Manufacturers and broadcasters take an x-ray of the present and future of connected TV under HbbTv

The 5th Annual Symposium on HbbTv brings together the main industry players in Madrid to discuss connected television with the possibilities opened by the latest version 2.0.1 of the standard in the spotlight.

HbbTv Association, aimed at promoting an open standard for the distribution of broadcast and broadband services through connected televisions and set-top boxes, and AEDETI, a Spanish association that brings together companies and entities related to interactive television, are organizing today and tomorrow in Madrid the 5th annual symposium on HbbTv.

This meeting coincides with a crucial moment for the development of hybrid television after the publication of the latest version of the HbbTv 2.0.1 standard, whose first developments we can already see in the United Kingdom and Italy.

On the other hand, the Smart Tv Alliance and the HbbTv Association have announced a close collaboration to extend the HbbTv specification to Over-The-Top services.

Antonio Fernández-Paniagua, deputy director general of Planning and Management of the Radioelectric Spectrum of the Ministry of Industry, has been in charge of opening these days and welcoming all the professionals from around the world who are gathering these days in Madrid to debate the present and future of hybrid television.

José Luis Vázquez, president of AEDETI and CEO of Mirada, has reviewed some of the most important milestones that from 2008 to today have consolidated interactive television in Spain. Vázquez has recognized the important push that both RTVE and other broadcasters and manufacturers have given to the development of HbbTv 2.0.1 with a return channel between the receivers and the transmitter. “In this sense, we are at the highest point in the sector in the Spanish market,” he stated.

"The new hybrid television standard 2.0.1 allows synchronization, multi-device, HTML5... Its official publication in the coming weeks will allow the development of powerful applications for the user. We are no longer facing the definition of a broadcasting standard, we are facing something alive and we are ready for the market, for the business," said Vázquez, before a practically full auditorium, with nearly 200 representatives of the Spanish and international audiovisual industry.

HbbTv in the world

Juergen Boyny, global director of consumer electronics at the market research company GFK, has reviewed the current situation of connected television in the world. "Connectivity has been aligned with consumers since the appearance of the first electronic devices. Beyond a wired connection, connectivity represents a different experience thanks to the Internet and mobility," he assured.

Currently, HbbTV is available in the vast majority of European countries, among which the high implementation of the standard stands out in Spain and Germany. In most of the territories analyzed, the presence of HbbTV is also closely linked to the penetration of Smart TVs in homes.

Consumer electronics are changing coinciding with the auge of new emerging markets such as Africa or India with a tendency to own several devices per inhabitant. The family of connected products is growing exponentially and will do so even more with the addition of new devices in relation to the Internet of Things and the “smart” concept, Boyny stated.

"The consequences are that the electronics industry is transforming high value into high volume with the entry of new participants that enter the production of small devices such as drones, cameras, speakers...", he emphasizes.

As for television, global television sales are a stable market that is slowly growing (sales of 231.3 million units are expected in 2017). According to GFK, consumers who decide to buy a new television will opt for a large screen format greater than 60 inches (6% in 2017). In 2017, forecasts indicate that 35% of television sales will correspond to televisions with 4K UHD resolution. As for connected television, small screens usually do not have an Internet connection. However, of total sales, 47% will be smart in 2017.

Boyny has emphasized that HbbTv is present today in around twenty countries with 18 million televisions connected this year and strong penetration in countries such as Germany, Switzerland, France, Austria, Holland, Estonia, Austria and Poland.

In Germany, for example, HbbTv is present on 84% of screens sold with a size greater than 50 inches, a figure that drops to 24% for those below 32 inches.

Regarding the use of smart TVs, 53% of Germans say that they have their television connected to the Internet, while in Spain it is already 48%. Regarding the services they use, catch-up applications, YouTube and VoD stand out.

As for the future, the consumer, familiar with applications for smartphones, will gradually adopt these apps on their television. "The consumer wants to see their favorite content no matter where it comes from or when it is broadcast. There will always be movies in primetime but now we will have the opportunity to watch it at any time. It will not matter so much when a content is scheduled," Boyny remarked. The user will also demand more information and content from the Internet with a greater level of detail than in the past. Furthermore, he emphasizes that "we have to take into account that for consumers their favorite program on television is important and they have services like YouTube, Netflix or Amazon in mind but they do not know what HbbTv is. It is necessary to convey to the consumer what the concept of HbbTv is so that it is as familiar as the concept of the remote control. If a technological product is not easy to use it will be very difficult to develop it."

GfK data shows that most users use HbbTV to access on-demand content from their favorite channels (58% of HbbTV users do so), watch videos on YouTube (57%) and view other video-on-demand platforms (48%).

