Bringing TV to Life, Issue IIThe race to dominatethe future of TV
Accenture’s Point of View series “Bringing TV to Life” focuses on the fast developing worldof Over-the-Top TV (OTT-TV). Th...
Dispersion2 = 2.70Introduction                                                                                            ...
Vision and realityThe once pristine vision of convergence between broadcastand broadband technologies is being overtaken b...
The winds of change are blowing                                                                                           ...
A battlefield or a chessboard?Even though it is still only in its         others do not take over their position.   and wi...
er                                                        Clo                                 ow                          ...
Making the headlines                                                                                                      ...
Center of Gravity                                                                                                         ...
The ultimate stakeholder:                                                                                                 ...
Consumers strongly indicate that they are ready for a truemulti-device experience—one that goes beyond simply             ...
Conclusion                         The heat is on…                         Technological and business innovation is having...
About the AuthorFrancesco Venturini is the GlobalLead for the Broadcasting andEntertainment Practice. With over 10years of...
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Accenture Future of TV

  1. 1. Bringing TV to Life, Issue IIThe race to dominatethe future of TV
  2. 2. Accenture’s Point of View series “Bringing TV to Life” focuses on the fast developing worldof Over-the-Top TV (OTT-TV). The convergence of the Internet and TV is revolutionizing thebroadcasting industry and has the potential to transform the market for every player—bothestablished and those that are just emerging into this exciting and dynamic environment.In creating this series, our goal is to analyze the dynamics driving OTT-TV’s rapid evolution.We aim to build an understanding of the market drivers and the technology and businesstrends that are radically reshaping the video industry. Our perspective reflects theexperience matured with different players at all points of the OTT-TV eco-system.We also make extensive use of Accenture’s primary industry research and surveysthat offer vital insights into fast changing consumer behavior, wants and preferences.In this second Point of View in the series we focus on outlining the new competitiveenvironment that is forming around OTT-TV. We examine some possible scenarios that mayemerge as a result of the competitive trends we see in the market. And to complete thepicture, we draw on dedicated OTT-TV research to understand how consumer behavior isexerting a powerful influence, reformulating traditional thinking and industry approachesto shape a new and very different world of TV, full of opportunities and challenges.Our series aims to help all the players in this rapidly evolving space to get fully up-to-speed.Watch this space. Bringing TV to Life 1
  3. 3. Dispersion2 = 2.70Introduction 6.0 Netflix, 5.92How Over-the-Top TV is 5.0reshaping the video industry 4.0 TRS Monthly ValuesThe “box” in the corner of the room is breaking out. The impact CBS, 3.61 Sun TV, 3.07 3.0of the Internet on TV is only the beginning—but it’s already ITV, 2.83 TWC, 2.75 RTL, 2.71changing everything. Consumers are taking control of their own 2.0 Antena 3, 2.22 DirecTV, 1.93 TIF1, 1.84viewing, creating personal schedules and using different devices Dish TV, 1.80 BSkyB, 1.62to dip into video when and where they want. The Internet has 1.0 Comcast, 1.61 Televisa, 1.49 Nippon, 1.45grabbed the remote to control a whole new world of TV viewing. Mediaset, 1.41 Canal Plus, 1.33And everyone in the industry needs to tune in. Tokyo Br, 0.91 0.0 Jan ‘09 Feb ‘09 Mar ‘09 Apr ‘09 May ‘09 Jun ‘09 Jul ‘09 Aug ‘09 Sep ‘09 Oct ‘09 Nov ‘09 Dec ‘09 Jan ‘10 Feb ‘10 Mar ‘10 Apr ‘10 May ‘10 Jun ‘10 Jul ‘10 Aug ‘10 Sep ‘10 Oct ‘10 Nov ‘10 Dec ‘10 Jan ‘11 Pay TV Segment Figure 1 Accenture Shareholder Value analysis: the broadcasting industry Free-to-Air SegmentThe broadcast sector (both pay and free) IPTV and Internet TV are often confused We have entered a new era, an era Some of the sources of competitive In the first Point of View in the outlining the increased competitiveis emerging from one of the toughest with one another, but in fact they are where even if TV remains the primary advantage of the traditional broadcast “Bringing TV to Life” series, issued in pressure brought to the broadcastperiods in its history. During the recent quite different. IPTV has matured (in the screen for video consumption, the model are being questioned: Proprietary 2010, we focused on defining the sector by Internet TV with playersrecession macroeconomic forces few countries where it has been able to long-term fragmentation of the and vertically integrated distribution Over-the-Top TV (OTT-TV) phenomenon from different backgrounds attractedcombined to provoke panic within the grow) into another form of pay TV, and audience will challenge traditional TV networks are being challenged by open and understanding its differences with by a multibillion dollar industryindustry and drain