Accenture Future of TV

Bringing TV to Life, Issue II

The race to dominate
the future of TV

Accenture’s Point of View series “Bringing TV to Life” focuses on the fast developing world
of Over-the-Top TV (OTT-TV). The convergence of the Internet and TV is revolutionizing the
broadcasting industry and has the potential to transform the market for every player—both
established and those that are just emerging into this exciting and dynamic environment.

In creating this series, our goal is to analyze the dynamics driving OTT-TV’s rapid evolution.
We aim to build an understanding of the market drivers and the technology and business
trends that are radically reshaping the video industry. Our perspective reﬂects the
experience matured with different players at all points of the OTT-TV eco-system.
We also make extensive use of Accenture’s primary industry research and surveys
that offer vital insights into fast changing consumer behavior, wants and preferences.

In this second Point of View in the series we focus on outlining the new competitive
environment that is forming around OTT-TV. We examine some possible scenarios that may
emerge as a result of the competitive trends we see in the market. And to complete the
picture, we draw on dedicated OTT-TV research to understand how consumer behavior is
exerting a powerful inﬂuence, reformulating traditional thinking and industry approaches
to shape a new and very different world of TV, full of opportunities and challenges.

Our series aims to help all the players in this rapidly evolving space to get fully up-to-speed.
Watch this space.

Bringing TV to Life 1

Dispersion2 = 2.70

Introduction 6.0 Netflix, 5.92

How Over-the-Top TV is 5.0

reshaping the video industry 4.0

TRS Monthly Values
The “box” in the corner of the room is breaking out. The impact CBS, 3.61
Sun TV, 3.07
3.0
of the Internet on TV is only the beginning—but it’s already
ITV, 2.83
TWC, 2.75
RTL, 2.71

changing everything. Consumers are taking control of their own 2.0
Antena 3, 2.22
DirecTV, 1.93
TIF1, 1.84
viewing, creating personal schedules and using different devices Dish TV, 1.80
BSkyB, 1.62

to dip into video when and where they want. The Internet has 1.0
Comcast, 1.61
Televisa, 1.49
Nippon, 1.45

grabbed the remote to control a whole new world of TV viewing. Mediaset, 1.41
Canal Plus, 1.33

And everyone in the industry needs to tune in.
Tokyo Br, 0.91

0.0

Jan ‘09
Feb ‘09
Mar ‘09
Apr ‘09
May ‘09
Jun ‘09
Jul ‘09
Aug ‘09
Sep ‘09
Oct ‘09
Nov ‘09
Dec ‘09
Jan ‘10
Feb ‘10
Mar ‘10
Apr ‘10
May ‘10
Jun ‘10
Jul ‘10
Aug ‘10
Sep ‘10
Oct ‘10
Nov ‘10
Dec ‘10
Jan ‘11
Pay TV Segment
Figure 1 Accenture Shareholder Value analysis: the broadcasting industry Free-to-Air Segment