Differential value of HbbTv

Ignacio Gómez (director of innovation at RTVE), Regis Saint Girons (co-president of the Marketing group at HbbTv), Erik Vold (broadcast and IT engineer at NRK) and Anil Nihalani (director of connected television at Mediacorp) have participated in a round table moderated by Juergen Boyny in which different experiences of connected television in the world have been put on the table.

Mediacorp has been offering free and premium OTT services in Singapore for three years now under the Toggle brand with a range of catch up, VoD, linear streaming and live content distribution on any device. Nihalani reviewed Mediacorp's experience in DVB-T2, which began broadcasting at the end of 2013, with coverage of 98% of the population. In his opinion, it is necessary to seamlessly integrate content by combining broadcasting with on-demand content and services such as the red button.

Ignacio Gómez highlighted that in 2015, 1.06 million HbbTv televisions were sold in Spain, which puts 4.5 million homes with television connected through the HbbTv standard (85% are HbbTv 1.2.1).

In 2015 alone, of the 3.2 million televisions sold, 1.4 million were connected and the vast majority supported HbbTV. According to data presented by RTVE's innovation director, two million are regularly used to access different connected television applications.

“Through HbbTV we can generate different streaming signals and show them on the television, to, for example, cover simultaneous content from different locations,” explained Ignacio Gómez.

In his presentation, Gómez reviewed some of the hybrid services offered by RTVE such as +24, +TDP or its catch up video platform Alacarta. On the other hand, he highlighted that on the occasion of the Rio 2016 Games, users were able to access 19 live signals with streaming (DASH + HLS), which represented about 350 TB live and 55 TB in VoD.

It has also presented the RNE service for the distribution of radio programs with Dolby Digital sound (DD+) and the new 4K content service that will be available to those who have sufficient bandwidth.

Gómez has also focused on the service that the Catalan TV3 offers for subtitling based on EBU-TT as well as the proposal under HbbTv that the Basque EiTB offered on the occasion of the last regional elections.

Regarding the challenges that HbbTv has, Gómez has pointed out the transition to version 2.0.1 working hand in hand with manufacturers to support next-generation applications, ensuring compatibility with the previous version of the standard. “In addition, a clear and differential value of HbbTV will have to be transmitted compared to a smart TV environment,” he assured.

Erik Vold has indicated that the Nordic broadcaster will be working from December of this year with experiences with the HbbTv 2.0.1 standard, especially on issues related to accessibility. The use of a second screen is growing in the younger population, so we must have a dual protocol so that applications can communicate between themselves and the different devices, Vold commented. "The use of second screens is very popular among younger people. We need connected applications that connect with them and integrate the conversation of social networks," said Erik Vold.

Another notable factor will be the exact synchronization with smartphones in an HbbTv environment, which will allow the development of multi-camera and accessibility applications (subtitles, sign language...) as well as remote control functions from a smartphone or tablet.

On the other hand, it has also highlighted the importance of being able to reuse applications developed in HTML5 in television environments as well as using HEVC coding for the distribution of Ultra High Definition content on OTT.

Régis Saint Girons has reviewed the status of the standard in different European territories, from Germany, where there are 10 million HbbTV devices and 90% are used daily, to the United Kingdom, where HbbTV is still taking its first steps.

“Television used to be movies and entertainment, but now it is evolving into something new that integrates a multitude of connected and interactive applications,” he stated.

Regarding the future of HbbTv in America, Régis Saint Girons has announced that there are conversations with the parties involved in Brazil for a possible development of the standard in the country.

HbbTv: business potential

Broadcasters, network operators and manufacturers have sat down at a round table to discuss the business possibilities offered by HbbTv.

Aisha Petter (sales and marketing director at ProSiebenSat1 Digital), has focused her intervention on the options that the red button opens to access entertainment, information and services, also emphasizing the valuable information provided by metadata in terms of demographic and user consumption figures. Petter has shown some initiatives developed by the German broadcaster to offer content related to the main program as well as services related to e-commerce or video games.

He also wanted to highlight the importance of synchronizing the red button with second screens through HbbTv 2.0.

Heinrich von Hoessle, director of the Addresable TV unit at SevenOneMedia, has shown the results of marketing campaigns carried out in different broadcasters through the use of the red button with successful experiences by brands such as Burger King, Opel or T Mobile. Schmidt has focused on the possibilities that open up when it comes to targeting the advertising message according to the profile of the potential consumer.

Torsten Schmidt, head of OTT and hybrid services at the German MediaBroadcast, has explained the advantages of the Freenet TV platform that allows content providers to connect with users through an easy-to-use interface. Freenet also offers numerous applications based on HbbTv and special functions for users subscribed to the paid modality. One of the advantages of this platform is that it offers seamless integration into the channel list thus allowing a true zapping experience.

