The Future of Tv 2014

THE FUTURE OF TV 2014

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Innovation, inspiration, and monetisation Every year the TV industry presents technological advances that have the potential to change the industry. 2014 is no exception. Moreover, this year represents a landmark for the TV industry. Not only are there advanced products and services that offer a step change in features, there is a commiserate revolution in connectivity with not only high speed ﬁxed broadband networks becoming ubiquitous in all of the major markets but also the availability of high bandwidth mobile networks capable of supporting TV and video in acceptable quality.

Such matters were manifestly demonstrated at the International CES 2014 which was described by its organisers as a forum for never-before seen tech breakthroughs and thousands of new products, where innovation took centre stage. “Technology of the future was widespread at the 2014 CES, where executives from every major industry came to see, touch, interact and do business at the world's intersection for innovation,” said Karen Chupka, senior vice president of International CES and corporate business strategy.

“Amazing new products emerged in the areas of wireless, apps, automotive, digital health and ﬁtness, 3D printing, start-up tech and so much more. It was an incredible event that brought the global tech community together and successfully celebrated and showcased the amazing innovation that is a hallmark of our industry.”

For TV, innovation included LG's 77EC9800 UHD OLED TV and webOS Smart TV; the Panasonic 4K Ultra HDTV Life+Screen AX800 series; the much-lauded Samsung 105” curved UHD TV and 78” U9000 curved UHD set; the Sharp Aquos HD TV line-up including the new Aquos Quattron+; and the Sony 4K Ultra Short Throw Projector. Just looking at the aforementioned brand names gives as clue as to one of the star items for 2014: UltraHD. 2014 is set to be the year when UltraHD starts making serious commercial traction.

It should be noted that UltraHD is not quite synonymous with 4KTV. This issue, and others, will be investigated in this issue. Drawing on CES 2014, we'll look at what's likely to inspire the TV and broadcast industry in 2014. We hope we can provide a good roadmap for the year ahead.

Making the second screen the ﬁrst choice for TV 4

UltraHD: more than 4K 6

New Year, new video monetisation strategy? 8 Making the second screen the rst choice for TV

For the last three or four years, tablets have cemented themselves into the TV landscape. Driven by increasing innovation by the tablet vendors — in particular Apple with the iPad and the Samsung Galaxy — not only have device sales rocketed, whole strategies for TV viewing by pay-TV providers have been transformed.

It's fair to say that up until now, pay-TV providers' understanding of the dynamics of what the second-screen market has been offering has been based mostly on insight and prediction. Now the ﬁrst reliable data not only of second- screen usage, but also how this is being monetised, is coming to prominence.

Interestingly, CES 2014, unlike its previous two or three shows, wasn't dominated by tablets. Data released by leading market research ﬁrm IDC at the end of January 2014 perhaps gives a hint as to why. The analyst calculated that worldwide tablet shipments grew to 76.9 million units in the fourth calendar quarter of 2013. This represents 62.4% growth over the previous quarter and 28.2% growth over the same period a year ago. For the full calendar year 2013, worldwide tablet shipments totalled 217.1 million units, which is up from 144.2 million units for the full year 2012 and represents a year-over-year growth rate of 50.6%.

As to who will lead the second-screen market, IDC found that Apple's worldwide tablet market share for the quarter grew to 33.8%, up from 29.7% in the third quarter but down from its 38.2% share in the fourth quarter of 2012. The iPad maker was being challenged by Samsung who claimed the second-place spot thanks to its portfolio of products and increased carrier support in markets like the US, grabbing an 18.8% share worldwide, up measurably from 13% in 2013. Rounding out the top ﬁve were Amazon (7.6%), ASUS (5.1%) and Lenovo (4.4%).

Yet while such growth rates are, IDC stressed, impressive, the company said that they are down “dramatically” compared with the year-over-year rates of the same quarter one year ago (87.1%) and indicate a signiﬁcant slowing of the overall market. "It's becoming increasingly clear that markets such as the US are reaching high levels of consumer saturation and while emerging markets continue to show strong growth this has not been enough to sustain the dramatic worldwide growth rates of years past," explained Tom Mainelli, research director, tablets, at IDC. "We expect commercial purchases of tablets to continue to accelerate in mature markets, but softness in the consumer segment — brought about by high penetration rates and increased competition for the consumer dollar — point to a more challenging environment for tablets in 2014 and beyond."

