF THE MIDDLE EAST ................................................................................ 61 BRAZIL: SELECTING ITS OWN DTT TECHNOLOGY GIVES SATELLITE AND CABLE AN EDGE ....... 63 CHINA: TOO BIG TO IGNORE BUT POLITICS DOMINATES ............................................................. 65 INDIA: CABLE STAGNATION AND SATELLITE TV GROWTH .......................................................... 67 AUSTRALIA: DTT DONE RIGHT ..................................................................................................... 69 SUMMARIZING THE GEOGRAPHIC DIVERSITY ........................................................................... 70


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KEY TECHNOLOGIES AND STANDARDS .......................................................................... 72

HYBRID TV STANDARDIZATION ACTIVITIES ............................................................................. 72 HYBRID BROADCAST BROADBAND TV (HBBTV) OVERVIEW................................................... 72 MHEG-IC, GEM/MHP, AND HBBTV ........................................................................................ 74 HBBTV ORGANIZATION AND DEPLOYMENT STATUS IN 2012 .................................................. 75 HBBTV SPECIFICATION OVERVIEW .......................................................................................... 76 EBIF AND TRU2WAY .................................................................................................................... 81 EBIF: CANOE IS DEAD LONG LIVE INTERACTIVE TV ................................................................... 81 TRU2WAY ...................................................................................................................................... 83 DVB-MHP (MULTIMEDIA HOME PLATFORM) AND GEM ........................................................ 83 WTVML: GREAT IDEA, BUT THE WORLD PASSED IT BY ......................................................... 84 CE-HTML .................................................................................................................................... 85 APPLICATION ENVIRONMENT AND APPLICATION STORES ....................................................... 86 STB: TRANSITION TO A FOCUS ON SOFTWARE ........................................................................ 86 TABLETS AND OTHER CONNECTED DEVICES ............................................................................ 88 CONDITIONAL ACCESS SYSTEMS ................................................................................................ 88 VERIZON CASE STUDY ON INTERACTIVE SERVICES ................................................................. 91 NETFLIX AND THE ROLE OF APIS .............................................................................................. 93 STB APIS AND THE PAYTV SILO CHALLENGE FOR INTERACTIVE SERVICES ........................ 95

UNDERSTANDING THE TV ECOSYSTEM .......................................................................... 98

PRODUCERS / DISTRIBUTORS AND STUDIOS ............................................................................... 99 BROADCASTERS .......................................................................................................................... 100 CABLE NETWORKS ..................................................................................................................... 101 ADVERTISERS ............................................................................................................................. 103 CANOE VENTURES ....................................................................................................................... 105 ADVERTISERS AND THE NETWORK PVR AND DISH’S HOPPER.................................................. 106 PAYTV PROVIDERS .................................................................................................................... 107 DEAL STRUCTURES .................................................................................................................... 108 IMPERFECT COMPETITION AND THE BATTLE BETWEEN NETWORKS AND PAYTV .............. 109 TELCO CHALLENGES ................................................................................................................. 110 IMPACT OF TECHNOLOGY ACROSS THE ECOSYSTEM.............................................................. 111 FUTURE SCENARIOS 2009 AND 2012 ......................................................................................... 112

HYBRID TV AND TV EVERYWHERECASE STUDIES: TELCO / SATELLITE /

CABLE / TERRESTRIAL........................................................................................................ 115

HYBRID TV DEPLOYMENT CASE STUDIES ............................................................................... 115 AT&T HOMEZONE (DISCONTINUED SERVICE) ........................................................................... 115 VERIZON FIOS ............................................................................................................................. 116 Verizon Flex View: Multi-Screen TV ......................................................................................... 118 Verizon FiOS Widgets ................................................................................................................ 119 DIRECTV AND DISH ................................................................................................................... 120 BT VISION ................................................................................................................................... 123 Unclear Addressable Market ....................................................................................................... 124