The broadcast sector (both pay and free) IPTV and Internet TV are often confused We have entered a new era, an era Some of the sources of competitive In the first Point of View in the outlining the increased competitive
is emerging from one of the toughest with one another, but in fact they are where even if TV remains the primary advantage of the traditional broadcast “Bringing TV to Life” series, issued in pressure brought to the broadcast
periods in its history. During the recent quite different. IPTV has matured (in the screen for video consumption, the model are being questioned: Proprietary 2010, we focused on defining the sector by Internet TV with players
recession macroeconomic forces few countries where it has been able to long-term fragmentation of the and vertically integrated distribution Over-the-Top TV (OTT-TV) phenomenon from different backgrounds attracted
combined to provoke panic within the grow) into another form of pay TV, and audience will challenge traditional TV networks are being challenged by open and understanding its differences with by a multibillion dollar industry
industry and drain investors’ confidence. involves the delivery of high quality business models in yet another example broadband distribution and linear “top IPTV and its relationships with the segment with high price earnings
While the upturn in the economy has video content to a captive consumer of media meltdown. Deep convergence down” programming (complemented online video space. ratios; and
given traditional broadcasters some device over a managed network. between television and Internet has by catch-up and video-on-demand).
presenting some potential end state
financial stability, the current bounce Internet TV (or Over-the-Top TV), finally arrived and as a result media Moreover, the traditional rights In this latest installment of the series
scenarios for the industry and the key
should not obscure some of the more defined as the distribution of video companies can no longer ignore windows, which gave broadcasters we will focus on:
capabilities that successful Over-the-
structural trends and issues that still content to a wide range of IP-enabled fundamental differences in the underly- almost monopoly over quality content,
understanding the drivers behind Top providers need to build.
threaten to overwhelm media busi- devices (TVs, PCs, mobile phones and ing business models and in the enabling have multiplied, and business-to-
the acceleration of Internet TV and
nesses that do not embrace and speed tablets) over the unmanaged Internet, technologies’ design principles. business revenue models are now being
identifying some of the enablers and
up their digital transformation journey has the potential to shift the existing questioned by potentially superior
challenges that could facilitate or
towards a multiplatform digital era. balance of power within the broadcast business models that are based on a
limit its mass adoption;
The performance of Netflix versus the sector and the wider communications deeper and more direct relationship
more traditional pay and free-to-air industry. Back in the late ‘70s a very with the end consumer.
broadcasters clearly highlights the popular song celebrated the golden age
different expectations that financial of a radio industry that was then on
markets have about the sustainability the brink of demise at the hands of TV.
of traditional broadcasting business “Internet Killed the TV Star” could be a
models, and the potential of truly potential hit in the charts of 2015.
“interconnected” business to consumer
models to gain traction and generate
value at scale.

2 Bringing TV to Life Bringing TV to Life 3

Vision and reality
The once pristine vision of convergence between broadcast
and broadband technologies is being overtaken by the messy
reality of conflict and volatility with little clarity about what
lies ahead. The outcome of this volatility is uncertain at
best and will clearly vary across geographies and different
regulatory frameworks.

The TV screen is both a gold mine and seamless integration across linear Clearly the threat of new players
a mirror in which broadcasters can and non-linear TV, broadcast and entering the broadcasting space
take stock on a daily basis of the need broadband; by leveraging Internet TV is real, is
for change in their business models. A happening now and is a major issue.
the ability to partner with other
direct attack on that screen by players But we argue that if Google can
industry players rather than attempt-
coming from outside the TV industry become a “broadcaster” then the new
ing to rebuild vertical integration in
(electronics companies, Internet order could also see a broadcaster
the industry value chain;
aggregators, telcos, and so on) will becoming a Google.
raise and is raising, attention levels a true multi-screen approach;
and driving reactions. In this paper we Amid all this uncertainty, however, one
will argue that these reactions will not just content (which could thing is sure: today’s video consumers
need to be built not on the traditional become a “king without a crown”) have never had it so good!
sources of broadcasting competitive but consumer content services that
advantage but instead on new ele- leverage the effective use of
ments that are derived from the different screens to build consumer
Internet experience, and will include stickiness and loyalty; and
the need to ensure: large, established players having
standards and ubiquity across the humility to recognize that they
platforms rather than “walled need to invest in new capabilities
gardens” built on proprietary (such as consumer insight,
devices and networks; service creation, and application
development).


The winds of change are blowing Average USA:
31 min

The Internet has become a mainstream news and entertainment Germany
35 min 86.5%
Total:
258 min 13.5%

medium, but its path to such scale has been far from smooth. On
the way it has met resistance and disrupted many long standing UK
33 min 88%
Total:
275 min 12%

media businesses, publishing being one of its first victims.
Spain
Total:
31 min 88.2% 265 min 11.8%

France
Total:
24 min 90% 236 min 10%

Italy
Total:
20 min 92.4% 266 min 7.6%

Linear TV (2010 avg) Online Video (Dec. 2010)