And therein exists the key to 2014 for the TV industry. Strong mature markets such as the US and Western Europe being able to support second screen industries.

But how will these markets be monetised? Research released at CES 2014 by the US Consumer Electronics Association (CEA) and National Association of Television Program Executives (NATPE) suggests that broadcasters have some way to go to fully realise the potential of second-screen services, in particular how to monetise the same content broadcast on all screens at the same time.

Fundamentally, the research concluded that there was tremendous potential in content designed for synchronous second- screen viewing and the simultaneous usage of both a primary screen and second device. Indeed there is a general consensus that the second screen is as an inevitable part of the future. Most study participants said they are excited about the opportunities second-screen content will provide creators, from building and sustaining a brand to providing a more meaningful connection between viewers and content. They view the second screen largely as a tool to drive viewers back to ﬁrst-screen content.

4 There was consensus among the producers and content creators surveyed that content not meant for live viewing presents an additional second-screen opportunity to maximise and extend their brand. While opinions about the second screen were mixed, nearly all agree that, if done properly, second screen offers a signiﬁcant opportunity to grow and sustain audiences around appointment viewing television and to increase viewer loyalty.

Additionally, the producers and creators surveyed found that the second screen enhances the viewing experience in a number of ways: building social currency among viewers; making viewers feel special; bringing about a deeper experience with the primary content; creating a shared viewing experience and sense of community among fans; and maintaining a show's relevance by offering viewers a platform to continue to interact and talk about the programme, even when it's not on air.

Yet even though some believe there are strong opportunities for synchronous viewing going forward, producers were found to be still searching for the best solutions to optimise technology to create a seamless experience for the viewer. Indeed the survey found second-screen content designed for synchronous viewing does not currently have unanimous support among show runners beyond sports, reality shows and news.

Moreover, at present synchronised content available for TV programmes does not generate strong positive perceptions, with only 13% indicating that it makes their viewing experience “much more enjoyable.” Only 42% have tried synchronising their content experience to live TV and almost four-ﬁfths of second-screen users access their connected device while watching TV programming, with nearly all of such views accessing asynchronous content either right before watching a show, right after watching or between episodes/seasons.

Very few found navigating synchronised second-screen content difﬁcult, but those who did cited a number of technical barriers that keep the synchronised experience from being ideal. The most cited issues are related to connectivity, content that is not optimised for the particular screen size and difﬁculty in locating content online. More than half of those who access synchronous second-screen content were found to do so during commercials, which, said NAPTE and the CEA, provides an opportunity to deliver provide synchronised content that can be easily and quickly accessed during commercial air time.

“This important research study underscores the exciting opportunities for consumer technology device manufacturers to market connected devices and potentially collaborate with content producers to enhance and improve the second-screen experience,” said CEA president and CEO Gary Shapiro. “Consumers accessing synchronised content generally ﬁnd it fun to use and more connected to the shows they are watching. At the same time, the study indicates there is an opportunity to expand consumer engagement with the second screen across a broader variety of programming.”

“The ﬁndings in this study present new information, challenges and signiﬁcant opportunities for content producers and advertisers,” added NATPE president and CEO Rod Perth. “We know TV viewers are beginning to use the second screen because it has the potential to extend enjoyment of the viewing experience. We believe this research study will illuminate new entertainment possibilities for consumers as well as content creators."

And these possibilities will only be realised by identifying and then addressing the key areas of consumer interest in engaging in the second-screen experience. In this way both device manufacturers and content producers will be able to create a winning, strategic approach to develop the second-screen market by providing tangible beneﬁts to viewers.

5 UltraHD: more than 4K

Anyone talking about the UltraHD market this time last year would almost certainly be commenting from a position of speculation, especially when considering what type of business there was. In January 2014 this position was rather ﬁrmer. There is no doubt that the UltraHD TV industry is quickly gaining momentum, making its move from being a true viable 'next big thing' in broadcasting.

