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Over the Top…or Managed IPTV?

My 4 year old daughter cannot tell the difference between a Desktop Monitor and a Flastcreen TV, and I really can’t blame her.
After all, they both could be 29" and are great for displaying. And after having seen the new "TVs" in Las Vegas at the International Consumer Electronics Show, it is going to be even more difficult to tell the difference, as the main trend in the TV industry is the internet, at the same time as the main broadband internet trend is TV. For me, it is clear we are entering the third phase of the fixed broadband evolution, where the first was internet surfing and the second was all about triple play. The third wave is very much about the big leap forward to high definition on-demand video to all big screens. But at the same time, two different business models––over the top internet distribution and managed IPTV offerings­––are competing/complementing for the user attention and wallet. The associated challenges could be divided into a few different categories: traffic volumes, direct revenues, indirect revenues, quality assurance and support. Independent if the TV and video traffic is distributed over the top or the managed way, the traffic will inevitably end up in the broadband network, and since the trend towards on-demand and high definition is so strong, it is reasonable to assume there will be a significant traffic increase. There will be no real way of avoiding it if we want to keep users, happy and if we want them to fully leverage the new TV devices that they will bring home. So the key questions are rather: A) Who earns the money from direct, as well as indirect revenues? B) Who will provide the required user support? C) Who will secure that the high definition experience also becomes a high quality experience? The broadband operators are in a good position to capture a good share of the revenues coming from the users in forms of broadband and IPTV service fees. The indirect revenues, in terms of advertising revenues and quality assurance fees from service providers, are less mature and a lot of innovation can be foreseen. And given the fact that TV ads have moved from national to regional/city-wide the translation to personal ads, enabled by personal on-demand streams, provide an array of opportunities. The only way I can move away from my 24/7 responsibilities as the family’s private helpdesk is when the service providers have a number that can be called and solutions be provided. No one calls the public service TV company if the internet TV offering does not work––they call their broadband provider first. The ability to get support if you want, and when you need, is likely a strong competitive differentiator between providers going forward, especially as we are moving into a more complex environment of devices and interface combinations. Last but not least, the idea that bandwidth is for free and great quality will always be in place might be an over-exaggeration. Given the very steep increase in traffic that high definition TV will generate, there will be a need for providing a Diamond Lane (the carpool lane in the US where you can travel if you are two in each car) for the TV/Video traffic where the network provider secures the required capabilities and where the cost of doing it need to be funded from a combination of the direct and indirect revenues generated by each user. The question isn’t will managed and over the top IP based television co-exist; it will. The question is how big can it become, and how will the traffic pattern be distributed among the two.

‘Hey hey, my my’

"Rock and roll can never die There's more to the picture Than meets the eye. Hey hey, my my. Out of the blue and into the black You pay for this, but they give you that And once you're gone, you can never come back"
Quoting these famous Neil Young lyrics seem strange when you’re talking about TV, but stick with me. I think that we will see something really fascinating in the "TV arena" in the near future. Something that, for the first time, will give both the "consumers" (though they could be called pro-sumers as users tend to produce nowadays almost as much as they consume) and the industry what they have been looking for. Imagine that there is away to give both the consumers and the industry control. Impossible, you say. Very possible, I say. After all--"There's more to the picture than meets the eye" First things first. I think we need to redefine the context in which we watch TV. There are no longer any TV sets, there are just screens. We will consume "TV" on TV sets, computer screens, mobile screens, any screen that is connected. Secondly, there is one thing that will change dramatically – interactivity. The internet proved that people want to engage, well beyond the red button that just turns the screen on and off. On that front, the TV industry has failed completely. Thirdly - combing the first two elements above – TV on any screen and interactivity– create a business model that will be disruptive if you add the words "Managed" and "Open.” What does all this mean? It means moving from the network to networked. It means we put demands on our cable company or phone company to delivers the service. It means that we want quality of service, whether it is in the upstream or the downstream. So what about the business model and the revenues? Well, companies need to thin out both downstream AND upstream. Because if quality is not good enough for the consumers when they watch Internet TV, maybe the internet players are willing to pay for managed connectivity, just like video game developers like Blizzard pay for a good gaming experience with World of Warcraft. The internet companies will pay for delivery of their "TV experience,” and where will the non-internet companies be then?