Figure 2 Average daily online video consumption in EU-5 and United States

Generally speaking, the Internet The current reigning champion of But there are a number of strong forces Patterns of video consumption are Time spent watching TV is still rising, Last, but by no means of least
disrupts media businesses in three Media—television—has thus far driving unprecedented change in changing fast and the new video even among the younger generations, importance, Gartner estimates that
ways: remained relatively unaffected by the broadcast industry. Broadband consumer has become a complex, and live TV is by far the largest by 2014 manufacturers will produce
the rise of the Internet. Three pieces penetration is on the rise across multifaceted user whose needs and component of video consumption, over 70 million broadband connected
It removes barriers to distribution,
of evidence offer proof that: the world. In the EU, the five most wants require a customized approach. especially in Europe. According to TV sets worldwide.6 If we add to this
which previously provided the basis for
connected countries have an average The “active vs. passive” differentiation Forrester research, even in the most the number of Internet-enabled gaming
monetization. It provides an abundance Television broadcast rights continue
broadband penetration of 50 percent, has become less relevant only because sophisticated digital markets such as consoles and set-top boxes it soon
of free content that shapes consumers’ to command world class price
and 80 percent of those connections active consumption has become more Sweden and the UK, more than 70 becomes clear that we are close to
expectations that content should tags (NBC recently agreed to pay
are of sufficiently high bandwidth to mainstream and has spilled from young percent of the total hours spent seeing mass adoption.
always be free and therefore under- US$2billion for 2010 and 2012
support OTT-TV consumption.2 Gartner people to other demographic segments. watching TV each week are devoted
mines models based on scarcity. And Olympics);
predicts that by 2014 broadband Consumers are increasingly used to to live broadcasts. But the multi-
it grabs a larger share of the time that
Consumer paid programming on connections globally will number viewing content on their terms and screen audience is growing and the
consumers devote to other media.
cable and satellite has recently 644m.3 not by appointment. This means that share of the European consumers who
provided some of the only bright loyalty is increasingly directed towards exclusively watch TV on a TV screen
spots for recession-battered TV And all this connectivity means online content brands rather than channel is decreasing fast. In 2009, only
companies; video consumption is on the rise. brands. Understanding how consumers 63 percent of European internet users
In the United States in December 2010 find and access content is becoming watched TV only on TV, down from
Although skyrocketing, online video there were 88.6m unique daily online critically important. On-demand 80 percent in 2007.5
consumption seems not to be at the video consumers and almost 179m in services, catch-up TV, recommendations
expense of linear TV but instead is an average month in 2010.4 Usage is rather than electronic program guides,
incremental and additive. also increasing considerably as figure 2 social networking applications,
shows, although, and this is very convergent services, which follow the
important since it reinforces the need consumer across devices (watch on
for seamless integration between the PC, continue on TV, receive advertising
1 Gartner Industry Research, “Two Roads to TV 2.0,” March 24, 2009. two worlds, this is not at the expense and extras on iPad) are all key to
2 Source: e-Media Institute Web-TV Intelligence & Strategies, March 3, 2011. of linear programming. remaining relevant in this new and 5 Forrester Research, “The European Three-Screen Audience Is Growing, But TV Still Reigns,”
3 Gartner, “Emerging Technology Analysis: Broadband-Connected Televisions, Consumer Technologies,” rapidly evolving space. April 22, 2010.
September 23, 2010. 6 Gartner, “Emerging Technology Analysis: Broadband-Connected Televisions, Consumer Technologies,”
4 Source: e-Media Institute Web-TV Intelligence & Strategies, February 22, 2011. September 23, 2010.


A battlefield or a chessboard?

