Smart TV and Digital TV: a quick SWOT analysis

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An attempt to define basics concepts of Digital and Smart tv.
A summary of potential of disruption of the "TV from the future" - which is already here...
This document is mainly based on European market characteristics which may differ significantly from others markets like US or Asia.

Content:
-Concept Definition (Smart TV, Connected TV, Apple TV, Google TV etc)
- Evolution of business models
- SWOT analysis
- short conclusion

This document is part of a larger study devoted to media convergence in Television. You will find more presentation or content (mainly in french) on the blog (www.synaptic.be/blog or on our ScoppIt dashboard http://www.scoop.it/u/synaptic)

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Smart TV and Digital TV: a quick SWOT analysis

  1. 1. Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV. A quick SWOT Analysis Definitions, strengths, Weaknesses, opportunities, threads ...
  2. 2. A short word about the author: Connected TV and Digital TV A quick SWOT analysis Geoffrey Laloux Consultant in Digital Strategy (Digital Transformation) Since 2015 – Senior Consultant @ Initio.eu (Square Group) 2007-2014 Founder of Agence Synaptic be.linkedin.com/in/geoffreylaloux @Synaptic_be Geoffrey Laloux – May 2013 – © @Synaptic_be
  3. 3. Geoffrey Laloux – May 2013 – © @Synaptic_be Table of Content 2. A disruptive model • Evolution • From one business model to a new one 3. SWOT analysis • Strengths • Weaknesses • Opportunities • Threats 4. Conclusions 1. Concepts Definition • Connected TV (Smart TV) • Digital TV • Apple TV, Google TV etc. • Content Providers
  4. 4. Geoffrey Laloux – May 2013 – © @Synaptic_be Concepts Definitions
  5. 5. Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV (Smart TV)
  6. 6. Connected TV (Smart TV) • A device (TV screen) connected by wire or WiFi to internet • Also know as “Smart TV” • Access to the internet content is done via widget and integrated software Benefits: • Browsing the Web (with the remote control) • TV Widget to access to video channels like Youtube or else • Specific Digital TV channel and VoD like Qriocity, HBO, HuLu or Netflix (where available) • Specific content provided by local TV Broadcaster. Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV A quick SWOT analysis
  7. 7. Connected TV (Smart TV) Embedded software (Samsung, Sony) no need of third party software or hardware Case where the TV device is fitted with RJ45 connection and embedded software (high end devices from Sony, Samsung, LG, Panasonic, Toshiba and Philips) SMART TV Internet Router Internet access provided by local ISP. Not necessarily linked with Digital TV service offer VOD providers TV broadcasters Free Web content Niche content Games, apps and Social Content Owner Pay TV operators Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV A quick SWOT analysis
  8. 8. Connected TV (Smart TV) • Smart TV can access to dedicated Appstore to improve the service offer. • Services offered by App Stores are different in each country and are highly dependent of the local regulatory framework and market potential. • From technical point of view Smart TV may offer almost same services as Digital TV but without the need to use Set Top box or additional paid subscription Examples of most common service offer of Smart Tv platform: • Skype, Facebook, Twitter (with no direct and automatic relationship with the TV content watched) • BBC iPayer, Digital Theatre (live recordings of stage plays), Eurosport, ESPN etc. In most cases we talk about limited samples of content more than real TV channel. Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV A quick SWOT analysis
  9. 9. Connected TV (Smart TV) No more compulsory syndication, content can be accessed directly from content producers and rights owners without passing through a third party platform Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV A quick SWOT analysis
  10. 10. Geoffrey Laloux – May 2013 – © @Synaptic_be Digital TV
  11. 11. Digital TV From technical point of view, the name “Digital TV” refer to the transmission of audio and video by digitally processed and multiplexed signal, in contrast to the totally analog and channel separated signals used by analog TV. Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV A quick SWOT analysis
  12. 12. Digital TV (Interactive Digital TV) • Digital TV is often (mainly in France & Belgium) used to design the Interactive Digital TV (IDTV or ITV) experience provided by “Box” like FreeBox, Belgacom Box etc. • Interactive TV is a form of media convergence, adding data services to traditional television mostly thanks to a digital tuner (Set Top Box). Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV A quick SWOT analysis
  13. 13. Digital TV (Interactive Digital TV) Most common features of Interactive TV: • More TV channels • Some with paid content • Electronic Program Guide (EPG) • Smart recording (automatic start of recording based on watermarking embedded in content signal) • Online VOD catalog (provided by the paid tv operator) • Content Preview • Catch Up (replay) TV provided by TV broadcaster: review a content already broadcasted. • Widget like weather, Stock Exchange information etc. • Additional content related to currently broadcasted program (bonus, making off etc.) • Possibility to broadcast content on second screens like PC, Smartphone, tablet etc. Linear content broadcastingTV Channel Scheduled broadcast Preview (Pay per view) Replay (usually free) Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV A quick SWOT analysis
  14. 14. Internet Router Digital TV (Interactive Digital TV) Set Top Box Digital Personal Recorder (optional) Internet router. Generally integrated in the Set Top box VOD providers TV broadcasters Free Web content Niche content Games, apps and Social Content Owner Pay TV operators IP Managed Network ContentSyndication HDMI compatible TV set, Not necessaily a connected or connectable TV Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV A quick SWOT analysis
  15. 15. Geoffrey Laloux – May 2013 – © @Synaptic_be Apple TV, Google TV etc.
