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UK News: Blinkbox

Discussion in 'More News from Your Google TV News Team' started by Rickaren, Sep 10, 2011.

  1. Rickaren

    Rickaren New Member Staff Member

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    Blinkbox: "We had to sell to Tesco"

    10.09.11


    This morning's conference keynote sessions at the IBC trade show currently taking place in Amsterdam covered the ongoing battle for the 'home' screen, and specifically how the rise of connected TV products has shaken up the previous predominance of pay-TV providers in controlling a consumer's primary TV.

    One of the major snippets of news which emerged from this session was provided by Pace CEO Neil Gaydon, who confirmed that the company is working with a UK operator to launch a set-top box based on the nascent YouView platform in 2012. This may prove significant as YouView-based boxes have so far been imagined as a retail unit, and the decision by a UK operator to get behind the project could prove key to its success.

    Possible candidates include TalkTalk, which recently deployed an IPTV monitoring solution from Swedish firm Agama Technologies, and BT, whose wholesale arm launched its 'Content Connect' service for CDN delivery of on-demand content earlier this year and is currently working on its 'TV Connect' service, which is a similar offering for live content (more information here).

    Chairperson Kate Bulkley, a presenter and freelance journalist from the UK, opened conference proceedings by outlining the struggle for the home screen, with pay-TV providers being historically strong in controlling a consumer's primary TV, but gradually losing ground to connected TV specialists such as Netflix, which are managing to gain huge traction by delivering content over-the-top. The more recently-emergent secondary screens such as the PC, tablet and smartphone are also clearly an important factor to consider in who will win out.

    "Great beer is all about quality control"

    Sony's Executive Deputy President Hiroshi Yoshioka opened his presentation by saying that he has had "much to learn and share" at this year's IBC, before expanding on his view that quality is the next key component for connected TV, making the analogy (perhaps a little early in the day) that "great beer is all about quality control".

    Mr. Yoshioka revealed that over 30% of Sony TVs now sold are connected TVs and feature a full Web browser (and Giles Cottle, Principal Analyst at Informa Telecoms & Media, stated in a later presentation this morning that only one model in Sony's entire 2011 television lineup is not a connected TV).

    Driving this rapid growth in devices connected to the Internet is an expansion in the number of screens used by consumers to access content: rather than the previously-accepted three, there are now five, according to the Sony exec: the smartphone, the tablet computer, the PC, the television and the cinema screen.

    Where next for connected TV? Mr. Yohioka believes that location-free services will continue to evolve further, but as indicated by his beer-based analogy earlier, he restated his belief that "quality brings excitement" - whether giving a super-natural experience with 4K resolution, as demonstrated elsewhere at IBC 2011 by Sony's partner the Japanese broadcaster NHK with its Super Hi-Vision technology, which delivers resolutions of up to 4K), or through the immersive reality of a sports stadium experience delivered in 3D.

    "The image quality of original content is critical," stated Mr. Yoshioka. "My aim is to be able to get more out of the content delivery value chain at all levels." The Sony boss concluded by exhorting those gathered in the conference hall not to accept "good enough" when it comes to content quality and delivery, adding: "Quality enables us to create new business models".

    A tale of two clouds

    Next up on stage was a man responsible for the pay-TV experience of around 30mn customers across both North and South America - Romulo Pontual, CTO of DirecTV. Mr. Pontual sketched out the latest technologies offered by DirecTV, including providing customers with both a cloud outside the home and also a cloud within the home that is managed by the DirecTV box, pushing content to different devices.

    "The question now is - what should we be doing to counter the challenge posed by over-the-top devices and services? The next leap will see improvements in device performance, enhanced WiFi, ubiquitous broadband, and an HD baseline," predicted Mr. Romulo, who described these developments as "inevitable".

    He also touched upon what is in the pipeline for DirecTV customers, including the planned transfer overnight of over 20mn boxes in the US to a new user interface, which will offer better graphics, social capabilities, enhanced user friendliness and more power, as well as personalised navigation and dynamically relevant search tools.

    Also located within DirecTV's future roadmap is its Home Media Centre architecture, which aims to draw together a number of technologies, including Multimedia over Coax (MoCA), Digital Living Network Alliance (DLNA) and the remote user interface standard RVU.

    "The problem with Google TV is that it is not tailor-made for each country"

    It was however during the panel session which followed these presentations that the debate really got going, with the addition of Neil Gaydon, CEO of Pace (recently named by Infonetics Research as the largest set-top box vendor in the world by volume) and Michael Comish, CEO of UK-based over-the-top video service Blinkbox to "spice things up", in the words of Ms. Bulkley.

    Once the relationship between Pace and DirecTV had been disclosed to the room (Pace is a major supplier to DirecTV), Mr. Gaydon did not shy away from addressing the recent acquisition by Google of one of Pace's major competitors - Motorola Mobility (discussed at length with Motorola's Steve McCaffery here).

    "If you look at what Google has bought, a large part of [Motorola's] pay-TV relationships can be attributed one customer - Comcast […] The problem with Google TV is that it is not tailor-made for each country. If you go out for dinner at 8pm in Germany you will be too late, everyone will already have eaten, whereas in Spain they won't have started yet - in Europe alone there are still major differences between different markets."

    Regarding the question of whether consumers will defect to connected TV platforms en masse, Michael Comish stated that the approach taken by pay-TV operators of adding new features to their services on a regular basis and using this as a justification to increase service charges above inflation cannot continue. "Consumers in markets such as the UK can now put together a pretty good service without the £50 per month service charge, using a variety of free and pay-per view services which are available over-the-top."

    "We had to sell to Tesco"

    Mr. Comish, who sold a majority stake in Blinkbox to UK retail giant Tesco earlier this year, described operators as fighting against many new and powerful entrants, some with major financial backing. "We had to sell Blinkbox to Tesco - the capital required to make the business a success meant that it is absolutely a big boys' game."

    Asked whether operators should be losing sleep over the emergence of over-the-top players such as Blinkbox, Mr. Comish admitted: "I think Romulo will sleep OK tonight. Advertising online doesn't make enough money unless you have massive scale, so you have to adopt a pay model. We soft-launched Blinkbox with university students, hoping that they would be evangelists for the service - but it turned out that they were evangelists for not paying for a service."

    Regarding Tesco's future plans for Blinkbox, Mr. Comish indicated that Tesco sees film as a strategic category and plans to use it to engage customers - it hopes that once customers are using the service, it will be able to upsell them on other e-commerce products and services.

    My enemy's enemy...

    One thing Romulo Pontual speculated that all of the panellists agreed upon were that it would make sense for Apple to bring out its own connected TV: "Apple are looking more and more like a pay-TV operator," was the view of Mr. Gaydon. The final word however was from Michael Comish, who said that the interesting dimension to a connected TV service from Apple would not happen with the TV screen, but rather behind the scenes with the software - that is to say, the link to the tablet or smartphone.
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