You ain’t seen nothing yet

We have just taken the first steps in a major transformation of how we define, produce and consume media in general, and TV specifically. Some would argue that our first few steps have already been quite a big transformation.
“To find something comparable [to the internet], you have to go back 500 years to the printing press, the birth of mass media – which, incidentally, is what really destroyed the old world of kings and aristocracies. Technology is shifting power away from the editors, the publishers, the establishment, the media elite. Now it’s the people who are taking control.” Rupert Murdoch, Wired Magazine Issue 14.07 - July 2006 The internet is the tool that we, the consumers, needed to gain the control we had been looking for. We were then able to take control of the one-way, centrally directed information stream that was being pushed at us. We could go straight to what we wanted, when we wanted it and how we wanted it. Suddenly we could blog, podcast, write and produce videos. Meanwhile, the popularity of YouTube, MySpace, iTunes, and so on, grew stronger and stronger. It’s pretty clear that the days of top-down, force-fed, one-size-fits-all media are over. The consumers are in control. So now we are moving away from a linear model where we are offered scheduled TV, which can feel like an appointment where we have to sit back and watch the TV program and, most importantly, the advertisements. The media houses delivered content that they thought we liked. But those old days are gone. The new imperative is to deliver precisely what audiences want, when and where they want it. So now we are moving towards a networked media model where everything will be on demand, whenever, wherever, and it will be an active experience, thanks to new interaction like voting, chatting and uploading. Since it is on demand and participative it will be content they know we like – because we have told them what we want! So what does this all mean? Well, what’s most important is that we must redefine what TV is. Today, among the digital natives, TV can still be seen on the traditional TV set, but more and more, it is about the computer screen as well as the mobile phone screen. More to come about the importance of social networking, chat, and new services on TV…

Hulu going International

I usually have a Hulu slide in my 'multimedia trends & innovation' presentation. Like BBC iPlayer, there is something trendsetting here in the behaviour of a media player and the behaviour of the end-users.
For those not in the know, Hulu is an American service that currently airs shows from NBC and Fox as well as other programmers including E! and the Sundance Channel. The news that Hulu is going international, announced a few months ago, is fraught with digital rights hurdles to be sure, but it is a potentially disruptive move. For example, it could give Fox a channel to users overseas who would otherwise would have to wait a few weeks for their local TV to distribute the program. News Corp president Peter Chernin says "Hulu will eventually be the leader in premium online TV worldwide - that's the aim. We are working on going international and you will see this in the future. We will probably look to do a series of joint ventures in local markets to roll out Hulu internationally." One to watch.

Location-Free TV or a Location Free from TV?

After a year together, I can’t find anything better than my primary TV. But can our happiness overcome locations free from TV?
Happy anniversary: my desktop PC and its 29" flat screen and I have just celebrated one year of it being the primary TV in my living room. All in all, I’m a happy user: It has nice big flat screen and access to regular TV programming, as well as some new favorite shows from the internet; and the interactive Public Service TV has just been upgraded to a new high quality version. But how do I transfer this TV environment to follow me wherever I go, at least as long as I stay in the country? I am currently restricted in terms of access to this environment from a single physical location–my home. If I would like to move around with access to the basic broadcast channels, I need to sign up for a new terrestrial and/or satellite service that are only available in 12 month packages and with use restricted to another physical location. If I would like to carry the interactive sessions with me, I need a Broadband connection at the new location that can match my TV consumption needs, often with varying levels of quality. I have been a low to mid-end TV consumer for most of my life, primarily due to the mismatch between program schedules and my personal schedules. But things are starting to change now, and I am eager to explore what alternative I might have… There are two things that stand out with what I desire out of my TV experience: the ability to switch between TV programs and on-line sessions and between getting fed with information, and following up with own research immediately for facts that I do find questionable. The second one is the ability to get access to some of the public service TV programs that I have always liked, in ways other than the traditional TV set, so that I can enjoy these programs on other sofas, beds and relaxation points, other than the ones that are placed in front of where I have placed the TV sets. I am just looking for how to take these concepts one step further and how to take them with me wherever I might go for a weekend. Why should you leave something behind that helps you to relax?

