Post #1:  The Latest OTT Opportunity: Connected TV

Of all the new Internet TV delivery options, the connected TV is especially interesting to service operators: It’s already front and center in the living room, there is perhaps no expensive STB required, it features an already integrated remote control and has the potential for high-quality presentation without distortion or noise from connecting cables.

On the other hand, today’s connected TVs are fundamentally constrained by proprietary interfaces, wholly proprietary aggregation portals and simplistic navigational schemes. Limited or no storage means streaming-only presentation of content. 

Our current feeling is that the Internet-connected TVs are primarily an aspect of a features game in a highly competitive consumer electronics market and is one of the options least likely to be exploited for premium video delivery services. The more likely scenario will be facilitated via connected devices such as Blu-ray players game consoles and last but not least via STBs, although these may take on a new identities such as whole home DVRs, media gateways, etc. 

It is possible that connectivity may be used to blend the TV and Web experiences together. Operators can choose to make this happen on a TV using overlay or screen sharing applications, such as calling up an actor’s Twitter feed while watching his performance.

But given that living room viewing is a shared experience, it may be more realistic to see TV supplemented by other more personal phone or pad devices with better user input capabilities to provide such interactivity. I can attest with my own family’s habits, that it has become more normal for viewers to watch TV while working on their connected laptop!

I presented last week at the TV 3.0 – Future of TV conference (co-located with @DisplayWeek) . I was surprised to hear that nearly 20% of TVs shipped in 2010 will be network‐enabled, which is projected to reach about 60% in 2013!

And we are experiencing some interest from CE manufacturers to embed software-based security technology directly into these next-generation TVs.

Nonetheless, I came back with the opinion that STBs are not going away anytime soon. The issue (and cost) of customer support needs to rest with the operator who ultimately owns the quality of experience.

What are your thoughts?

For one, there is very little 3D content and little commitment to produce more. I heard a statistic that I can’t prove, but sounds about right: there is a total of 120 hours of 3D television programming in the world. And one reason that Hollywood is willing to invest so much in experiences like Avatar is to bring new life to the theater release window. In other words, to make 3D an experience you won’t have at home. It seems logical for them to hang on to that distinctive advantage as long as possible before making the same content available at home.

And of course, there are a lot of people who just got “spousal approval” for an HD flat screen and they aren’t likely to head back to Costco for a replacement technology any time soon. 

Is seems like there is at least a possibility of a HD-DVD vs. BluRay style overhang in 3D technology as well.  We are seeing competing standards from organizations like CEA and SMPTE, plus the announcements from Panasonic about displaying 3D TV images at 1080p along with a Blu-ray disc player supporting the same resolution. The standards battles that are upon us will surely slow down development.  Peter White of Rethink Researchwrote a great piece on the topic in the latest Faultline, 3D’s cold shower – 3D Standards merely sub-standard. Check it out. 

Speaking of Blu-ray players . . . one thing that struck me at CES was that the most promoted feature of new Blu-ray players has nothing to do with playing Blu-ray discs!  Instead, there seems to be a race to collect box-top logos for internet delivered video services like Netflix. 

Since Blu-ray is all about the quality of the picture and streaming video is all about easy and direct access to content, it will be interesting to see how consumers choose.  If convenience trumps quality, it could be fatal for Blu-ray discs. Do you agree? 

Please come visit us at CSTB 2010in Moscow, Feb. 2-4.  Our very own Steve Oetegenn will be presenting on, “Emerging Delivery Technologies that Can Enhance your Business Model.”