Even though it is still only in its others do not take over their position. and widgets on which to host or
formative stage, the emerging world In recent years, broadcasters have seen provide on-demand services. On one
of Internet TV already has a fairly their monopoly over auto-produced hand they clearly have great consumer
well-defined set of players. We see a content eroded. Rights holders (such traction and the ability as global
number of distinct groupings of these as the football leagues) and the major players to negotiate global content
players emerging, each with their own studios hold the vast majority of the acquisition deals, but on the other it is
distinctive sources of competitive much needed on-demand content hard to envision a world of proprietary
advantage to deliver video content to and could themselves have the same standards in which consumers decide
consumers from outside the traditional ambitions as traditional broadcasters. which TV set to buy based on the
paths of linear programming (terrestrial, content it carries. (However, it should
satellite and cable). These players can Service power not be forgotten that one of the lead-
be grouped around four main sources ing manufacturers, Sony, is also one of
Represented by the telecommunication
of power: content, service, device and the largest original content producers
companies who act as consumer and
cloud. and distributors in the world.)
service provider aggregators (triple
play/four play). These companies
Content power serve as single point of contact and
Cloud power
Represented by the traditional a common user interface to the This group introduces a new concept,
broadcasters (free and pay) that see consumer over any device and in encapsulating the ability to deliver
Internet TV as a way of delivering most cases owning a content delivery cloud-based infrastructure and services
new consumer experiences directly to network (CDN), which can guarantee for management and distribution of
consumers without being intermediated the much needed quality of service. video to any Internet connected device.
by telecommunication companies and While this group may lack the needed
IPTV providers. While they see Internet Device power media market expertise to strike
TV as a great opportunity to evolve significant content deals, they have
Manufacturers of TV sets, PCs, and
towards becoming consumer compa- developed a critical ability to intercept
hybrid set-top boxes who have the
nies, they also need to take care that and manage the needs and behaviors
opportunity to become access gate-
of the online consumers.
ways and develop their own platforms


er Clo
ow ud
P

Po
nt
Google
nte
Sports Leagues/

we
Rights Holders

r
Co

Studios Hulu

FTA Amazon.com
Broadcasters Netflix
Video
Consumers
Cable/IPTV
Operators STB Manufacturers

Electronic
Manufacturers

r
we
Se

Telecommunication TV set

Po
r vi

Manufacturers
Po i
ce

ce
v
we
r De

Figure 3 A competition framework

Now, what are the key success factors The need to provide seamless The experience and insight to shape
and the new capabilities that will integration across linear and non- and successfully deliver partnerships
be required to succeed in this new linear services on hybrid broadcast across the industry value chain in a
competitive environment? There is a and broadband devices. As mentioned context where traditionally vertically
wide range of both adapted and wholly before, linear TV remains the largest integrated value chains are
new forms of behavior and abilities component of video consumption and fragmenting and exploding.
that players will need to acquire in VoD and catch-up services become
The ability to attract and aggregate
order to be successful. These include: even more indispensable on the
content and value-add services from
back of a strong linear and live
The ability to create the future a multitude of sources in a way that
programming.
platform for content consumption. consumers find easy to use, and
The video market is the evolution of The ability to understand CDN-based identify and present them with
a platform that connects content and cloud-based content distribution relevant, personalized content.
creators, advertisers and consumers. mechanisms and platforms.
Successful players in the past
The capability to leverage consumer
managed to define unique platforms
insights in order to develop tailored
(NTSC, PAL, SECAM) and adapt the
and personalized video services
ecosystem to it. The same thing will
across all IP-based platforms (vs.
happen to online video consumption.
traditional top down programming
This implies the need to be present
schedules) to build loyalty through-
across non-proprietary devices and
out a 360-degree consumer experi-
platforms, in particular connected
ence and, crucially, to monetize them.
TVs and gaming platforms, the latter
being the next big thing in terms of
competing for the time and attention
of users on the TV screen.


Making the headlines
n

lue ain s s Users
s s Operators Providers
urers
Program
Packagers

iption Includes music, movies, news, t
sports, television programs, distribution network
and video production and
adoption to web video (User
Generated and Professional)
E electronics

FOX, BBC, Disney, MGM,
Paramount, NFL, Warner ESPN, ABC, NBC, Discovery,
ends Brothers, Sony BMG, HBO, FOX, CBS, CNN, Vudu,
Universal Veoh, Google, BBC, iPlayer,
Hulu, Netflix

COX, Time Warner Cable,
Comcast, CableVision,
Cisco, Sharp, Apple, LG,
Verizon, AT&T, Dish
Samsung, Motorola, Roku,
Sony, Vizio, Intel, Tivo,
Microsoft, Panasonic

