Amsterdam 9.-12.9.2011

Reporting by Timo Argillander and Seppo Kalli

The main sentiment at this year's IBC event was that Internet is now an elementary part of TV industry. The question is no longer whether Internet will change TV business or not, but rather how to use its possibilities to bring value to viewers or to boost revenues. Now that Internet is an everyday thing, all big players are investing in it, making the market for smaller companies challenging.

Internet changes many things in TV business, market becoming more difficult for new entrants

All major TV vendors offer TV sets with Internet connectivity (such TV sets are called "connected TVs"). Internet connectivity can be used for video-on-demand (VOD) viewing or accessing Internet services such as Facebook. We however note that is has not been proven yet, whether people will use personal services like Facebook on big living room TV screens.

New independent content services are providing consumers video content over open Internet. This phenomenon is called over-the-top television or OTT. OTT may challenge traditional pay TV operators by bypassing them and providing consumers attractive pricing. Many incumbent companies like US cable and satellite operator Directv have addressed OTT threat by launching expanded customer offering comprising VOD, broadband connectivity and home WiFi. It seems that big players are investing in new Internet services and thus making market entry for new OTT providers difficult.

OTT model is also controversial for content owners. UK online video provider Blinkbox CEO Michael Comish noted that "Big studios are really good in playing down new technology". Once the technology is ready, they come to the market by big financial muscle and take the market. Blinkbox had been acquired by retail chain Tesco earlier this year. Comish explained the reason for selling the company was that online video is a business where deep pockets are needed.

The "second screen" is the tablet

Second screen or dual-screen viewing refers to using mobile phones, computers or alike for interacting during TV viewing. Many share the view that TV screen is good for TV content but additional interactivity takes place on other devices, which are often personal devices.

While using mobile phones for dual-screen interaction was suitable mostly for the young with sharp eyes and precise fingers, tablet seems to be an answer to everybody's wishes for a convenient second screen device.

The role of a tablet can be either interacting with friends, other viewers or advertisers, or alternatively the actual TV programs could be viewed on tablets. TV channels and content producers are developing their second screen services or apps. In practice however the interaction takes today place mostly on Facebook, Twitter and alike.

It was noteworthy at IBC that the tablet always equalled iPad. It remains to be seen when other manufacturers get their share of the tablet market and when tablets in lower price ranges take up.

Social media finding its role in and around TV

BBC's Kevin Bakhurst summarised three motives for TV news production to adopt social media. These apply to other TV productions as well:

1. Gathering video and other content from audiences

2. Letting audiences to engage and interact

3. Utilise social media services as content delivery channels

Now that the amount of user content sent to news editors continues to grow a key competence for professional news producers is to curate and verify whether the videos and pictures sent are real. During this year Arab uprisings it has been notably difficult to assess the huge amount videos sent. In Syria there is an organisation "Syrian media action revolutionary team", which aggregates user videos for Western media.

Social media will play an important role on TV content discovery. TV Genius presented “Social EPG”, where a personalised programme guide was compiled according to real-time suggestions and likes of the person’s Facebook friends.

"Convergent content" finally taken for real

On the content side there were several signs that investments are now being made for interactive content. UK's Channel4 has set aside a two million GBP fund for convergent content acquisitions and experimentations.

Fremantle has established an "internal start-up" Screenpop to develop interactive content.

Popular music recognition service Shazam is teaming up with TV advertisers: an "audio watermark" can be embedded in a TV spot and viewers can access interactive services by activating Shazam on a smartphone during the spot.

Games make also an attractive content category. Playjam's Stuart Walsh referred to Parks Associates data, which tells that while 21 % of connected TV buyers have gaming as a primary purchase motive for Internet connected TV, 47 % of connected TV owners do play games on their TV sets. However there are no signs that people would be ready to buy games on TV sets, mainly due to lacking TV app store and billing ecosystem. For game developers there is a potential market in selling game development projects for advertisers but TV is not yet a viable channel for selling games.

Exhibition full of technology

The IBC exhibition was larger than in couple of previous years. It seems that some amount of recovery in the business has happened. No specific theme was taken up. Except that the lively activity in the  “IBC Connected Word” hall indicated that broadcast and broadband cannot be separated any more.

Technological solutions for multi-screen content production and workflow are becoming ready. Most vendors for IPTV infrastructure showed solutions where VOD content can be ordered and watched with TV, tablet and smart phone.

Smart card based content protection technology is turned to software based systems. And finally Conax, the main conditional access vendor in Scandinavia, was able to demonstrate their software based conditional access systems targeted on OTT delivery on PC, smart phone and tablets.

The new DVB-T2 Lite standard and its reference model implementation by BBC was presented by the DVB organisation. Practically the standard is just a subset from T2 standard including only the necessary features and parameters needed for mobile reception plus the energy saving modes from the DVB-H standard. As demonstrated the standard is very flexible enabling both robust mobile services and on the other hand high definition enhanced services transmitted in the same frequency block. And the whole service allocation can be done dynamically simply by modifying the transmission parameters.

Other noteworthy findings

At this year's IBC there were lots of other interesting things. In addition to those topics described above we mention the following findings:

- broadcasting industry is worried about future spectrum allocations and what auctions and priorisations would bring; the industry is fiercely competing with mobile industry to have an adequate amount of frequencies in use

- stereoscopic 3D is on the market, but without major success so far; DVB organisation is in the process of developing second generation 3D standards, which e.g. allow users to control the depth impression and provide ways to control the depth of subtitling

- Finnish telecom and broadcast operator DNA received IBC innovation award for their implementation of single-frequency DVB-T2 network that utilises existing cellular masts

Timo Argillander and Seppo Kalli are consultants at Digital Media Finland and long-time IBC attendees.