investors’ confidence. involves the delivery of high quality business models in yet another example broadband distribution and linear “top IPTV and its relationships with the segment with high price earningsWhile the upturn in the economy has video content to a captive consumer of media meltdown. Deep convergence down” programming (complemented online video space. ratios; andgiven traditional broadcasters some device over a managed network. between television and Internet has by catch-up and video-on-demand). presenting some potential end statefinancial stability, the current bounce Internet TV (or Over-the-Top TV), finally arrived and as a result media Moreover, the traditional rights In this latest installment of the series scenarios for the industry and the keyshould not obscure some of the more defined as the distribution of video companies can no longer ignore windows, which gave broadcasters we will focus on: capabilities that successful Over-the-structural trends and issues that still content to a wide range of IP-enabled fundamental differences in the underly- almost monopoly over quality content, understanding the drivers behind Top providers need to build.threaten to overwhelm media busi- devices (TVs, PCs, mobile phones and ing business models and in the enabling have multiplied, and business-to- the acceleration of Internet TV andnesses that do not embrace and speed tablets) over the unmanaged Internet, technologies’ design principles. business revenue models are now being identifying some of the enablers andup their digital transformation journey has the potential to shift the existing questioned by potentially superior challenges that could facilitate ortowards a multiplatform digital era. balance of power within the broadcast business models that are based on a limit its mass adoption;The performance of Netflix versus the sector and the wider communications deeper and more direct relationshipmore traditional pay and free-to-air industry. Back in the late ‘70s a very with the end consumer.broadcasters clearly highlights the popular song celebrated the golden agedifferent expectations that financial of a radio industry that was then onmarkets have about the sustainability the brink of demise at the hands of TV.of traditional broadcasting business “Internet Killed the TV Star” could be amodels, and the potential of truly potential hit in the charts of 2015.“interconnected” business to consumermodels to gain traction and generatevalue at scale.2 Bringing TV to Life Bringing TV to Life 3
  4. 4. Vision and realityThe once pristine vision of convergence between broadcastand broadband technologies is being overtaken by the messyreality of conflict and volatility with little clarity about whatlies ahead. The outcome of this volatility is uncertain atbest and will clearly vary across geographies and differentregulatory frameworks.The TV screen is both a gold mine and seamless integration across linear Clearly the threat of new playersa mirror in which broadcasters can and non-linear TV, broadcast and entering the broadcasting spacetake stock on a daily basis of the need broadband; by leveraging Internet TV is real, isfor change in their business models. A happening now and is a major issue. the ability to partner with otherdirect attack on that screen by players But we argue that if Google can industry players rather than attempt-coming from outside the TV industry become a “broadcaster” then the new ing to rebuild vertical integration in(electronics companies, Internet order could also see a broadcaster the industry value chain;aggregators, telcos, and so on) will becoming a Google.raise and is raising, attention levels a true multi-screen approach;and driving reactions. In this paper we Amid all this uncertainty, however, onewill argue that these reactions will not just content (which could thing is sure: today’s video consumersneed to be built not on the traditional become a “king without a crown”) have never had it so good!sources of broadcasting competitive but consumer content services thatadvantage but instead on new ele- leverage the effective use ofments that are derived from the different screens to build consumerInternet experience, and will include stickiness and loyalty; andthe need to ensure: large, established players having standards and ubiquity across the humility to recognize that they platforms rather than “walled need to invest in new capabilities gardens” built on proprietary (such as consumer insight, devices and networks; service creation, and application development).4 Bringing TV to Life Bringing TV to Life 5
  5. 5. The winds of change are blowing Average USA: 31 minThe Internet has become a mainstream news and entertainment Germany 35 min 86.5% Total: 258 min 13.5%medium, but its path to such scale has been far from smooth. Onthe way it has met resistance and disrupted many long standing UK 33 min 88% Total: 275 min 12%media businesses, publishing being one of its first victims. Spain Total: 31 min 88.2% 265 min 11.8% France Total: 24 min 90% 236 min 10% Italy Total: 20 min 92.4% 266 min 7.6% Linear TV (2010 avg) Online Video (Dec. 2010) Figure 2 Average daily online video consumption in EU-5 and United StatesGenerally speaking, the Internet The current reigning champion of But there are a number of strong forces Patterns of video consumption are Time spent watching TV is still rising, Last, but by no means of leastdisrupts media