By: Kurt Scherf, Vice President, Principal Analyst

With the Cable Show taking place in Boston this week, there have been a number of announcements regarding "TV Everywhere," multi-screen pay-TV strategies, and the role of connected consumer electronics such as smart TVs in delivering a new video experience to consumers.

Recently, there were a number of very good articles written by John Moulding at Videonet about how pay-TV providers are working within the framework of connected consumer electronics and smart TVs to deliver their services without need of a set-top box. Specifically, John writes about operators such as Verizon, Viasat and Etisalat, and the role of connected consumer electronics manufacturers and technology vendors in bringing about a “new world order” of content delivery.

We’ve also covered this topic for several years, dating back to 2010, when the first announcements by pay-TV operators and smart TV manufacturers were made. Some of the notable operators delivering at least a portion of their content to smart TVs include:

• North America
  • Comcast
  • DirecTV
  • Time Warner Cable
  • Verizon
• Europe
  • Orange (LG Electronics and Samsung)
  • Viasat (Nordics)
  • YouSee (Denmark)
• Asia-Pacific
  • CJ Hellovision in South Korea
     

Pay-TV operators continue to take interest in the concept of making some or all of their content available on the smart TV or connected CE platform, reducing their CAPEX costs, and increasing customer satisfaction by offering TV Everywhere and other content services to a host of new devices. We have covered this trend in 2011 and 2012 reports, specifically:

• The Smart TV Development Ecosystem; and
• Connected Consumer Electronics: Market Update.

What intrigues me is how much the evolution of video delivery (the ability to bring video directly to a connected CE device like a smart TV, for example) could radically disrupt video delivery as we know it today. There are different approaches to how this can occur:

• The video can be transcoded (from MPEG-2 to an IP-friendly MPEG-4, for example) using solutions from companies like Elemental, Envivio, Harmonic, and RGB Networks. Light Reading has an interesting article about these companies’ roles in TV Everywhere, and notes that they have had success with many of the large U.S. pay-TV providers. At the same time, systems integrators such as Cisco and Motorola are also offering their full-service suites that include media management, transcoding, and content delivery.
• Companies like ARRIS and Motorola, which offer CPE, promote the idea of in-home transcoding via their residential gateways/set-top boxes. In a briefing with ARRIS officials recently, they stated their belief that the operators will continue to distribute MPEG content via QAM for quite awhile, and their in-home transcoding solution will bring in-home multi-screen services to complement out-of-home TV Everywhere services. Eventually, operators will have to migrate to an all IP delivery, but they are in place to serve the middle ground.
• ActiveVideo Networks and Clearleap advocate for the development and deployment of content and the user interface through distributed cloud-based solutions. Their argument is that it allows operators to deploy services for Web content and video without the need for swapping out equipment at the headend or edge.
   

I wonder if the “New World Order” of video delivery will mean significant opportunity for traditional online video publishers/content management companies (Brightcove, Ooyala, Kaltura, and thePlatform)? Although much of their work has been with content providers, will they assume a greater role for all kinds of video delivery? According to industry officials with whom I’ve briefed, these companies could play a role in IP content management in situations where operators aren’t using existing solutions from companies such as SeaChange.

How will CDNs benefit from the evolution? Limelight is trying to get deeper into content management with its purchase of Delve. Akamai touts its ability to provide deeper intelligence about the networks upon which content is being delivered and the devices that are being reached. All this is an effort to more intelligently deliver content in the appropriate format and adhering to specific rules regarding adaptive bitrate streaming, DRM, and other considerations.

I’m also intrigued by companies such as SyncTV and Rovi, which have been playing in a specific area of VoD storefront creation for CE manufacturers and retailers. To expand their businesses, I wonder how much opportunity there might be for them in working with small- and medium-sized pay-TV operators in areas such as video-on-demand. SyncTV has already moved in this direction by partnering with Avail-TVN to offer multi-screen VoD services to customers of Lime in the Caribbean. When you look at the acquisition of Acetrax by BSkyB, it’s clear that Acetrax’s existing partnerships to deliver online VoD to many different kinds of connected consumer electronics played a significant role.

Finally, I think it’s interesting how companies like Accedo Broadband are transforming themselves into “Apps Sherpas” to help guide pay-TV operators through the maze of bringing their pay-TV services to smart TVs. They’ve had some good partnership deals with Viasat, Elisa, and SBS. Also, TV OEMs are transforming themselves into software development companies to specifically assist pay-TV operators to make their content available on a growing number of connected consumer electronics. For example, LG Electronics demonstrated this week at the Cable Show an HTML5 app that can be used by cable operators to deploy their content on smart TVs. LG is working with the leading two-screen app developers to provide a variety of content discovery and remote control options for MSO subscribers. Given the fragmentation in apps platforms across connected devices, I think that there is a valuable role for apps developers to play in making sure that content is optimized for specific devices.

The evolution of video delivery with connected consumer electronics taken into context is the theme of an upcoming industry report titled Smart TVs in a Pay-TV World. Also, this topic will be the centerpiece of several panels and research presentations at our CONNECTIONS™ conference in a couple of weeks. Sessions that will incorporate this topic include:

• What to Watch: Connecting Consumers to Content;
• Innovations in Digital Content Delivery;
• Second Screen Services – Apps, Interactivity, and Advertising;
• The Next Steps in TV Everywhere;
• The Rise of the App Platform in the Mobile and CE Markets;
• Connected Consumer Electronics as the Set-top Box; and
• Defining Roles for Connected Consumer Electronics.