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Confused Consumer Proposition ................................................................................................. 124 Unclear Revenue ......................................................................................................................... 125 Intense Competition Across All Viewer Categories .................................................................... 125 No Apps No Ecosystem .............................................................................................................. 125 SKY ANYTIME+ .......................................................................................................................... 125 ORANGE TV ................................................................................................................................. 128 CANAL+ LE CUBE ........................................................................................................................ 130 DETSCHE TELEKOM T-ENTERTAIN .............................................................................................. 132 TELECOM PORTUGAL MEO .......................................................................................................... 133 TELEFONICA O2 CZECH REPUBLIC O2TV ................................................................................... 135 HANSENET ALICETV (NOW TELEFONICA O2) ............................................................................ 136 TELECOM ITALIA CUBOVISION ................................................................................................... 137 JAZZTEL AND TELEFONICA ......................................................................................................... 138 COMHEM ..................................................................................................................................... 139 TELECOM NEW ZEALAND AND TIVO .......................................................................................... 140 LEARNING FROM HYBRID TV DEPLOYMENTS ......................................................................... 141 TV EVERYWHERE CASE STUDIES ............................................................................................. 142 AT&T, USA ................................................................................................................................ 143 BELGACOM, BELGIUM ................................................................................................................. 144 BELL, CANADA ............................................................................................................................ 145 BHARTI AIRTEL ........................................................................................................................... 145 CABLEVISION, USA .................................................................................................................... 146 CHARTER, USA ........................................................................................................................... 147 CHINA TELECOM, CHINA ............................................................................................................. 148 COMCAST, USA ........................................................................................................................... 149 COX COMMUNICATIONS .............................................................................................................. 150 DIRECTV, USA............................................................................................................................ 151 DISH NETWORKS, USA................................................................................................................ 152 MEDIASET, ITALY ........................................................................................................................ 153 ORANGE, FRANCE ........................................................................................................................ 153 ROGERS, CANADA ....................................................................................................................... 154 ROMTEL, ROMANIA ..................................................................................................................... 155 SFR, FRANCE ............................................................................................................................... 155 SHAW, CANADA ........................................................................................................................... 155 SK TELECOM ............................................................................................................................... 155 SKY, GERMANY ........................................................................................................................... 156 SKY NEW ZEALAND ..................................................................................................................... 156 SKY, UK ...................................................................................................................................... 156 SWISSCOM ................................................................................................................................... 157 TELECOM ITALIA, ........................................................................................................................ 157 TERRATV .................................................................................................................................... 157 TIME WARNER CABLE ................................................................................................................. 157 VERIZON ...................................................................................................................................... 158 LEARNING FROM TV EVERYWHERE DEPLOYMENTS .............................................................. 159

HYBRID TV, OTT TV, AND TV EVERYWHERE SURVEYS AND BUSINESS MODELS

..................................................................................................................................................... 160


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DRIVERS FOR HYBRID TV FOR IPTV PROVIDERS ................................................................... 160 DRIVERS FOR HYBRIDTV FOR SATELLITE TV PROVIDERS .................................................... 161 BROADCASTER PARTNERSHIP? ................................................................................................. 161 BUSINESS MODEL HYRID TV: IPTV PROVIDERS .................................................................. 162 PAYTV OPERATOR HYBRID TV SURVEY ................................................................................. 162 KEY POINTS FROM PAYTV OPERATOR HYBRID TV SURVEY ................................................ 170 TV EVERYWHERE SURVEY........................................................................................................ 172 INTERVIEWEES ............................................................................................................................. 172 KEY FINDINGS ............................................................................................................................. 172 The are no longer TVE Content Rights Issues, Just Old Deals Playing Out ............................... 173 TV Everywhere is NOT a well-defined solution category .......................................................... 174 Incumbent Middleware Suppliers are Extending their Solutions into TVE ................................ 174 TVE Packages and Services ........................................................................................................ 175 Vendor Review ............................................................................................................................ 175 KEY POINTS FROM THE TVE SURVEY ...................................................................................... 177

OVER THE TOP PROVIDERS .............................................................................................. 178

OVER THE TOP TV OPTIONS .................................................................................................... 178 TRADITIONAL TV GOES ONLINE ............................................................................................... 181 COMPARING UK OTT PROVIDERS ........................................................................................... 182 BBC IPLAYER .............................................................................................................................. 182 SKY GO (REPLACED SKY PLAYER) ............................................................................................. 184 ITV PLAYER (WWW.ITV.COM/ITVPLAYER) .................................................................................. 185 Platform Availability ................................................................................................................... 185 4OD (4 ON DEMAND, WWW.CHANNEL4.COM/PROGRAMMES/4OD) ............................................. 187 Platform Availability ................................................................................................................... 187 DEMAND FIVE .............................................................................................................................. 188 Platform Availability ................................................................................................................... 188 YOUVIEW (PREVIOSULY PROJECT CANVAS) .............................................................................. 189 Unclear Addressable Market ....................................................................................................... 190 Confused Customer Proposition .................................................................................................. 190 Unclear Revenue ......................................................................................................................... 190 Intense Competition Across All Customer Segments ................................................................. 190 No Apps No Ecosystem .............................................................................................................. 191 TV MANUFACTURERS ................................................................................................................ 191 SHARP .......................................................................................................................................... 192 TOSHIBA ...................................................................................................................................... 192 PANASONIC .................................................................................................................................. 194 LG ................................................................................................................................................ 194 PHILIPS ELECTRONICS ................................................................................................................. 195 SAMSUNG ..................................................................................................................................... 195 SONY ............................................................................................................................................ 196 INTERNET TV AND BRINGING IT BACK TO THE TV .................................................................. 196 BOXEE .......................................................................................................................................... 197 TIVO ............................................................................................................................................ 198 ROKU .......................................................................................................................................... 199 CRACKLE ..................................................................................................................................... 200


