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Ericsson's MediaFirst Integrates with Android TV

Jonathan Doran, Principal Analyst, TV

One of the key highlights of the first day of IBC was Ericsson's announcement of plans to integrate MediaFirst – its cloud-based service delivery platform that launched commercially in 2015 – with Google's Android TV. This move will expand the range of set-top-box software options it can offer to pay-TV operators.

The integration gives operators direct access to the Android platform, along with all of its associated functionality and capacity for accommodating rapid service innovation. Crucially, it brings together two key facets of the TV experience – the traditional, conditional access-based component upon which operators still rely for monetization, alongside the access to OTT apps and services that consumers increasingly expect – into a unified software and hardware environment.

While a handful of operators – including Swisscom and more recently TIM – have acted upon the benefits of flexibility and service agility associated with Android TV, the majority remain tied to the service options and user experiences dictated by traditional STB software vendors. This has resulted in a continuing fragmentation between the traditional (operator-delivered subscription services) and next-generation (flexible access to OTT services) TV experiences. The partnership between Ericsson and Google seeks to address this fragmentation by combining their respective TV software platforms within a single device. Importantly for operators, it also extends the integrated pay-TV / OTT environment to an ever-growing range of STB configurations, allowing them greater choice of hardware partners.

Related research:

"Android TV continues to expand via new devices and markets," TE0004-001085 (June 2016)

Conditions for 4K explosion on the cusp of being achieved

Adam Steel, Research Analyst, TV

From 4K broadcasts of the Rio Olympics to the launch of Ultra HD (UHD)-capable STBs, 2016 has been a year of firsts for UHD television. But despite every "UHD first" that brings 4K content from niche channels into the mainstream, the technology still faces some key challenges.

Speaking at today's IBC Conference, Andrew Beale, chief engineer at BT Sport, outlined a number of these challenges, pointing to: 1) a lack of industry standards; 2) issues around cameras and lenses; and 3) a dearth of UHD-capable STBs as major barriers for UHD broadcasters. While problematic, the good news for those invested in the technology is that solutions are rapidly emerging.

For instance, the Ultra HD Forum – a global organization responsible for promoting market adoption of Ultra HD by defining industry best practices – made the latest versions of its industry guidelines public prior to IBC, while an increasing number of pay-TV operators are launching UHD-capable STBs along with UHD services – in the UK, Sky's new set-top box Sky Q is just one example, while the broadcaster has also added 4K capabilities to a new version of Now TV, its standalone OTT product.

But perhaps the most promising thing to emerge, so far, from IBC 2016 for UHD is Netflix's announcement that it plans to expand its UHD offering, aiming for more than 600 hours of 4K content by the end of 2016. So, while the conditions for UHD broadcasting ripen, broadcasters' success may well also be assisted by Netflix's – and, more generally, digital media's – ability to expose customers to this kind of content en masse.

Related research:

4K UHD Technology: Go-to-Market Strategies and Future Outlook, TE0004-001074 (April 2016)

Industry embraces Netflix, as its numbers continue to impress

Tony Gunnarsson, Senior Analyst, TV

Netflix's vice president of business development for EMEA, Christopher Whiteley, began his morning keynote presentation at IBC 2016 by dropping some impressive numbers about Netflix's business: The company now has more than 83 million subscribers globally across more than 190 markets, and its subscribers now watch on average 125 million hours of content every day. Netflix says that in 2015, it saw an overall increase of 46% in viewing time over 2014, up to 43 billion hours screened during the year.

Driving such traffic on its services, of course, costs the company a lot of money. This year it will have spent over $800m on technology alone, but it is a small sum compared to its massive $6bn commitment to producing original content this year – including the recently announced third and fourth seasons of its hit show Narcos (due 2017).

Whiteley says that service growth remains very strong, particularly internationally, following the near-global expansion of the service in January 2016. One interesting benchmark to look out for is that the international segment will overtake the US "very soon" – which Ovum's analysis shows is likely to happen in 2017.

In the Q&A session following his presentation, Whiteley said there had been a shift in mindset across the industry, which is now much more inclined to work with Netflix. Netflix's huge commitment to original programming has helped, he said, as Netflix is no longer directly competing with pay-TV operators for content. And partnering with Netflix is proving to be a mutual customer-acquisition tool, which explains how former archrival Comcast has ended up signing a deal with Netflix to place the streaming app on Comcast STBs later this year.

Related research:

OTT Video Innovation Tracker: Focus on Netflix and SVOD, May 2016, ME0003-000679 (June 2016)

Eutelsat to drive HDR adoption with new channel launch

Holly Reid, Research Analyst, TV

In an attempt to drive the industry-wide adoption of High Dynamic Range (HDR), satellite operator Eutelsat has used IBC to announce the launch of a new UHD HDR channel named Hotbird 4k2 HDR. It is set to broadcast across the Hotbird "video neighborhood" – an area covering 135 million homes throughout the EMEA region. The channel, which will feature a variety of sports, wildlife, and cultural content from 4Ever-2, DBW Communication, The Explorers Network, and RAICom, will broadcast at 50 frames per second and use 10-bit color, HEVC encoding, and the Hybrid Log-Gamma (HLG) standard developed by the BBC and NHK.

With an increasing number of TV manufacturers, OTT service providers, and Hollywood studios adopting the format, including global streaming services Netflix and Amazon Prime, Ovum expects consumer demand for HDR content to grow substantially in the coming months and Eutelsat's move provides an important opportunity for traditional linear broadcasters to enter the market by providing the necessary platform as well as invaluable expertise.

Related research:

"Netflix and Amazon compete in the race for HDR content," TE0004-001091 (July 2016)

Curzon calls for release-window shake-up

Adam Thomas, Lead Analyst, TV

The first day of IBC 2016's Platform Futures stream featured a very interesting presentation from Curzon Home Cinema. During a session called "The New Broadcasters: From bricks to clicks," Curzon called for a further shake-up of the sequential release-window system, specifically arguing that the window for cinema releases should be shorter and also no longer remain exclusive, i.e. it should be in alignment with the digital window.

Ovum's research on the topic has found that the mature and developed markets of North America and Western Europe, as well as developed Asia-Pacific markets such as Australia, broadly enjoy the same release windows. Markets in Latin and South America, and the developed markets of Middle East, Africa, and Asia also share broadly similar release windows.

India, Russia, China, and South Korea are exceptions, whether because of piracy, Internet speeds, or local preferences for local films, these markets tend to have radically shorter, or longer, release windows than the rest of the world.

Current theatrical release windows around the world, whether by law or by agreements with studios and distributors, are largely set on a permanent basis, as cinemas are very protective of the exclusive theatrical release window. Our view therefore is that it is highly unlikely that existing cinema release windows – typically four to six months' exclusivity – will be cut substantially in the near future.

Related research:

Content Release Window Strategies, ME0003-000502 (November 2014)

Appendix

Authors

Holly Reid, Analyst, TV

holly.reid@ovum.com

Adam Steel, Research Analyst, TV

adam.steel@ovum.com

Adam Thomas, Lead Analyst, TV

adam.thomas@ovum.com

Jonathan Doran, Principal Analyst, TV

jonathan.doran@ovum.com

Tony Gunnarsson, Senior Analyst, TV

tony.gunnarsson@ovum.com

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