Schmidt concluded his speech by assuring that “MPEG DASH, H264 and HEVC raise the quality of OTT services to a very competitive level.”

Merwan Mereby, president of the Smart TV Alliance and vice president of product strategy at Panasonic, has commented on the problems faced by the sector in relation to connected television due to the lack of interoperability. In his opinion the motto should be “Build once, run everywhere – develop once, run everywhere.” The challenges now involve developing high-quality applications to achieve attractive audiences with a certain scale for brands, he stated.

Challenges and doubts

Petr Mazanec (CTO Mautilus), Pawel Tutka (HbbTv expert at Hydra.Tv), Matthew Huntington (CTO of Freesat) and Mikko Karppinen (director of Icareus) have participated in a panel moderated by Niko Muñoz, Innovation Hunter Chief at Inicia Corporate.

Mazanec has highlighted that HbbTv is full of challenges and doubts compared to pure OTT initiatives such as Netflix or Amazon. "We have to monetize what we have and to do so we will have to be more 'sharks' than we have been until now. We believe in this technology but broadcasters consider it as just another technology," he commented. The Mautilus manager has presented his initiative for a virtual television channel developed in the Czech Republic.

For his part, Pawe Tutka has shared some examples of developments under HbbTv for Polish television. "Many agencies believe that HbbTv is adequate to include their typical spot. But if you broadcast the same spot, we will not offer something interactive that captivates users," he defended. For this reason, Hydra.Tv has developed more interactive formats to introduce them on television through teasers and interactive applications. As we have seen at this Symposium, brands such as Axa, Philips, Orange or Nescafé have already been able to successfully test in the Polish market the potential of HbbTv with interactive video elements through HbbTv together with interactive applications “without limitations of space or time”.

From his point of view "it is very important to talk to clients about the interactivity of the product. There are clients who would invest in an HbbTv campaign but are unaware of its real potential."

Matthew Huntington has outlined the position of the British satellite operator Freesat regarding HbbTv. In his opinion, one of the objectives that HbbTv allows is to replace linear advertising with managed and addressable advertising. However, in the United Kingdom 73% of the population consumes live content compared to 14% who consume recorded television and only 4% access on-demand and catch-up TV services.

Huntington recalled that in the US, addressable advertising has allowed thematic channels to multiply their advertising revenue by four in the last two years.

"We have the technology to distribute addressable advertising and the business model but a collaborative model between companies will be necessary since a broadcaster alone could not implement this advertising and exploit the inventory. To develop this framework we can use a technology introduced in the devices or take advantage of HbbTv to have a specific segment for advertising with videostream to distribute it to a specific user," he commented.

Mikko Karppinen has shared Icareus' experience in developing innovative television services. The main challenge for advertising on television is “getting viewers to the stores.” In this line, a campaign they developed based on mobile coupons that allowed anyone who presented it at a network of kiosks to obtain a free bottle of water last summer stood out. This campaign was based on synchronization between television and mobile, achieving magnificent results. Despite the low use of HbbTv in Finland, 4% of viewers interacted with the campaign (compared to 1% on average).

Addressable advertising

“Replacing live ads during the advertising break is possible through an IP signal, so we could have ads aimed at a very specific audience within a home,” said the British executive. Similar initiatives have already been developed in the United States and the United Kingdom by pay television platforms such as DirecTV or SKY.

“If free-to-air television does not go for targeted ads (known as addressable ads in advertising jargon), it will lose the battle against pay television, which already has a greater segmentation capacity,” Huntington added. “And free-to-air TV can already do that through HbbTV.”

Similar initiatives have also been developed experimentally in Finland through digital terrestrial television (DTT). “Television is no longer something linear, it is now made up of many more services, which is why we have to work on targeted and interactive advertising,” explained Mikko Karpinen, director of Icareus.

“Finland is a small market, but this type of advertising achieved an engagement level of 4%, while the other types of ads are below 1%,” Karpinen said. “And the audience data that was obtained was much more detailed.” Furthermore, the Finnish executive noted, during the advertising impact study, viewers claimed to have perceived targeted advertising as something non-invasive, as a service.

As a summary, the general lines highlighted by the eight advertising experts who spoke on the first day of the HbbTV Symposium 2016 indicate that HbbTV allows greater segmentation of the audience, at levels that were previously only achieved by paid operators, and great interactivity. Although there are challenges inherent to a technology that is taking its first steps at a commercial level, hybrid television provides new income opportunities for open television operators.

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