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WALMART / VUDU ....................................................................................................................... 200 APPLETV ..................................................................................................................................... 201 AMAZON INSTANT VIDEO ............................................................................................................ 202 NETFLIX ....................................................................................................................................... 202 GOOGLETV .................................................................................................................................. 203 CUSTOMERS’ CRITICAL MATH ................................................................................................. 204 MAPPING THE LANDSCAPE ........................................................................................................ 205 SOCIAL NETWORKS AND TV ..................................................................................................... 206 SOCIAL TV .................................................................................................................................. 207 ONLINE TV NETWORKS ............................................................................................................. 210 HULU ........................................................................................................................................... 210 ALSO RANS ................................................................................................................................. 211 CONCLUSIONS ............................................................................................................................ 211

PRACTICAL EXPERIENCES OF CUTTING THE PAYTV CORD ................................. 214

INITIALLY: A FAILURE TO LAUNCH ......................................................................................... 214 REVIEWING THE OPTIONS: SERVICES ...................................................................................... 215 AMAZON ON DEMAND: NETFLIX AND HULU COMBINED (WITH FREE SHIPPING) ....................... 215 Pricing for content not included in Prime .................................................................................... 215 Platform Availability ................................................................................................................... 216 CRACKLE .................................................................................................................................. 217 HBO GO ...................................................................................................................................... 217 HULU: CATCH-UP TV .................................................................................................................. 218 ITUNES AND APPLE TV ................................................................................................................ 218 LOVEFILM: EUROPE’S NETFLIX ................................................................................................ 218 Pricing ......................................................................................................................................... 219 NETFLIX: GOLD STATNDARD VOD ............................................................................................. 220 SONY VIDEO STORE ..................................................................................................................... 221 VODDLER ..................................................................................................................................... 221 WALMART / VUDU: HIGH QUALITY RENTAL SERVICE ............................................................... 222 YOUTUBE / GOOGLE PLAY .......................................................................................................... 223 COMPARING THE OPTIONS SIDE BY SIDE .................................................................................... 224 REVIEWING THE OPTIONS: HARDWARE .................................................................................. 227 APPLE TV: STEP TOO FAR INTO THE APPLE CHASM FOR ME ....................................................... 227 BOXEE: ROLLS ROYCE SOLUTION, PERHAPS A LITTLE TOO GEEKY (AT THE MOMENT) .............. 227 CONSOLES, SONY PS3 AND XBOX: BECAUSE THEY ARE THERE .................................................. 227 GOOGLE TV: ONE TO WATCH ..................................................................................................... 227 PC: ............................................................................................................................................... 228 ROKU: SWEET CHEAP LITTLE DEVICE ......................................................................................... 228 SMART TVS ................................................................................................................................. 228 LG ................................................................................................................................................ 229 Panasonic ..................................................................................................................................... 229 Samsung ...................................................................................................................................... 229 Yahoo TV .................................................................................................................................... 229 TABLETS ...................................................................................................................................... 229 Android Tablets: Some Good Some Bad .................................................................................... 229 Apple iPad: The Gold Standard ................................................................................................... 230


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Kindle Fire: Great Video Experience, Great Android App Recommendations .......................... 230 Nook: Really for Books. .............................................................................................................. 230 COMPARING THE OPTIONS ........................................................................................................ 230 AND FINALLY THE LAUNCH AND INITIAL EXPERIENCES ....................................................... 231 LOOKING INTO THE LONG TERM ON INTERNET TV ............................................................... 232

VIEWER SURVEY ................................................................................................................... 235

INTERVIEWEES ........................................................................................................................... 235 RESULTS...................................................................................................................................... 236 WHAT IS YOUR VIEW OF INTERNET TV SERVICES LIKE NETFLIX, HULU, LOVEFILM ? ............ 236 ARE YOU CONSIDERING MOVING FROM YOUR CURRENT PAYTV PROVIDER TO INTERNETTV? .. 237 WHAT IS YOUR VIEW OF YOUR CURRENT PAYTV BILL? .............................................................. 238 HAVE YOU HEARD OF TV EVERYWHERE / MULTI-SCREEN TV / TV APP (E.G. PAYTV ON YOUR

PHONE / IPAD)? ............................................................................................................................ 239 IF YOU HAVE USED TV EVERYWHERE / MULTI-SCREEN TV WHAT WAS YOUR EXPERIENCE?.... 239 WHAT DO YOU EXPECT FROM A TV EVERYWHERE / MULTI-SCREEN TV SERVICE .................... 240 WHAT IS YOUR VIEW OF YOUR PAYTV PROVIDERS ONDEMAND SERVICE? ................................ 241 KEY POINTS FROM THE VIEWER SURVEY ............................................................................... 242

RECOMMENDATIONS .......................................................................................................... 244

RECOMMENDATIONS FOR PAYTV PROVIDERS ....................................................................... 244 RECOMMENDATIONS FOR SUPPLIERS ...................................................................................... 246 RECOMMENDATION FOR APPLICATION DEVELOPERS ............................................................ 246 RECOMMENDATIONS FOR INVESTORS ...................................................................................... 247 A FINAL NOTE ............................................................................................................................ 247

