Smart TV and Digital TV: a quick SWOT analysis

Geoffrey Laloux – May 2013 – © Synaptic www.Synaptic.be

Connected TV and Digital TV.

A quick SWOT Analysis

Definitions, strengths, Weaknesses, opportunities, threads ...

A short word about the author:

Connected TV and Digital TV A quick SWOT analysis

Geoffrey Laloux e-Business consultant (Strategy & Marketing). Founder of Agence Synaptic and Lead business consultant @ Kcompany (Cronos Group)

Agence Synaptic A network of seasoned consultants in Digital Marketing. We transform Digital strategy into concrete benefits www.synaptic.be

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Table of Content

2. A disruptive model • Evolution • From one business model

to a new one

3. SWOT analysis • Strengths • Weaknesses • Opportunities • Threats

4. Conclusions

1. Concepts Definition • Connected TV (Smart TV) • Digital TV • Apple TV, Google TV etc. • Content Providers


Concepts Definitions


Connected TV (Smart TV)


• A device (TV screen) connected by wire or WiFi to internet

• Also know as “Smart TV”

• Access to the internet content is done via widget and integrated software

Benefits: • Browsing the Web (with the remote control)

• TV Widget to access to video channels like

Youtube or else

• Specific Digital TV channel and VoD like Qriocity, HBO, HuLu or Netflix (where available)

• Specific content provided by local TV Broadcaster.




Embedded software (Samsung, Sony) no need of third party software or hardware

Case where the TV device is fitted with RJ45 connection and embedded software (high end devices from Sony, Samsung, LG, Panasonic, Toshiba and Philips)

SMART TV

Internet Router

Internet access provided by local ISP. Not necessarily linked with Digital TV service offer

VOD providers

TV broadcasters

Free Web content

Niche content

Games, apps and Social

Content Owner

Pay TV operators




• Smart TV can access to dedicated Appstore to improve the service offer.

• Services offered by App Stores are different in each country and are highly dependent of the local regulatory framework and market potential.

• From technical point of view Smart TV may offer almost same services as Digital TV but without the need to use Set Top box or additional paid subscription

Examples of most common service offer of Smart Tv platform: • Skype, Facebook, Twitter (with no direct and automatic

relationship with the TV content watched)

• BBC iPayer, Digital Theatre (live recordings of stage plays), Eurosport, ESPN etc. In most cases we talk about limited samples of content more than real TV channel.




No more compulsory syndication, content can be accessed directly from content producers and rights owners without passing through a third party platform




Digital TV

Digital TV

From technical point of view, the name “Digital TV” refer to the transmission of audio and video by digitally processed and multiplexed signal, in contrast to the totally analog and channel separated signals used by analog TV.



Digital TV (Interactive Digital TV)

• Digital TV is often (mainly in French) used to design the Interactive Digital TV (IDTV or ITV) experience provided by “Box” like FreeBox, Belgacom Box etc.

• Interactive TV is a form of media convergence, adding data services to traditional television mostly thanks to a digital tuner (Set Top Box).



Digital TV (Interactive Digital TV) Most common features of Interactive TV: • More TV channels

• Some with paid content • Electronic Program Guide (EPG)

• Smart recording (automatic start of recording based on watermarking embedded in content signal)

• Online VOD catalog (provided by the paid tv operator) • Content Preview • Catch Up (replay) TV provided by TV broadcaster: review a content already broadcasted. • Widget like weather, Stock Exchange information etc. • Additional content related to currently broadcasted program (bonus, making off etc.) • Possibility to broadcast content on second screens like PC, Smartphone, tablet etc.

Linear content broadcasting TV Channel

Scheduled broadcast

Preview (Pay per view)

Replay (usually free)



Internet Router

Digital TV (Interactive Digital TV)

Set Top Box

Digital Personal Recorder (optional)

Internet router. Generally integrated in the Set Top box

VOD providers

TV broadcasters

Free Web content

Niche content


Content Owner

Pay TV operators

IP Managed Network

Cont

ent S

yndi

catio

n

HDMI compatible TV set, Not necessaily

a connected or connectable TV




Apple TV, Google TV etc.