3-screen experience for Volvo Ocean Race

For some people, over two years of preparation came to a sudden end October 4.
At the same time, the broadcasting preparation that would bring their story to thousands of viewers continued at full-power. I’m talking, of course, about the Volvo Ocean Race. At 1 pm October 4, the first in-port race in Alicante started, which sailing crews have been training for for years. For the first time in history, their efforts were simultaneously broadcast live over web and mobile, all around the world. The common consensus among those who watched was that it was beautiful weather, excellent sailing–and brilliant streaming. But, as always, what people do not see is just as impressive as what they do see, and a lot of work went into ensuring a great streaming experience. When you think about it, just how does video get off sailing boats in the middle of the water to somebody’s PC in Brazil, and somebody’s mobile in the Netherlands? Well, the process begins with capturing the content. There are more than 50 HD Sony video cameras filming, on helicopters and chase boats, as well as the main boat. These cameras transmit video back to shore via microwave transmitters on each boat and helicopter. After that, the content travels to the video production room. All boats and helicopters broadcast continuously but only two signals are ever received in parallel. One is the live production feed, and the other is the scanning channel with shots from the other boats/helicopter. Once these feeds arrive in the production room, the producer chooses the shots and puts together a polished final product. So now we have the production–but unfortunately, the only people that can see it are in a tiny hotel room in Alicante. Not a huge audience even if you try to squeeze more people in. The next step is to get the feed back to the media room, where it’s pushed onto the internet via a caching provider. Finally, the feed can be advertised on all of the web sites and when somebody clicks on the Volvo Ocean Race TV player, requesting to watch the live race, the caching provider decides where the closest streaming proxy is and voila - you are watching it all live! Well, now we’ve gotten the content to computers around the world—but what about the mobile phone viewers who want to watch the race on the go? It’s actually pretty simple. When someone requests the live link from their mobile, the feed has be transcoded live to whatever encoding and bitrate that works best for the requesting handset. And that’s that! Now anyone from Brazil to the Netherlands to India and everywhere in between can watch what is going in a little point in Spain, from wherever they are and on whatever device they have. Not bad, huh?

What is your tele-vision about the next Olympic Games?

Perhaps you are already working as a televisionary to get your full service broadband network in place for Vancouver...
The first Olympic Games I ever watched was the 1972 games in Munich. Back then, only one channel covered all the games, the time-zone was not an issue for us in Sweden, and the entire world watched as an American swimmer set a world record when he won seven gold medals. Fast forward to 2008 and things have obviously changed. Besides the fact that the 2008 Beijing Olympics happened on the other side of the world and saw another American swimmer beat the 1972 record, we now we have a myriad of channels and great coverage on the web. This time, I watched the games while sitting in a brand new hotel in Boston (launching the new Televisionary messages to the analyst community) with a 42” HDTV, a state-of-the-art notebook with wired and mobile Broadband access, and a mobile phone with all the latest features and mobile TV capabilities. It can definitely be said that we have seen a lot of progress in the last 36 years, but I think what will be more remarkable is the amount of changes we’ll see between now and the London games, thanks to the current fast past of innovation. If we are to make similar advances in the years to come…what will they be? How will televisionaries experience the London games in just 4 short years? First, the number of sports included in the games is so vast that it can be easy to lose track of my country’s athletes. I want to be assisted with a MyGames tool where I can program in the sports I’m interested in, and get alerts of when they’re on, and replays whenever I want if I miss it. Second, the time-zone issues need to be eliminated. Instead of real-time, I would like to get my pre-made selections to be made available in relay-time, i.e. a collection of video streams for all the key things that has occurred since my last viewing, one after another, decoupled from channels and focused on the events I would like to cover. They could be spiced up with the producers’ picks of the day, and some commercials matching my interest to make the experience affordable. Third, I would like to have the freedom to access my Olympic Games interests from my HD capable TV, my connected notebook, or on my mobile phone (and any other new MID devices that will develop over the next four years). This year our solutions contributed to the MPEG4 encoding of the high definition content distribution. Now it’s time to join in creating a delivery environment where end-users will get their next Olympic experience in a time zone referred to as NOW, with a coverage they refer to as PERSONAL, with a choice of access device they will remember as ANY, the only restriction being that it has a screen. What is your tele-vision about the next Olympic Games in London? Perhaps you are already working as a televisionary to get your full service broadband network in place for Vancouver…

What was happening at IBC?

