Everything seemed so tidy and settled six months ago. A growing new conventional wisdom acknowledged that pay TV is, in fact, not only moving to Internet protocol, but also, that the titans of pay TV had all but won the day over ‘Web video.’ This sense of complacency was disrupted when Google made a trio of noteworthy announcements at its annual Google I/O developer conference last week…
Microsoft today made the long-expected announcement that it is ‘transforming TV’ by bringing the TV experience to the Xbox 360 (or, said another way, adding a ‘TV portal’ to the Xbox). My first reaction was that it was the ‘inverse’ of DISH Network’s Blockbuster Movie Pass announcement of September 23. But then, the term ‘inverse’ doesn’t really apply if there are three terms to the online video equation.
Here’s what I mean:
- Microsoft’s Xbox 360 TV initiative is ‘device-centric,’ independent of service or content provider,
- DISH’s Blockbuster Movie Pass is ‘service-centric,’ independent of content provider or device,
- Then, there’s ‘content centric,’ as in HBO GO or Max GO or WatchESPN; where the content can be just as easily delivered to an app – independent of service provider or device – as it can be to a TV set.
On the surface, ‘Xbox 360 TV’ doesn’t sound like such a big deal, but it is. On one hand, Xbox users can already get on-demand online video content through the Zune on Xbox Live marketplace, which, according to IHS Screen Digest has 16.4% market share for online movies – not to mention Hulu and Netflix.
But on the other hand, it’s live TV. This is of strategic importance for Microsoft: its ability to provide live multichannel TV instantly differentiates the Xbox 360 from other online video devices like Apple TV, Google TV, Boxee, Roku and seemingly dozens of other little boxes that have come and gone over the past couple of years.
Which brings us to DISH. Interestingly, DISH seems to have looked at their Blockbuster announcement more as a way to counter the threat of online video from Netflix, Comcast and DirecTV, when in reality, the chart that DISH published at announcement underscores – did they mean not to mention this? – what’s missing from Netflix
and Qwikster: multichannel TV itself as the differentiator.
[ Note: 5 days after this blog posting, Netflix decided to cancel Qwikster, which would have separated Netflix’ DVD rental business from its streaming business – but the point I make still remains. Just combine the two rightmost columns of this table. ]
Add in DISH’s Sling technology, Move Networks’ online video codec, the fact that DISH bought three satellite companies this year, and now owns a Telco? Hmmm…something is brewing at DISH, and I bet it will have more impact than ‘Xbox TV’
It just goes to show how much navel-gazing there is about online TV. Consider how much our industry has ruminated over OTT and cable TV cord-cutting, when in fact, the percentages (and the revenues) are still very low. The other standout stat on the chart is the fact that it underscores how many titles are not available online, compared with what’s on DVD.
The Xbox 360 gives content providers another channel to market, putting their content in front of people via a device that’s new to many of the content providers. [ Notice, by the way, that several TV programmers are going to the Xbox directly, including HBO, ESPN and SyFy. We'll see how much leverage this gives them when it comes time for pay TV providers to renew carriage agreements with them. ]
As a set-top box substitute, the Xbox 360 stands to reduce CapEx for service providers (although AT&T, BT, Telus and other service providers have deployed using the Xbox as a set-top, and none of them are are saying how widely adopted it has been). We’ll see about that too.
Lately, I’ve been seeing more discussion about distributing Apps to various devices. For example, an article in Connected Planet entitled “Do Web App Stores Matter In The Age Of Mobile Apps?” (the title reminds me of “Do Androids Dream Of Electric Sheep?” which I’m surprised Google or Motorola haven’t tried to borrow yet).
There are lots of pieces to this discussion. There’s the apps- and content-centric discussion: how can the same apps be cross-purposed and used in multiple consumer devices. There’s an operator-centric discussion: how can apps and content be commonly managed and distributed in a more efficient way? There’s a network/planning-centric discussion: How can a service provider do a better (faster, less expensive) job of app and content distribution than a data-center-based CDN can?
I think the Web makes a good common denominator as an interface that consumers can use to acquire and manage apps and content within a multi-play service environment. Mobile smartphones, TV set-tops, PCs and game consoles can all access and display the Web, and there’s less of a need to develop a separate app for every blessed mobile and portable and PC and set-top platform. Develop once, and time-to-market improves. Good argument for Android as well, come to think of it (except for, come to think of it again, the game console and PC parts, since Android doesn’t run there).
A Web-based common interface benefits the service provider too: a Web based store as a common single point of purchase, and a common platform that could associate purchases with devices and entitlements and make sure that the right content and apps go to the right entitled devicees.
As a consumer, if I were subscribed to ABC Service Provider’s TV, mobile smartphone and ISP services, I could sign up for their TV Remote DVR feature using the consumer-facing online storefront. Upon registration or purchase, the associated apps could be pushed to my set-top, to my PC and to my mobile phone, so I could use any of those devices to set up recordings that I can watch when I get home. Or, if the content is hosted in the network cloud, to watch whenever and wherever I want. As a consumer, one point of contact and automated distribution add up to convenience.
As a service provider, it’s a way to leverage common resources to save OpEx and maybe even CapEx. This is going to be a very active discussion. This is part of the future that we’ve used so many awkward acronyms and terms to try and describe. One of my favorites is ICE (Information Communications and Entertainment), which says everything, yet nothing. It’s really well-intentioned and after you think about it for a minute, it’s a good acronym. But would your Uncle Don know what it is?
I’ll be writing more about this over time.
There has been a lot of discussion over “TV Everywhere,” the service option being launched by many of the pay TV operators, including Verizon, AT&T, Comcast and others; which allows pay TV subscribers to access programming via the Internet. DISH also has been using this term, in reference to its Sling-enabled devices.
I haven’t really heard of it being characterized in this way, but isn’t TV Everywhere simply another example of a supplier (in this case, a supplier of programming to consumers) finding a new and ready distribution channel (broadband Internet access) and harnessing it in order to remain an option for some would-be cable-cutters, and maybe attract some people that aren’t on their service at all, in the process?
TV Everywhere was topic of a panel discussion at the NCTC Independent Show, and blogged about by Bernie Arnason, co-founder of TelcoTV, on his Telecompetitor blog. The point was made that “over the top” (OTT) video should be differentiated from TV Everywhere because OTT disintermediates the pay TV provider while TV Everywhere is a pay TV service. So when a pay TV provider refers to extending its own service package over the Internet, it should have a different name – and “Under the Bottom” was suggested. Semantics aside, whatever “TV Everywhere” is, the point that it’s different from OTT is well taken.
It’s understandable that Avail TVN, a “wholesale” supplier of pay TV programming to Telcos and other operators, would feel this way about it. In their case, TV Everywhere is another way to position their TV programming, so it would appeal to operators that may never do a facilities-based IPTV solution.