APPENDIX 1. GEOGRAPHIC MARKET DATA ............................................................... 249

AUSTRALIA: DTT DONE RIGHT ................................................................................................ 249 BRAZIL ........................................................................................................................................ 252 CANADA ...................................................................................................................................... 254 CHINA.......................................................................................................................................... 256 FRANCE ....................................................................................................................................... 258 GERMANY ................................................................................................................................... 260 INDIA ........................................................................................................................................... 263 ITALY .......................................................................................................................................... 265 JAPAN .......................................................................................................................................... 267 MEXICO ...................................................................................................................................... 270 RUSSIA ........................................................................................................................................ 272 SINGAPORE ................................................................................................................................. 274 SOUTH AFRICA ........................................................................................................................... 276 SWEDEN ...................................................................................................................................... 281 TURKEY ...................................................................................................................................... 283 UNITED KINGDOM ...................................................................................................................... 285 UNITED STATES OF AMERICA ................................................................................................... 288


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APPENDIX 2: TV EVERYWHERE QUESTIONNAIRE .................................................... 293

APPENDIX 3: SUMMARY OF THE ONLINE VIDEO SERVICES .................................. 295

NORTH AMERICA ....................................................................................................................... 295 AMAZON INSTANT VIDEO ......................................................................................................... 295 APPLE TV .................................................................................................................................... 295 BLOCKBUSTER ON DEMAND ....................................................................................................... 296 BEST BUY, CINEMANOW ............................................................................................................. 296 CRACKLE ..................................................................................................................................... 297 HULU PLUS .................................................................................................................................. 297 NETFLIX ....................................................................................................................................... 298 WAL-MART VUDU ..................................................................................................................... 298 HBO GO ...................................................................................................................................... 298 REST OF THE WORLD ................................................................................................................. 299 ACETRAX (BOUGHT BY SKY) ...................................................................................................... 299 BLINKBOX .................................................................................................................................... 299 FILM2HOME ................................................................................................................................. 299 FILM4OD (FILMFLEX) ................................................................................................................. 299 FILMISNOW ................................................................................................................................. 300 LOVEFILM ................................................................................................................................. 300 MAXDOME ................................................................................................................................... 302 SF ANYTIME ................................................................................................................................ 302 VIDEO FUTUR (GLOWRIA) ........................................................................................................... 302 VIDEOLAND ................................................................................................................................. 302 VODDLER .................................................................................................................................. 303

APPENDIX 4: GLOSSARY OF TERMS ............................................................................... 304


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TA B L E O F F I G U R E S Figure 1. Mapping the Hybrid TV Landscape ...............................................................................................19 Figure 2. Total TV Market Size (also includes Free Sat, Free Cable and Free Terrestrial) (Millions of

Households) source Alan Quayle Business and Service Development ..........................................................21 Figure 3. Split between Pure and Hybrid TV Subscribers (Millions of Households) source Alan Quayle

Business and Service Development ...............................................................................................................21 Figure 4. Analog Versus Digital STB Across All TV Households (Millions) source Alan Quayle Business

and Service Development ..............................................................................................................................22 Figure 5. STB Middleware Vendors and Their Key Accounts .......................................................................27 Figure 6. Rating Technology Impact on TV Ecosystem Members .................................................................29 Figure 7. Review of Future Scenarios, based on industry interviews 2009 ...................................................30 Figure 8. Review of Future Scenarios, based on industry interviews 2012 ..................................................31 Figure 9. TV Everywhere Market Structure ..................................................................................................37 Figure 10. Mapping the Internet TV on the TV Landscape ...........................................................................39 Figure 11. Battle Across the TV Landscape .................................................................................................41 Figure 12. Mapping the Hybrid TV Landscape .............................................................................................53 Figure 13. Total TV Market Size (also includes Free Sat, Free Cable and Free Terrestrial) (Millions)

source Alan Quayle Business and Service Development ...............................................................................55 Figure 14. Split between Pure and Hybrid TV Subscribers (Millions) source Alan Quayle Business and

Service Development .....................................................................................................................................55 Figure 15. Source Data for Figure 13 and Figure 14 (Millions of Households) ..........................................56 Figure 16. Analog Versus Digital STB Across All TV Households (Millions) source Alan Quayle Business

and Service Development ..............................................................................................................................56 Figure 17. Source Data for Figure 16 (Millions of Households) ..................................................................56 Figure 18. Breakdown of Netflix Subscribers (source Netflix) ......................................................................59 Figure 19. USA TV Household Status and Projections (Millions of Households) source Alan Quayle

Business and Service Development ...............................................................................................................61 Figure 20. Data for Figure 19 (Millions of Households) ..............................................................................61 Figure 21 Turkish TV Household Status and Projections (Millions of Households) source Alan Quayle

