New television, new business models

AEDETI, Spanish Association of Interactive TV Companies, analyzed this Wednesday, in a Conference under the title of 'The new television' in which representatives of the different networks and operators participated, the challenges faced by the television market such as the emergence of new hybrid business models through broadband.

Bernardo Lorenzo, General Director of Telecommunications, stood out at the opening of the 'New Television' Conference organized by AEDETI, that television faces important transformations that will affect both the way of consumption and the arrival of new business models after the blackout. Lorenzo has acknowledged that the Ministry of Industry hopes that in January 2015 all the multiples will be assigned, having released the 790-862 MHz band, thus achieving more spectrum capacity for television stations that will be able to offer new additional services.

“This entire process would be carried out from a principle of equity in both spectral capacity, coverage and antennaization, trying to guarantee the minimum impact on users and ensure the maximization of the spectrum,” Lorenzo assured.

Lorenzo has estimated between 12,000 and 16,000 million euros what the liberation of the 790-862 MHz band for new mobility services would mean for Spain.

Regarding high definition, Bernardo Lorenzo has commented that the Royal Decree prepared by the Government to regulate high definition establishes H264 MPEG-4 encoding with a minimum resolution of 720 active lines. Regarding the procedure for the start of HD broadcasts, it only establishes a notification model for broadcasters, so you will only have to notify it to the corresponding administrative body. It will also include the obligation that all televisions larger than 21 inches must include a DTT HD tuner.

Lorenzo has recognized that with regard to interactive television it has not been possible, despite the efforts of the Ministry, to achieve a consensus in the industry unlike what happened with the development of DTT or high definition.

The General Director of Telecommunications has also made reference to the new hybrid television models, both those in which the Internet is complementary and those that replace traditional broadcasting. “I think there is a very interesting field, for the future, and many manufacturers are working with these receivers, and different platforms are appearing, so a certain standardization would help to market solutions with greater economies of scale,” said Lorenzo.

Three-dimensional television is also experiencing a notable development, having a very clear future, “since it represents a very good opportunity for the Spanish industry” in Lorenzo's opinion. At the moment the Ministry of Industry, within the DVB consortium, is working on standardization through the creation of two working groups, commercial and technical, which have already started the first meetings.

During the opening of this event, José Luis Vázquez, president of AEDETI, welcomed how the analogue blackout process has been carried out, "but we believe that in the working groups of the Technical Forum promoted by the Ministry of Industry, there are open aspects for the industry such as issues related to high definition or interactivity... We would like to see a specific table created for the study of interactivity." Linear television is reaching a turning point, since the viewer wants to participate in the content and the entire value chain, and this represents “an opportunity for new business models such as hybrid television,” in the opinion of Vázquez.

The president of AEDETI has advocated resuming the reflections of the Digital TV Forum (2007), for the creation of a specific debate table on interactive television as a generator of business models. "The viewer wants to participate in television content and all agents involved in the television sector must analyze whether that demand can be satisfied."

The tv after turning off

In a round table moderated by Eladio Gutérrez, president of Impulsa TDT, representatives of public and private broadcasters as well as the operator Abertis Telecom participated, analyzing the resulting panorama after the shutdown.

José Juan Gutiérrez, one of the professionals most involved in the development of interactive television in the RTVE group, has shared in this table a survey recently carried out by a national newspaper among 84,456 Formula 1 participants, which reflects numerous demands related to quality and interactivity (graphic information, on-board camera selection, high resolution,...). According to Gutiérrez, “unsatisfied demand is an opportunity for competition.” "Television is a continuous flow of content that is distributed over the air to a massive, indiscriminate and passive audience. Today a television without a grill seems as strange to us as a clock without hands in 1968," added the RTVE director.

Looking to the future, Gutiérrez believes that we are facing a television that will be viewed on multiple devices and consumed individually, anyone will be able to put content on the television, there will be competition for the viewer's leisure time with other devices connected to the television, the increase in video-on-demand consumption will diminish the importance of the grid, the life cycle of the programs will be lengthened, social networks will have a greater impact, each viewer reached will cost money, and the viewer will be proactive.

He has also highlighted that "competition for the viewer's leisure time no longer occurs only between broadcasters, but also competes against any operator that can put content on the Internet. The increase in video-on-demand consumption will be more important, and changes will be necessary in the distribution cost structure, moving from the flat rate of broadcast platforms to the cost per user for IP distribution."