Google TV

• A Smart TV platform from Google co-developed by Intel, Sony and Logitech

• The interface is (will be) embedded in Sony TV devices (Samsung and LG are expected to participate)

• Google TV is more a feature integrated in some Smart TV than a device.

Benefits: • Accessing to Google services (ie Gmail) directly on TV

screen.

• Accessing directly to specific content provided by third parties like HBO or CNBC, Netflix etc.

• Surfing the web on Tv screen.



Apple TV

• A wireless device to broadcast on screens (TV or else) content from specific content providers. (iTunes, Netflix, YouTube, NBA & NHL leagues etc.)

• The Apple TV is a digital media receiver (and transmitter) IT’s NOT a content provider like classical TV channel or a TV Tuner or even a content recorder.

Benefits: • Viewing YouTube video on TV screen or on

any screen compatible with Apple standards like AirPlay.

• Accessing directly to specific content provided by third parties.

• Allowing to access to internet via TV screen even if the TV device is not fitted with Internet connection.

Apple TV is like a Set To Box…



Archos TV (Android TV)

• Archos TV is a set top box, that can be compared with Apple TV… but for Android world.

• It’s an external device to be connected between TV screen and internet router.

• It’s different and not integrated with Google TV.

Benefits: • Accessing the web even without native smart TV

• Accessing the Google Play Store

• Can be used also as media center



Game Console & Blu Ray players

• Modern Blu Ray Players and Game Console like PS3 or XBOX propose also “Smart TV” alike functions.

• Some Blu Ray allow access to specific online content like bonus, 2nd movie etc.

Usual Benefits: • Accessing the web even without native smart TV

• Accessing the Google Play Store

• Can be used also as media center

• Extra interactive content and/or second screen

application



Web TV

• Original content produced for broadcast via the Internet (UGC or professional content)

• Not to be confused with Television content reformatted to be broadcasted also

on internet.

• Some successful web tv content may be "promoted" and then be broadcasted on classical Television channel

Examples: • Youtbe, DailyMotion etc. • http://tv.dassault-aviation.com/web/ • http://fr.int.renault.tv/

• “Capsules” like Remy Gaillard, Bref etc. • Fan films made to give second life to famous TV shows,

films, books etc. http://bit.ly/11o2kkO

Field of Shadows, a French Star Wars Fan Film



http://tv.dassault-aviation.com/web/

http://fr.int.renault.tv/

http://bit.ly/11o2kkO

Content Feature / Application

Service Device

Digital TV Smart TV

Google TV

Apple TV

WebTV

Interactive TV

IDTV

TV Numérique

IPTV

Archos TV Android TV

Connected TV

VoD

Catch Up

OTT*

* Over The Top content

Etc.

Synonyms

French equivalent

Bravia Internet Video

Set Top Box (STB)

BBC iPlayer

MyTF1 M6 Replay

FOX Now

Hybrid TV



In short…

There is 3 type of players who can give you access to Internet via your TV set

TV manufacturer (Smart Tv)

Via embedded connectivity, operating software and TV apps.

The content is not proprietary and not provided by the manufacturer

Managed Network (Digital tv)

Via set top box and paid subscription.

Service is mostly provided by ISP, Telco operators and Cable operators

The content may be partially

proprietary and provided by the network operator

Third Party Devices (Set Top Box)

Via a set top box and eventually additional subscription.

Service is provided by operators not

affiliated with Managed Network operators or TV manufacturers

The content may be partially proprietary

and provided by the device operator



Content providers Content that can be accessed (in theory) by Smart TV owners or STB service subscribers

VOD providers

TV broadcasters

Free Web content

Niche content


Content Owner

Pay TV operators

They propose their own content and syndicated content which is also available on the air as well as Catch Up, Replay, PPV etc.

They provide online content catalogs and paid download or streaming. They may be independent or related with Cable or Internet operators.

Web content directly accessible via embedded Browser interface or TV widget

Niche content (extreme sport, anime, news) provided by local broadcasters or banded content syndication channels.