On the eve of the world's largest consumer electronics show, leading analyst IHS upgraded its forecast of shipments of both tablets and UltraHD-compatible TVs. After observing what it called "swift" reductions in pricing, IHS now predicts 38.5 million UltraHD LCD TV sets will ship in 2018, up from 1.5 million in 2013. It is forecasting huge growth for 2014, with shipments soaring by 500% to reach ten million in 2014.

"While television brands will show off their massive new ultra high deﬁnition sets at CES, the real focus for UltraHD makers in 2014 will be cost reduction," said Jusy Hong, senior analyst for consumer electronics & technology at IHS. "Lower pricing will enable the market to expand — but UltraHD sets still have a long way to go before they command a major share of the overall market. In 2018, UltraHD will account for only about 16% of all LCD TV shipments."

But one only had to wander around CES 2014 to see this momentum translated into thronging crowds gathered round the booths occupied by the likes of Samsung, LG Electronics and Sony.

Working on the basis of wanting to be the biggest name in UltraHD, Samsung unveiled to huge interest its 105” U9500 Curved Ultra High Deﬁnition TV and 85” U9B Bendable UltraHD TV to consumers in the second half of 2014. The former is the world's ﬁrst and largest curved UltraHD TV and is said to be the largest TV ever with a movie-theatre aspect ratio of 21x9 to create a truly cinematic viewing experience in the living room, with 4K content very much centre stage in terms of key applications. The 85” U9B Bendable UltraHD TV transforms from a at panel to a curved TV design with a touch of a button enabling viewers to control the way they want to watch according to their individual circumstances.

“Given the tremendous media and industry reception for these new products, we are excited to bring our 105” Curved UltraHD TV and 85” Bendable UltraHD TV to consumers around the world,” said HS Kim, executive vice president of the visual display business at Samsung Electronics at the launch. “People who are passionate about entertainment will have a whole new way to experience the content they love with these exciting new models that showcase exceptional design and UltraHD picture quality.”

There's a huge assumption here: that there will be 4K content available in commercial volumes. As well as other key issues such as pricing and quality of display, it was lack of content that really struck the death knell for 3DTV. The 4K industry seems utterly determined not to make the same mistake.

6 Somewhat overshadowed by the TVs on display, at CES Samsung announced that it would bolster the UltraHD ecosystem by working with global content partners to help accelerate consumer adoption and access to UltraHD content. The logic of the move was very clear to the CE giant. “As a market leader, we have responsibility to not only introduce the most advanced products, but also build the relevant ecosystem and market,” said Kyungshik Lee, senior vice president of the service strategy team of visual display business, Samsung Electronics. “We will continue to work with global content partners and distribution channels to accelerate consumer adoption and access to UltraHD content.”

Samsung plans to offer an UltraHD content streaming service through each company's application and other technologies by working with leading streaming video providers including Amazon, M-GO and Netix, as well as cable TV provider Comcast and satellite TV provider DIRECTV. Samsung UltraHD TV owners will be able to enjoy the company's UltraHD content streaming service in an easy and convenient way by downloading these applications from Smart Hub.

In order to accelerate consumer adoption and access to UltraHD content, Samsung is also working with Amazon, Comcast, DIRECTV, M-GO and Netix to integrate UltraHD content within their respective TV applications. It has in addition launched an UltraHD Video Pack — comprising a hard disk loaded with UltraHD movies and documentaries — in partnership with Hollywood production studios including 20th Century Fox Home Entertainment and Paramount Pictures.

Growing online video company Amazon also chose CES 2014 as a springboard for its 4K plans. Its Instant Video service has joined forces with leading CE ﬁrms, Hollywood studios and TV companies to offer customers a premium 4K UltraHD experience. With partners such as Samsung, Warner Bros, Lionsgate, 20th Century Fox and Discovery, Amazon Studios will shoot all 2014 full original series, including comedies and dramas, in 4K UltraHD.

"Customers are excited about the future of 4K and the next evolution of high resolution video. We're working with consumer electronics leaders and Hollywood studios to make that a reality," explained Bill Carr, vice president of digital video and music for Amazon. "There are a number of elements that need to work together to create a true 4K experience for customers — you need great content and compatible devices but you also need a service that can deliver that content to your devices so that it plays beautifully — we're excited about making that a reality."