businesses in three Media—television—has thus far driving unprecedented change in changing fast and the new video even among the younger generations, importance, Gartner estimates thatways: remained relatively unaffected by the broadcast industry. Broadband consumer has become a complex, and live TV is by far the largest by 2014 manufacturers will produce the rise of the Internet. Three pieces penetration is on the rise across multifaceted user whose needs and component of video consumption, over 70 million broadband connectedIt removes barriers to distribution, of evidence offer proof that: the world. In the EU, the five most wants require a customized approach. especially in Europe. According to TV sets worldwide.6 If we add to thiswhich previously provided the basis for connected countries have an average The “active vs. passive” differentiation Forrester research, even in the most the number of Internet-enabled gamingmonetization. It provides an abundance Television broadcast rights continue broadband penetration of 50 percent, has become less relevant only because sophisticated digital markets such as consoles and set-top boxes it soonof free content that shapes consumers’ to command world class price and 80 percent of those connections active consumption has become more Sweden and the UK, more than 70 becomes clear that we are close toexpectations that content should tags (NBC recently agreed to pay are of sufficiently high bandwidth to mainstream and has spilled from young percent of the total hours spent seeing mass adoption.always be free and therefore under- US$2billion for 2010 and 2012 support OTT-TV consumption.2 Gartner people to other demographic segments. watching TV each week are devotedmines models based on scarcity. And Olympics); predicts that by 2014 broadband Consumers are increasingly used to to live broadcasts. But the multi-it grabs a larger share of the time that Consumer paid programming on connections globally will number viewing content on their terms and screen audience is growing and theconsumers devote to other media. cable and satellite has recently 644m.3 not by appointment. This means that share of the European consumers who provided some of the only bright loyalty is increasingly directed towards exclusively watch TV on a TV screen spots for recession-battered TV And all this connectivity means online content brands rather than channel is decreasing fast. In 2009, only companies; video consumption is on the rise. brands. Understanding how consumers 63 percent of European internet users In the United States in December 2010 find and access content is becoming watched TV only on TV, down from Although skyrocketing, online video there were 88.6m unique daily online critically important. On-demand 80 percent in 2007.5 consumption seems not to be at the video consumers and almost 179m in services, catch-up TV, recommendations expense of linear TV but instead is an average month in 2010.4 Usage is rather than electronic program guides, incremental and additive. also increasing considerably as figure 2 social networking applications, shows, although, and this is very convergent services, which follow the important since it reinforces the need consumer across devices (watch on for seamless integration between the PC, continue on TV, receive advertising1 Gartner Industry Research, “Two Roads to TV 2.0,” March 24, 2009. two worlds, this is not at the expense and extras on iPad) are all key to2 Source: e-Media Institute Web-TV Intelligence & Strategies, March 3, 2011. of linear programming. remaining relevant in this new and 5 Forrester Research, “The European Three-Screen Audience Is Growing, But TV Still Reigns,”3 Gartner, “Emerging Technology Analysis: Broadband-Connected Televisions, Consumer Technologies,” rapidly evolving space. April 22, 2010. September 23, 2010. 6 Gartner, “Emerging Technology Analysis: Broadband-Connected Televisions, Consumer Technologies,”4 Source: e-Media Institute Web-TV Intelligence & Strategies, February 22, 2011. September 23, 2010.6 Bringing TV to Life Bringing TV to Life 7
  6. 6. A battlefield or a chessboard?Even though it is still only in its others do not take over their position. and widgets on which to host orformative stage, the emerging world In recent years, broadcasters have seen provide on-demand services. On oneof Internet TV already has a fairly their monopoly over auto-produced hand they clearly have great consumerwell-defined set of players. We see a content eroded. Rights holders (such traction and the ability as globalnumber of distinct groupings of these as the football leagues) and the major players to negotiate global contentplayers emerging, each with their own studios hold the vast majority of the acquisition deals, but on the other it isdistinctive sources of competitive much needed on-demand content hard to envision a world of proprietaryadvantage to deliver video content to and could themselves have the same standards in which consumers decideconsumers from outside the traditional ambitions as traditional broadcasters. which TV set to buy based on thepaths of linear programming (terrestrial, content it carries. (However, it shouldsatellite and cable). These players can Service power not be forgotten that one of the lead-be grouped around four main sources ing manufacturers, Sony, is also one of Represented by the telecommunicationof power: content, service, device and the largest