There was a lot to see at the show, with top-hitters being mature solutions for HDTV, IPTV, and Mobile TV technologies.
All these areas now have a well-served eco-system of suppliers, and, of course, the larger suppliers were showing integrated end-to-end solutions, which are deployment ready. There was not the same emphasis on on-demand and advertising that I'm used to in the North American market - it is not that the technologies were not being demonstrated, just that they weren't front and center in many cases. In addition, some newer technologies were generating quite a buzz; 3D and higher-than HDTV picture resolution. HDTV displays were everywhere and all of the other stages in the productions process were well represented too. At the same time I heard of lot of complaints from Europeans that there isn't much HDTV content to be had in the home, so Europe is, in general, way behind North America in this aspect. In addition, there were a lot of 4K displays (twice the resolution of HD) showing quite stunning pictures - it is obvious that video display technology will not stop at HDTV, and that display and camera technology is evolving much faster than the other components in the production chain. Since HDTV still seems to be slow in taking off in Europe it could be that a hybrid IPTV model might do well here; a lot of operators may decide to combine satellite or terrestrial broadcasting (for live events like sports) with IPTV for narrowcast programming and on-demand. IPTV was everywhere at the show. It seems IPTV is finally ready to take off - after a slow start conditions now seem perfect for rapid adoption and deployment by operators. IPTV system requirements include high-performance; cost-effective set-tops, mature middleware, efficient MPEG-4 AVC compression, reliable networks and robust security, and these are all in place. In addition operators want a supplier that can deliver a complete, field-hardened solution tailored to their needs; and there were many to pick from at IBC. Ericsson's IPTV business solution created a great deal of interest as the first IMS-enabled solution allowing TV to be personalized across 3 screens (TV, PC, and mobile). Mobile TV is expected to grow from 11 million users in 2006 to 356 million by 2010 according to Gartner research. Mobile Zone at IBC was packed with mobile video devices and the emphasis seemed to be on broadcast solutions like DVB-H and MediaFlow. In Video-on-demand, there wasn't quite the maturity of the market that we see in US. However, this no doubt will change. Edgeware were probably the biggest attraction for me at the show as their technology is truely disruptive, and demonstrates neatly why educated operators choose our TANDBERG Television OpenStream product. The Edgeware video server platform can deliver 10,000 streams from a tiny 1RU platform because it uses FLASH storage (instead of hard disk), with only 85 W power dissipation. 3D seems to have finally come of age and was the darling of the show. It seems that all of the technology has finally matured and this is no longer a gimmick, so we can expect to see a lot more movies either all in 3D or with 3D segments. Having said that only nine digital 3D have been released to date. "Journey to the Center of the Earth" is the first live-action movie shot in 3D. The show featured the first live 3D HDTV transatlantic broadcast of an interview with Jeffrey Katzenberg, of DreamWorks, and he said he believed all movies would be in 3D in 5-10 years. Part of the interview was two clips: one was a segment of Kung Fu Panda completely re-authored in 3D, which was visually stunning. He also showed a segment from the new animated movie Monsters and Aliens - this entire movie is in 3D. The realism and effectiveness of the 3D authoring is now so good that even in a short time you become totally immersed in the story telling. Obviously the 3D technology gives theatrical screenings an advantage over the home. However Katzenberg predicted that the next step to put the technology into the home where it would be particularly important for gaming on the laptop. Super Hi Vision This is a demonstration of the next level of quality - and is being demonstrated by Japanese broadcaster NHK in partnership with the BBC, IRT and RAI. The technology is called "8K" because it quadruple the horizontal resolution from HDTV - HDTV is 1920 horizontal pixels, Super Hi Vision is 7680 horizontal. The same is true for the vertical res which is quadrupled from 1080 to 4320. This provides an image with an amazing 33 megapixels being refreshed 60 times every second. Not only that but the audio is greatly improved to 22.2 channels (including one above your head!) this allows the sounds to be much more accurately positioned for greater realism. What does this mean? Essentially it allows a much more immersive experience because you can have a very large screen and still be close to it - to see fantastic detail, But still be enveloped in the experience of the picture.- this would also be great for sporting events - allowing you to see the entire football field in exquisite detail for example. When it it coming to your home? Well don't expect this one until about 2020 according to the pundits - although it might be used for digital cinema a lot earlier than that.

Why mobile-TV?

