Hello and welcome to my report on this year’s IBC, the leading European broadcasting industry event, held in Amsterdam.

Here comes what I found the most interesting at the event:

Internet video to be business as usual, but still a headache for many broadcasters

• There is a clear consumer demand for internet video, but the broadcasting companies haven’t clearly figured out how to monetise it.
• “Advertising revenues earned on Internet video will settle on a lower level than what has been the case with broadcast TV advertising, broadcasters need to accept and adapt to this fact”, says IBM’s Saul Berman. “If you don’t cannibalise your own business [with internet video] others will do it, as has happened in music industry.”
• Ogilvy’s Rory Sutherland notes, that when launching a new delivery channel in any business, 50 % of the revenue of the new channel may be incremental. This is because people have (often non-rational) channel preferences and they don’t automatically convert to new channel. Instead, new channels can attract to a large extent new customers. In broadcasting this means that majority of viewers are likely to continue to watch linear broadcast TV even if online video were more convenient or provided better value.

IPlayer success continues, BBC considers opening the platform for others

• BBC’s iPlayer, the catch-up service on the Internet continues to show success.

• • - BBC plans to provide iPlayer platform for other broadcasters worldwide as well; the proposal is still subject to approval of BBC Trust
  • - iPlayer video game console adaptations have also proven to be popular, at its best PS3 platform has represented 10 % of all iPlayer viewing
  • - iPlayer is available also on Virgin Media cable network – that is on a non-IP service

• UK company IP Vision has launched hybrid service “Fetch TV” that combines broadcast and broadband TV.

• • - Fetch TV device comprises of two free-to-air terrestrial receivers and internet connectivity
  • - Supports free-to-air terrestrial transmissions, BBC’s iPlayer catch-up-service and video-on-demand pay TV offering
  • - Can be configured to show other web video content as well
  • - Consumer price is around 200 GBP, there is no subscription fee

• Hybrid Broadcast Broadband TV or “HbbTV” is a new initiative backed by French and German broadcasters that aims at providing an open solution for joining broadcast and online video content on TV screens (see www.hbbtv.org).

London 2012 a rising sun for the industry

• London 2012 Olympics are building momentum – and hype – for broadcasting industry. By 2012 the recession should be over and businesswise ever-important Olympic games are anticipated to boost digital technologies. Everything will of course be shot in HD; Super-HD and 3D will be piloted.
  • - BBC’s Director of London 2012, Roger Mosey was asked how much the event will cost for the pubcaster. The answer: hasn’t been decided yet and when decided, it will not be disclosed…
• Sports continue to be among the major drivers for media business. Eurosport’s Arnaud Simon comments on future trends:
  • - Many youngsters get acquainted with sports and sports idols through video games first and afterwards start to follow live or televised sports.
  • - Society’s trend towards shorter span of attention and superstar culture will have an impact on what sports will be televised and thus what sports will enjoy most spectators – and sponsorship income. Tennis will be in trouble, also Olympics will struggle whether to stick with its traditional values or to change towards headline- and controversy-generating direction.

Social media takes some small steps

• There was not much social media hype at IBC, some interesting solutions though:

• - Internet recommendation network Trusted Opinion launched a solution for IPTV providers to bring TV and VOD content reviews and ratings for their viewers. The service takes the benefit of Trusted Opinion’s 1 million user base on the Internet.

• - Broadcasting technology vendor Harris launched their own virtual world environment based on Second Life platform to provide support and training for their customers. Yes, avatars are included.

3D and mobile TV don’t fit on agenda in recession

• 3D TV with or without glasses can be seen in horizon, but nobody promised any large-scale roll-outs in the near future.
• Mobile TV was in practice non-existent at the show.

author:

Timo Argillander

Digital Media Finland Oy

www.digitalmedia.fi

by Mr. Timo Argillander:
Hello and welcome to my report on this year’s IBC, Europe’s leading broadcasting event. As always, this is my subjective summary of what I found important at the show and conference.

Economy slow-down brings implications to media technology as well, but the industry will continue to grow

• - the growth of broadcast and media technology market will slow down to 5% or below in 2009 from this year’s 13% (IABM)
• - in 2010 the growth will speed up again
• - in 2009, Japan will see a 1% decline, all other markets still are to show growth
• – fastest growing markets are unsurprisingly Latin America (+30%), Africa (+24%) and Eastern Europe (+17%)
• - in general consumers tend not to cut their media consumption during recession, but they are likely to postpone buying new gadgets and to downscale their pay-tv subscriptions
• - economy slow-down will also further speed up the trend towards free content services (today’s general belief is that content services should comprise some relevant free content to attract audiences and pay content to generate more revenues)
• - some further broadcast and media technology market data presented by IABM:
• – the total worldwide market size is 24 bn$
• – products bring revenues of 15 bn$ and services 9 bn$, with services showing the highest growth