original content producers companies who act as consumer andcloud. and distributors in the world.) service provider aggregators (triple play/four play). These companiesContent power serve as single point of contact and Cloud powerRepresented by the traditional a common user interface to the This group introduces a new concept,broadcasters (free and pay) that see consumer over any device and in encapsulating the ability to deliverInternet TV as a way of delivering most cases owning a content delivery cloud-based infrastructure and servicesnew consumer experiences directly to network (CDN), which can guarantee for management and distribution ofconsumers without being intermediated the much needed quality of service. video to any Internet connected telecommunication companies and While this group may lack the neededIPTV providers. While they see Internet Device power media market expertise to strikeTV as a great opportunity to evolve significant content deals, they have Manufacturers of TV sets, PCs, andtowards becoming consumer compa- developed a critical ability to intercept hybrid set-top boxes who have thenies, they also need to take care that and manage the needs and behaviors opportunity to become access gate- of the online consumers. ways and develop their own platforms8 Bringing TV to Life Bringing TV to Life 9
  7. 7. er Clo ow ud P Po nt Google nte Sports Leagues/ we Rights Holders r Co Studios Hulu FTA Broadcasters Netflix Video Consumers Cable/IPTV Operators STB Manufacturers Electronic Manufacturers r we Se Telecommunication TV set Po r vi Manufacturers Po i ce ce v we r DeFigure 3 A competition frameworkNow, what are the key success factors The need to provide seamless The experience and insight to shapeand the new capabilities that will integration across linear and non- and successfully deliver partnershipsbe required to succeed in this new linear services on hybrid broadcast across the industry value chain in acompetitive environment? There is a and broadband devices. As mentioned context where traditionally verticallywide range of both adapted and wholly before, linear TV remains the largest integrated value chains arenew forms of behavior and abilities component of video consumption and fragmenting and exploding.that players will need to acquire in VoD and catch-up services become The ability to attract and aggregateorder to be successful. These include: even more indispensable on the content and value-add services from back of a strong linear and live The ability to create the future a multitude of sources in a way that programming. platform for content consumption. consumers find easy to use, and The video market is the evolution of The ability to understand CDN-based identify and present them with a platform that connects content and cloud-based content distribution relevant, personalized content. creators, advertisers and consumers. mechanisms and platforms. Successful players in the past The capability to leverage consumer managed to define unique platforms insights in order to develop tailored (NTSC, PAL, SECAM) and adapt the and personalized video services ecosystem to it. The same thing will across all IP-based platforms (vs. happen to online video consumption. traditional top down programming This implies the need to be present schedules) to build loyalty through- across non-proprietary devices and out a 360-degree consumer experi- platforms, in particular connected ence and, crucially, to monetize them. TVs and gaming platforms, the latter being the next big thing in terms of competing for the time and attention of users on the TV screen.10 Bringing TV to Life Bringing TV to Life 11
  8. 8. Making the headlines n lue ain s s Users s s Operators Providers urers Program Packagers iption Includes music, movies, news, t sports, television programs, distribution network and video production and adoption to web video (User Generated and Professional) E electronics FOX, BBC, Disney, MGM, Paramount, NFL, Warner ESPN, ABC, NBC, Discovery, ends Brothers, Sony BMG, HBO, FOX, CBS, CNN, Vudu, Universal Veoh, Google, BBC, iPlayer, Hulu, Netflix COX, Time Warner Cable, Comcast, CableVision, Cisco, Sharp, Apple, LG, Verizon, AT&T, Dish Samsung, Motorola, Roku, Sony, Vizio, Intel, Tivo, Microsoft, PanasonicFigure 4 The emerging OTT-TV value chainSince the birth of commercial remain a mystery to most of them. fluid and complex environment. Wetelevision, TV broadcasting has been Some of these players are truly global believe that rather than an ‘all againstdominated by a limited number of in nature, this means that for the all’ battlefield (which is what thestakeholders (the networks, the TV first time competition is becoming competitive landscape looks like today)manufacturers and the advertisers) extra-territorial, and with that change the situation will come to resemble aand has been ostensibly local in nature. comes a whole new mindset. chessboard, where alliances, partner-Today the future of TV is clouded by an ships and commercial collaborationsoverabundance of stakeholders, most Over the last twelve months we have across different players will becomeof whom have a defensible position in witnessed a wide array of public key imperatives for success. Speed totelevision’s future. New stakeholders announcements and a number of market and agility are must have quali-such as telcos, web search engines, service launches. Every player in the ties in this space, but so increasingly isportals, new media titans such as industry value chain is clearly marking the ability to assess and understandApple and Microsoft, and other their territory and planting a flag in the complementary capabilities ofelectronic manufacturers are all the future landscape of television. “competitors” and reward themlooking for a significant stake in the However, very few of these launches accordingly to ensure a larger slicefuture of TV, even if revenue models are real industry plays. Most of them of the overall pie.for next generation broadcasting tend to be individual efforts in a very12 Bringing TV to Life Bringing TV to Life 13
