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The biggest take-aways from CES 2019: Apple opens up its ecosystem and Amazon embraces broadcast

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Two leading analysts agree that the biggest story from CES 2019 was the announcement that Apple is making iTunes Movies and TV Shows and Apple AirPlay 2 available on Samsung’s smart TVs, starting with the new 2019 models and, via a firmware update, 2018 models. This industry-first means owners of the relevant Samsung TVs can access their existing iTunes library of content, and browse the iTunes Store to buy or rent from a huge catalogue of movies and TV episodes (including 4K HDR movies). AirPlay 2, which currently lets you stream content from Apple devices to an Apple TV and smart speakers, will also be made available for use with LG, Vizio and LG televisions, Apple has revealed.

Why is it such a big deal? “It is the first time Apple has made iTunes available on CE products from major rivals and it means that a company famous for its vertically-driven approach is opening up the Apple ecosystem,” explained David Mercer, VP and Principal Analyst at the research firm Strategy Analytics during Videonet’s ‘Post-CES 2019 Roundup: The Good, the Bad and the Ugly’ webcast this week.

Referring to rumours that Apple will launch its own OTT service, Mercer added: “You can imagine that Apple is preparing the ground to ensure more people can stream their video content to the big screen, which is where consumers prefer to watch.”

As Samsung pointed out at CES, the iTunes Movies and TV Shows will work seamlessly with the manufacturer’s Smart TV services, such as Universal Guide, which combines streaming and TV services in one place, and its New Bixby conversational digital assistant (their answer to Alexa and Google Assistant), plus search. “Bringing more content, value and open platform functionality to Samsung TV owners and Apple customers through iTunes and AirPlay is ideal for everyone,” is how Won-Jin Lee, Executive Vice President, Service Business of Visual Display at Samsung Electronics, explained the move.

Also speaking on the webcast, Paul Gagnon, Executive Director of Analysis & Research at IHS Markit, the research and analyst company, confirmed the Samsung/Apple announcement was the biggest take-away from CES 2019, in his opinion. But he also wanted to highlight another important TV set development: the arrival of far-field microphone technology (as found in smart speakers) on television sets, to support digital assistant voice conversations.

The Chinese manufacturer TCL is leading the way with the use of such technology in the TV set itself, Gagnon noted. “TV makers, in particular, have been concerned about privacy issues around always-on listening capabilities, but everyone recognises the trend for its adoption in smart speakers. This will open up television as a more conversational product.”

Another of the so-called FAANG disruptors provided the biggest take-away for Nigel Walley, Managing Director at the media consulting firm Decipher, who also guested on the webcast. This time it was Amazon, with its new (announced last autumn) set-top box, which combines an HD-compatible terrestrial receiver to pick up over-the-air channels in the U.S. (all available free) and a DVR recorder. This device (the Fire TV Recast) can also stream the over-the-air programming to other compatible devices like Fire TV, Echo Show and some Fire tablets, plus iOS and Android devices. It records up to four shows at once and streams up to two programmes simultaneously to other devices.

At the time of launch, Marc Whitten, Vice President of Amazon Fire TV, declared: “We are focused on making Fire TV an easy way to watch all the entertainment you love, whether it’s through streaming video services, cable and satellite providers, or even local broadcast stations.” This is a device that fits the cord-cutting narrative, too, providing a way for people to use SVOD with free broadcast content.

“I was completely bowled over on the Amazon stand and spent ages staring at their PVR,” Walley revealed. “This is a company at the heart of the VOD revolution launching what is effectively a piece of memory that sits in your house in an old-style set-top box. I think that is a fundamental statement about their impending shift to mainstream TV.

“They are being realistic, because broadband is not brilliant outside of Asia. And in most sophisticated TV markets, people are still watching broadcast TV. Amazon knows that if they are looking to launch devices that dominate in TV, they need to reflect the way most people watch at the moment. This is a broadcast-friendly STB.”

Amazon also featured in Walley’s CES 2019 highlights as one of the OS (operating system) providers to watch in the smart TV space. The company already has deals with TV makers: Fire TV Edition smart TVs made by Toshiba and sold by the retailer Best Buy started shipping in June 2018, as one example. Developers can publish an app for the Amazon Appstore and Fire TV to get their apps and games onto these televisions (and they can harness Alexa). Walley was impressed by the Toshiba smart TVs he saw running the Amazon OS, including their programme guides.

Roku is also busily porting its operating system beyond its own devices and into television sets. “A few of the big Chinese manufacturers have gone with Roku as their OS,” Walley observed. Indeed, Roku used CES 2019 to announce new models with Roku TV onboard from TCL and Hisense, among others.

Nigel Walley thinks the smart TV OS market will settle around a few big players. Samsung and LG will continue with their proprietary solutions. “Their operating systems used to be pretty poor, but they have taken a leaf out of the Netflix book [of UI development] and now they are pretty good for the first time.” Almost no other TV set makers will build or maintain their own OS, he reckons.

Amazon will succeed, “as they want every screen in the home running on their OS”. The rest of the TV manufacturer market will turn to Android TV (which will sweep up the mid-level and smaller TV manufacturer brands), Walley predicts. “Android has become the default OS for most smart TVs that do not fall into one of the other camps.”

The Videonet webcast, ‘Post-CES 2019 Roundup: The Good, the Bad and the Ugly’ also covered how Smart TV makers can make money from advertising, new screen technology and notably 8k, television home furnishing (particularly, the roll-up television screen from LG) and voice technology generally. The webcast is free to listen to, and available on-demand now.

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