  16. 16. Google TV • A Smart TV platform from Google co-developed by Intel, Sony and Logitech • The interface is (will be) embedded in Sony TV devices (Samsung and LG are expected to participate) • Google TV is more a feature integrated in some Smart TV than a device. Benefits: • Accessing to Google services (ie Gmail) directly on TV screen. • Accessing directly to specific content provided by third parties like HBO or CNBC, Netflix etc. • Surfing the web on Tv screen. Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV A quick SWOT analysis
  17. 17. Apple TV • A wireless device to broadcast on screens (TV or else) content from specific content providers. (iTunes, Netflix, YouTube, NBA & NHL leagues etc.) • The Apple TV is a digital media receiver (and transmitter) IT’s NOT a content provider like classical TV channel or a TV Tuner or even a content recorder. Benefits: • Viewing YouTube video on TV screen or on any screen compatible with Apple standards like AirPlay. • Accessing directly to specific content provided by third parties. • Allowing to access to internet via TV screen even if the TV device is not fitted with Internet connection. Apple TV is like a Set To Box… Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV A quick SWOT analysis
  18. 18. Archos TV (Android TV) • Archos TV is a set top box, that can be compared with Apple TV… but for Android world. • It’s an external device to be connected between TV screen and internet router. • It’s different and not integrated with Google TV. Benefits: • Accessing the web even without native smart TV • Accessing the Google Play Store • Can be used also as media center Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV A quick SWOT analysis
  19. 19. Game Console & Blu Ray players • Modern Blu Ray Players and Game Console like PS3 or XBOX propose also “Smart TV” alike functions. • Some Blu Ray allow access to specific online content like bonus, 2nd movie etc. Usual Benefits: • Accessing the web even without native smart TV • Accessing the Google Play Store • Can be used also as media center • Extra interactive content and/or second screen application Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV A quick SWOT analysis
  20. 20. Web TV • Original content produced for broadcast via the Internet (UGC or professional content) • Not to be confused with Television content reformatted to be broadcasted also on internet. • Some successful web tv content may be "promoted" and then be broadcasted on classical Television channel Examples: • Youtbe, DailyMotion etc. • http://tv.dassault-aviation.com/web/ • http://fr.int.renault.tv/ • “Capsules” like Remy Gaillard, Bref etc. • Fan films made to give second life to famous TV shows, films, books etc. http://bit.ly/11o2kkO Field of Shadows, a French Star Wars Fan Film Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV A quick SWOT analysis
  21. 21. ContentFeature / Application ServiceDevice Digital TV Smart TV Google TV Apple TV WebTV Interactive TV IDTV TV Numérique IPTV Archos TV Android TV Connected TV VoD Catch Up OTT* * Over The Top content Etc. Synonyms French equivalent Bravia Internet Video Set Top Box (STB) BBC iPlayer MyTF1 M6 Replay FOX Now Hybrid TV Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV A quick SWOT analysis
  22. 22. In short… There is 3 type of players who can give you access to Internet via your TV set TV manufacturer (Smart Tv) Via embedded connectivity, operating software and TV apps. The content is not proprietary and not provided by the manufacturer Managed Network (Digital tv) Via set top box and paid subscription. Service is mostly provided by ISP, Telco operators and Cable operators The content may be partially proprietary and provided by the network operator Third Party Devices (Set Top Box) Via a set top box and eventually additional subscription. Service is provided by operators not affiliated with Managed Network operators or TV manufacturers The content may be partially proprietary and provided by the device operator Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV A quick SWOT analysis
  23. 23. Content providers Content that can be accessed (in theory) by Smart TV owners or STB service subscribers VOD providers TV broadcasters Free Web content Niche content Games, apps and Social Content Owner Pay TV operators They propose their own content and syndicated content which is also available on the air as well as Catch Up, Replay, PPV etc. They provide online content catalogs and paid download or streaming. They may be independent or related with Cable or Internet operators. Web content directly accessible via embedded Browser interface or TV widget Niche content (extreme sport, anime, news) provided by local broadcasters or banded content syndication channels. Examples: Gmail, Skype, Online games, Facebook, Twitter etc. Including content and apps provided by local / national players. Broadcast rights owners like sport league or international contest, but also like HBO, Movie studios etc. Local or international Cable and satellite operators. They propose syndicated content and sometime their self-produced content Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV A quick SWOT analysis
