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Will Connected TVs Disconnect IPTV Providers?

Connected TVs clearly will have an impact on the pay-TV world, and on IPTV in particular

May 6, 2011

3 Min Read
Will Connected TVs Disconnect IPTV Providers?

The IPTV community and wider pay-TV world may deny it, but connected TVs represent more than just another screen to be assimilated into the managed service. With growing penetration of connected TV sets, there is significant potential for the substitution of walled-garden, subscription-based TV services, as consumers realize that premium "over-the-top" (OTT) content -- live, catch-up and on-demand video from well-known content owners and aggregators -- can be delivered to the main TV screen, with none of the previous difficulties of connecting to a PC and no need to pay a monthly TV service bill to the cable or broadband provider.

Connected TV makers and their platform partners are addressing the managed-service attributes that providers thought were hard to replicate with connected TVs -- such as upgradeability of software, integration with other devices in the home using standards-based protocols such as DLNA, and integrated, multi-screen services orchestrated in the network. The user interfaces are becoming more feature-rich and mature, and integration with smartphones and tablets is happening as fast as it is with managed pay-TV services.

It may not matter that connected TV platforms are currently fragmented and not standardized: The same could be said of IPTV platforms and services. Certainly consumers do not care, and content owners and app developers seem happy developing a few more platforms: Connected TV's roster of content and apps is becoming well developed, and new content deals are being struck weekly. It can no longer be said that TV manufacturers are only experimenting with service provision -- it is starting to look serious. And some sets now come with webcams and microphones ready for videoconferencing, putting further pressure on network operator revenue.

But the IPTV world still has some good cards in its hand. IPTV service providers can roll out hybrid managed/OTT services (using new set-top boxes or companion boxes) that will replicate anything that a connected TV set can offer, in addition to providing familiar, high-quality (and HD) premium linear and on-demand TV content, with multi-room setup if required. They know their local markets better than the global TV makers do and are likely to be able to negotiate better lineups of premium content. They have existing -- and growing -- customer bases that like what they offer. They offer support to their subscribers, and they are in a position to guarantee the quality of the customer experience for their service.

The latest Heavy Reading Insider, "Connected TVs Will Help Drive Big Changes in Video Services," examines the potential impact of connected TVs on the video services business from the perspective of IPTV technology suppliers, including those that are developing software for connected TVs, and examines how the industry is responding to the challenge these devices pose. It maps the factors affecting how connected TVs are likely to be used and their role in the sophisticated multi-room, multi-screen TV services of the future. The report considers whether connected TVs threaten to derail service innovation or will propel the established pay-TV community to faster incorporation of OTT content into their managed services and app stores into their front-end design. It also looks at how connected TVs might be used by service providers to extend the reach of their TV and other communications offers. Finally, the report profiles leading suppliers of end-to-end IPTV solutions and STBs, as well as manufacturers of connected TVs.

— Danny Dicks, Analyst, Heavy Reading Insider

Connected TVs Will Help Drive Big Changes in Video Services, a 19-page report, is available as part of an annual subscription (12 monthly issues) to Heavy Reading Insider, priced at US$1,595. This report is available for $900. To subscribe, please visit: www.heavyreading.com/insider.

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