We all know about ‘Over the Top,’ where an online video provider circumvents or disintermediates a pay TV operator (while using the operator’s own network to deliver said video). Then there’s ‘TV Everywhere,’ in which pay TV content providers require users to associate themselves with their pay TV subscriptions or, no play.
Through the Middle
A third online video service model is where a pay TV operator enters into a relationship with an OTT provider or online aggregator and exposes the online service within its pay TV experience. In other words, not OTT or TVE, but “through the middle,” or “TTM.”
At first, it sounds like a gimmick – some kind of desperation move by the pay TV provider to give frustrated subscribers one more reason not to cut the cord. But let’s look a little further…
TTM: A little background
In March 2014, the Danish broadband provider Waoo! introduced Netflix from within its pay TV user interface, through the middle. Here’s a demo video (in Danish).
This is enabled through the integration of software from Netflix, Nordija and Airties, which are Waoo!’s TV middleware and set-top box suppliers, respectively.
DISH embraced TTM too
In December 2014, DISH Network introduced Netflix integration as well. DISH’s implementation is different from Waoo!’s. While Waoo! dedicated a button to Netflix in its main menu, DISH placed Netflix within the electronic program guide, which made Netflix “just another channel.”
So now, I can access Netflix using the same method of access as DISH uses for video on demand.
TTM’s not a gimmick
Again, I thought “it’s a gimmick.” Until I decided to try it. If you own a streaming video player, you’ve probably been through a drill that goes something like this:
- Turn on the TV set (using either the pay TV STB remote or the TV set’s own remote)
- Locate the streaming video player’s remote, press the button to activate it
- Locate your TV set’s remote, and change the input from your pay TV set-top box, to the streaming video player
- Navigate the video player’s menus to the Netflix application, and activate the app
- Navigate the Netflix thumbnails, using up/down/right/left on the streaming player’s remote, or locate the search field and use the text search character matrix.
- Watch videos on Netflix
- Grab the TV’s remote and switch the input back to your pay TV set-top box
- (…At which point, we’ve used at least two different user interfaces – that of your streaming player and Netflix.’ Plus, perhaps, the TV set’s own UI – and as many as three different remote controls)
- (…At which point, my wife asks me to call someone for technical support – but who?)
Compare this classic early-adopter experience with DISH’s TTM experience
- Turn on the TV, using the DISH remote
- Bring up the EPG and navigate to Channel 370
- Press the center button to enter Netflix.
- The Netflix user experience takes over (DISH can’t be held responsible for Netflix’ unusable search and recommendation capabilities)
- Hit Cancel, Cancel, Cancel… to back out of Netflix and return to DISH
- (…at which point we used one remote control and two UIs: that of DISH and that of Netflix)
The first time you access Netflix via the DISH EPG, you must enter your Netflix ID and passcode. Any subsequent use of Netflix goes right from the EPG to Netflix, with no login needed.
Has someone already decided that TTM is too good to be true?
I was initially motivated to write this article because Zatz Not Funny published a report that the YouTube and Amazon apps were being removed from the TiVo Series 2 and Series 3 DVRs, as of April 15. Sure enough, TiVo confirms this. Because the apps reside on the TiVo box, this is really another version of Through the Middle.
I immediately jumped to the conclusion that Amazon and YouTube were starting to get choosy about their distribution channels – and that TTM might just be a fleeting phenomenon as different content providers contend against one another to be the one on top. Or as my wife’s dad used to say: “If it’s any good, they’ll stop making it!”
As it turns out, the moves by Amazon and YouTube are simply because the TiVo 2- and 3-Series are old, and the app developers made the choice not to support them anymore. In fact, video apps from Amazon, YouTube, Hulu Plus, Netflix, Vudu (and others) are all key selling points for TiVo’s current Roamio DVR, and surely these video providers must appreciate having access to TiVo’s subscribers.
Not long ago, an industry friend of mine told me that Netflix had been in a pay TV operator’s EPG, but had pulled out. But the reason that Netflix and the pay TV provider went their separate ways was because Netflix wanted more control over the user experience.
So, these weren’t cases of competitive wrangling or channel conflict at all. One was about discontinuing support for old devices, and the other was about a content provider trying to maintain its look and feel across any device environment.
TTM is BoBW
Pay TV operators that integrate their services with TiVo can choose whether or not to expose TiVo’s OTT apps through the middle, but that’s also another story. In those cases, the pay TV operator is calling the shots, which brings us full circle back to the debate as to whether OTT is a threat or an opportunity for operators.