Figure 4 The emerging OTT-TV value chain

Since the birth of commercial remain a mystery to most of them. fluid and complex environment. We
television, TV broadcasting has been Some of these players are truly global believe that rather than an ‘all against
dominated by a limited number of in nature, this means that for the all’ battlefield (which is what the
stakeholders (the networks, the TV first time competition is becoming competitive landscape looks like today)
manufacturers and the advertisers) extra-territorial, and with that change the situation will come to resemble a
and has been ostensibly local in nature. comes a whole new mindset. chessboard, where alliances, partner-
Today the future of TV is clouded by an ships and commercial collaborations
overabundance of stakeholders, most Over the last twelve months we have across different players will become
of whom have a defensible position in witnessed a wide array of public key imperatives for success. Speed to
television’s future. New stakeholders announcements and a number of market and agility are must have quali-
such as telcos, web search engines, service launches. Every player in the ties in this space, but so increasingly is
portals, new media titans such as industry value chain is clearly marking the ability to assess and understand
Apple and Microsoft, and other their territory and planting a flag in the complementary capabilities of
electronic manufacturers are all the future landscape of television. “competitors” and reward them
looking for a significant stake in the However, very few of these launches accordingly to ensure a larger slice
future of TV, even if revenue models are real industry plays. Most of them of the overall pie.
for next generation broadcasting tend to be individual efforts in a very


Center of Gravity
Expanding Dominating

Fast forward: Right Holders Creators
Right Dealers

Program
Packagers
Content
Aggregators
Network Access
Device
Manufacturers
Users

What scenarios in the future?
Traditional Telco
Scenario 1 Content is king

Center of Gravity
Dominating Expanding
Rather than a clear future scenario in the medium term, we see Right Dealers
Content Device

the coexistence of several business models and value chains,
Right Holders Creators Program Network Access Users
Aggregators Manufacturers
Packagers

depending on local market conditions, industry structure and Scenario 2 Devices drive users
Traditional Telco

regulatory frameworks. Center of Gravity
Dominating
Right Dealers
Content Device
Packagers

Traditional Telco
Scenario 3 Aggregators rule

No Explicit Center of Gravity
Right Dealers
Content Device
Packagers

Traditional Telco
Scenario 4 Scattered playing field

Besides the current all-against-all option to negotiate a carriage fee, 2. Devices drive users 3. Aggregators rule Aggregators: focused on content 4. Scattered playing field
scenario (which is not sustainable in trying to extend their role to locally acquisition, best user experience,
the long term) we envisage four main relevant functions such as content This scenario sees users buying content To some degree, this is the natural commercial relationship with the In this scenario, participants across
scenarios: delivery, content encoding and digital through the walled gardens that device extension of existing business models, customer; the entire ecosystem fail to create
right management (DRM) settlements, makers manage to establish (i.e. an with a complication owing to the partnerships and value chains remain
extension of the iTunes model to fact that the platform to deliver video Platforms: focused on service highly fragmented across geographies
local front end/shop management, local
1. Content is still king support, and digital home integration. devices and operating systems), services may not be unique (as currently enablement, technology complexity,
device support, content lifecycle,
and types of content. Unresolved
Over the years, broadcasters have with content rights holders sharing happens with broadcasting). In this conflicts of interest between industry
In this case, content rights owners revenues with the device makers. There case users still prefer specific shops to security (this role may be taken by participants mean few major deals and
progressively lost a significant degree
manage to create a unique platform is a substantial failure to build a unique consume content, with the difference both aggregators and carriers); and the opportunities from OTT-TV are not
of control over content and increasingly
for content consumption that platform (as is presently the case in that jumping from shop to shop does fully realized. A lack of standardization
rely on specialized/independent produc- Carriers: focused on content delivery,
seamlessly supports most devices. the gaming business), and the role for not require cord cutting. This is more across devices and content formats
ers. If they do not act swiftly in the user support, digital home enablement.
Disintermediation is pushed to the limit, broadcasters and carriers changes: like the mall model, where the success means consumers have to engage with
Over-the-Top space by developing
letting users establish a direct link to of retailers is determined by their This scenario sees broadcasters fighting different content providers and create
compelling multi-screen strategies,
the major shops, and the leading brand Broadcasters could try and build for relevance and position against
they could face a considerable loss ability to provide the best personal multiple, overlapping relationships.
is the content brand. User choices are strong customer relationships the Internet aggregators, such as
of relevance in the on-demand world, user experience, shielding the user from
driven by content rather than other leveraging better customer insight Netflix and Google TV. Hybrid devices,
succumbing to the fast growing content complexities derived from technology, In this fragmented scenario (which
factors, and business models are and providing a more localized user seamless integration with linear
brands and being disintermediated by devices, and payment models. In this most closely resembles where the
extremely shortened. In this scenario, experience. This would require the programming, ubiquity in terms of
them in relationships with consumers. scenario, there is a role for most of the market finds itself today) there are no
traditional aggregators have a reduced support of all devices, so that users platforms and the ability to provide
players in the ecosystem: clear ‘winners’ with content from many
role in the best case (i.e. the cord-cut- can access the same branded multi-device services with specific sources on many different devices.
ting nightmare), and carriers have the experience across all of them. value proposition, rather than just Telecommunication companies could
Carriers should try to build the replicas of the original TV service, play an enabling role, helping consumers
underlying platform that unifies become key capabilities in order to connect up all the services, devices
the user experience across devices, to succeed. and content they need.
addressing technological complexity
and supporting aggregators in the
multi-screen play.