Why would anyone want to watch a football game (or any kind of favorite entertainment) on a mobile phone? The short answer is: they won’t—if they have a choice.
Why would anyone want to watch a football game (or any kind of favorite entertainment) on a mobile phone? The short answer is: they won’t—if they have a choice. If you love football, hockey, dance or just about anything else, you will want to watch live or as close to live as possible on the biggest and best screen you can find whether at home, in the bar or pub or elsewhere. Two years ago consumer surveys showed that as many of 50% of the people who bought digital flat-panel sets thought they were receiving high-definition when in reality they did not have a HD signal. Today that problem is disappearing and once a viewer sees real HDTV he or she can immediately discern the difference. Today the difference between traditional analog television and digital HDTV has never been so great. Early studies show that people watch more television on HDTV and seek out HDTV programming because the experience is so remarkable. When you compare large-screen HDTV to viewing video on a mobile, the comparison jumps to ridiculous proportions. Our choice is now between a home environment that resembles a movie theater and a small handheld screen half the size of the palm of our hand. So the question remains, why would anyone watch programming they like on a small, mobile screen? Think of the home HDTV as the home base of television viewing in your own comfortable, secure environment with the biggest screen your budget or wall allows you to own. In the past almost all of our television viewing was confined to “home base” and in the days of rigorous network scheduling we would plan our social schedules to be at “home base” before our favorite program aired. When we have a choice, we want to watch our favorite shows at home base with the people we love on the biggest screen we can get access to. We watch our favorite programs on those small screens in our pockets when the programming is so important or compelling we want to watch as soon as possible, no matter where we are and before we have access to the big picture. We may be hours or thousands of miles from home base and the desire to view the program exceeds the desire to see it on a big screen. We watch on our mobiles because it is the way to gain immediate access. Shortly after 9/11 the Center for the Digital Future launched a major survey to see how Americans found information about the tragedies in New York and Washington. Use of all media was increased, including radio and especially television. The increase in radio use stemmed from the extraordinary interest in news around 9/11. However, the number of people listening to radio only increased among those who did not have immediate access to television. As soon as they had television access, radio use dropped. Radio was a way to still know what was happening until they could get to their preferred medium (at least for that event). We see the same behaviors where video on mobile is concerned. But, consumers will also watch on mobiles because it means they can carry television with them, outside the house and as a way to always have something to fill time. We still reserve our favorite television and video for the big screen at home base, but mobiles can carry all the other video we have interest in watching. And surprisingly, as much as we love the big HDTV picture, the role of the picture is not as important as we think. About 15 years ago, I arrived in Hong Kong just before a typhoon was about to hit the area. When I got to the hotel, they warned me there was only one room left and that room had a defective television; it had sound and no picture. Wanting to remain dry and safe, of course, I took the room. During a typhoon there is little you can do besides sleep, read, eat and watch television. Over the next three days I “watched” a great deal of television (without the picture). To my great surprise, my comprehension level of the programming I was “listening to” was about 95%. What little I could not understand, not having a picture, almost always became clear in the next line of dialog. My best guess is that if I had a picture and no sound, my comprehension level would have been no better than 20%. As much as we love the picture, especially the big HDTV pictures, the truth is that almost all the message is in the sound. And where mobiles are concerned, it is not a case of no picture, but a small one. When we want to watch something that fills a full screen, we will always seek out a movie theater or the closest thing to it. George Lucas understood this when making the first “Star Wars” film in 1977. After the scroll, the first scene is the spaceship filling the entire screen and rocking the theater. No one wants to watch “Star Wars” for the first time on a mobile phone. The same is true of our favorite sports or television programs. Mobiles mean, however, that we can view when we can’t get to the big screen and they also mean that we will be watching far more than our two or three favorite shows and can watch in any environment, anywhere we are.