In the end, I view ‘Through the Middle’ is BoBW (the Best of Both Worlds) as a consumer retention tool for pay TV. But I think it’s more because of the added convenience, and it’s a tacit admission by pay TV operators that OTT can be a friend and isn’t a threat.
[ Side note: This topic takes us into a whole 'nother discussion about where the pay TV provider's user experience leaves off, and where the OTT (TTM) provider's UEx takes over. I promise an article about this soon. ]
As the 2015 CES conference fades (already!) in the industry’s rear view mirror, it’s worth recognizing how much occurs during CES week, but not at CES itself. Apple famously casts its long shadow each year, since Apple products are surrounded by a large halo of aftermarket offerings, but Apple (the company) had no overt presence in Las Vegas that week. But another company of similar stature does: AT&T, which begins its annual Developer Summit with a Hackathon during the weekend prior and concludes it with a conference, consisting of a keynote and breakout sessions on the Monday just prior to the CES opening day.
“Mobile is eating the world!”
The 2015 AT&T Developer Summit, in its ninth year, had 4,000 developers in attendance. For the Hackathon, the attendees broke up into groups to create apps that followed the decidedly “mobile” themes of the event: mobile apps, the ‘Internet of Things’ (including smart homes and the Connected Car), WebRTC, atop the software-defined network (SDN) and network function virtualization (NFV). SDN and NFV are about defining the resources you want in your applications, and making sure that the network can provide them on demand.
The conference keynote was opened by AT&T Mobile and Business Solutions President and CEO Ralph de la Vega, who exclaimed that “Mobile is eating the world!” (riffing on the famous 2011 “Software is eating the world” article, about how old-school hardware companies like HP are turning toward software to help ensure their futures). Mr. de la Vega then explained how the combination of software, mobility, the cloud and security have already disrupted many industries, changing the way consumers live and work by creating ecosystems that connect secure end points to a secure VPN. Uber is the obvious example.
If it’s not networked, it’s dumb
In an ‘Internet of Things’ (IoT) panel later in the keynote session, Glenn Lurie, now CEO of AT&T Mobility, elaborated that “Any device that’s connected is smart, and if it’s not connected, it’s dumb,” and that AT&T’s goal in the IoT space is to connect to any kind of device or customer, whether it’s an individual or a city; a network of street lights, or a consumer’s automobile or smart watch. With that context in mind, Mr Lurie’s panel had a wide-ranging discussion.
Panelist Steve Mollenkopf, CEO of Qualcomm, unsurprisingly believes that a fundamental quality of IoT will be mobility. Benedict Evans of the investment firm Andreessen Horowitz believes that IoT will be a bigger opportunity than mobility, the PC, and software. Cisco’s Chief Technology and Strategy Officer, Padmasree Warrior, said that now that it is in place, is commerce-enabled and is social, IoT is the next logical step in the evolution of the Internet. Alex Hawkinson, CEO of SmartThings, a ‘smart home’ technology company, added that the key to IoT is to make devices and use-cases simple, accessible, easy to use, and to be sufficiently open to enable walled gardens that provide opportunities for innovation.
The panelists agreed that there is no single unified trend in IoT because it’s so diverse. The most interesting things will happen at the edges of networks, but the availability of connectivity and bandwidth will limit how much ongoing communications will take place, and therefore, how much of the experience will actually need to be available within a given device if the connection can’t be guaranteed. There must be a balance between them to best leverage both. Devices will become so cheap and so useful that they will be everywhere, but they will need software and networks to enable the use-cases.
Smart Homes and IoT are the next frontiers
A September 2014 Goldman Sachs report quotes the Consumer Electronics Association as saying that only 10% of new homes current have home automation. To drive adoption, the panelists said that greater awareness must be created that home solutions exist in the first place. Another driver will be a combination of openness and a consolidation of standards, because consumers will not want to have to decide which walled garden they want to be a part of. It’s up to the developer community to enable use cases regardless of device and network. [ My comment: in the adjacent Connected Car space, some car companies are already planning to enable consumers to bring either Android or iOS into the car, and not force that choice on the consumer. ]
Security was another area of discussion. Last September, a Hewlett-Packard report said that 70% of IoT devices lack security. In order to accommodate security, several things will need to change. First, security must become appropriate to the use-case, and less of a ‘point product.’ For example, DRM for video and data security for health care applications are very different. Yet, an AT&T consumer might have the need for both within the same account relationship. Also, there is already a simultaneous need for security and privacy: data is collected about a device user, but it must be kept anonymous – often for regulatory reasons. In all, the Internet will be called upon to enable an increasingly diverse and personalized experience. There will be more end-points, so the architectures of networked applications and devices will have to accommodate that. There must be distributed intelligence that functions in realtime and, from moment to moment, recognizes that an end user’s device or data may be vulnerable to attack, and decides when to implement security from the cloud and when to invoke it local to a device.