Business and Service Development ...............................................................................................................63 Figure 22. Data for Figure 21 (Millions of Households) ..............................................................................63 Figure 23. Brazilian Market Status and Projection (Millions of Households) source Alan Quayle Business

and Service Development ..............................................................................................................................65 Figure 24. Data for Figure 23 (Millions of Households) ..............................................................................65 Figure 25. China Market Status and Projection (Millions of households) source Alan Quayle Business and

Service Development .....................................................................................................................................66 Figure 26. Data for Figure 25 (Millions of Households) ..............................................................................67 Figure 27. India TV Household Status and Projections (Millions of Households) source Alan Quayle

Business and Service Development ...............................................................................................................68 Figure 28. Data for Figure 27 (Millions of Households) ..............................................................................68 Figure 29. Australian TV Households by Platform (Millions of Households) source Alan Quayle Business

and Service Development ..............................................................................................................................70 Figure 30. Data for Figure 29 (Millions of Households) ..............................................................................70 Figure 31. HbbTV Overview (source HbbTV) ...............................................................................................77 Figure 32. TV Services, Broadcast Applications and Broadcast Independent Applications .........................79 Figure 33. Simplified EBIF Architecture .......................................................................................................81 Figure 34. STB Breakdown by Number Deployed .........................................................................................87 Figure 35. Content Security Table ................................................................................................................91 Figure 36. Verizon’s STB interactive Technologies ......................................................................................92 Figure 37. Verizon Architecture ....................................................................................................................92 Figure 38. Verizon Widget Bazaar and Twitter Widget (source Verizon) .....................................................93 Figure 39. Role of APIs in Netflix Business .................................................................................................94


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Figure 40. STB Middleware Vendors and Their Key Accounts .....................................................................96 Figure 41. TV Ecosystem ...............................................................................................................................99 Figure 42. Measured Ad Spending in the US Q1 2012 compared to Q1 2011 (source Kantar Media) ......102 Figure 43. TV Ad Spending in US (source Nielsen) ....................................................................................103 Figure 44. Advertising Value Chain ............................................................................................................104 Figure 45. Trend in PayTV Subscription and Advertising Revenues ..........................................................105 Figure 46. Global Growth in PayTV (Millions of Households) source Alan Quayle Business and Service

Development ................................................................................................................................................108 Figure 47. Examples of Deal Structures in the Value Chain .......................................................................109 Figure 48. Rating Technology Impact on TV Ecosystem Members .............................................................112 Figure 49. Review of Future Scenarios, based on industry interviews 2009 ...............................................113 Figure 50. Review of Future Scenarios, based on industry interviews 2012 ..............................................114 Figure 51. Verizon FiOS Architecture and Migration Plan (source Verizon) ............................................117 Figure 52. Verizon FiOS Customer Numbers (source Verizon) ..................................................................118 Figure 53. Verizon MY FIOS App (source Verizon) ....................................................................................119 Figure 54. FiOS TV Widgets (source Verizon) ............................................................................................120 Figure 55. DirecTV Hybrid Set Top Box (source Verizon) .........................................................................121 Figure 56. DISH Hopper (source Dish Networks) ......................................................................................122 Figure 57. DISH DVR and SlingMedia (source Dish Networks) ................................................................123 Figure 58. Sky Anytime+ (source Sky) ........................................................................................................126 Figure 59. Sky Go Pricing (source Sky) ......................................................................................................127 Figure 60. Sky Go Experience (source Sky) ...............................................................................................127 Figure 61. How OrangeTV Delivers on Service Ubiquity (source Orange)...............................................128 Figure 62. Simplifying the Purchase decision – Regardless the customer will get OrangeTV (source

Orange) .......................................................................................................................................................129 Figure 63. Orange TV Subscribers (source France Telecom) ....................................................................130 Figure 64. CanalSat Proposition (source CanalSat) ..................................................................................131 Figure 65. O2TV Hybrid STB ADB-3800TW (source Telefonica) .............................................................136 Figure 66. CuboVision WebTV Solution Topology (source Cisco) ............................................................138 Figure 67. Belgacom’s TV Partout iPad Screen Shot (source Belgacom) ..................................................145 Figure 68. CableVision’s TV To Go (source CableVision) .........................................................................147 Figure 69. Xfinity Streampix (source Comcast) ..........................................................................................150 Figure 70. DirecTV Anywhere (source DirecTV) ........................................................................................151 Figure 71. DISH Remote Access Rating on Google Play (source Google Play) .........................................153 Figure 72. SKT Hoppin Experience (source SKT) ......................................................................................155 Figure 73. Sky Go Pricing (source Sky) ......................................................................................................156 Figure 74. Sky Go Experience (source Sky) ...............................................................................................157 Figure 75. Verizon MY FIOS App (source Verizon) ....................................................................................158 Figure 76. Geographic Distribution of Respondents for 2012 Survey Source Alan Quayle Business and

Service Development (Number of Respondents in brackets) .......................................................................163 Figure 77. What are your drivers for Hybrid TV (2012 Survey)? Source Alan Quayle Business and Service

Development ................................................................................................................................................165 Figure 78. What are your drivers for Hybrid TV (2009 Survey)? Source Alan Quayle Business and Service

