Media & Entertainment Industry Trends, Technology and Research

Connected TV + Smart TV – Key Challenges and Road Ahead – Part III

Posted In Connected TV, Featured, New Media, Television - By Nitin Narang on Tuesday, June 14th, 2011 With 1 Comment
Connected TV Challenges

Connected TV Challenges

New launches of digital media adaptors / Smart TV models, increasingly content tie- ups among OEMs, service providers and studios; expanding Netflix user base and all round euphoria for Connected TV as the future of television – But are consumers ready or are there still queries which remain cornerstone for evaluation
  1. Is Connected TV ready for Primetime?
  2. How many users will actually fall in the category of cord cutting (cable or satellite service) and rely solely on Internet-delivered video (as against using it as a complementary service)
  3. What chunk of advertising budgets (approx. $69 Billion USD a year) will connected TV command – since for most part advertisement revenue is the primary reason we have the TV content in first place
Connected TV has huge potential but it may take a while before above can be reliably negated and challenges with respect to quality of service, bandwidth, availability of content, legal compliance and collaboration among ecosystem players are sorted for hassle free service. Some considerations which bear significance are

Ease of Usage – Majority of users are comfortable and accustomed to their existing TV sets in conjunction with a cable/satellite box. Replacing their existing TV with an IP enabled one or introducing a new IP enabled set top (or Digital media adaptor) adds usability and configuration confusion to a majority audience – add broadband, Wi-Fi issues and another customer support interface gets added. Since the comparison here is against an older technology which just works when switched ON – ecosystem players will have to innovate much harder to keep a simple, intelligent, self-resolving configuration requiring least user intervention. For majority of users it will require a mindset change and usage adoption from the way we discover, engage and consume content today to what the new technology has to offer.

Interface for Content– Most content interfaces (websites, portals etc.) today are not factored for 10 feet experience and hence will need refactoring. Although we see efforts been made e.g. YouTube lite, Netflix and major broadcasters customizing their on demand portals for TV viewing – it will require significant cost and effort commitments to have a truly integrated system in place. Over the top OTT has been the major driver for connected TV platform but it also faces several challenges which are still unresolved

Comparison Connected TV vs Broadcast TV

Connected TV vs Broadcast TV

TV with a Shelf Life– With large number of technologies, specifications and connected TV devices emerging in short span of time, there will be resistance from mainstream consumers to commit on getting a new or replace an existing one until the ground settles, remember the “decade tenet”.  Further connected TV will come at a premium compared to its non-connected counterparts, hence for majority of new consumers it will be a choice to buy something at a premium which is future enabled or wait till the price difference become a non-issue and one would not mind spending few additional dollars 1for features one might use.

Purpose of TV- To watch TV – While social networking applications, weather tool, online update, poke my face etc… sound interesting, majority of TV viewing is still a dull, lean back activity where posting messages while watching your soap opera or movie is least expected. Further majority of exciting apps are more for personal consumption rather than communal viewing. TV applications will need to have relevance to Television environment; In short apps will add comfort and convenience but content will still be the deciding factor for success.

Mainstream product– It takes several years before a platform starts to mature and issues are sorted out. Smart phones took a while before they started becoming candidate for mainstream consumption. With passage of time technology changes, price barrier diminishes, hardware and software matures and all of them play a significant role to how early the product converges. And till that time one can always buy an extra cable and connect their TVs with laptop to get the content streamed. Connected TV technology brings fascinating features but its true worth has be gauged from what actual value it brings among majority of users rather than what the technology in itself is capable of?

Standardization– In the currents scenario various CE manufacturers are building proprietary Connected TV platforms and apps environments around them while multiple hybrid broadcast broadband standards and specifications exists meeting local market expectations. Absence of a unified, proven and accepted standard limits consumer confidence to invest in a product which may get obsolete due to standard limitations. It also brings challenge for application developers, app ecosystem players for its maintenance and expansion. Google has paired with Sony and Logitech in the past and now with Vizio and Samsung, similarly there are offerings from LG, Samsung and Apple. But until there is a fear of buying something non-standard and lack of assurance in terms of safe long term investment – consumers will think twice before replacing their setup.

Competition – Mobile handhelds iPad and tablets although complementing the TV experience may well provide a stiff competition to connected TV itself. There is also competition from Pay TV operators who have started offering  services in their closed systems and may well open up to provide a reliable, internet connected experience to hold their ground and customer base

Conflict of Interest –There also remains an inherent challenge to arrive at a common consensus agreeable to cable companies, content owners, broadcaster and service providers for a business model and revenue split which meets acceptance without adding cost pressure on consumers. (TWC and Viacom riding into conflicts over launch of iPad apps). Although it may take a while but companion device led content consumption is too big opportunity which will eventually force networks and cable companies (who control programming) to mutually resolve and extend the service to consumers.

The Road Ahead

Future of Connected TV

Future of Connected TV

Sometime in future, connected TV’s will  integrate Broadcast TV/online video content, apps, gaming, DVR, Controller for smart home devices and a central media hub driving content across multiple consumption (screens) devices in the network. Smart TV’s with enough processing power, memory (think cloud) and integrated conditional access (security) may well become the complete product rendering STBs and cable gateways seem like passé.  Some of the exciting features which may emerge are

Gesture and voice controlled interfaces for content navigation, smart home extension through device management, (xfinity recent launch) control of security systems and home appliances
Evolution of new revenue generating avenues through commercial offerings like professional training courses, online education, participative gaming, medical consultation etc. may emerge as new business offerings
– Integration of EPG with social mediums (Twitter and Facebook are increasing sought to find out what’s popular) added with content filtering to suit consumer needs, personalized and targeted advertising could emerge as additional channels for monetization. Broadcast interactivity is another concept being evaluated to integrate TV apps into the broadcast experience

While industry is all geared to revolutionize the Television on similar pattern as smart phones, it may take some time before a similar (mobile) revolution encompassing consumers, developer community and device manufacturers can be recreated for Television audience since adaptability, price point, usage pattern and the ecosystem are different.

About - Digital Media Technology Consultant. I have passion for TV technology, digital convergence and changing face of Media and Entertainment industry.