For an informed view on connected entertainment in the UK & Ireland, visit Cue Entertainment
July 2010
marked a significant milestone in the evolution of the connected home. In the
third week of the third quarter of this year someone, somewhere in the world,
became the 500 millionth broadband subscriber.
It has
taken just 11 years to reach this landmark and the news that around a quarter
of the world’s households are online is an indication of how far we have come
in such a relatively short time.
The
information comes from the research company Point Topic and has been released
by the industry organisation Broadband Forum to coincide with its Q3 conference
on Sept. 20. Appropriately, the meeting is being held in Hong Kong, which
overshadows everywhere else in the world as the first territory anywhere to
achieve 100% of households passed by broadband. The figures show that the UK is
in sixth place internationally, with 19 million landline connections, some way
behind fourth-placed Germany (26.2 million) and just behind France, which is in
fifth place with 19.5 million subscribers.
The data
suggests that only 7.6 million UK households will be able to access HD streamed
content reliably by the end of 2012. Of the 26 million households in Britain,
15.3 million will be limited to standard definition streaming over the same
timescale and 3.1 million will have only digital terrestrial (DTT) or satellite
TV to entertain them. Around 90,000 won’t even be able to receive DTT and will
have to rely on satellite.
The
digital TV data and mapping specialist Apogee has come together with Point
Topic to provide a dataset tracking broadband and digital TV delivery in
Britain. Managing Director Louise Kavanagh says, “At the end of the last decade
the whole UK was in essence a captive audience for broadcast TV.
Consumers now shift between platforms, time-skip on a regular basis and have
access to an increased range of programming and other entertainment options.”
She
describes the overlapping of linear, digital and interactive TV services as
“the digital intersection”. The data shows that the UK audience has more choice
than ever before, although access to it is something of a postcode lottery.
Kavanagh says, “With complication comes opportunity, at least for those that
manage to navigate the digital intersection.”
That
digital intersection is becoming ever-more complex, as it’s no longer simply a
matter of buying a TV, plugging in a dish or an aerial and switching on.
If you are
tempted by the new generation of connected TVs, the seductive advertising, the
promise of the whole world in your living room, you may decide to take the
plunge and acquire an Apple TV for £99 or a Boxee Box for £199. Then again, the
idea of a separate unit may not appeal, particularly when a 42-inch Panasonic
G15 TV with Viera Cast, or the equivalent Internet@TV from Samsung with Yahoo
TV Widgets, can be yours for under £1,000.
Never has
the potential for consumer confusion been greater. These devices promise a lot
but there are so many caveats that only the lucky urban few will be able to get
the most out of their new toys.
As it says
in the small print, “One off installation payment for Freesat services whereas
for Freeview HD you will need to ensure coverage is available in your local
area.” To which might be added “Connected TVs require a broadband connection,
only 1 in 3 customers will be able to receive streaming HD video, please
consult a map if you live near Canterbury, Chester or Carlise as streaming is
difficult to impossible in these areas…”
No wonder
there is a plaintive, unanswered, request on one of the many online forums, “I
have just invested in a Panasonic TV that connects to the internet. Has anyone
found a movie streaming or download source that works with this set up?”
The answer
for anyone determined to watch TV online may be a dedicated IPTV service, such
as BT Vision. At least the supplier is committed to delivering a fixed quality
of service, unlike the open internet Over The Top (OTT) services that supply
the connected TV. Anyone trying to sign up for IPTV from a “not-spot” — and
there are plenty of those in the UK — will be told from the outset that their
broadband connection is inadequate.
France has
long been a shining example of IPTV take-up and the Broadband Forum confirms
that the country has retained the top spot for subscriber numbers. There were
9.4 million hooked up at the end of Q2 this year, having attracted just short
of 2 million additions in the previous 12 months. This means that France has
around four times the “2.4 million French IPTV households by 2010” that some
analysts were predicting only four years ago.
The French
success highlights the comments that BT Vision CEO Mark Watson made in October
2009, “We have not yet found the best way of explaining what the benefits are
to consumers, and what BT Vision stands for.” In the year since Watson made
those remarks, the French have signed up four times as many new accounts as BT
Vision has subscribers.
Watson
must be wondering just what they have to do to make it all come right, when
France Telecom seems to have no problem communicating with their home market.
Giving away Sky Sports for £11.99 a month when they are paying Sky £19.00 per
subscriber seems unlikely to be the winning formula.
Despite
this relative failure to get the IPTV message across, the UK sits just outside
the Top 10 IPTV nations of the world in eleventh spot, having added just 19,000
new subscribers in Q2, 2010 to record a 9.16% increase in the year.
But France
is set to lose its crown, probably within the next year. IPTV is really taking
off in China and the Point Topic data indicates that the French lead in the
absolute number of subscribers will end within the next half year. Although the
6.8 million IPTV viewers in China (including Hong Kong and Macao) are but a
tiny fraction of the population, net additions in Q2 2010 of 421,000 indicate
just how fast IPTV is catching on.
The
research commissioned by the Broadband Forum shows that Europe has nearly a
third of the world’s fixed line broadband connections, ahead of the Americas
but some way behind Asia, which has a more than 40% share. The Middle East and
Africa together account for just 3% of the global total.
The IPTV
picture is different. Thanks mainly to the French, Europe has 49% of the
world’s IPPTV market, Asia has 32% and the Americas account for 18%
Watching
television over the internet is on the increase everywhere. The data released
today shows that the percentage of the world’s broadband lines carrying IPTV
services, currently 7.7%, is rising in direct proportion to the 12% annual
growth of broadband infrastructure.
In
difficult times, opportunities such as this are hard to come by. The message
for the UK seems clear; ignore this trend and we will miss out on a burgeoning
market opportunity for both hardware and software. Connected TV is here to
stay, only time will tell whether OTT or IPTV will be winner.
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