The need for a Prime Integrator

A Prime Integrator is needed to help operators make the most out of the opportunities, following the evolution of Media, Internet and Telecom.
The evolution of the three areas Media, Internet and Telecom means a new market has arisen with consumers asking for new types of advanced services. As the players in these areas come closer they need to interact to meet the consumer demands - the complexity increases – both business and technology wise. As the need and usage of web and TV related services continues its phenomenal growth, the need for telecom providers to open up their network and facilitate delivery of these data services is growing fast. To make the most out of all the opportunities, following the evolution of Media, Internet and Telecom, many operators must radically change the way they do business. This will not happen over night, it is a process over several years. For many operators this transformation affects different aspects of their business. It may involve a technology shift; where broadband will be the common denominator for any type of access to telecom and media services. It may involve acquisitions as a way to rapidly increase market share and get access to infrastructure. During a technology migration or a merger a telecom operator must maximize the use of all their existing assets and continue with day-to-day operation. Then there is the never ending search for cost efficiency that might lead to a restructuring of operations and overhaul of the support systems. There are always ways to work smarter and cut cost. But let’s not lose focus here, the most important thing is, and always will be to stay focused on the core business – to keep consumers happy and continue to create new services. The true convergence of the three industries and the transformation involved is driving demand for business, process, complex network and content integration, efficient data delivery and its management, which all in all is the key for the growing demand for prime integrators. A Prime Integrator is a trusted business partner - who performs and coordinates aspects such as service fulfilment, solution deployment, end-to-end integration, and business process integration. For many of the critical challenges that operators are facing right now, using a partner taking the end-to-end responsibility, including the handling and integration of multiple vendor solutions, operations etc is the right way to go. Based on a common understanding of operators’ strategies, a strategic partner can take on any level of scope in a variety of roles ensuring the business success - “small to everything and anything in between.” So, what is the business case? For operators there are several business opportunities arising: • new sources for competitive advantage, moving into the media value chain, win more customers, be more competitive • top line growth for potential application and services, new revenues sources when customers spend more • launching TV services means tremendous amount of more stickiness making customers stay longer Main challenges for making IPTV and mobile TV fully successful: • level of innovation • what role will advertising play? • pricing - nothing happens in this industry unless the pricing is right Working with a Prime Integrator allows operators to focus on their core business goal of customer satisfaction. A Prime Integrator act as a single point of contact for operators confronted with complex projects, specifically those involving multiple suppliers or subcontractors. With thorough insight into the technical complexity of the network and service evolution, as well as the ability to carry out vendor-independent integration work, this expert business partner carries the ultimate responsibility for project completion.

NXTComm

From Lite products and Big audience to Lite Audience and IPTV sized pipes
At SuperComm in 1998 there was a big crowd in Atlanta and the Broadband theme at that show was DSL.Lite. Since then the show has changed its name (a few times) to NXTcomm and moved to Las Vegas. The take away this year was "lite" with respect to audience “big” when it comes to IPTV capable networks (powered by fiber access and cost efficient aggregation networks). The driver behind this evolution is IPTV and the need to differentiate your services towards established TV distribution alternatives. This is most certainly the case if you are serious in pursuing a competitive broadband offering beyond mainstream triple play or basic surfing. As we move toward the Individual TV Experience fewer and fewer operators are turning to a consolidated list of vendors to address the issue of how to create strategic differentiation in the TV market place. This is not dissimilar to what has already happened for telephony and is happening (as we speak) for high speed Internet access to notebooks. Four major differentiation opportunities exist: 1. Exploit the multi-stream/HDTV/On-Demand potential - enabled by a high downstream capacity towards the user. 2. Exploit the fact that user has moved from consumers to prosumers of Media - enabled by a high upstream from the user towards the network (as a note I record all my video content with a HD enabled camera, but still send the DVDs by snail-mail to friends and family, which feels a bit 1990-ish) 3. Exploit the ability to combine multimedia communication and media consumption - enabled by IMS. The digital natives will never understand why we voted in the Idol TV programs with our mobile phones and not directly on the screen 4. And last but not least, exploit that TV is moving from being one service on one device towards a world where TV can be accessed on a variety of devices – Any platform, Any device™. I was invited to a panel on home networking at NXTcomm. The most remarkable fact in that session was the mention of 33 standardization bodies worldwide that are attempting to standardize various parts of home networking. Sound like a bit of a challenge for the all players to pick the right one and hope that all other players have picked the same one. I think we are getting to the point where a multitude of parallel standards (that we by heritage have developed on the Fixed Broadband side) are about to come to a halt and reduction to a few vital ones. This will be especially relevant during the next 12 months and could be the turning point we have been waiting for to make our 1990 dreams about IP Tell-A-Vision a reality. Stay tuned