Development ................................................................................................................................................165 Figure 79. What are the Barriers to hybrid TV (2009)? Source Alan Quayle Business and Service

Development ................................................................................................................................................167 Figure 80. What are the Barriers to hybrid TV (2012)? Source Alan Quayle Business and Service

Development ................................................................................................................................................168 Figure 81. Applicability of Hybrid TV (2009 and 2012) Source Alan Quayle Business and Service

Development ................................................................................................................................................169 Figure 82. Hybrid STB Vendor Comparison Source Alan Quayle Business and Service Development ......170 Figure 83. TV Everywhere Interviews by Companies Interviewed ..............................................................172 Figure 84. TV Everywhere Market Structure Source Alan Quayle Business and Service Development .....173 Figure 85. Scope of TV Everywhere Offers .................................................................................................174


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Figure 86. Example of how Existing Systems are Extended into TVE .........................................................175 Figure 87. Vendor Perception Rating Source Alan Quayle Business and Service Development ................176 Figure 88. Vendor Perception Rating and General Comments Source Alan Quayle Business and Service

Development ................................................................................................................................................176 Figure 89. Plurality of OTT Options (Diagram is from 2009 to Highlight how Quickly Brands have

Changed in Dominance) ..............................................................................................................................179 Figure 90. Trends in the Evolution of TV ....................................................................................................179 Figure 91. TV Landscape ............................................................................................................................181 Figure 92. BBC iPlayer Requests January through April 2012 (source BBC) ...........................................182 Figure 93. BBC iPlayer Demographics January thru April 2012 (source BBC) ........................................183 Figure 94. iPlayer Requests by Device Type (source BBC) .......................................................................183 Figure 95. BBC iPlayer – use for TV by time of day, April 2012 (source BBC) ........................................184 Figure 96. Sky Go Pricing (source Sky) ......................................................................................................184 Figure 97. Sky Go Experience ....................................................................................................................185 Figure 98. Major Internet Services on TVs (source CNET) .......................................................................191 Figure 99. Sharp SmartCentral UI (source Sharp) ....................................................................................192 Figure 100. Toshiba’s Places Platform User Interface ...............................................................................193 Figure 101. Panasonic Veira Connect (2012) UK Version (source Panasonic) .......................................194 Figure 102. LG Smart Hub Experience (UK Version) ................................................................................195 Figure 103 Online Video Content Properties Ranked by Unique Video Viewers May 2012 (source

comScore) ....................................................................................................................................................196 Figure 104. Mapping the Internet TV on the TV Landscape Source Alan Quayle Business and Service

Development ................................................................................................................................................206 Figure 105. TNO Field Trial (Source TNO) ................................................................................................207 Figure 106. TNO Results (source TNO) ......................................................................................................208 Figure 107. Commercial Opportunities Enabled by Social TV (Source TNO)............................................208 Figure 108. Battle Across the TV Landscape .............................................................................................213 Figure 109. Amazon Prime Eligible TV Shows (1801 Results, 475 HD and 1326 SD) ...............................216 Figure 110. Amazon Prime Instant Video Movies (3347 items) ..................................................................216 Figure 111. Amazon Video Content, 62,000 Instant Videos, and surprisingly 300k VHS tapes! ................217 Figure 112. Netflix Just For Kids Web Interface (source Netflix) ...............................................................221 Figure 113. YouTube’s Renaissance in part from its Channel Investment (source ComScore) ..................223 Figure 114. Google Play Review (Source Google Play) .............................................................................224 Figure 115. Comparison of Over The Top TV Services..............................................................................225 Figure 116. Example OTT MLB.TV Offer (source MLB.tv) .......................................................................226 Figure 117. MLB.TV Usage by Platform 2011 and 2012 ............................................................................226 Figure 118. Google TV Remote (source LG) ...............................................................................................229 Figure 119. Comparing Internet TV Service Coverage for Some of the Devices (Source The Verge) .......230 Figure 120. Comparison Table of Internet TV Devices and Service Coverage (source The Verge) ...........231 Figure 121. Geographic Distribution of Interviewees source Alan Quayle Business and Service

Development ................................................................................................................................................235 Figure 122. Household Status on Interviewees ...........................................................................................236 Figure 123. What is your view of internet TV services like Netflix, Hulu, LOVEFiLM? ............................237 Figure 124. Are you considering moving from your current payTV provider to Internet TV? ..................238 Figure 125. What is your view of your current payTV bill? source Alan Quayle Business and Service

Development ................................................................................................................................................238 Figure 126. Have you heard of TV Everywhere / Multi-Screen TV (e.g. payTV on your phone / iPad)?

