Tablet TV: This is Just the Beginning

The tablet boom has already transformed the TV Anywhere and OTT strategies of some Pay TV operators but the real disruption is yet to come. The tablet market has so far been dominated by Apple with the iPad, but now attention is switching to Amazon whose product has been factored into forecasts by some analysts even before its launch. Forrester Research predicts it will give Apple a run for its money and notch up sales of up to 5 million units worldwide during the last quarter of this year. Apple, by contrast, will sell anywhere between 10 million and 22 million iPad2s in the same period depending on whose forecast you believe in a highly volatile and wildly fluctuating market.

For Pay TV operators the point is that the Amazon device, assuming analysts’ predictions are correct and that its launch is imminent, will retail for around $250, or perhaps under €200 in Europe, about half the price of the iPad2, and be designed with video in mind. It could turn the tablet into the second TV of choice for many homes during 2012, making it imperative that Pay TV operators act immediately to ensure that this is an opportunity rather than a threat to their business.

Some operators have already done this, with the consensus being that tablets should be embraced as companion devices acting as remote controls and programme guides or for associated activities such as voting in games or reality TV shows, as well as alternative TVs themselves. And without question there should be no extra charge for delivering content to tablets or any other device. This point was made before IBC by US satellite operator DISH Network, whose VP of Consumer Technology Vivek Khemka argued that extending TV services to tablets should not be viewed as an immediate revenue opportunity but as a competitive measure.

“I think the revenues will flow from the customer becoming stickier, and maybe upgrading to premium packages,” said Khemka.

The same line has been taken by Liberty Global with its multimedia gateway called Horizon, which was unveiled at IBC. This includes Wi-Fi ports to deliver TV services to tablet devices at no extra charge. Liberty Global is conducting field trials with Horizon in the Netherlands with commercial launch planned for Q1 2012 by its UPC operation there, followed by its operations in Switzerland and Germany soon after. The aim is to attract developers of Apps to enrich the service both on tablet devices and primary TVs.

“We have ripped up the set-top and made it into a platform so that users can seamlessly navigate content and integrate it onto many devices in multiple places,” said Mike Fries, President and CEO of Liberty Global.

For operators such as Liberty Global, the challenge is to tie tablets into their Pay TV package to prevent consumers from defecting to emerging services that may provide some of the same content free over-the-top. One point in their favour is that at present tablets will consume most TV content over Wi-Fi within the home, rather than over cellular 3G or 4G services that are as yet incapable of delivering premium video services through lack of consistent bandwidth. This means that operators who supply the broadband connection are well placed to provide content to tablets within the home, especially if they can integrate them with the service as companion devices.

Tablets in companion mode can also create the indirect revenue opportunities alluded to by Khemka at DISH Network by increasing engagement with the content being watched on the big screen, drawing more viewers in. During the IBC conference several speakers referred to the ability of companion devices, which admittedly could be smartphones or laptops as well as tablets, to boost audiences for less popular niche content by providing an added element of entertainment or enlightenment.

Such entertainment can involve integration with social media, and this has been exploited very effectively by the UK Eden channel, which re-broadcasts natural history and action programmes made by the BBC and others. The channel allows viewers to vote via companion devices on aspects of programmes, such as their favourite wildlife attraction, with prizes. It also features question and answer sessions via Facebook with major wildlife presenters such as David Attenborough.

“This has led to a 112% increase in viewing within the key 16 to 34 age group,” said Steve Plunkett, Director of Innovation and Technology at Red Bee Media UK, which worked with the Eden channel on the project. Speaking at an IBC conference panel, Plunkett described this as a striking result given that the Eden channel broadcasts content that is quite specialised rather than having mass-market appeal.

To be successful with tablets, operators or broadcasters must play to their strengths rather than just treating them as second TV sets, as the Eden channel has done. The failure of mobile TV so far can be attributed partly to an inability to exploit smaller screens properly, according to Sefy Ariely, VP for Sales and Marketing at IPTV middleware and content discovery specialist Orca Interactive.

“At the end of the day the reason I believe mobile TV was not successful is because it was trying to take the experience from one context to another,” said Ariely, speaking to Videonet at IBC.

This led to a temporary loss of interest in convergence between fixed and mobile TV, according to Ariely, but now the tablet is fast bringing it back. “We have watched how the iPad and tablet have sown the seeds for a tsunami of multi-screen and TV Anywhere discussions, and seen everyone scrambling while for us it was already built-in. We see this as another step in the trend towards personal TV.”

Indeed it is the potential of tablets to personalise the whole TV experience that holds the keys to success for operators, according to Neale Foster, VP of Global Sales at ACCESS, a provider of software for portable and wireless devices. “Apps can seriously enhance that experience and that is the point of companion and multi-screen devices,” said Foster, speaking on a panel hosted during IBC by CA and Pa TV software provider NDS. “They must be enjoyable and fun.”

Over time apps on tablets as companion devices also have potential to create those elusive new revenue opportunities that Pay TV operators are craving, by enabling adverts that play across both screens with scope for interactivity. “I think when the advertisers and media buyers get hold of this it is going to go stellar,” said Steve Godman, Sales Director at London-based digital media agency Skinkers, speaking on the same NDS sponsored panel. “The minute you get a really robust advertisement platform plugged into this stuff you will start generating revenue from it”.

The tablet boom has opened this door for advertising related apps, Godman added. “Tablets change the dynamic – you don’t have to fire up a laptop.” But for advertising, as with the associated programme, the context must be right for the device. “The opportunity lies in providing the right content for the device.”

The potential of tablets is not just as companion devices, or even as second TVs within the home, but also to usher in the era of full TV Anywhere that is not confined to locations where wired connectivity or Wi-Fi access is available. This full tablet potential will emerge gradually over the next few years, according to Andrew Baron, Chief Operating Officer at the UK cable operator Virgin Media.

“We are starting to see the ecosystem emerging, with video and the mobile getting ever-closer,” said Baron at an IBC conference. “I confidently predict the major theme here (at IBC) in the next three or four years will be mobile.”

This will require either further improvement in the ability of mobile 4G networks to provide the required bandwidth and Quality of Service for HD video, or else carpeting almost the whole country with Wi-Fi. With the arrival of the tablet, the end device is now driving mobile video forward rather than holding it back as before.

By Philip Hunter, Videonet