Television will grow in importance

While most media (theatrical film, music, newspapers) will thrive, it will be as smaller businesses in a digital era. Television, as it merges with video (and the two terms become indistinguishable), will grow enormously in importance and become a much bigger business than it ever was before the web.
Our work makes a compelling case that users will watch video on small, mobile screens and not just two- or three-minute clips or trailers. We already see the interest in viewing 30- and 60-minute shows and some films as well. Sometimes those long programs will be watched straight through when waiting for a delayed airplane and sometimes they will be watched in 10 or more parts filling in the little pockets of time during the day. At the same time that consumers across the globe are putting mobile screens in their pockets or purses, they are also buying bigger and better screens at home than they have ever had before. The gap between the theater and the home has never been so narrow and the time gap has never been so short. The big-budget film we have never seen before and our favorite television program will be viewed on the biggest and best screen we have available, but much of the rest of our viewing will move, in large part, to mobile. No one will ever watch “Lord of the Rings” for the first time on a mobile device, but they may well watch it there for the second or third viewing. Thirty years ago all television viewing was on one screen and total screen time averaged about 16 hours a week. The addition of a second and third screen has brought screen time up to 34 hours a week and changed the rules of viewing. Teenagers barely understand the concept of watching television “on someone else’s schedule.” In a few years our stories of watching a program at a prescribed time (and we had to plan our schedules around it) will sound to teens the way our great-grandparents would have sounded describing horses and buggys. In a mobile video area television will no longer be confined to the home. Until now, television barely existed outside the home; the exceptions were the hospital or the bar. Soon we will carry our televisions with us everywhere. We will watch while waiting at the airport, on the airplane itself, in the back seat of cars (hopefully not the front seat while driving) and anywhere else we have a few minutes to view. As we carry our “television sets” with us, video becomes our constant companion filling the little gaps of the day and alleviating boredom. Until now, voice has been our constant companion filling the downtime of the day. If we are delayed waiting for a flight, we pull out our mobile phones and begin calling people. Only after they answer do we determine whether we really have anything to say. We are communicating to fill empty time that arrives, usually unexpectedly, in our lives. Many of the people we call have already figured this out when our calls are met with: “I guess you’re stuck somewhere and called me because you have nothing better to do.” The filling of downtime will move from telephone calls to television and video. We will fill that time with television programs and other sorts of video that we have loaded from our home servers or have streamed directly to our mobile device. When people around the world are asked if they had to give up their mobile phones, the Internet or television, just about everywhere except the U.S. would give up television first, then the Internet and finally their mobiles. America, with its less sophisticated mobile system, would still give up television first, then mobile phones and finally the Internet. Of course no one will ever be forced to give up any of these devices or services (except possibly in a few instances for economic reasons), but we see that television, the first service everyone would abandon (if they were forced to), is about to grow immensely in importance. It is coupled with both the biggest and best screen at home that in many instances resembles a theater screen and now it is also coupled with the most valuable of all screens that can be found in the pockets or purses of one-half the people on Earth. The third screen is dramatically changing the economic and social importance of television. There are still important issues to be decided, including how consumers will “pay” for content and how those revenues will be divided between content providers, telcos and handset manufacturers, as well as issues of intellectual property and the ability to move content freely across platforms. While those issues still need to be worked out in a way that provides an economic incentive to create and distribute content in a way that satisfies consumers, it is clear that television, as it merges with video, will have a brighter and more universal appeal than it has ever had before, now that digital will increase its importance in our lives.

Ericsson is in the TV business?