  24. 24. Geoffrey Laloux – May 2013 – © @Synaptic_be A disruptive model
  25. 25. Evolution Analog TV Digital TV / Smart TV Disruption Linear access Collective usage of the TV set On demand access, any time and “anywhere” (multiple interfaces) No more (?) Prime Time Consumption Access manager Managed Network is the provider, TV channel is the gatekeeper Digital Managed Network (Digital TV), TV manufacturer (Smart TV), TV channels (STB + Smart TV) Gatekeepers bypassed by Internet services and device managers Services Broadcast TV Multichannels, catchUp, Vod, Connected contents (Social TV) End of classical TV ads ? Business Model Public funding, Advertising, Paid channels Content or channel subscriptions, pay per view, in program purchase Kind of “performance pay” Players TV channels Rights owners Users Rights Owners Internet services providers Internet Access providers Managed Network owners Device Manufacturers TV channels Social Networks and users More players, a different pyramid of influencersDecreasing order of influence Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV A quick SWOT analysis
  26. 26. Analog TV content distribution model TV Broadcasters Content Owner & Pay TV Operators Content Premium Content (Pay content) Own productions & syndicated content BroadcastcontentExtracontent Cable Converter Box Over the air transmission National Local Managed Network CABLE SATELITE Analogic Signal Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV A quick SWOT analysis
  27. 27. Content Owner & producers Money Monthly subscription + Extra fee to access to more content Public funding (in Europe) Brands TV Broadcasters National Local Syndication Syndication & Exclusive agreements Commercialads Managed Network CABLE SATELITE Analog TV business model Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV A quick SWOT analysis
  28. 28. And now the disruptive model Content Owner & Pay TV Operators Premium Content (Pay content) Extracontent 1 Set Top Box Managed Network CABLE SATELITE 3 Owned TV widget Digital Signal Smart TV IP Network & ISP 2 Third party Specific Set Top Box 4 Game Station 1. content owners may still sell their content via pay Tv operators 2. But they may also sell directly to end users via third party set top box like Apple TV or Amazon TV directly connected to Internet, without passing by pay TV operator. 3. They can even propose direct access to their content thank to TV widget embedded in smart TV set (in partnership with tv manufacturer) 4. Content owner like SONY or Microsoft may propose exclusive access to their own content catalog via their own game station like Xbox or PlayStation. Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV A quick SWOT analysis
  29. 29. Geoffrey Laloux – May 2013 – © @Synaptic_be SWOT analysis
  30. 30. Strengths Opportunities Weaknesses Threats Good installed base in terms of use, device, infrastructures and habits • Heterogeneous offer (i.e VoD) • Multiple payment systems and multiple authentication required • Multiple different experiences • Disappointing service offer • Low image quality (replay in Mono and SD) • Overlap between Smart Tv and Digital TV services • Locally produced (or adapted) contents are the best defense • For consumers: more direct and fast access to latest contents • New commercial formats. • New advertising formats (i.e Product Placement) • Opportunity to develop a new business model for public TV broadcasters • Supra National competitors • Channels vs. Devices vs. Rights Owners • Risk of disinterest and lack of investments in economically less attractive areas • Managed Network (Cable & ISP) as bottleneck • Increasing power of search engine (dominated at 95% by Google) • Proprietary content linked to proprietary device and/or platforms © Synaptic 2013 Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV A quick SWOT analysis
  31. 31. Connected TV, Smart TV, Second Screen What are we talking about ? Strengths 23% % of televisions sold that are connectable (source: CSA): worldwide: 90% (ScreenDigest) 2012 80% 2013 95% Penetration rate of Television in Europe 73% Penetration of Internet in Europe 75% Penetration of Digital TV 21/27Digital television (by cable, TNT,Satellite) will be the standard in 21 EC countries (over 27) in 2015. Geoffrey Laloux – May 2013 – © @Synaptic_be
  32. 32. Strengths Infrastructures, usages and devices are already widely widespread Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV A quick SWOT analysis
  33. 33. Weaknesses More than half of Connected TV are…. disconnected from Internet Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV A quick SWOT analysis
  34. 34. Weaknesses • Heterogeneous offer (i.e VoD) • Multiple payment systems and multiple authentication required • Multiple different experiences • Disappointing service offer • Low image quality (replay in Mono and SD) • Overlap between Smart Tv and Digital TV services • Etc. Weak usability of Smart TV interfaces… and of Remote controls. (Smartphones, Tablet, remote keyboards and motion control are proposing better performances) Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV A quick SWOT analysis