Fernando de Miguel, director of resources and operations at LaSexta, has highlighted the extreme division that is occurring in the audience after the analog blackout in which national generalists account for 59.4% of the audience; the regional ones 11.3; the DTT themes on the 17th; payment themes 7.2; the local ones on o,2; and the rest accumulate 5%. De Miguel has pointed out high definition and interactivity as two possible incentives for the development of new services in a country where there are many millions of televisions.

He has also reviewed some of the challenges that television stations face, such as the exploitation of different sources of financing (paid and open), and the development of transversal programming with investment in creativity. De Miguel, who has not ruled out new concentration processes in the sector, has emphasized the need for the complete digitalization of production with a change in the production model under an industrial scheme. Finally, he insisted that "the public wants to see product, creativity and ingenuity, and operators must, from an industry perspective, offer the content that the public wants, as happened last Sunday in Montmeló in LaSexta where F1 attracted more than five million spectators in a morning slot. An industrial process in this sector will be key to a cost adjustment in the sector that is absolutely necessary."

For his part, José María Casaos, technology director at Antena 3, has emphasized the change in consumer habits that is taking place, forcing broadcasters to face new agents in the social and family leisure market in which the convergence process will play a determining role.

According to Casaos, "Antena 3's strategy is the 3.0 model playing with the three DTT channels, both on television, Internet and mobile, developing a new way of producing multi-platform content for the user to consume when, where and how they want. We are also compensating for a loss of audience on the main channel with the good results of Neox and Nova. The channel group family strategy is optimizing our income by working hand in hand with advertisers so that fragmentation does not prevent the advertiser from positioning itself through from all our platforms, whether in television, Internet, cinema, radio..”

With respect to interactivity, Antena 3 is carrying out many experiences working with content on the Internet and on other platforms with agreements signed with Sony, Samsung, LG... for catch-up TV, video game consoles, social networks... thus satisfying the demand of consumers with new consumption habits. “When negotiating with these players we have missed the existence of a standard that facilitates the development of these new business models,” commented Casaos.

The table was closed by Álex Mestre, strategic marketing director of Abertis Telecom, who reviewed the experience of TDTcom, an online distribution platform for content linked to DTT developed together with Microsoft "to test an environment that makes it easier for the broadcaster to establish itself on the Internet in a competitive manner, maximizing its performance in coherence with its websites." This pilot carried out in 2009 has demonstrated the increase in the consumption of online video content and the difficulty in monetizing online content for broadcasters with high distribution costs and the danger of 'dying of success' in the face of massive demand. The need for a viable economic model for TDTcom and the emergence of connected televisions with the capacity to play OTT (Over-The-Top) online content has also become evident. Mestre has highlighted the 38% increase in advertising investment on the Internet, being the content distribution platform that is growing the most in terms of investment volume.

Mestre has asked himself: “How can we make a profit from this growth, taking into account that the audience share on the Internet is lower than the audience share on television?” To do this, according to the Abertis manager, “the broadcasters' portals must be at the top of the ranking, so an approach like TDTcom can help concentrate this traffic and, consequently, advertising investment.”

Mestre ha hecho hincapié en la apuesta por nuevas vías de negocio audiovisual, que ya se ha puesto en marcha con éxito en países como Inglaterra (Arqiva, que trabaja en conjunto con los radiodifusores BBC, ITV y Channel 4) o Estados Unidos (Hulu, sitio web que oferta, con el apoyo publicitario, streaming de programas de televisión películas de las cadenas NBC, Fox y Disney). Para Mestre, hay razones de peso para apostar por proyectos como TDTcom, como “el aumento de las audiencias de los radiodifusores; estimular el consumo; máximizar los contenidos, adaptarlos a la multipantalla, además de minimizar los costes de las cadenas”. En el caso norteamericano NBC, Fox y Disney-ABC han puesto en marcha un portal de distribución conjunta de contenidos (Hulu) que en el Q4 ha generado cien millones de dólares con 40 millones de usuarios únicos al mes y más de tres horas de media de consumo mensual por usuario. El espacio publicitario de Hulu lo administra una plataforma que abona el 70% de la inversión al radiodifusor.