  9. 9. Center of Gravity Expanding DominatingFast forward: Right Holders Creators Right Dealers Program Packagers Content Aggregators Network Access Device Manufacturers UsersWhat scenarios in the future? Traditional Telco Scenario 1 Content is king Center of Gravity Dominating ExpandingRather than a clear future scenario in the medium term, we see Right Dealers Content Devicethe coexistence of several business models and value chains, Right Holders Creators Program Network Access Users Aggregators Manufacturers Packagersdepending on local market conditions, industry structure and Scenario 2 Devices drive users Traditional Telcoregulatory frameworks. Center of Gravity Dominating Right Dealers Content Device Right Holders Creators Program Network Access Users Aggregators Manufacturers Packagers Traditional Telco Scenario 3 Aggregators rule No Explicit Center of Gravity Right Dealers Content Device Right Holders Creators Program Network Access Users Aggregators Manufacturers Packagers Traditional Telco Scenario 4 Scattered playing fieldBesides the current all-against-all option to negotiate a carriage fee, 2. Devices drive users 3. Aggregators rule Aggregators: focused on content 4. Scattered playing fieldscenario (which is not sustainable in trying to extend their role to locally acquisition, best user experience,the long term) we envisage four main relevant functions such as content This scenario sees users buying content To some degree, this is the natural commercial relationship with the In this scenario, participants acrossscenarios: delivery, content encoding and digital through the walled gardens that device extension of existing business models, customer; the entire ecosystem fail to create right management (DRM) settlements, makers manage to establish (i.e. an with a complication owing to the partnerships and value chains remain extension of the iTunes model to fact that the platform to deliver video Platforms: focused on service highly fragmented across geographies local front end/shop management, local1. Content is still king support, and digital home integration. devices and operating systems), services may not be unique (as currently enablement, technology complexity, device support, content lifecycle, and types of content. Unresolved Over the years, broadcasters have with content rights holders sharing happens with broadcasting). In this conflicts of interest between industryIn this case, content rights owners revenues with the device makers. There case users still prefer specific shops to security (this role may be taken by participants mean few major deals and progressively lost a significant degreemanage to create a unique platform is a substantial failure to build a unique consume content, with the difference both aggregators and carriers); and the opportunities from OTT-TV are not of control over content and increasinglyfor content consumption that platform (as is presently the case in that jumping from shop to shop does fully realized. A lack of standardization rely on specialized/independent produc- Carriers: focused on content delivery,seamlessly supports most devices. the gaming business), and the role for not require cord cutting. This is more across devices and content formats ers. If they do not act swiftly in the user support, digital home enablement.Disintermediation is pushed to the limit, broadcasters and carriers changes: like the mall model, where the success means consumers have to engage with Over-the-Top space by developingletting users establish a direct link to of retailers is determined by their This scenario sees broadcasters fighting different content providers and create compelling multi-screen strategies,the major shops, and the leading brand Broadcasters could try and build for relevance and position against they could face a considerable loss ability to provide the best personal multiple, overlapping the content brand. User choices are strong customer relationships the Internet aggregators, such as of relevance in the on-demand world, user experience, shielding the user fromdriven by content rather than other leveraging better customer insight Netflix and Google TV. Hybrid devices, succumbing to the fast growing content complexities derived from technology, In this fragmented scenario (whichfactors, and business models are and providing a more localized user seamless integration with linear brands and being disintermediated by devices, and payment models. In this most closely resembles where theextremely shortened. In this scenario, experience. This would require the programming, ubiquity in terms of them in relationships with consumers. scenario, there is a role for most of the market finds itself today) there are notraditional aggregators have a reduced support of all devices, so that users platforms and the ability to provide players in the ecosystem: clear ‘winners’ with content from manyrole in the best case (i.e. the cord-cut- can access the same branded multi-device services with specific sources on many different devices.ting nightmare), and carriers have the experience across all of them. value proposition, rather than just Telecommunication companies could Carriers should try to build the replicas of the original TV service, play an enabling role, helping consumers underlying platform that unifies become key capabilities in order to connect up all the services, devices the user experience across devices, to succeed. and content they need. addressing technological complexity and supporting aggregators in the multi-screen play.14 Bringing TV to Life Bringing TV to Life 15