Before we answer that question, let’s get to a few other things - housekeeping items if you will. A warm welcome to the first ever Ericsson Televisionary blog! In the coming months, you will hear from both Ericsson and third party Televisionaries about the fast moving and “oh so much fun” TV market. Additionally you can browse through this campaign site to find podcasts, videos, articles, press releases and other materials that all relate to TV.
You will find that at Ericsson we are quite passionate about TV. But passion and innovation are nothing new at here. We have been defining and improving the way people communicate for over 100 years. Take a moment to consider the traditional telephone experience. Using a phone used to mean being physically near a device that was tied via fixed line to your home or office. While that experience still exists, it has been dramatically improved by the advent of mobile networks and mobile phones. Today we think nothing about communicating with our friends and family from anywhere in the world at anytime; Ericsson was and is a key driver in this paradigm shift. At the core of that shift was Ericsson technology, passion and innovation. We are now applying these same ingredients to the transformation of television. There is no reason the market should not expect Ericsson to have a major role in this here as well. As you might expect, I am quite interested in TV myself - both as a consumer and in my role at Ericsson. I can clearly remember our family getting a new and improved television when I was about six years old. It was a Zenith and had a rotary dial. What I didn’t know was that even at that time (around 1974) it had remote control. The remote control technology was not so advanced. In fact, it worked like this: My dad would say, “Dwight, change the channel.” And so the channel would be changed. I lived in relatively small town and there was only one TV station and about 12 decent channels. However, technology and content improved over time. I can remember adding pay channels when companies like HBO burst on to the scene. Of course we added a VHS player and so the drum beat of TV’s evolution continued into my lifetime. Today my oldest son (about the same age as me when I was a remote control) does NOT understand the concept of linear TV. His experiences are enabled through technologies like Digital Video Recorders (DVR), Video on Demand (VOD) an array of new content and, of course, the Internet. His experience is blended and he sees no difference in the network or the screen. Today, if you are willing to be an early adapter of technology (and can act as your household’s IT department), you can enable a TV experience that is quite good and comprehensive. But what about the average consumer? Are they willing to be box installers in their own home and on their own time? Let’s take the DVR as an example. Almost everyone that has used one loves it, yet the numbers are still relatively low at around 12 million. When you consider the global number of TV viewers is over 1 billion, the uptake is quite small. This is where Televisionary companies (content owners, service providers, technology suppliers and Internet companies) need to do more. It is incumbent on us to enable the Individual TV experience in an easy and intuitive way for today’s busy and demanding consumer. We need to make these technologies affordable, easy to use with lots of choices and everything in a high quality format. So if you were a bit skeptical about why Ericsson in TV, maybe now you feel a more informed. And if that is the case it is probably appropriate to tell you who I am and why I am writing this blog… I have been working in technology since 1995; however it was in 2001 that I began to fully understand how much TV was evolving.. At that time I joined a fledging start-up company called N2 Broadband (N2). I can remember coming home from my first interview and my wife asking me how it went. I told her that it was a pretty small group of guys, the commute was ridiculously long and I wasn’t entirely sure they would be able to pay me for more than a few months (if that). Still, there was something very exciting going on in the hallways of N2’s tiny office. So I took the job (did I mention N2 had free snacks, gourmet coffee and a decent foosball table?), gritted my teeth on the long commute and went to work developing the company’s first communications plan. It wasn’t hard work because N2 immediately had success deploying solutions that helped cable operators and content providers securely manage and deliver VOD content. N2 also developed and commercially deployed the world’s first open back office solution for VOD. That disruptive technology received a Technical & Engineering Emmy this year and the solution is now deployed around the world. A few years and many commercial customers later, N2 was acquired by TANDBERG Television. I had of course heard of TANDBERG Television, but it wasn’t until I looked “under the hood” of our new owners did I fully understand what a fantastic innovator they were. The combination of N2 and TANDBERG Television was great for the obvious reason that you had two companies whose employees were passionate about TV. TANDBERG Television had been innovating since 1991 when they developed the world’s first MPEG-1 encoder. In 2004, TANDBERG Television delivered the world’s first MPEG-4 encoder, which was no small accomplishment and a gamble that the industry was moving in that direction - a Televisionary moment to be sure. Fast forward to April of 2007, and I awoke early to discover that Ericsson was in the process of acquiring TANDBERG Television. As I mentioned above, I knew Ericsson as a great company and a communications innovator. But TV? Ericsson had already made several strategic acquisitions in the space and none more important than Redback Networks in January 2007. Acquiring Redback has provided Ericsson with increased portfolio, deployed customer base in IPTV and a strategic Silicon Valley presence. The company now has market-leading solutions in VOD, HDTV, combined with the networking and IP infrastructure dominance of Redback Networks and wrapped in the cloak of Ericsson innovation, global customer reach and brand presence. Today Ericsson supports 6 of the top 10 IPTV deployments in the world. This has not gone unnoticed by the market as Ericsson has picked up several analyst accolades including a number two ranking by Heavy Reading in the category of Fixed and Mobile TV. In summary, the market has come a long way since my family’s first Zenith TV set. (Of course it’s interesting to note the importance of my father’s desire to interact with his TV - even if that meant me standing there changing the channels!) The new TV subscriber however continues to demand more and more from their TV experience. While we are making great strides, it is clear that we need to move much faster in order to deliver. How do best do this will be discussed here in the coming months. Without question you will hear more from Ericsson on the importance of open solutions, adapting to new and existing standards and applying consumer behavior to our work. We will rely heavily on these trends to secure rapid evolution of the Individualized TV experience.