Many service providers already offer television, broadband and voice and some have introduced mobile to create the quad-play. The Smart Home is generally regarded as the fifth-play and encompasses a wide portfolio of possible applications, most notably home security (intruder alarms and video cameras, for example), home automation (like turning off lights and closing curtains automatically) and connected energy (smart control of thermostats and remote control of heating, as examples). Connected wellbeing (e.g. using inputs from kettles or lights to determine that a vulnerable person is awake and getting around normally) and connected medicine (like heart monitor data being sent back to care-givers via the cloud) have enormous potential. As the Smart Home is increasingly connected to the world outside, so it becomes a sub-set of the Internet of Things (or Internet of Everything), which is an all-encompassing technology and social revolution waiting to happen.
An important question for every service provider with access into customer homes and lives, including those who do not even offer broadband today (like some Pay TV operators) is what their role could be in the Internet of Things. The IoT/IoE is going to be so big, and will reach so deeply into our lives, that pretty much any company in the networking and communications industries needs to work out if there is a market opportunity (or maybe a threat) that awaits them.
This was the subject of a discussion at Connected TV World Summit earlier this summer when speakers considered the value-add that Pay TV operators can offer in the emerging Smart Home and IoT era. And the word that stood out above all others was â€˜trustâ€™. Pay TV operators have earned consumer trust over years of offering subscription services with billing and customer management, with secure data handling and a proven determination and effectiveness when it comes to respecting privacy. As consumers have to allow new software, connections and corporations deeper into their homes to gain the benefits that will come from the Smart Home and IoT, so they will want to deal with companies who can protect them and their families from outside attack or privacy leaks.
Goncalo Monteiro, IOE/IoT & Pay TV Senior Strategist, who offers advisory services to Pay TV operators investigating this market (having previously spent 16 years at a Portuguese telco and IPTV provider), highlighted data privacy as one of the big challenges and also one of the big opportunities for the IoT era. He asked: â€œWhen it comes to the management of your Smart Home, who would you prefer to confide in? Someone that you know and have a long-term relationship with like your telco. This trust is the biggest opportunity for Pay TV operators in the Internet of Things because it is already in place.â€
Because there are lots of companies who want to offer Smart Home services but do not have the same levels of consumer trust, Pay TV operators can build the alliances that will gather the solutions needed, creating a win-win for IoT applications and service providers and the platform (Pay TV) operator.
Dimitri Carbonnelle, Founder of Livosphere, which is an
IoT consulting firm covering strategy, technology and implementation issues (he is also an IoT expert at the French Public Investment Bank), believes Pay TV operators should partner with companies offering Smart Home solutions and bundle these with the entertainment offer. He agrees that platform operators can leverage their direct customer relationships. He also has a warning: â€œDo you want the direct interface to customers when providing Smart Home services or will it be the Smart Home companies who have that, with your Pay TV provided under their umbrella? Depending on where you are [in the value-chain] you could become the commodity or have the direct relationship with the customer.â€
Steve Christian, SVP, Marketing at Verimatrix, the content protection specialist covering set-top boxes and smart CE devices with unified CA and DRM management, has no doubt which route operators should take. He reckons it is no big deal for Pay TV operators, with established subscriber relationships, to offer more services under their umbrella. Beyond trust, operators must make it easy for us to manage the Smart Home for ourselves, without any technical expertise, and all services must be robust and reliable, he points out.
Christophe Rufin, Marketing & Innovation Director at Orange, in charge of the innovation team designing next-gen cloud, TV and digital entertainment services at the telco giant (he also created and launched Orangeâ€™s Cloud Pro suite of business applications) noted that for years the Smart Home was for geeks who had to build and manage the solutions themselves. Orange has changed that with its managed service for home security, where it takes responsibility for making things work.
