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June 2, 2010

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The Latest OTT Opportunity: Connected TV

As we head into summer, Internet TV remains a hot topic among network operators.  Over the next few weeks, we will explore the OTT opportunity, the challenges associated with Internet TV services, and how we think the adoption of more open standards can help bridge the gap between those challenges and opportunities. Post #1:  The Latest OTT Opportunity: Connected TV Of all the new Internet TV delivery options, the connected TV is especially interesting to service operators: It’s already front and center in the living room, there is perhaps no expensive STB required, it features an already integrated remote control and has the potential for high-quality presentation without distortion or noise from connecting cables. On the other hand, today’s connected TVs are fundamentally constrained by proprietary interfaces, wholly proprietary aggregation portals and simplistic navigational schemes. Limited or no storage means streaming-only presentation of content.  Our current feeling is that the Internet-connected TVs are primarily an aspect of a features game in a highly competitive consumer electronics market and is one of the options least likely to be exploited for premium video delivery services. The more likely scenario will be facilitated via connected devices such as Blu-ray players game consoles and last but not least via STBs, although these may take on a new identities such as whole home DVRs, media gateways, etc. 

It is possible that connectivity may be used to blend the TV and Web experiences together. Operators can choose to make this happen on a TV using overlay or screen sharing applications, such as calling up an actor’s Twitter feed while watching his performance. But given that living room viewing is a shared experience, it may be more realistic to see TV supplemented by other more personal phone or pad devices with better user input capabilities to provide such interactivity. I can attest with my own family’s habits, that it has become more normal for viewers to watch TV while working on their connected laptop! I presented last week at the TV 3.0 – Future of TV conference (co-located with @DisplayWeek) . I was surprised to hear that nearly 20% of TVs shipped in 2010 will be network‐enabled, which is projected to reach about 60% in 2013! And we are experiencing some interest from CE manufacturers to embed software-based security technology directly into these next-generation TVs. Nonetheless, I came back with the opinion that STBs are not going away anytime soon. The issue (and cost) of customer support needs to rest with the operator who ultimately owns the quality of experience. What are your thoughts?

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