“Hundreds of electric motors”
Andreessen’s Evans noted that “you have hundreds of electric motors in your home, but you didn’t set out to buy these electric motors. Instead, you bought refrigerators and mixers and applienaces and all of them have use-cases. So developers need to respect these accepted use-cases.” Ms. Warrior from Cisco elaborated, saying: “There is a lot of value in connected IoT devices and developers must expose that value. They must make them more efficient, which is where analytics comes in.”
Another issue is one of ‘certification.’ Many devices will be retrofitted into connected applications that have never been connected before. Who will use the technologies? Who will enable them? Are they capable and qualified for use? Developers must ask themselves: “how will we make it easy for applications to happen, and how do we make them easy to use?”
This discussion seemed rather remote from AT&T, but the opposite is true, since AT&T already offers a home security and home control service (AT&T Digital Life) and is trying to drive adoption against entrenched competition like ADT. In addition to AT&T’s strategic initiatives into the Connected Car, where AT&T offers a global automotive telematics platform in partnership with in-country communications carriers in virtually every market where automobiles are sold. AT&T’s NetBond platform provides APIs that enable developers and enterprises to create virtualized applications that integrate AT&T’s network with cloud partners that include SoftLayer, CSC, Amazon Web Services, VMWare, IBM and Microsoft Azure.
But this was a Hackathon – what happened?
Developers participating in the Hackathon had 48 hours to put together apps using the AT&T network platforms and APIs. Many teams formed, from which 20 teams were selected for further evaluation by AT&T, which eventually resulted in three finalists. The winning team won $25,000, and was presented with a check on the spot.
Anti-Snoozer, the winning app, utilized AT&T’s Drive APIs, a camera, and motion-sensing to monitor the driver’s position and the dilation of the driver’s pupils to sound an alarm to awaken a drowsy driver (presumably, for long enough to find a place to pull over or stay).
The other apps both used Web RTC to establish a realtime video conference between a user and a business via Web sites, using AT&T Web RTC APIs. “Sitter” is for care-givers in the home. It enables a parent to advertise for care givers. The applicant can record a personal video interview for the parent via a Web site. When the selected sitter gets to the home, the app connects to AT&T Digital Life, to enable or block access to rooms in the house, as enabled by the parent. “Host Magic” was for a home owner renting a property. Potential renters sign up, and the property owner receives an email notification that there is an applicant waiting. Similar to ‘Sitter,” the property owner can interview the applicant and grant access only to desired parts of the property.
The meaning of it all
Telcos will win the long-term battle of communications, because they place the network itself at the center of their business, not the delivery of paid content – as cable companies do. In other words, AT&T’s product is its network, and it is AT&T’s strategic interest to rally as many developers around it as possible. Just as Apple began doing in 1990 with its Worldwide Developers Conference (WWDC), and Microsoft with its Professional Developers Conference (PDC) in 1992.
I was a fairly late smartphone adopter – I didn’t have my first one until 2012, and only because I inherited it from another family member. It was the replacement for a lost phone, until the lost one turned up. So I decommissioned my 2007-vintage Nokia XpressMusic 5310 and popped my SIM and MicroSD cards into my new Samsung Exhibit II 4G. T-Mobile is my carrier. Wow! The Future!
But then reality set in. The Android experience did not meet my basic expectations. I found the user interface for basic phone calling to be awkward – dialing with one hand is difficult. Even though I would set the screen to time-out after 10 minutes, it would go dark in 10 seconds, so the act of deleting a voicemail meant that I would have to re-awaken the phone with the power button. The controls for apps were different for each app – no consistency. Often, the phone couldn’t pick up a network provider, even in London where six of them would be in range at any given moment.
Apps are unstable: Firefox could never get past two pages before crashing. Perhaps this instability has to do with poor memory management. One memory management app allows the user to quit all of the processes running in RAM, but within a few minutes they would always reactivate and sneak back in. On the left is a screenshot of this app after clearing 7 apps from RAM. The screenshot on the right shows the same app after clearing ram again six minutes later. This even happened with apps that I thought I had un-installed.
But above all, my greatest concerns went to security and privacy. Android’s ‘Privacy’ settings include ‘Back up my data’ and ‘automatic restore.’ That’s all. Under ‘Location and Security,’ there’s an option to ‘Install encrypted certificates from USB storage.’ Another is to ‘Add or remove device administrators.’ Wow, what an invitation – anyone could pick up my phone when I wasn’t looking and install a mole! Stop and think about this for a minute. The level of access should be a concern to anyone – especially corporate users concerned with data security.