Source Alan Quayle Business and Service Development ............................................................................239 Figure 127. If you have used TV Everywhere / Multi-Screen TV what was your experience? Source Alan

Quayle Business and Service Development .................................................................................................240 Figure 128. What do you expect from a TV Everywhere / Multi-Screen TV service ..................................240 Figure 129. What is your view of your PayTV provider’s on-demand service? (Used Internet TV) source

Alan Quayle Business and Service Development ........................................................................................241


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Figure 130. What is your view of your PayTV providers on-demand service? (Not used Internet TV) source

Alan Quayle Business and Service Development ........................................................................................242 Figure 131. Australian TV Households by Platform (Millions of Households) source Alan Quayle Business

and Service Development ............................................................................................................................250 Figure 132. Data for Figure 131 (Millions of Households) ........................................................................251 Figure 133. Brazilian Market Status and Projection (Millions of Households) source Alan Quayle Business

and Service Development ............................................................................................................................253 Figure 134. Data for Figure 133 (Millions of Households) ........................................................................253 Figure 135. Canadian TV Household Status and Projection (Millions of Households) source Alan Quayle

Business and Service Development .............................................................................................................255 Figure 136. Data for Figure 135 (Millions of Households) .......................................................................255 Figure 137. China Market Status and Projection (Millions of Households) source Alan Quayle Business

and Service Development ............................................................................................................................257 Figure 138. Data for Figure 137 .................................................................................................................257 Figure 139. France TV Household Status and Projection (Millions of Households) source Alan Quayle

Business and Service Development .............................................................................................................258 Figure 140. Data for Figure 139 (Millions of Households) ........................................................................259 Figure 141. German TV Households Status and Projections (Millions of Households) source Alan Quayle

Business and Service Development .............................................................................................................261 Figure 142. Data for Figure 141 (Millions of Households) ........................................................................262 Figure 143. India TV Household Status and Projections (Millions of Households) source Alan Quayle

Business and Service Development .............................................................................................................264 Figure 144. Data for Figure 143 .................................................................................................................264 Figure 145. Italy TV Household Status and Projections (Millions of Households) source Alan Quayle

Business and Service Development .............................................................................................................265 Figure 146. Data for Figure 145 (Millions of Households) ........................................................................266 Figure 147. Japan TV Households Status and Projections (Millions of Households) source Alan Quayle

Business and Service Development .............................................................................................................268 Figure 148. Data for Figure 147 (Millions of Households) ........................................................................269 Figure 149. Mexico TV Household Status and Projections (Millions of Households) source Alan Quayle

Business and Service Development .............................................................................................................271 Figure 150. Data for Figure 149 (Millions of Households) ........................................................................271 Figure 151. Russian TV Household Status and Projections (Millions of Households) source Alan Quayle

Business and Service Development .............................................................................................................273 Figure 152. Data for Figure 151 (Millions of Households) ........................................................................273 Figure 153. Singapore TV Household Status and Projections (Thousands of Households) source Alan

Quayle Business and Service Development .................................................................................................274 Figure 154. Data for Figure 153 (Thousands of Households) ....................................................................275 Figure 155. Republic of South Africa TV Households (millions) source Alan Quayle Business and Service

Development ................................................................................................................................................280 Figure 156. Data for Figure 155 (Millions of Households) ........................................................................280 Figure 157. Swedish TV Households Status and Projections (Thousands of Households) source Alan

Quayle Business and Service Development .................................................................................................282 Figure 158. Data for Figure 157 (Thousands of Households) ....................................................................282 Figure 159 Turkish TV Household Status and Projections source Alan Quayle Business and Service

Development ................................................................................................................................................284 Figure 160. Data for Figure 159 .................................................................................................................284 Figure 161. UK TV Household Market Status and Projections (Millions of Households) source Alan

Quayle Business and Service Development .................................................................................................287 Figure 162. Data for Figure 161 .................................................................................................................287 Figure 163. Breakdown of Netflix Subscribers (source Netflix) ..................................................................289 Figure 164. USA TV Household Status and Projections (Millions of Households) source Alan Quayle

Business and Service Development .............................................................................................................291 Figure 165. Data for Figure 164 (Millions of Households) ........................................................................292


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INTRODUCTION

The TV industry is going through a period of change more significant than the conversion from analog to digital, as significant as the creation of the industry itself when on 2 November 1936 the BBC began transmitting the world's first public regular broadcast TV service from the Victorian Alexandra Palace in north London. In the conversion from analog to digital customers generally perceived little change in the core TV service or service providers, perhaps a few more channels and the availability of additional services like internet access, fixed voice, video on demand, and eventually High Definition TV and 3DTV. It’s important to view the current change from the perspective of the decades long cycle taken for analog to digital conversion.

From a technology perspective the current change is stimulated by the convergence of the internet that can now support adequate quality video services lessening the barrier to entry of a national TV distribution infrastructure and consumer electronics making video consumption pervasive and on the customers’ terms; it is impacting the whole of the TV ecosystem.

