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November 21, 2012
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Cross-device OS will be key development for Smart TV

The respected media consulting firm Decipher expects to see a consolidation in Operating Systems in the Connected TV marketplace next year and that is likely to include an increasing role for Android and Windows 8 – and maybe for Apple. The company also believes that the availability of popular catch-up and other on-demand content on the major UK pay platforms, Sky and Virgin Media, will limit interest in Smart TV media portals in Pay TV homes even though this is where most of the new devices are currently destined. Decipher believes Smart TVs are better suited to free-to-air homes, where the content offer is less comprehensive and there is more chance of attracting consumers to their content apps. The challenge for the CE companies, therefore, is to get more devices into those homes.

These were two of the many insights the company provided in the most recent of its Antenna Programme workshops, provided in association with MediaTel. Open to media professionals and held in Decipher’s iBurbia Studios, where every classic and connected TV service available in the UK is displayed, the session began by analysing the growth of catch-up TV content on Sky and the importance of this for keeping subscribers away from the catch-up apps now available within a few button clicks on a Smart TV.

Lloyd Mason, Business and Strategy Analyst at Decipher also predicted a new lease of life for the PVR in the next year as these devices are hooked up to home networks and morph into home media servers. Apps that let you find and then watch content on tablets are an early illustration of how consumers benefit when the PVR is part of the home network. But as Mason pointed out, this could be followed by the ability to drag-and-drop content that has been recorded on the PVR to an Apple iPad to watch outside the home, effectively turning the tablet into a mini-PVR. Place-shifting is another possibility, with consumers remotely accessing content that is on their PVR drive, with the content streamed to them wherever they are over the Internet.

The PVR could provide an efficient way to deliver content around the home rather than relying on the broadband network, too. “Eventually the PVR will leave the living room and go into the network but in the meantime having the PVR drive is valuable,” Mason said.

The workshop outlined the differences between the next-generation free-to-air platforms in the UK, both of which feature much improved user interfaces including compelling backwards facing EPGs that provide access to web-based catch-up services. However, Decipher does not believe they compete with each other.

<free time> from Freesat is a natural evolution of the existing digital satellite offer and is viewed as a premium option to go with zapper boxes and PVRs. Mason believes this service will appeal to the existing Freesat market, made up of homes that have churned away from Sky (and so can use their existing dish to get free satellite) or consumers who have moved into homes with a satellite dish attached. YouView addresses the existing DTT user base although, as Mason pointed out, its market entry is more complex because of its availability in three flavours: Simple (retail boxes bought by consumers themselves) and the BT or TalkTalk YouView offers that are part of a broadband bundle.

The Smart TVs demonstrated were from LG and Samsung and Mason highlighted the opportunity for special interest content providers to target a new market through these devices. A good example is the Berlin Philharmonic, which gives you a pass into its ‘digital concert hall’ for a monthly subscription. The estimated cost of developing a quality Smart TV app that includes integration with video delivery is around £100,000, Mason said. That is why the lack of standardisation across the different Smart TV platforms becomes a handicap [even if you can re-use parts of the apps development between them].

He pointed to the market reach you get with an Apple app, in contrast, then predicted the development of one or two standard platforms like we have seen in the mobile market. “We will see if the Smart TV manufacturers decide to allow an overlying OS on their televisions but we think it makes sense from a commercial point of view,” he said. Decipher views Google TV as a proof-of-concept for Android on TV, with any app built for that platform working across TV brands that support Google TV.

Decipher highlights the value of the vertical integration that Google, Microsoft and Apple can bring to the market. Microsoft has Windows 8 running on tablets, PC and phones plus a universal log-in the form of Windows Live ID that gives them a credit card relationship with customers, for example. But the company is also convinced that all connected devices like game consoles will remain connected to the television as the secondary input, after a platform operator set-top box, unless they integrate broadcast TV into the proposition much more effectively.

Mason does not believe the CE companies have the content to become the primary entry point to entertainment, whereas Pay TV operators can probably not match the deep integration between hardware, software and content that companies like Microsoft can provide. So he expects a symbiotic relationship between the two.

Taking the Xbox 360 as an example, if there is a Pay TV app on the console, Microsoft will still want consumers to see their desktop first but the operator, like Sky, might be offered a more prominent role when consumers start looking for video entertainment. “We would expect the apps that are front and centre to be from Sky or Virgin Media or maybe YouView,” he explained.

For more information about the excellent Antenna Programme, click here.