The ultimate stakeholder: 50%

The consumer

40%
40%

The era of broadband video is here, and it’s influencing the
viewing behaviors of more than just younger generations. 30%

24%
According to new research from Accenture, high percentages
of consumers of all ages around the world are now watching 20%

video content over the Internet via a PC or TV.

14%

12%

11%
10%

0%
Catch-up TV to pause Personal Video Recorder Surfing the web on Ability to watch the Having interactive/
and watch at leisure (ability to store and your TV content on other social networking
watch whenever) devices functionalities

Total US Brazil UK Germany Italy Spain Australia

Figure 5 Most important video-over-internet service feature: total and by geography

In this environment of overwhelming The results of Accenture’s “2011 watching TV, and with tablet penetra-
market potential it’s more important Video-Over-Internet Consumer Usage tion set to reach mass market levels,
than ever for all players in this space— Survey” provide companies with a this is clearly going to increase). They 70%
broadcasters and content providers as view not only of current trends, but are also looking for an anytime service
well as network operators and other also of where those trends are leading, on TV through catch-up rather than
60%
kinds of communications companies— both in terms of video viewing habits hardware based personal video
to have a better understanding of and where revenue growth may most recorders (PVRs). And they are very

49%
changing consumer behaviors and likely occur. Although traditional clear about the role of each device 50%
interests, so that they can direct their linear TV offerings still dominate and how each of them connects
investments effectively. consumer viewing habits, that together. They also see the PC as an
40%
dominance is already open to extension of the TV set to watch or
To give companies deeper insights into question. record programs via their laptop.

27%
their target customers as they launch 30%
or extend broadband TV and video The results from the survey show What’s more, these behavioral traits
capabilities, Accenture has conducted how the new consumer is evolving: are not specific to the Millennial
a global survey of more than 6,500 They are using multiple devices to generation (the 18-24 age bracket) 20%

14%
consumers around the world across watch video content and they are but are rapidly spilling over to older

11%
major geographies—the United States, multitasking while watching video on generations. 10%
United Kingdom, Australia, Brazil, a traditional TV set (over 48 percent
Germany, Italy and Spain. of respondents use a laptop while
0%
Quality of service (i.e. HD (high-definition viewing) User interface and ability Quality of recommenda-
clarity of the picture, to find and manage tions of videos/ shows I
speed of content delivery) video content might be interested in
viewing
Total Male Female 18—24 25—34 35—44 45—54 55—64

Figure 6 Most important video-over-internet technical feature by gender and age


Consumers strongly indicate that they are ready for a true
multi-device experience—one that goes beyond simply Core beliefs of Over-the-Top TV
replicating traditional TV on another device, and instead
Broadcasting Companies
creates a new experience where content is important,
quality is critical and personalization of the service is a must.
TV set as primary Web experience Anytime before
Over-the-Top TV can succeed if companies understand and screen anywhere
embrace these new consumer behaviors.
The TV Set remains The key value of bringing Customers value time
the primary screen to the internet paradigm to shifting over place
generate revenue and the TV is around content shifting and three/four
win the customer discovery, recommendation, screen delivery
relevance and social—
PCs, Tablets and Mobiles
not browsing the web
are additive, having a
key role as “companion Span linear and on-demand
devices” content, immediacy of
content experience,
no deep menus