  10. 10. The ultimate stakeholder: 50%The consumer 40% 40%The era of broadband video is here, and it’s influencing theviewing behaviors of more than just younger generations. 30% 24%According to new research from Accenture, high percentagesof consumers of all ages around the world are now watching 20%video content over the Internet via a PC or TV. 14% 12% 11% 10% 0% Catch-up TV to pause Personal Video Recorder Surfing the web on Ability to watch the Having interactive/ and watch at leisure (ability to store and your TV content on other social networking watch whenever) devices functionalities Total US Brazil UK Germany Italy Spain Australia Figure 5 Most important video-over-internet service feature: total and by geographyIn this environment of overwhelming The results of Accenture’s “2011 watching TV, and with tablet penetra-market potential it’s more important Video-Over-Internet Consumer Usage tion set to reach mass market levels,than ever for all players in this space— Survey” provide companies with a this is clearly going to increase). They 70%broadcasters and content providers as view not only of current trends, but are also looking for an anytime servicewell as network operators and other also of where those trends are leading, on TV through catch-up rather than 60%kinds of communications companies— both in terms of video viewing habits hardware based personal videoto have a better understanding of and where revenue growth may most recorders (PVRs). And they are very 49%changing consumer behaviors and likely occur. Although traditional clear about the role of each device 50%interests, so that they can direct their linear TV offerings still dominate and how each of them connectsinvestments effectively. consumer viewing habits, that together. They also see the PC as an 40% dominance is already open to extension of the TV set to watch orTo give companies deeper insights into question. record programs via their laptop. 27%their target customers as they launch 30%or extend broadband TV and video The results from the survey show What’s more, these behavioral traitscapabilities, Accenture has conducted how the new consumer is evolving: are not specific to the Millenniala global survey of more than 6,500 They are using multiple devices to generation (the 18-24 age bracket) 20% 14%consumers around the world across watch video content and they are but are rapidly spilling over to older 11%major geographies—the United States, multitasking while watching video on generations. 10%United Kingdom, Australia, Brazil, a traditional TV set (over 48 percentGermany, Italy and Spain. of respondents use a laptop while 0% Quality of service (i.e. HD (high-definition viewing) User interface and ability Quality of recommenda- clarity of the picture, to find and manage tions of videos/ shows I speed of content delivery) video content might be interested in viewing Total Male Female 18—24 25—34 35—44 45—54 55—64 Figure 6 Most important video-over-internet technical feature by gender and age16 Bringing TV to Life Bringing TV to Life 17
  11. 11. Consumers strongly indicate that they are ready for a truemulti-device experience—one that goes beyond simply Core beliefs of Over-the-Top TVreplicating traditional TV on another device, and instead Broadcasting Companiescreates a new experience where content is important,quality is critical and personalization of the service is a must. TV set as primary Web experience Anytime beforeOver-the-Top TV can succeed if companies understand and screen anywhereembrace these new consumer behaviors. The TV Set remains The key value of bringing Customers value time the primary screen to the internet paradigm to shifting over place generate revenue and the TV is around content shifting and three/four win the customer discovery, recommendation, screen delivery relevance and social— PCs, Tablets and Mobiles not browsing the web are additive, having a key role as “companion Span linear and on-demand devices” content, immediacy of content experience, no deep menus Telecommunication Companies“Content is king” has been a standard Different types of companies are In general, openness is becoming anphrase of the broadcast industry for experimenting with video-over-Internet important marketplace characteristic,many years. The statement remains services, and savvy players are learning and also a key to success. Today, manytrue but in addition the quality of both from past mistakes and current players are jockeying for position in thetechnical delivery of that content is stumbles. Original IPTV offerings, for Over-the-Top space. New stakeholders—now on the minds of