The HbbTv model

Jon Piesing, senior technical consultant at Philips and current president of the HbbTv consortium, participated in the conference organized by AEDETI, who reviewed this hybrid TV-Internet model in different European countries such as the United Kingdom, France and Germany. This consortium is made up of IRT, ANT Software, Astra, Canal+ France, France Télévisions, OpenTv, Philips, TF1 and EBU. Piesing highlighted that at this time the consortium is actively working to finally approve a standardization based on existing standards and web technologies including OIPF (Open ITV Forum), CEA, DVB and W3C.

Angelo Pettazzi, head of the DTT content factory Mediaset, also participated in this round table, who provided a review of what is happening in Italy under the direction of the DGTV consortium. Italy began its analog switch-off in 2008, with it scheduled to conclude in 2012, Pettazzi acknowledging that everything is going according to plan, reaching digitalization of 70% of the population by the end of this year. At this moment, the Italian government, at the request of operators, is studying a possible advance of the blackout at the end of 2011 to free up spectrum resources to be able to develop new business models.

The manufacturers' vision

Andrés Román, television strategic planning manager at Sony Europa, has highlighted two aspects to take into account when designing products for the final consumer, such as the connectivity of devices and people, both inside and outside the home.

Román highlighted that at this time interactive solutions for IPTV are being developed by consortia such as DVB or HbbTv, telcos, broadcasters and the manufacturers themselves without there being a standardization in the standard currently found in Europe from MHEG/Connected Tv in the United Kingdom, MHP in Italy or HbbTv in France and Germany.

Since April of this year, Sony and its Bravia Internet Video proposal have included the contents of 6 broadcasters, 3 in Spain (this month there are already twenty, and it is expected that the majority of European broadcasters will participate in Sony's non-linear television proposal before the end of the year.). Sony currently supports MHEG+IP in the United Kingdom and Ireland and MHP 1.0.3 (1.1. in Italy), providing HbbTv support for territories such as Germany and France with expectations in Spain in the short term.

Andrés Román has highlighted that "none of the standards have DRM closed, with functionality limited to on-demand television, confirming a clear fragmentation in Europe. It may be necessary to work with MHEG, MHP and HbbTv together on each television since they are manufactured at a pan-European level."

For his part, Gerardo Lucio, director in Spain of SmarDTV, has explained his company's vision of the value of CAM CI+ standardization, facilitating the convergence of vertical and horizontal business models. The weak points, in Lucio's opinion, of the current operators is that "the majority of manufacturers are suppliers, with limited commercial channels with little strength in retail. The CI+ facilitates access to on-demand services, including video, offering new services through widgets and definitively integrating into the digital home (DLNA), in addition to offering maximum security by eliminating barriers for high definition content. The CAM CI+ allows hosting applications that standardize the operator's service (user interface, EPG...) iDTV and CAM CI+ constituting a complete solution for pay television with a drastic reduction in subscriber acquisition costs, enabling new commercial alliances and opening up possibilities for advanced video-on-demand and value-added services (betting, contests, timeshift,…).”

Daniel Isus, commercial director of Engel Axil, a company specialized in set-top-boxes with more than thirty different models, has recognized that "the blackout, more than an end, should be a starting point with many challenges and opportunities at all levels for all the companies involved in this sector." Isus has detected an evolution in the purchase of set-top-boxes (STB), initially moving from a zapper to new, more advanced terminals with more features such as access to paid DTT, being optimistic about the products that will be presented in the coming months. According to data from Engel Axis, the lifespan of an STB is just 16 months, adapting to the applications that technological evolution entails. In the opinion of Daniel Isus, the arrival of DTT opens new possibilities such as high definition with the consequent step from MPEG2 to MPEG4 at 1920x1080, 3D television and pay DTT.

In the near future, Engel Axil will tend to hybrid IP DTT STBs with DVB-T receiver with high definition and HDMI, PVR Ready with Time Shift and Pause/Fx/RW (USB), common interface for DTT, multimedia connection with all audiovisual equipment (USB/DLNA) as well as Wifi Internet and Bluetooth. Daniel Isus considers that "the immediate future will involve integrating DVB-T/C/S with IP from a television experience point of view with immediate access to content. The hardware must be totally linked to the content, requiring collaboration with the different players such as operators, manufacturers, ISP...".

On the other hand, Alain Motard, account manager at Netgem, has highlighted the benefits of Internet TV adapters compared to classic STBs since they provide a direct link with the user, allowing the operator to offer additional or paid services while responding to adaptation problems by regulators.