Then there’s the level of access that’s available to software developers. Let’s look at a popular app whose purpose is to use the LEDs of the camera’s flash as a torch to illuminate your path. In reviewing the permissions associated with this app, it’s hard to believe that a flashlight is its true purpose. This app can access your storage, report your location, read the status of your phone calls, and has full access to the Internet. Really? A flashlight? And no way to disable this. The last item in the permissions list notes that it can control the hardware as a flashlight.
By contrast, Apple does not grant app developers access to phone or log functionality. Also, Apple provides system-wide settings for privacy, and both system-wide and app-specific settings to enable or disable location-awareness. in iOS, users can also enable a setting that shows them that an app has reported your location and when. Users can also disable location-based iADs (Apple’s mobile advertising platform).
Android’s location-awareness can be controlled system-wide but not app by app. If you want to grant access to Yelp or Urbanspoon but not to your flashlight, you’re out of luck. I don’t know whether later releases of Android have addressed this because my phone has been dead-ended. I can’t update the OS past Android v2.3.6 (Gingerbread), so I’ll never know (unless I look at the specifications of later releases, but what consumer will do that?).
In the end, privacy was the thing that ultimately won me away from Android, and even kids steeped in these new technologies agree with my decision. A few months into my smartphone, I reached a point where I stopped downloading apps for which I couldn’t control my level of privacy. Soon I realized that this meant I had to stop downloading nearly all apps. For some time afterward, I remained hooked on accessing the Web while mobile, but ultimately I said to myself: “What’s the point when my phone always crashes and I’m always looking over my shoulder?” My phone is a necessity. The rest is not.
And yes, we’re bashing Android, but this article doesn’t do the bashing justice. Juniper Networks estimated that 276,259 apps presented security issues, up 614% from 2012. Apple security isn’t perfect either: at the 2013 Black Hat conference, Georgia Tech researchers showed how malware could be injected into Apple iOS devices via the power connector. But this is nothing compared to kinds of hacks being publicized for Connected Cars. The University of Washington and UC San Diego conducted tests on several connected vehicles and were able to access and disable a vehicle’s controls via the car’s electronic tire-inflation sensor.
There’s a lot of conventional wisdom out there right now that Android is the winning mobile device operating system wars, and Apple’s influence in that market space is waning. This is reflected in the declining market share numbers for Apple in both the smartphone and tablet categories. But that doesn’t tell the whole story. A lot of people out there have opted for Android, been disappointed, and gone to (or back to) iOS. IPhone loyalty is higher also.
For now, I’m back to a Nokia XpressMusic 5310, which a nice gentleman in Shenzhen can sell to you on eBay, unlocked, for about $70. Later I’ll be one of those going to the iPhone, once the next generation is available. [ ...once again, dodging rotten tomatoes from those accusing me of being an Apple fanboy... ]
Ahhh, the Future!
[ Revised August 26: Another data point that acts to reaffirm my decision to leave Android is that there’s conjecture Google is devising a new kind of advertising measurement based on the number of gazes to ads viewed via Google Glass. A sort of “ad impressions” metric on steroids. I know this has nothing to do with my afore-referenced phone, but I don’t have to like it either. ]
This week, The New York Times and The Wall Street Journal both reported on efforts being mounted by Google to launch an “Internet cable TV service” (an oxymoron). Joining Intel, Sony, Microsoft, Apple and others. Let’s look at them one at a time.
Intel is on the record as hoping to launch its own consumer Internet TV service, although in my opinion – even if they DO launch a service, which they insist they will – a service is not Intel’s true intention in that space. Instead, it’s another market-seeding effort – which Intel has done in the past with set-top box reference designs and software SDKs to drive that industry’s adoption of Intel processors. In other words, a retail TV service might be the icing on a different cake.
For years, Apple TV has been Apple’s entry into the streaming video player market space, and the TV vector of Apple’s device-content-software ecosystem. After many rumors have come and gone, Apple is now reportly “playing nice” in the pay TV industry sandbox. People forget that Apple has been on the side of Big Media for years. The same strategy worked for them with the music industry a decade ago. Also, most pay TV operators, premium pay TV programmers and TV networks offer apps designed to work on iPads, iPhones, and iPod Touch devices (and on the Mac via a Web browser). Steve Jobs became the largest shareholder of The Walt Disney Company when he sold Pixar to them. And now, Sky News, ESPN, HBO Go (among others) have launched apps designed expressly for Apple TV. Bottom line, Apple is both a friend and a friendly distribution channel; not a threat.