  35. 35. Opportunities • Locally produced (or adapted) contents are the best defense • For consumers: more direct and fast access to latest contents • New commercial formats. • New advertising formats (i.e Product Placement) • Opportunity to develop a new business model for public TV broadcasters Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV A quick SWOT analysis
  36. 36. Threats • Supra National competitors • Channels vs. Devices vs. Rights Owners • Risk of disinterest and lack of investments in economically less attractive areas • Managed Network (Cable & ISP) as bottleneck • Resistance of TV Broadcasters • Increasing power of search engine (dominated at 95% by Google) • Proprietary content linked to proprietary device and/or platforms Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV A quick SWOT analysis
  37. 37. Threats Major players such as Google, Apple, Microsoft, etc. have now the distribution channel and the financial ability to negotiate exclusive content distribution worldwide directly with producers. Local TV channel Local VoD operator (Paid TV operator) Viewer TV Broadcast VoD & CatchUp distribution Before And Now Exclusive VoD distribution Viewer TV Broadcast* * The local TV channel may eventually continue to distribute a translated content Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV A quick SWOT analysis
  38. 38. The end of the classical content lifecycle (Movie, then DVD, then original TV broadcast, then syndication etc.). What Europeans call “the cultural exception” and “media chronology”. Threats Geoffrey Laloux – May 2013 – © @Synaptic_be Time Line + 4 months End availability in movie theater DVD, VoD, Blu Ray + 8 months Paid TV channels (dedicated to Movies) + 10 months TV channels (co-producers) TV broadcast minimum 22 months after movie release Now Connected TV and Digital TV A quick SWOT analysis
  39. 39. Time Line + 4 months DVD, VoD, Blu Ray + 8 months Paid TV channels (dedicated to Movies) + 10 months TV channels (co-producers) And then Threats The end of the classical content lifecycle (Movie, then DVD, then original TV broadcast, then syndication etc.). What Europeans call “the cultural exception” and “media chronology”. Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV A quick SWOT analysis
  40. 40. Content Owner Market A Local TV broadcaster Market B Market C Local TV broadcaster Local TV broadcaster End user End user End user New business model IP Network & ISP No more obligation for a content owner to manage specific syndication agreement for each country. International events like World Football Cup, F1 championship or Olympics games could be sell directly to international end users. Threats (or opportunity) Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV A quick SWOT analysis « Old » business model
  41. 41. Threats for some, opportunity for others Content Channel Microsoft want to produce new episodes of « Heroes » to propose them exclusively on VoD via Xbox and MSN Amazon is now the producer of ZombieLand. An exclusive content to be proposed on next gen of Kindle and Amazon Set Top Box. Playstation store give access to the huge music, game and movie catalog of Sony media mogul. Connected TV are expected to propose the same. The Football – Soccer team ‘Barca’ wants to broadcast its matches on his own (paid) TV channel only. (from 2014 season). Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV A quick SWOT analysis
  42. 42. Geoffrey Laloux – May 2013 – © @Synaptic_be Conclusion (kinda)
  43. 43. The full potential of Smart TV / Digital TV will be unleashed once high quality content will be widely available High quality content will be produced / available once a new business model will be defined between public TV broadcasters and managed network operators Private TV broadcasters need to diversify incomes sources or at least to find new advertising formats Consumers must adopt new ways of consuming TV content (On demand access, Pay per view, non linear content, multi screen viewing) Conclusions Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV A quick SWOT analysis
  44. 44. Raise Create Reduce Eliminate • Easy of use / access • Usability • Easy to use remote control (motion control, keyboard etc) • Open standards (Hbbtv) • Service offering • Proprietary technologies • Bottlenecks (resistance to change) • Country-restricted content (internet is worldwide) • Unique identifier / Single sign on • Cross platforms analytics • Unique TV appstore (no more restricted to some manufacturers) • Search engine able to browse Program guide (omni channels) • Unified payment system • Devices with no upgrade options • Services / content with no or low added value © Synaptic 2013 Geoffrey Laloux – May 2013 – © @Synaptic_be Connected TV and Digital TV A quick SWOT analysis
  45. 45. Geoffrey Laloux – May 2013 – © @Synaptic_be Contact https://be.linkedin.com/in/geoffreylaloux @Synaptic_be

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