Eduardo Faro, director of consumer marketing at Samsung, closed this round table by highlighting that his company's growth in the sale of televisions has been due, to a large extent, to the incorporation of new technologies and services to the television. "We are now facing a revolution similar to the one experienced in the transition to black and white, giving the user a series of tools that they had never had until now, being able to enjoy high definition content and 3D and virtual reality content, in addition to the possibility of connecting the television to other devices and networks. We have to make it easy for the user to access these technologies," Faro highlighted.

In his opinion, the television is once again the center of the home, with interactive TV displaced to the PC, being vital how the convergence between the different screens and technologies will be carried out. Eduardo Faro sees it as essential "to have the user's experience when introducing these new challenges, as well as to have a standard promoted by the Ministry so that the user trusts in the new technologies." While this standardization arrives, Samsung has developed its own Internet@TV platform as a home entertainment center, working hand in hand with local partners such as YouTube, Antena 3, Marca, El Mundo or Terra. Eduardo Faro concluded his speech by assuring that the benefit of the new business model is in the trivergence between manufacturers, network operators and broadcasters, with technological challenges such as the integration of the three screens under the same user experience, cloud content (a challenge at the level of services and standards), 3D in IPTV (avoiding the bandwidth bottleneck) and the development of IPTV platforms.

In short, all manufacturers want a standard to be available as soon as possible, although in the meantime they are developing their own proprietary platforms, further increasing the flexibility in the options to choose from and, consequently, slowing down the possibility of having the long-awaited standardization.

The contents

Aletxu Echevarría, director of Endemol Digital, has wondered if the return on investment in interactive television is effective and is consumed with the same immediacy as on the Internet since "this achieves added value and segmentation that from my point of view has not yet been achieved in interactive television."

For her part, the director of strategic partners for EMEA at YouTube, María Ferreras, has emphasized that the user experience plays a role in developing new experiences that enrich interactive content.

Niko Muñoz, director of corporate development at Havas Media, has been blunt when stating that "users are interactive, and interactivity does not exist today because the industry has not wanted to, among other things because there has been no interest in having a reliable standard... Meanwhile, external agents in this industry, such as Google, will be the ones that will take the lead while the industry continues discussing technologies." Muñoz recalled that "four years ago, when we witnessed the first interactive experiences, the advertising market was asked to make an investment to develop other links in the value chain... and while users have approached Google."

The members of this round table have agreed that the business concentration of broadcasters will generate saturation and an increase in rates that will force many advertisers to look for other avenues. For this reason, television stations would have to improve their multiplatform inventory with professional content while also increasing their audiences on the Internet with initiatives such as the one presented by Abertis with its TDT.com proposal.

Ricardo Alvariño, deputy director general of infrastructure and technical regulations, closed the day by recalling that the Ministry has always been open to creating work forums such as those that in recent years have debated issues such as receivers for high definition and pay DTT, pending reaching an agreement "even if it is minimal" by the industry with respect to setting specifications for interactive television. Alvariño recalled what happened in his day with the MHP regarding the normalization of this platform... "without this experience being able to be described as a success." Now, he hopes that the steps taken will be aimed at finding a standard at the European level setting the corresponding specifications in the Spanish industry, as long as they make effective use of the spectrum, which will help to boost this sector.

AEDETI demands the standardization of interactive and hybrid TV

The Spanish Association of Interactive TV Companies (AEDETI) has shown during the conference held this Wednesday in the SETSI assembly hall in Madrid its full support for the HBB third-generation interactive systems since they will make it possible to take full advantage of the potential of interactivity.

According to the association, it is necessary for a country to choose a standard since only those countries in which standardization has been implemented have interactivity been deployed effectively. Likewise, he has requested that this election cannot wait long, since if it is left longer, pure B systems will complicate the model for our industry, losing an opportunity for developers to grow under the protection of these models.

Desde AEDETI piden también la creación de un grupo de trabajo que establezca un estándar y en el que estén presentes broadcatsers, operadores de red, fabricantes e industria del software. Para AEDETI, el Ministerio de Industria podría ser el moderador de este grupo ya que al no existir unanimidad, debido a los numerosos intereses enfrentados, se hace necesaria una figura que aglutine a los diferentes agentes del sector para estandarizar estos nuevos modelos de negocio. La asociación ha pedido también que, una vez alcanzada una conclusión en este grupo de trabajo, ésta se eleve a rango de regulación obligatoria, tal y como ha ocurrido en la alta definición.

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