Viewers have new consumption options and new video service providers, e.g. a library of tens of thousands of movies and shows available over the internet for only $8 per month with no advertising. Viewers can watch their payTV service and recorded shows anywhere they take their laptops, tablets and smartphones (they are all computing devices just of different sizes) as long as they have an internet connection. Content owners have created their own internet-based catch-up TV / VoD (Video on Demand) services, e.g. Hulu, HBO Go and BBC iPlayer. PayTV providers have rushed out partially formed TV Everywhere (multi-screen TV) offers. And hybrid TV has rapidly become pervasive since the last version of this report was written in 2009 / 2010, e.g. most satellite TV providers in developed markets have adopted hybrid TV to support on-demand and interactive services.

The later changes of content providers’ support of new TV delivery models and proven consumer demand and acceptance of those new TV delivery models are critical to why the current changes are more significant than the move from analog to digital. The whole of the TV ecosystem is changing, not one component of the ecosystem. This will in time enable Google, Apple, Netflix, Amazon, Facebook to become payTV competitors, not directly at first, rather capping expansion of payTV revenues, but in time competing more directly as viewer habits evolve.

We are only at the start of the beginning of the change that the internet and consumer electronics convergence will have on the TV industry; it will be a multi-decade-long change, just like the conversion from analog to digital that is still ongoing. Only in 2012 did the number of digital TV households exceed the analog TV households in the world. This report takes a global view, analyzing what is happening outside North America as much as what is happening in North America. As an independent consultant I have the fortune of not having a pay-master with an agenda to set; whether that is to sell a product, maintain a service provider’s stock price, or keep a group of major clients overpaying for projects. I consult with payTV providers, internet companies, and technology suppliers around the world. I live in the North American market and will share my direct objective experiences from being a consumer of bleeding-edge TV services as well as consulting around the world on TV projects.

This report is purposefully broad in scope to provide a reference text in the evolution of TV delivery. OTT (Internet) TV cannot be viewed as a silo, it must be considered in the wider evolution of the industry, and today OTT TV is generally consumed as a complement to traditional payTV services, not as a substitute, this makes internet TV a latent threat.


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I have included the feedback provided by the over 17,000 readers of the old report written in 2009/2010, and thank you all for the excellent feedback and guidance in creating this report. The overall structure of the report is divided into 4 sections: providing an understanding of the market; learning from real-world case studies and surveys of payTV providers’ views and plans; understanding what the end customer (viewer) is thinking; and then bringing it all together into a view on the future of TV delivery evolution and recommendations.

The chapters are summarized here:

Understanding the TV Market: overall size, technologies, standards, and how the ecosystem works.

o Definitions and TV Market sizing. Defining hybrid TV, TV everywhere (multi-screen TV) and Internet (Over The Top) TV. Providing the latest TV market data and projections from 2008 to 2017 across all TV platforms, i.e. terrestrial, satellite, cable, IPTV (DSL/fiber) and OTT. The market analysis is broken down to 17 specific countries, some of which are reviewed in the main body of the report as they exemplify particular regions or are simply interesting in their own right, while others are included in Appendix 1.

o Key Technologies and Standards. Understanding the status of interactive services and Hybrid TV standardization, the role APIs (Application Program Interfaces) play for OTT TV providers, the role of conditional access systems in the multi-screen environment, and the challenge standards are causing in the traditional payTV industry in adequately reacting to the OTT threat.

o Understanding the TV Ecosystem. Frank review across the producers, content owners, TV networks, payTV networks and advertisers. The TV ecosystem is complex and well-established; this is the dominant limiting factor on change. However, change will happen as the viewers are increasingly empowered by technology, but we change habits slowly as changing payTV provider is a household not individual decision.

Case Studies and Market Surveys

o Hybrid TV, TV Everywhere, and OTT TV Case Studies. Reviewing the experiences of 16 Hybrid TV deployments including Orange TV, Verizon FiOS, BT Vision, JazzTel, and Telecom Italia CuboVision; and 25 TV Everywhere case studies including Bharti Airtel, China Telecom, DISH Networks, and TerraTV.

o Results from 3 global surveys on Hybrid TV, OTT TV, TV Everywhere, and the future of the TV ecosystem. Sharing insights on business models, service plans, requirements, differences based on geographic region and operator type, and deployment experiences.

o Detailed review of 44 Over the Top TV providers and enablers.


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What the Viewers Think

o My practical experiences in cutting the payTV cord, and personal review of OTT services.

o Viewer Survey. What customers are really thinking in North America and Western Europe about what is happening to their TV service?

The Future of TV Delivery and recommendations.

This report brings together work performed on TV everywhere, hybrid TV, OTT TV, and service innovation in the payTV space through over 900 operator, regulator, viewer and supplier interviews and online questionnaires, gathering information on deployment experiences, market requirements, competitive landscape, and technology trends. In particular the market sizing data is based on actual regulator, operator and supplier figures / projections; not conjecture from out of market analysts.

Evolution of Hybrid TV, Over The Top (Internet) TV and TV Everywhere Issue 2 Tables of Contents and...

Technology

Transcript of Evolution of Hybrid TV, Over The Top (Internet) TV and TV Everywhere Issue 2 Tables of Contents and...