If you use a PC as your primary entertainment access device then you are already consuming entertainment OTT (over the top of the internet). It’s a simple model; you have a platform with a lot of horsepower, which is extensible, upgradable and modular. The delivery mechanism is ubiquitous and only limited by your broadband subscription and you are part of a massive seamless audience that gives great collective buying power.

On a TV platform, things have been different. Set top boxes are low powered, they don’t support content format standards that enable them to exist in a world where content is delivered OTT. The audience is fragmented into silos as each platform deployed per telecoms operator is slightly different to the next one and there is no mechanism to change, upgrade and respond to a dynamically changing market.

But if this is the case, why haven’t media center PCs become universal behind our TVs? Well firstly there are certain expectations on a consumer electronics device that are challenges to the media center PC:

1) The need to deliver the TV experience, instant on demand and at broadcast quality.

2) The user interface needs to be: High Performance, Easy to use, Reliable, Consistent, Attractive and Adaptable. Most try to be but just aren’t.

3) Vast amounts of disparate content needs to be organized, contextualized, editorialized to just keep up with the standard of coherent entertainment offered by linear broadcast TV. If we want to move on to the next level it also needs to be personalized to the viewer as well.

4) The need to operate an environment that just doesn’t crash but is still flexible enough to upgrade on the fly. My media center has desperate trouble with standby, USB devices going to sleep and never waking and generally needing a lot of maintenance.

Even with a great CE OTT device, the operator can still have a key role. If they provide a guaranteed QoS/QoE that means the viewer can always get the content they want at a consistent speed. They could implement user interface design principles that enable viewers to interact with their service in a predictable way across all of the devices they will use to access it on. They could also make all content available through the same interface, from short-form clips on YouTube, to linear programming at a particular time, to recordings on the local or network PVR, to photos or music stored on a NAS device in another room – everything needs to be easily accessible.There is also the opportunity to aggregate and provide editorial context to the mass of content out there. Collect the content together, make sense of it with by associating intelligent meta-data that describes it and provide a great interface through which the viewer can find it. And finally, if the operator makes the service personal to a viewer that exists in a time-poor world of overwhelming choice, then through understanding what the viewer likes and dislikes by measuring what they consume (within acceptable limits), they will be able to deliver relevant and compelling content propositions that will truly delight their customers.

Doh! I’ve just realized that I’ve spent a lot of time worrying about formats for internet video delivery. Whether it was, previously, what should I stream my content in so that the most people could view it an acceptable quality and could be shown advertising without being able to rip it off too easily? or now what should my device support in order to enable the consumption of those videos that I previously worried about distributing?

We all used to debate these formats; originally it was Windows Media 9 with their DRM and great services offered by streaming companies such as Narrowstep. Or do you take the other route and encode in VP6 inside an FLV container, no DRM but much more interactive for advertising purposes.

The video player application was just something that enabled the playback of our video in the format we chose to distribute it, pretty transparent really.

It’s a different world now.

The player is the device that controls a good portion of the experience that we give our viewers (taking the network for granted there!), it allows you to understand what they are watching for how long and how often. In short, it’s a pretty useful tool that content owners want to own and brand and use for their own devices.

This presents an interesting problem to device manufacturers in that not only do we have to worry about the video codec and container support but also the player and the framework it is written i.e. my problem is .swf support not just .flv. Last year if you were even remotely interested in exhibitions where TV STB manufacturers were showing their wares, a number of YouTube demos were available. These were largely achieved either by using the fantastic Google API and transcoding the actual video into a native format for the STB or if they were really advanced, natively playing back a .flv and still building the service around the media player using the API.

No one very visible was supporting the player format (.swf) and if they were then they were only going to be able to support it whilst that format didn’t change, but unfortunately it does. Often.

So the answer is we have to build platforms that can update their core application frameworks extensibly, only then can we keep up. Another solution might be that everyone uses the HTML 5 element to playback video and the problem of regularly updating player technologies is mitigated. But is that really going to happen? I think the battle may already be won and what will afford universal OTT content access will actually be the convergence of CE media players onto more traditional PC platforms, not an enforced standard for video players – it maybe just too late for that.

TV Widgets, Gadgets, Slices, Downloadable applications are all very hot topics in 2009 and so we all scrabble to demonstrate support for these extensible application platforms. And by extensible we mean largely being able to connect to other information sources and display them in a neat little persistent package that doesn’t interfere too much with the primary television function of actually watching television.

For those that love to tinker and play and customize their experience to somehow make it their own, it’s a ‘god send’ and a form of entertainment in its own right. However, it’s very much on the periphery of entertainment and therefore will be extremely price elastic. For example, I am quite willing to pay 59p for an iPhone application which will give me a limited amount of disposable fun, but definitely not £19.99. These kinds of applications include weather, stock tickers, games, mobile EPGs and more.