Examples: Gmail, Skype, Online games, Facebook, Twitter etc. Including content and apps provided by local / national players.

Broadcast rights owners like sport league or international contest, but also like HBO, Movie studios etc.

Local or international Cable and satellite operators. They propose syndicated content and sometime their self-produced content




A disruptive model

Evolution Analog TV Digital TV / Smart TV Disruption

Linear access Collective usage of the

TV set

On demand access, any time and “anywhere” (multiple interfaces)

No more (?) Prime Time Consumption

Access manager

Managed Network is the provider, TV channel is the

gatekeeper

Digital Managed Network (Digital TV), TV manufacturer (Smart TV),

TV channels (STB + Smart TV)

Gatekeepers bypassed by Internet services and

device managers

Services Broadcast TV Multichannels, catchUp, Vod, Connected contents (Social TV)

End of classical TV ads ?

Business Model

Public funding, Advertising,

Paid channels

Content or channel subscriptions, pay per view, in program purchase

Kind of “performance pay”

Players TV channels

Rights owners

Users

Rights Owners Internet services providers Internet Access providers

Managed Network owners Device Manufacturers

TV channels Social Networks and users

More players, a different pyramid

of influencers Decreasing order of influence



Analog TV content distribution model

TV Broadcasters

Content Owner & Pay TV Operators

Content

Premium Content (Pay content)

Own productions & syndicated content

Broadcast content Extra content

Cable Converter

Box

Over the air transmission

National

Local Managed Network

CABLE

SATELITE

Analogic Signal



Content Owner & producers

Money

Monthly subscription + Extra fee to access to

more content

Public funding (in Europe)

Brands TV Broadcasters

National

Local

Syndication

Syndication & Exclusive agreements

Comm

ercial ads

Managed Network

CABLE

SATELITE

Analog TV business model



And now the disruptive model

Content Owner & Pay TV Operators

Premium Content (Pay content)

Extra content

1 Set Top Box

Managed Network

CABLE

SATELITE

3 Owned TV widget

Digital Signal

Smart TV

IP Network & ISP

2

Third party Specific Set Top Box

4 Game Station

1. content owners may still sell their content via pay Tv operators

2. But they may also sell directly to end users via third party set top box like Apple TV or Amazon TV directly connected to Internet, without passing by pay TV operator.

3. They can even propose direct access to their content thank to TV widget embedded in smart TV set (in partnership with tv manufacturer)

4. Content owner like SONY or Microsoft may propose exclusive access to their own content catalog via their own game station like Xbox or PlayStation.




SWOT analysis

Strengths

Opportunities

Weaknesses

Threats

Good installed base in terms of use, device, infrastructures and habits

• Heterogeneous offer (i.e VoD) • Multiple payment systems and multiple

authentication required • Multiple different experiences • Disappointing service offer • Low image quality (replay in Mono and SD) • Overlap between Smart Tv and Digital TV

services

• Locally produced (or adapted) contents are the best defense

• For consumers: more direct and fast access to latest contents

• New commercial formats. • New advertising formats (i.e Product

Placement) • Opportunity to develop a new business model

for public TV broadcasters

• Supra National competitors • Channels vs. Devices vs. Rights Owners • Risk of disinterest and lack of investments in

economically less attractive areas • Managed Network (Cable & ISP) as bottleneck • Increasing power of search engine (dominated

at 95% by Google) • Proprietary content linked to proprietary

device and/or platforms

© Synaptic 2013



Connected TV, Smart TV, Second Screen What are we talking about ?

Strengths

23%

% of televisions sold that are connectable (source: CSA): worldwide: 90% (ScreenDigest)

2012

80%

2013

95%

Penetration rate of Television in Europe

73%

Penetration of Internet in Europe

75%

Penetration of Digital TV

21/27 Digital television (by cable, TNT,Satellite) will be the standard in

21 EC countries (over 27) in 2015.


Strengths

Infrastructures, usages and devices are already widely widespread



Weaknesses

More than half of Connected TV are…. disconnected from Internet



Weaknesses

• Heterogeneous offer (i.e VoD) • Multiple payment systems and multiple authentication

required • Multiple different experiences • Disappointing service offer • Low image quality (replay in Mono and SD) • Overlap between Smart Tv and Digital TV services • Etc.

