STB vs. Smart TV

With the arrival of SmartTV, triple-play ISPs are facing a huge challenge. The connectivity and interactivity coming through their Set-Top-Boxes is no longer a unique feature. Smart TV are now rich with interactive services. ISPs don’t like at all Smart TV as they are flooding their network with data and stealing their customer. What VoD service will the end user use? The one from its ISP or the one embedded in the TV set?

There are 2 tracks that ISP can follow:

  1. The first is to offer a 2-tiered service. Over the Top (OTT) services coming with SmartTV have no QoS whereas they guarantee the QoS of the services coming from their STB.
  2. The second track is to push further their STB experience with more features. It is the track followed by Free in France offering a STB featuring an Atom processor, a full browser, a remote control with an accelerometer, a blue ray player, etc. On the other hand TV set makers cannot compete as they cannot subsidize all these features. With these specs the STB is more like a smartphone capable of running games and advanced applications. E.g. the new Freebox revolution can run Asphalt 6 Adreline game (picture from last Aug.).

Free STB apps

By increasing its specs the STB is now eating in the console plate and some console like the Xbox is starting to feature interactive services. Frontiers between these product categories are blurring.
Some small ISPs are currently considering another route. As very soon, TV sets will be able to display multicast streams for the additional TV channels, they want to withdraw back. Their plan is to save some CAPEX in not offering any STB at all. They are just assuming their pipe positioning.


3 Smart TVs pitfalls

There are a few pitfalls to avoid in SmartTV.

The first is for TV manufacturers: It is really painful when you switch on your TV set to have a nice message ‘Please wait. Downloading new firmware…’, because when you switch on your TV usually it is to watch a program and usually it is right now! The firmware update should happen when you switch off your TV. Unlike a laptop you are not in a hurry to move your TV. I don’t like either the Windows update process when you want to switch off your PC and already late for an appointment. But that’s another story.

TV firmware

The 2 other main pitfalls are for CSP.

A TV is a video first device. So when you land on the home page of a service a video should fire at once and maintain the user in a soft lean back experience.

The last one is the click experience. It is tedious to navigate a page with just 4 arrow keys. The end user should be able to navigate using a minimum of click and if possible in a single page. The loading of page takes 1 or 2 seconds which is a time end user aren’t used to anymore. So when designing your service use the colors buttons but not the red one which is reserved for HbbTV services.

Smart TV in the deception zone of the Hype curve

Smart TVs were a big hype 18 months ago and were to replace every internet device in the home and drive millions of consumers away from their favorite TV channels to the magic world of interactivity.

Even though TV manufacturers have had always a very careful speech, some enthusiastic futurologists were predicting a big tsunami that will smash every other way to consume the Internet in the home.

Technology Hype Cycle

Technology Hype Cycle

Since that time, Google have failed to launch its first version of Google TV. The market is still waiting for the first Apple TV set due in June 2012 apparently. Rumors are growing…

The first Content Service Providers are a bit disappointed by the Return On Investment of their TV first services.

I think we are the deception zone of the Hype Curve, but the connected TV is there and there for a long time. It will not replace Tablets or PC but TV connected TV services will find their audience.

The main showstoppers today to the growth Smart TV are

1. Distribution

Shops don’t have internet connectivity to show off properly connected TV services. Sales assistants need to be trained properly

2. Monetization

  • Monetization of Smart TV services are an issue as there is little or no advertising method.
  • There is no payment mean natively integrated in the TV set that would enable a 2 click purchase (1 click and a PIN code confirmation).

The latest figures of smart TVs that have been really connected to the Internet are growing to an impressive 50% from 20% 6 month ago.  For sure connected TV will find their place in our digital lives. It will just take a bit longer than expected.

Apple next 2 killer products

OK, I’m neither working at Apple, nor with Apple and I’m not a friend of Steve Jobs.

But when you look at Apple’s growth over the last 5 years, you cannot start to wonder how will they sustain their growth pace (nearly 40% on average the last 3 years)? Tablet is one thing, and iPhone another but it wont be enough. Apple needs to enter new spaces in Consumer Electronics with some exciting new products.

I see two arenas where Apple know-how could be put at work almost instantaneously: PNDs and connected TVs.

Apple PND

Personal Navigation Devices are a declining market but navigation is still increasing. Google and Nokia are offering navigation services on their device for free. So I think Apple could acquire a company like TomTom. TomTom with a Market Capitalization of 1.4B € is a small bite for Apple 50B$ cash chest.

This acquisition would give Apple access to a navigation software and services, maps and a unique know-how with car makers to have PND (or other devices like iPod, or iPhone) embedded into a car dashboard. Furthermore it will strengthen its value proposition against Android and Nokia Windows Phones launching soon.

> PND in car experience

Apple connected TV

Connected TV, the other killer product doesn’t require any acquisition. It is a straight forward route.

Imagine a TV set with an Internet connection so you get access to iTunes (like in Apple TV set-top-box) for VoD and music. Furthermore Apple can leverage its Face time application in making video calls entering the living room by adding a camera on the TV set. Add a touch of magic with a “Kinect like” gesture recognition UI.

Next stop would be to provide a nice SDK so developers can develop services and applications for the platform. Last but not least, add some nice home content streaming application to watch on the TV set the contents from your iPad, iPhone, iPod, iMac. Then call it iTV or iSomething…

With these two new categories of product Apple will emerge as a tier-1 Consumer Electronics brand playing in every domain: phone, PND, multimedia player, tablet, PC, and TV, along with Sony, LG and Samsung.

I think these products will materialize in the next 12 months.

Television networks rebelling against Google TV

Engadget regports that some Television networks rebelled against Google TV raiding their contents.

> Engadget article

ABC, CBS and NBC are barring Google TV powered devices from accessing full episodes of streaming video content. The reason is simple: they won’t get any revenue from these viewing and Google will be able to sell keywords, ads, etc.

Google is reported to be discussing with the networks, i.e. discussing a revenue share on those contents. I would recommend to the US networks not to open the door to the big bad wolf. Once he gets in the story will be over.

The only other route for Networks is to discuss with manufacturers and imagine a standard to keep a minimum control over their contents like HbbTV in Europe. Like in Europe, US Networks should start building quickly their house of hard bricks.