Orange Homelive lets users manage a range of connected appliances in the home using a smartphone or tablet app and you can choose from a range of intelligent sensors and devices from Orange partners including weather monitors, thermostats, light switches, sound and movement detectors and cameras (all to detect intruders) and smoke detectors. Rufin told the London conference that home security services is a great first step into the Smart Home business. â€œThe first thing consumers want in their home is to be safe and secure and they want a provider they can trust.â€
He highlighted how important data security will be to consumers when they are dealing with their lives and homes, with the fear that the data could be exposed. â€œWhen you trust your home to an IoT system you have to trust your provider with your data and that data is as precious to you as your money,â€ he declared. â€œWe believe it is the role of the operator to manage this data. Unlike some other players, we do not provide services free and we do not give away or sell your data and that is a very strong message.â€
Goncalo Monteiro asserted that every analyst is agreed on the first two barriers to the IoT in our lives: personal privacy and data security. Steve Christian at Verimatrix also believes that secure data management will be a key role for the Pay TV platform operator in the IoT era. â€œHome security is interesting â€“ you are effectively bugging your own home and you donâ€™t necessarily want any advertising guys to get hold of the data!â€ he declared. â€œYou may not worry about people watching what you do on your smartphone but now we are talking about video feeds from your bedroom, and that is a different kind of data.â€
He said a Pay TV operator has experience in guaranteeing the integrity of end-devices. Currently these are set-top boxes or CE devices running video player apps, for example, but the same know-how can be applied to a camera, he suggested. â€œIt is about the ability to prevent someone being hacked and a device turned to the dark side. There is a strong relationship between managing media delivery to a set-top box, including regulatory compliance, and managing other devices.
â€œThe STB is business-critical for Pay TV operators. Think about the issues involved such as the integrity of the software and security of the communications and compare that to a medical IoT application, like managing a heart monitor where it is critical to someone personally. Operators have the right experience and the right level of regulatory visibility to be a good player when providing some of the applications that will follow. There are lots of parallels between media delivery and IoT applications.â€
Christian believes that Pay TV vendors like Verimatrix, though not directly involved in IoT services, have the technology integrations and partnerships that will be important to the wider IoT market. â€œWe have experience answering questions that will be asked for a wider range of applications,â€ he suggested.
So where is the money in the IoT or Smart Home for a Pay TV operator? â€œThe money will come from convenience,â€ Goncalo Monteiro reckons. He thinks freemium business models, allowing consumers to try Smart Home services and then pay for them if they consider them relevant enough, is a good way to build the market. IoT applications must make a real difference in our lives to earn revenue, whether it is the connected car or a connected watch that monitors our pulse if we have heart problems, or an app that improves security for our children.
And why is there increased interest in Smart Home services and the IoT now, when many of the concepts like automated curtains have been around for years? Monteiro cites the globalization of connectivity. â€œWith everything being connected it is almost inevitable that creative minds have started trying to hit big audiences and their wallets with solutions.â€
Christophe Rufin at Orange says the time is now right for Smart Home and IoT applications because connectivity has improved so much in the last ten years, with the Internet becoming mainstream as well as mobile communications commonplace. Network infrastructure plus the cloud are the driving technology forces. â€œPeople are now ready to use it,â€ he adds.
It is expected that there will be siloed ecosystems within the Smart Home, so that your security sensors will operate in a separate world to your car navigation system, for example. Sometimes the ecosystems will be joined togetherâ€“ and the connected fridge and ordering our shopping is a good example. There are concerns that an inability to access the mobility ecosystem, controlled by mobile operators and mobile OS giants, will be a significant weakness for a Pay TV operator in the IoT.
The ubiquity of companies like Apple, Google and possibly Microsoft, who are literally in our pockets much of the day, could make them key players in this new world, as Monteiro pointed out. He sees the smartphone as a key device that other new devices can use in order to â€˜talkâ€™ to us. Yet nobody will be able to offer the Smart Home or IoT solutions we need alone, so integration will be important.
Dimitri Carbonnelle at Livosphere pointed out that all companies involved in this market, including Pay TV operators, will have to be open and share some information with other applications using APIs. Monteiro thinks interoperability between the different software and devices is one of the main challenges to the IoT market.
He talked about the IoT as a giant wave that is coming and Christian at Verimatrix views the current Smart Home applications as the ripples that precede it. As more data is shared and more intelligence is harnessed and we start to look beyond the Smart Home to the Smart City, that is when the wave arrives, he predicted. Monteiro agreed that there is a much bigger IoT world out there, also covering manufacturing industry.
For companies in the Pay TV industry, the task is to decide what part of this new post-post-industrial revolution they can make their own. This is not just about service providers positioning themselves for the Smart Home and connected car but about technology vendors finding new places where their existing talents can be put to good use. We have previously reported on two instances of early positioning, with Verimatrix looking to become the secure data aggregator that oversees the data handover to a range of applications providers, and ACCESS becoming a data gatherer. Both companies have software embedded in devices found inside homes. Ciscoâ€™s ambition for the Internet of Everything market (as it prefers to call this) is well known. We can expect more new IoT related concepts and strategies to emerge from vendors, including at IBC next month.