But is it just me? Would you pay for a stock ticker or traffic reports, does weather mean so much on your TV that you are willing to make a payment for it?

Possibly, but possibly not. We know from Apple’s experience and their initially very impressive statistics of over 1bn downloads to 30m+ iPhone’s/iPod Touch’s that an audience exists. However the ratio of free to paid apps is at 30:1 and the ARPU is around $1 which isn’t a significant contribution to any operator’s balance sheet.

However, learning lessons from some established web monetization models the answer may lie in one of the following not at all exhaustive list:

Advertising/Sponsorship: This is likely to be all over the place, unless it is a highly regulated platform like the nature of the currently proposed BBC Canvas project.

TCommerce: Highly likely, eBay TV widgets are very common and online payment services such as PayPal are a small price to pay for not having to become a merchant acquirer yourself.

Branded Content: Very likely in the TV Application world, a big media owner is likely to pay for the development of applications that exist purely in the context of their brand.

Acquisition: establish the application and then sell it and all the registered users to the highest bidder – a bit of a one-shot model.

Sell out your audience: the collection of consumption data is very valuable and where local legislation allows this could be sold to marketers for lead generation purposes.

Interactive Marketing: Application developers may well sell space actually within their existing applications to brands. This is proving popular in video games now.

For the moment applications on demand are a great way of reducing churn and making a platform desirable to new customers but it does seem to take a massive investment for limited returns if micro-payments are the only model. The chance to make real money will probably come from a variety of business models but also critically understanding the customer properly and somehow harnessing that understanding to give them exactly what they want just like personalized TV.

But saying all that, this visual representation of the Apple App store is still irritatingly cool though:

This looks like a great idea:

Jolicloud

Really looking forward to having a go (what a geek!)

A great new interface for Hulu, clearly the ambitions for the 10ft experience are right there!

Hulu Desktop

What it would be to have unlimited memory power and Flash available on mainstream STBs….

This is very cool and one of my favourite examples of a potential idea for visualizing networks of associated entities, in this case the entities are Windows Live users:

Digital Kitchen

anyone got a spare seven-story sphere?

Interesting: other middleware vendors should be worried as the cost of ownership of Mediaroom may start to fall.

Mediaroom Gets Cheaper to Own!

From the theatre director, to the record company; from the Hollywood studio to the sporting governing body the provision of a compelling content schedule forms a structured environment within which we can all be entertained. Without it we rely on our own search and discovery having to actively seek out and compile our own on demand playlist. The question is, is this better than being given to us with editorial voice?

In his recent blog, Andrew Burke (CEO of Amino, who I work for) cites research from Accenture where nearly three quarters of the sample will follow a programme from channel to channel suggesting that in the viewer’s eyes, content is more important than the channel itself which is a point that would be futile to argue against.

But the research also  goes on to say that  “The increase in viewing platforms and programming makes it more challenging than ever for consumers to discover and obtain the best information available about programs they might enjoy watching. Despite more alternatives like the Internet and on-screen program guides that help consumers discover and find new content, consumers are still using traditional means to find content they would like to watch. These include commercials (selected by 40 percent of respondents), channel surfing (33 percent), recommendations from friends and family (30 percent) and TV listings (28 percent).”  

This research suggests to me that content is king but the role of the broadcaster is to act as a guide and mentor to help the viewer understand the potential chaos of an exponentially growing on demand universe. Editorial voice stitching together a suggested on demand playlist that complements a linear schedule will be a massively compelling entertainment offering.

The broadcaster also has a vital role in creating programming we actually want to watch; it’s the record company A&R man finding amazing new recording talent or the entertainment impresario signing a vaudeville act, the agent sponsoring the sporting genius or the indeed the broadcaster commissioning the fantastic new series. By being an active entertainment source in the on demand world that effectively merchandises their wares to the viewer they will derive the revenue needed to support future cross-platform programme making.

Ben Silverman, co-chairman of NBC Entertainment and Universal Media Studios made an interesting point in a recent interview. He points out that he regards NBC as “a content company, migrating our content all over the world and across all platforms to make money.” And that these extra platforms are not cannibalizing primary broadcast programming, the only thing being hurt by VOD, catch-up TV and  video over broadband are “reruns that are now much less valuable than they used to be.”

VOD, catch-up TV and video over broadband are even indirectly good for the consumer if it motivates the broadcaster to produce more original programming to demand our attention.

In a world without the broadcaster providing a compelling source of organized entertainment, my fear is that the viewer could be stuck with a vast cesspool of under-produced user generated rubbish and end up having to actually work hard to be entertained at home.

At the moment we have access to high quality entertainment that can be presented either as part of a linear schedule or on-demand when we want, how we want. The reason we have a lot of this, is because of the broadcaster, the Hollywood studio and the multinational record company. Take that away and our choices of entertainment in the home will be a lot poorer – still, it could be good for cinema!