Samsung looks to have won the battle to become the dominant proprietary smart TV platform, with a UK 2013 market share expected to exceed 51%.
According to the new report Connected Television in the UK and Ireland from Deadline Media Television, television-like OTT TV in the UK and Ireland will generate revenues of some £532 million in 2013, representing about 4% of all television broadcasting revenues. This will rise to some £1.6 million in 2017 – some 15% of total broadcasting revenues.
The report shows that despite the UK and Ireland having the competitive broadcasting sector in Europe, the UK has not got its act together on standards. YouView has failed in its objectives and it needs to promote the MHEG-IC platform (Interactive Channel). Ireland does not have the wherewithal to implement a competitive and attractive HbbTV platform.
The cost to the consumer of connecting their televisions to broadband has become irrelevant. Streaming media boxes and dongles are likely to play an increasing role but connectivity is increasingly being built into televisions as a matter of standard practice. In the meanwhile STBs will continue to play a major role in the provision of OTT TV services. Samsung’s UK 2013 market share is expected to exceed 51%.
However, the average UK and Irish household already has some 3.3 different ways of connecting their television.
The tablet is emerging as both a second (companion) screen and a second screen but the evidence is increasingly suggesting that it is largely, for television purposes, an in-home device rather than a truly mobile “television everywhere” platform. There is room for substantial further innovation, creating new dedicated companion screen devices rather than the multipurpose tablet.
Connected television is by far the most complex challenge the broadcasting industry has ever faced. The convergence of point to multipoint with point to point services questions the very definition of what television is. Players from each side don’t think the same way and have difficulty communicating with and understanding each other.
Connected Television in the UK and Ireland identifies new paradigms in advertising and social TV as the biggest challenge of all. Development of new advertising models is work in progress, complicated by technology in pursuit of a market and conservatism in the advertising industry.
The report analyses the competitive positions of major players including pay and FTA broadcasters (amongst them BBC, ITV, RTE, BSkyB and others), new market entrants (including Netflix, YuTV, LoveFilm, FilmFlex, Blinkbox and others) and IPTV players (BT TV, Eircom and TalkTalk Plus TV). It concludes that, for the time being, OTT TV services have largely emerged as “top up” TV options rather than low-pay alternatives to BSkyB.
Indeed, the report identifies OTT TV as primarily a battle between the BBC and BSkyB. In contrast, advertising funded broadcasters are struggling with it.
Broadband providers are faced with huge challenges on capex to deliver video-centric services of the future. We identify the cable operator UPC (Liberty Global) as a long-term winner, with both BT and Eircom struggling to maintain market share. BT TV, though, is the only really big investment in OTT TV content in the UK.
Underlying connected television is a battle between content owners weak on technology and technologists who have no compelling content. There is no obvious outcome. However, the evidence presented suggests that the demand for connected television primarily arises from “television anytime” rather than “television everywhere”. That favours existing incumbent broadcasters who have the brand names and the content.
Communications regulation is falling behind technological change. This is likely to cause huge problems in providing a competitive market for high speed broadband. LLU and facilities-based competition are beginning to break down. Attempts to define and regulate “near TV-like” VoD are farcical. Ireland offers a much more benign regulatory environment for VoD.
Connected Television in the UK and Ireland also analyses a wide range of other issues including TV White Spaces, spectrum shortages, new local TV operations, piracy, digital rights management, cross-border services, 3D and 4k services, physical disc rental and retail, Blu-ray players, games consoles, PVRs, cord cutting, CDNs and continuing impact of Moore’s Law.
It provides a detailed overview of the current market conditions for connected television, projections for the next five years and a long-term strategic overview for the 10-15 years from 2018. European and US trends and comparisons are provided as well as an analysis of the impact of severe macro-economic environment facing the communications sector. Moore’s Law is currently the problem of, not the solution to, economic growth.
The 250-page Connected Television in the UK and Ireland comes complete with 80 tables and 20 charts and can be ordered from the Broadband TV News webshop.