Telecommunication Companies
“Content is king” has been a standard Different types of companies are In general, openness is becoming an
phrase of the broadcast industry for experimenting with video-over-Internet important marketplace characteristic,
many years. The statement remains services, and savvy players are learning and also a key to success. Today, many
true but in addition the quality of both from past mistakes and current players are jockeying for position in the
technical delivery of that content is stumbles. Original IPTV offerings, for Over-the-Top space. New stakeholders—
now on the minds of many consumers. example, did not meet expectations telcos, web search engines, portals, Access as key unique Aggregation and Closing window
Asked to name the most important because they tried to imprison device and software giants, and more— selling proposition indexing
technical feature of Internet TV, about consumers in proprietary, walled are looking to play a key role in how the
one half of the consumers we surveyed gardens. Mobile video has struggled industry evolves. This is now a wide Window of opportunity to
around the world (slightly higher in with overcoming the restrictions of open and increasingly global playing
To be successful in the Any aggregation play
the UK and Australia) cited quality smaller screens and devices. field. OTT-TV space, telcos need should aim for an open seize market and eyeballs
of service, clarity of the picture and to leverage their core delivery platform that is now and closing fast
speed of content delivery. This statistic The ultimate stakeholder, USPs around access, allows combining
is almost uniformly consistent across however, is the consumer. Set-top boxes are key
all age groups, too. network quality and aggregated (i.e. own now, but will disappear
customer proximity hosted) and indexed within years
(i.e. referenced) content


Conclusion

The heat is on…
Technological and business innovation is having a decisive
impact on established distribution mechanisms in the video
industry. And that creates major risks for the incumbent
players—including broadcasters (both free-to-air and pay)
and telecommunications companies (cable and IPTV)—
in what is now a mature market.

In response to these emerging risks, Telecommunication companies struggle There is clearly no single recipe
companies in both sectors are moving to control content and package seam- for how each market will develop;
fast. But rather than pursuing tactical less multi-device linear and non-linear geographic differences, regulatory
and ambitious product launches and services. However, the requisite end- frameworks and different industry
new services, they need to make the to-end capabilities could be delivered structures all create very different
transition to a more structured and through deeper cooperation between competitive contexts. But what is clear
collaborative go-to-market strategy. broadcasters and telecoms businesses, is that engaging in direct competition
with each playing to its strengths. with one another—and ignoring the
The need to collaborate arises from the benefits of collaboration—will simply
lack of relevant knowledge, experience In this new space, vertically integrated make it easier for outsiders to enter
and capabilities that each has in vital business models are a thing of the the market. And as we have seen,
areas of the video industry. Generally, past. Instead, broadcasters will move there are powerful newcomers on
broadcasters do not possess the towards becoming true business-to- the horizon.
required experience and knowledge consumer operators, establishing a
of devices/access and of managing presence across all devices and
content delivery networks. providing seamless linear and non-
linear services. Telecommunications
companies will not be relegated to
merely acting as “dumb pipes” but
will have the opportunity to provide
much needed cloud-based multi-
tenant capabilities in an enabling role
(hosting, management and delivery of
content) and in the connected home.


About the Author
Francesco Venturini is the Global
Lead for the Broadcasting and
Entertainment Practice. With over 10
years of experience within Accenture,
he works with major international
media and entertainment companies—
and in particular—broadcasting
companies. Francesco leads complex
projects around Over-the-Top TV
(OTT-TV) and Digital Terrestrial TV
(DTT)—helping his clients launch
new innovative services, restructure
existing businesses, and achieve
operational excellence. He is a regular
speaker at international industry
conferences and an author of many
strategic whitepapers around the
topics of Over-the-Top TV, Rights
Management, and Shareholder Value
Management for Broadcasting.

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