Hello and welcome to my report on MipTV, the TV content market and conference held in Cannes this week. The report is published in co-operation with digibusiness.eu service.

A multitude of business models

In a multi-channel world we will have a multitude of business models for content owners. Both main approaches, advertising and pay-for-content models will see new forms or applications emerging. On the advertising side at MipTV there was much emphasis on branded content, that is advertisers taking part in production processes through product placement or various sponsoring concepts.

News Corp’s digital arm chief Jonathan Miller predicted, that the most successful model may be a moderate pay-per-view charge complemented with some advertising.

Miller noticed that the question is not only whether the model is pay-per-view, subscription or something else, also value chains differ: as e.g. Amazon is a reseller who buys products with a wholesale price and sets their price independently, Apple is running an agent model where they decide on pricing and deliver the vendor a provision.

Now that I mentioned Apple: In Jonathan Millers vision iPads will turn newspapers into multimedia content providers and thus into another online TV or video access channel. iPads are more interesting as a platform than Kindle and other “e-book-readers”, as iPad has multimedia capabilities.

Online TV is the new normal, utilising measurement data brings new opportunities

Hulu, US web TV service backed by major broadcasters, disclosed that they generated last year 100 million dollar revenue and will this year reach 100 million in the middle of the year. According to Hulu SVP Johannes Larcher, their two last quarters have been profitable. Currently, Hulu reports 40 million monthly users.

US company Jumpwire launched their service for analysing internet torrent traffic to provide data on viewing demographics. The company points out that researching also illegal delivery they can gather useful information for content owners about viewers and their geographical locations. Should a TV show be frequently downloaded on a market where the show doesn’t air, the content owner might consider selling the programming on TV channels on such a market.

Also YouTube emphasises their friendship with content owners. According to Patrick Walker of YouTube, they are able to provide not only advertising services but also valuable viewing data. News Corp’s Jonathan Miller also found that online video delivery brings much needed data on viewing demographics and habits. According to Miller, online delivery can lower content development costs as new shows can be piloted on online services before deciding on full-scale TV production. Online piloting gives information on the popularity and viewer profile of the show. Miller estimated that News Corp. will be using around 10 million dollars this year for made-for-web TV productions.

Don’t forget the mobile

Mobile TV as it was promoted couple of years ago is next to dead in Europe. Despite of this, mobile devices and mobile viewing may have an impact on TV business, many experts reminded. The concept of mobile Apps – however trivial for software engineers – will bring interesting difference to how content is sold and bought on mobile channel.

Now that media companies are actively promoting mobile content and services (largely sparked by iPhone and iPad), the role of telecom operators seems to be becoming difficult. Especially, if they want to expand their business from the basic data transfer.

Yahoo Widgets live on TF1

Yahoo, Samsung and French commercial broadcaster TF1 had launched last Saturday interactive TV service running on Yahoo Widgets platform. In France, Samsung TV set buyers get access to a variety of TF1 and Eurosport add-on content. Yahoo lauched the Widget platform early 2009 and this is one of the first deployments in Europe. TF1 is also participating in another interactive platform development, HbbTV.

3D progresses surprisingly fast, will largely challenge content production

3D seems to be progressing much faster than anticipated. However, in the short term stereoscopic picture will play role mostly for cinemas: There seems to be a business model in a form of placing premium in movie ticket prices. Cinemas can also handle the viewing glasses issue better than homes, where the need for glasses is a real problem. It will take at least a couple of years until we will see 3D TV sets on market that do not require special glasses (this is called “autostereoscopic viewing”).

3D is not just a technical change. It has an impact on production and narration. In 2D, the programme is edited to emphasise details according to director’s vision. In 3D, the viewer’s eye does a part of this work. If the content is cut in too short segments, viewers may suffer of headache in 3D viewing.

Optimally, the distance to main target in 3D shooting should be 10-15 meters, the camera should not be far up from the ground level and the background should be not too far away. This results in that high-quality 3D production cannot be directly integrated in 2D shooting and editing processes.

In sports programming tennis, boxing and small stadium football are favourable for 3D. Gabriel Fehervari, CEO of major technical production company Alfacam noticed that 3D football in the FIFA World Cup may be a disappointment as the mentioned optimal conditions will not be met there.

As a sign of 3D importance and potential, Singapore has chosen to foster heavily 3D production. Production companies there have an access to a funding that covers 80 % of the extra cost in 3D productions compared with 2D.

3D advertising content hasn’t yet taken off. 3D spots are shown mostly just before cinema movies. Clearly advertisers don’t find the TV 3D advertising coverage to be adequate.

Social media didn’t find its role at a TV conference

Every reputable professional conference needs to mention social media. Real news, applications and business models related to TV viewing were few at MipTV.