many consumers. example, did not meet expectations telcos, web search engines, portals, Access as key unique Aggregation and Closing windowAsked to name the most important because they tried to imprison device and software giants, and more— selling proposition indexingtechnical feature of Internet TV, about consumers in proprietary, walled are looking to play a key role in how theone half of the consumers we surveyed gardens. Mobile video has struggled industry evolves. This is now a wide Window of opportunity toaround the world (slightly higher in with overcoming the restrictions of open and increasingly global playing To be successful in the Any aggregation playthe UK and Australia) cited quality smaller screens and devices. field. OTT-TV space, telcos need should aim for an open seize market and eyeballsof service, clarity of the picture and to leverage their core delivery platform that is now and closing fastspeed of content delivery. This statistic The ultimate stakeholder, USPs around access, allows combiningis almost uniformly consistent across however, is the consumer. Set-top boxes are keyall age groups, too. network quality and aggregated (i.e. own now, but will disappear customer proximity hosted) and indexed within years (i.e. referenced) content18 Bringing TV to Life Bringing TV to Life 19
  12. 12. Conclusion The heat is on… Technological and business innovation is having a decisive impact on established distribution mechanisms in the video industry. And that creates major risks for the incumbent players—including broadcasters (both free-to-air and pay) and telecommunications companies (cable and IPTV)— in what is now a mature market. In response to these emerging risks, Telecommunication companies struggle There is clearly no single recipe companies in both sectors are moving to control content and package seam- for how each market will develop; fast. But rather than pursuing tactical less multi-device linear and non-linear geographic differences, regulatory and ambitious product launches and services. However, the requisite end- frameworks and different industry new services, they need to make the to-end capabilities could be delivered structures all create very different transition to a more structured and through deeper cooperation between competitive contexts. But what is clear collaborative go-to-market strategy. broadcasters and telecoms businesses, is that engaging in direct competition with each playing to its strengths. with one another—and ignoring the The need to collaborate arises from the benefits of collaboration—will simply lack of relevant knowledge, experience In this new space, vertically integrated make it easier for outsiders to enter and capabilities that each has in vital business models are a thing of the the market. And as we have seen, areas of the video industry. Generally, past. Instead, broadcasters will move there are powerful newcomers on broadcasters do not possess the towards becoming true business-to- the horizon. required experience and knowledge consumer operators, establishing a of devices/access and of managing presence across all devices and content delivery networks. providing seamless linear and non- linear services. Telecommunications companies will not be relegated to merely acting as “dumb pipes” but will have the opportunity to provide much needed cloud-based multi- tenant capabilities in an enabling role (hosting, management and delivery of content) and in the connected home.20 Bringing TV to Life Bringing TV to Life 21
  13. 13. About the AuthorFrancesco Venturini is the GlobalLead for the Broadcasting andEntertainment Practice. With over 10years of experience within Accenture,he works with major internationalmedia and entertainment companies—and in particular—broadcastingcompanies. Francesco leads complexprojects around Over-the-Top TV(OTT-TV) and Digital Terrestrial TV(DTT)—helping his clients launchnew innovative services, restructureexisting businesses, and achieveoperational excellence. He is a regularspeaker at international industryconferences and an author of manystrategic whitepapers around thetopics of Over-the-Top TV, RightsManagement, and Shareholder ValueManagement for Broadcasting.Copyright © 2011 Accenture Contact us About AccentureAll rights reserved. To learn more about how Accenture Accenture is a global managementAccenture, its logo, and Accenture can help your company achieve high consulting, technology servicesHigh Performance Delivered are performance by deploying services, and outsourcing company, withtrademarks of Accenture. This content and infrastructure for more than 215,000 people servingdocument is produced by consultants advanced broadband video solutions, clients in more than 120 Accenture as general guidance. please contact: Combining unparalleled experience,It is not intended to provide specific comprehensive capabilities across alladvice on your circumstances. If you Francesco Venturini industries and business functions,require advice or further details on Global Broadcast Lead and extensive research on the world’sany matters referred to, please contact most successful companies, Accentureyour Accenture representative. collaborates with clients to help them Angelo Morelli become high-performance businesses Product Innovation offering area Lead and governments. The company generated net revenues of US$21.6 billion for the fiscal year ended Aug. 31, 2010. Its home page is