"2014 will be a breakthrough year for UltraHD, and it is important to deliver on not only the top-of-the-line products but also great content to fully enjoy the beneﬁts of UltraHD," added Samsung's Kyungshik Lee. “[We are] excited to work with content services like Amazon Instant Video to bring the clarity and life-like quality of 4K to our customers."

There's something really interesting in Lee's statement in that he mentions 4K and — in no way suggesting that he as Samsung spokesperson was making this point — it has become something of a trend to use 4K as a synonym for UltraHD which in turn was simply 'better' than HD. This is somewhat incorrect, suggested Chris Cookson, president, Sony Pictures Technologies, at a breakout session at the show. “There' a danger people see 4K as better than HD Blu-ray. We need to educate. UltraHD should include more than just 4K resolution of images. It's also about dynamic range [of input], colour gamut and brightness levels. ” Furthermore though, Cookson said that there was another step to ensure 4K's success: gaining the conﬁdence of the post-production community. “If we design an infrastructure with 4K as part of it, then [the added cost of] 4K becomes a non-issue. The problem is that the post-production industry needs to be conﬁdent that 4K is real and there will be a business to recoup investments.” Cookson added that the problem was one of price, not cost, but that in any case there was only a small increase in this when business amortised investment across all of the titles they would be producing.

7 New Year, new video monetisation strategy? Luke Gaydon, VP of Media, EMEA, Brightcove The past year brought marked change in how publishers and media organisations make money from video. Viewers are welcoming, and have come to expect, a variety of pay models to match the changing ways they're viewing video content – from rentals, to subscriptions, to pay-per-view.

But 2014 is going to be the year that video monetisation really gets interesting. As paid content models mature – and as consumers increasingly demand personalised, addressable video experiences – the opportunities to monetise video will truly transform.

Smart ad insertion Turn on the TV, and playback is a seamless experience, so when a programme ends, another starts. VOD should operate in the same manner, and the industry will make great strides in making this a reality in 2014 as we transition from linear to digital distribution across multiple devices. With the shift comes a host of monetisation challenges, but advancements in ad technology will help brands navigate the obstacles and capitalise on the transformation.

Cloud-based advertising will provide marketers with more sophisticated insight from their advertising – everything from reach and interactivity, to play-time and click-through data. Exceeding the level of information available via legacy broadcast advertising, this insight will help brands better target their messages and streamline spend, paving the way for greater experimentation with new formats and delivery.

Server-side ad insertion means that opportunities to monetise TV viewing new experiences will be greatly enhanced. Using the technology, content providers will deliver VOD through continuous playback, serving viewers with related content that enables and encourages consumers to move seamlessly into the next episode or relevant video.

By bundling content together, publishers have an opportunity to sell more advertising and integrate more interactive ad creative. In this personalised environment, viewers will be comfortable with seeing ads after every few videos, as part of an addressable, personalised-TV experience. Clickable calls-to-action within those video ads will be easily achieved with server- side ad insertion and will provide a more interactive means of reaching and engaging viewers.

How these new advertising assets fare will be tracked by a new wave of technology since measurement – from user behaviour, through to video playback and quality – will remain a vital part in any monetisation strategy.

Monetising live video Live ad insertion is going to be vitally important this year as live programming surges, opening up new channels to the individual user. We're seeing dramatic growth in live content coming from all types of organisations and this is set to soar as brands capitalise on the opportunity to push out timely content alongside major sporting events such as the World Cup and Winter Olympics.

Indeed, the drive towards relevant, personalised TV means consumers will increasingly expect live content as part of a lean- back experience regardless of content source. Traditional boundaries between the likes of a live show and an advertisement will likely be removed, paving the way for powerful engagement – especially when high-quality live streaming on any device is combined with social channels.

The ability to deliver engaging, high-quality content in real-time provides a unique medium for story-telling and building brand impact. What's more, as video gets personalised with better search and recommendations, and seamless delivery across all screens, content providers have a unique opportunity to maximise that messaging in combining broadcast-like linear delivery with sophisticated, cloud-driven advertising.

That's why every media organisation's New Year's resolution should be to take advantage of the growing opportunity for smarter monetisation made possible by the appetite for smarter, seamless programming.