Internet video is now

• - IPTV is already business as usual and now TV and video services that are delivered on open internet have moved from “future trends category” to today’s services
• – a steadily growing amount of consumers want their TV/video content on demand and broadcasters just cannot leave these audiences unserved
• - the flagship example at the show was BBC´s iPlayer service, which has been very successful in the UK
• – 63% of the viewers are 35 years or older (well, it’s BBC…)
• – many platforms are supported; split of viewing by platform: Windows 85%, Mac 10%, iPhone/iPod Touch 3%, Linux 1%, Wii 1%
• – yes, they really support Nintendo Wii as well, however, its user experience in TV viewing was said to be disappointing
• - other notions on internet video services:
• – Apple is the dominant online video content retailer: over 150 million TV episodes and 15 million movies sold online
• – in the US, Hulu (joint service of NBC Universal and News Corp.) has been a success with 119 video streams served in July
• – previously much-hyped Joost is said to do not too well
• – Amazon is coming to market with “Amazon Video on Demand” service
• – UK broadcasters BBC, ITV and Channel 4 are developing “project Kangaroo” as a common web interface to their programming
• – and yes, there of course is YouTube, but it is seen more a promotion channel for content owners, not a serious delivery platform
• - video rental is moving online
• – in online rental the content owners get 60% of the money, in physical DVD rental only 20%
• – US company Netflix - famous for its web-based order service and innovative logistics for physical DVD rentals - is now offering rental movies also online
• - some market data provided by Strategy Analytics:
• – European online video revenues are 1.4 bn$ this year and 6 bn$ in 2012
• – in Europe’s big countries web TV is watched most in Spain, UK and Italy; less in France and Germany
• – in Europe half of the 15-24 year olds watch web TV at least once a month; in this age group web TV streaming is now more common that p2p shared video viewing
• - consumer electronics manufacturers are bringing new products and features for web TV
• – Panasonic has introduced Vieracast - a TV set with internet connectivity and content bundle with Eurosport
• – Sony has released Bravia Internet Video Link connection box for TV, upcoming movie “Hancock” will be shown through this device prior to theatre launch
• – Apple TV has high potential despite of drawbacks (Apple surely has a strategy for digital home)
• - there will also continue to be user-generated content on the web, but now that mainstream content owners are coming to web with force and mainstream consumers are starting to tune in to web TV, user content was left in the shadow of professionally produced content
• - web is also a potential channel for professionally produced non-broadcast video, for production companies this may mean new business

Mobile TV still going forward, but it’s a multi-platform world

• - Austrian and Dutch DVB-H launches were seen as good signs for mobile broadcast TV; at least this was the first time at IBC that there was a commercial mobile broadcast stream on air
• - German operators have caused confusion by introducing DVB-T for mobile use, so what do we need DVB-H and other specific mobile broadcast networks for?
• – despite of battery technology enhancements, DVB-T still consumes clearly more handset power than DVB-H
• – DVB-T does not allow decent indoor reception
• – DVB-T does not allow interactivity as such (although this probably is no issue for consumers)
• – DVB-T wouldn’t work in many countries for mobile, as few countries can use such high transmitter powers than is possible in German terrestrial network
• - US-based MobiTV announces that their service has over 4 million subscribers in cellular networks
• - Nokia is now including DVB-H software components on all handsets with S60 platform, which makes is easy for product development to add DVB-H functionalities for handsets
• - there are still different competing mobile broadcast technologies in use and it seems that so will be in the future as well
• – many mobile TV hardware and software providers have chosen a multi-standard strategy, they either deliver products for different platforms or have in their product range hybrid products that are supporting two or more platforms
• - now that we are in a multichannel world, technology providers in all parts of the value chain support several delivery channels, mobile usually being one of them; this increases the readiness for supplying TV and video content for mobile devices (e.g. Envivio encoder incorporates encoding of several parallel video streams for different codecs in a single system)
• - mobile TV is being introduced also in many non-phone devices, such as car navigators

After DVB-T comes T2

• - the industry organisation DVB has developed next generation terrestrial broadcast technology called DVB-T2
• - compared with widely used DVB-T, new T2 provides 50% better capacity - around 36 Mbit/s in a multiplex
• - T2 will be deployed over time and it will co-exist with DVB-T
• - first live DVB-T2 demonstration was shown at IBC
• - BBC will probably be the first user of T2 - they plan to convert one of their two UK multiplexes to T2 to allow inclusion of HD content in their transmissions in late 2009

Digital Signage said to make breakthrough - again

• - digital signage usually equals replacing outdoor billboards and signage with flat-screen displays and providing compelling (advertising) content on them
• - now that display technology gets all the time better and cheaper, the cost of digital signage competes with the cost of operating and maintaining traditional signage, in addition to this digital signage brings moving image to outdoor marketing
• - at IBC lots of digital signage technology was shown, many say that this time digital signage will make breakthrough
• - UK company Digital Screen Networks (DSN) is running a digital signage advertising network
• – DSN rents window space from high street retailers and places 63″ displays in the windows
• – DSN sells advertising for the screens and pays the window owner a share of revenue
• – the displays are now in 17 locations in major UK cities, with 8 million people walking by the windows weekly
• – they run a six-minute loop consisting of unmodified TV and cinema ads
• – 75% of products advertised are entertainment, which DSN says means lucrative ad content
• – the cost of one installation (screen, sound system, pc, software) is 15.000 pounds
• – DSN is experimenting with bluetooth connectivity and interactive advertising as well
• - control software is essential, advertisers need reliable reports how their campaigns are run
• - in addition to advertising all kinds of application areas such as schools or corporate training were mentioned, but I suspect whether one can find a business case there

3D, Super Hi-Vision and other nice cool stuff

• - 3D video demos have developed to a good quality level (unfortunately I didn’t have the time to look at 3D video business more deeply)
• - Japan’s NHK demonstrated what they call “Super Hi-Vision”, 7680 x 4320 pixel digital video with 22.2 multichannel sound
• – also live connection from London was shown, with this resolution and a 600 Mbit/s (!) fibre transmission
• - Vuzix sells nicely working video-eyeglasses that support also 3D video in price range of 200-330 EUR
• - DiBcom showcased Packetvideo’s small white-label box that receives DVB-H broadcast signal and retransmits it over WLAN to mobile device; this way they could show “mobile TV” on an iPhone…

Timo Argillander
Digital Media Finland Oy