Then there are Sony and Microsoft. Over the past year, reports have had both of them taking runs of their own at being “Internet TV providers.” Sony’s effort sounds ambitious, but the rumor mill had gone quiet. They’d have some chance, by virtue that Sony is a media company (Sony Pictures) and the PlayStation is a content ecosystem; not just a game platform.
AT&T offered a special kit for Microsoft’s Xbox 360, to make it compatible with AT&T U-verse IPTV, although sales of that add-on have been suspended. Microsoft also offers branded apps from Comcast, Verizon and a number of TV programmers via Xbox Live. But Microsoft’s efforts to launch its own TV service by negotiating directly with TV programmers ran onto the rocks.
I was originally inspired to write this article because I started thinking how Google might have a better chance than any of these competitors. The TV networks are distrought over the fact that audience measurement for online video is not comprehensive, making advertisers leery of advertising in that medium. Meanwhile, 97% of Google’s revenue is from online advertising, so you’d think they’re onto something (See *** below). But a number of other TV programming distributors offer online platforms and already have relationships with the networks. Also, Google would expect a share of any ad revenue and is no friend of pay TV or broadband providers, particularly in cities where Google is building its own broadband service.
Not to mention that Google has taken other runs at the TV opportunity, most notably with Google TV, a noteworty technology that happened to be one of the great failures of high-tech marketing. Google TV cost Logitech millions of dollars, and their CEO his job. For its part, Google did nothing to correct the misperception that Google TV was a service, instead of the TV middleware that it actually was. [ Update July 26: Google has launched yet another TV device, Chromecast ]
So, here’s how I rank their chances at launching and sustaining an online TV service:
- Google: 0%, for having alienated the TV industry, which is highly resistant to change
- Microsoft: 0%, because they don’t instill confidence that they can succeed. Consider the recent launches of Windows 8, Xbox One, Surface, Windows Phone, and Microsoft’s exit of the IPTV middleware category (Mediaroom) only after becoming a leading supplier.
- Sony: 50% because they are working with TV industry players and because they are a content owner themselves. Also, they are in the process of revitalizing the Playstation ecosystem. [ Note: I previously was saying they had a 10% chance. ]
- Intel: 50%, because they appear to be trying to work within the parameters of the TV industry. If the retail service fails, it’s not the end because a service is only part of Intel’s true agenda despite what they say.
- Apple: 100% if they collaborate with the pay TV industry. Apple’s ecosystem is the broadest and deepest (albeit sans games). Also, Apple gets credit for having saved the music distribution industry’s bacon.
Samsung is a huge wild-card here. They have a device and in-home distribution product ecosystem and have been successful in extending Android into something useful, but Samsung has not announced any intentions of their own, other than partnering with content companies and distributors (pay TV, Redbox Instant and a few others)…
*** I’ve begun to think of Google Search, Android and Chrome as ad-malware. But that’s a whole ‘nother rant, for the next episode of “Why can’t I download that Android app without accepting its terms to track my location and phone usage?” I’m saying to myself “Get over it or switch!” and from my tone, you might guess my decision.
We all replace our mobile phones and computers every few years, not to mention our cars and many other high-ticket items in our lives. But TVs are different. They’re supposed to last for ten or twenty years, aren’t they? But our first-generation Google TV device has reached its half-life. Read the entire article on Telecompetitor!
At CES 2013, Cisco held an event which included demos of Cox Communications new Cisco video gateway, a Cox TV app on the iPad, and a new EPG. DISH Network launched a new version of its Hopper whole home DVR and AT&T held its 2013 Developer Summit. Read the rest of the article on Telecompetitor…
The telecom industry is accustomed to conflict. Recent battles have been fought over network platforms, apps, and the electromagnetic spectrum. And the next set of transformational battle lines are already drawn in areas such as home automation and connected cars.
As with past industry transformations, these are high stakes games, being driven by powerful industry forces. Here we’ll look at some current low-profile but potentially high-impact battles involving mobile payments, user interfaces and the personal communications experience. Read the entire article on Telecompetitor!
AT&T announced additional second-screen and social features for its U-verse IPTV service a couple of weeks ago. Judge for yourself whether its U-verse App is an increasingly handy virtual Swiss Army Knife of sorts or whether it might instead be bordering on bloatware…
Note: I now have the privilege to blog for Telecompetitor, an active telecommunications industry news and information resource. This is my first entry. I’ll be making entries twice every month, and linking to them from here. – Steve Hawley
Alcatel-Lucent’s annual industry analyst meeting took place against a challenging backdrop. Since the company’s creation in 2006, Alcatel-Lucent has had just one profitable year (2011), and the current economic slump – particularly in Europe – won’t help in 2012….