Swedish company Starling launched a platform for TV channels to provide viewers ways to communicate and interact during TV shows. The idea reminds me on Sofanatics service that concentrates on sports content.

Video summary

Check out also our video wrap-up: Digital Media Finland MipTV Video Summary

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Timo Argillander is a consultant specialised in digital media strategies and business planning.

Hello and welcome to my report on Consumer Electronics Show CES held in Las Vegas last week. As always, this is my subjective summary what I found interesting there!

Recession is here (but the next thing is upswing)

• CES regular attendees were wondering how empty it was at the show; there were 110.000 visitors (down 30.000 from the previous year) and 2.700 exhibitors (down 300)
• Consumer Electronic Association released some data on consumer electronics market: the global market in 2008 was up 13 % from the previous year; in 2009 the growth will slow down to 4,3 % and the market size will reach revenues of 724 billion $.
• In the US the market will decline this year by 0,6 %
• The good news: many good people are available for companies to hire in order to be fit when the upswing comes; people’s growing spare time will also give boost for social networking activities

TV sets to connect to the Internet, Yahoo presents TV interactivity

• Major TV manufacturers have launched at least pilot solutions where TV set is connected to broadband and Internet video content is almost seamlessly brought to TV screens (see also my IBC posting in September)
• Many TV vendors have partnered with video sites (YouTube, Amazon video, Netflix etc) and offer theri content through a television user interface
• Some solutions are shipping in the US, but I got no information when they would appear in Europe; partly a reason may be that the content partnerships are difficult to implement on European multi-country market
• Yahoo released an interesting widget platform, which allows to develop applications for TVs; widgets would be delivered over a broadband connection. Widgets and widget content is free while Yahoo places there some advertising. Yahoo pushes the widget platform to be standardised on some level. Many TV vendors were on the board, e.g. LG and Samsung. To me this concept made very much sense, could this be the route to make TV interactivity happen? (see also: connectedtv.yahoo.com)
• Ebay running on Yahoo widgets pictured below:

• 

3D comes to TV but it is still long way to go

• There is a growing interest towards 3D stereoscopic TV content and several TV vendors showcased their 3D solutions
• TV manufacturers are now looking for the next big thing after flat panel TVs and HD, 3D could be one (but the consumer interest needs to be awaked first: just 7 % of Americans have heard of the idea of bringing 3D to TV)
• 3D systems are widely being installed in movie theatres
• 3D requires usually special spectacles, but technologies that make eyeglasses redundant are coming
• Big film studios will launch 40 3D movie titles within next two or three years
• Content will be a bottleneck; ideally the same content could be used both for 2D and 3D viewing
• The boldest prediction was given by Fox’s President of Engineering, Andrew Setos: “HD quality autostereoscopic [no spectacles needed] will be here in two years”

OLED is the new, green TV display technology

• So-called organic LED (OLED) is the new display technology that brings many advantages compared with LCD: OLED need no backlighting making it energy-efficient and allowing really thin displays
• Several TV vendors showcased OLED TV sets (see Samsung’s OLED TV pictured below)

• 

• Sony unveiled a thin, flexible OLED panel that could be used for e-books

Netbooks continue to wake interest

• Several computer vendors unveiled new netbook – or small laptop – models, joining Asus and Acer, who have lead the netbook race so far
• Some of the netbooks are teared-down laptops for simple writing and browsing needs while are others fully-equipped computers
• For Internet service developers, netbook is a new form factor between mobile handsets and PCs – and a new screen size that needs to be supported

It’s their own mobile TV game in the USA

• As it has been known, Qualcomm’s subsidiary is running a mobile broadcast service based on MediaFLO technology. The service is provided for consumers by two major mobile operators, AT&T and Verizon. No information is available on the subscriber numbers (I tried to do some detective work but got no wiser).
• Now, US standards committee ATSC is the process of preparing their own new standard for transmitting existing TV channels with free-to-air business model, much in the way mobile TV works in Japan.
• There was a trial broadcast stream on air at CES and at least LG had several handsets on show that were receiving ATSC-based stream (see picture below; yes, there is an external antenna!)

US analog TV will be shut off in February… maybe…

• USA has decided to close down terrestrial analog TV transmissions in February, 17th
• During CES, Obama’s transition administration sources suggested that the switchoff date could be postponed, because many citizens are unprepared and government’s 40-dollar set-top-box subsidy coupons have run out. Regulator FCC’s chairman Kevin Martin however told CES attendees that they are committed to the decided date.
• 17 million US households depend on terrestrial transmissions
• Because US pay-TV market is already well developed, digital switchover is not believed to give a boost for TV subscriptions

Your comments are again more than welcome! (Don’t be discouraged by the somewhat clumsy reply process on this site!)

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