Weak usability of Smart TV interfaces… and of Remote controls. (Smartphones, Tablet, remote keyboards and motion control are proposing better performances)



Opportunities

• Locally produced (or adapted) contents are the best defense

• For consumers: more direct and fast access to latest contents • New commercial formats.

• New advertising formats (i.e Product Placement)

• Opportunity to develop a new business model for public TV broadcasters



Threats

• Supra National competitors

• Channels vs. Devices vs. Rights Owners

• Risk of disinterest and lack of investments in economically less attractive areas

• Managed Network (Cable & ISP) as bottleneck

• Resistance of TV Broadcasters

• Increasing power of search engine (dominated at 95% by Google)

• Proprietary content linked to proprietary device and/or platforms



Threats Major players such as Google, Apple, Microsoft, etc. have now the distribution channel and the financial ability to negotiate exclusive content distribution worldwide directly with producers.

Local TV channel Local VoD operator (Paid TV operator)

Viewer

TV Broadcast VoD & CatchUp distribution

Before And Now

Exclusive VoD distribution

Viewer

TV Broadcast*

* The local TV channel may eventually continue to distribute a translated content



The end of the classical content lifecycle (Movie, then DVD, then original TV broadcast, then syndication etc.). What Europeans call “the cultural exception” and “media chronology”.

Threats


Time Line + 4 months

End availability in movie theater

DVD, VoD, Blu Ray

+ 8 months

Paid TV channels (dedicated to Movies)

+ 10 months

TV channels (co-producers)

TV broadcast minimum 22 months after movie release

Now


Time Line + 4 months

DVD, VoD, Blu Ray

+ 8 months

Paid TV channels (dedicated to Movies)

+ 10 months

TV channels (co-producers)

And then

Threats The end of the classical content lifecycle (Movie, then DVD, then original TV broadcast, then syndication etc.). What Europeans call “the cultural exception” and “media chronology”.



Content Owner

Market A

Local TV broadcaster

Market B

Market C



End user

End user

End user

New business model

IP Network & ISP

No more obligation for a content owner to manage specific syndication agreement for each country. International events like World Football Cup, F1 championship or Olympics games could be sell directly to international end users.

Threats (or opportunity)



« Old » business model

Threats for some, opportunity for others Content Channel

Microsoft want to produce new episodes of « Heroes » to propose them exclusively on VoD via Xbox and MSN

Amazon is now the producer of ZombieLand. An exclusive content to be proposed on next gen of Kindle and Amazon Set Top Box.

Playstation store give access to the huge music, game and movie catalog of Sony media mogul. Connected TV are expected to propose the same.

The Football – Soccer team ‘Barca’ wants to broadcast its matches on his own (paid) TV channel only. (from 2014 season).




Conclusion (kinda)

The full potential of Smart TV / Digital TV will be unleashed once high quality content will be widely available High quality content will be produced / available once a new business model will be defined between public TV broadcasters and managed network operators Private TV broadcasters need to diversify incomes sources or at least to find new advertising formats Consumers must adopt new ways of consuming TV content (On demand access, Pay per view, non linear content, multi screen viewing)

Conclusions



Raise

Create

Reduce

Eliminate

• Easy of use / access • Usability • Easy to use remote control

(motion control, keyboard etc) • Open standards (Hbbtv) • Service offering

• Proprietary technologies • Bottlenecks (resistance to change) • Country-restricted content (internet

is worldwide)

• Unique identifier / Single sign on • Cross platforms analytics • Unique TV appstore (no more

restricted to some manufacturers) • Search engine able to browse

Program guide (omni channels) • Unified payment system

• Devices with no upgrade options • Services / content with no or low

added value

© Synaptic 2013




Contact

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Geoffrey Laloux eBusiness Consultant

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Smart TV and Digital TV: a quick SWOT analysis

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Transcript of Smart TV and Digital TV: a quick SWOT analysis