2012 Global Digital Media - Video and Television in a Smart Connected World

Smart TV is a sign of the future

The latest annual publication by BuddeComm titled: Global Digital Media – Video and Television in a Smart Connected World, provides key global insights and statistics for this exciting growing and evolving sector.

The internet is presenting consumers with choice and access like never before and this is transforming the home entertainment industry. The battle for the lounge room is heating up with all major TV manufacturers now shipping smart internet-connected TVs which provide an “app-like” interface to new IPTV content services through instant streaming.

While penetration of these new TVs is still relatively small in most countries; in the USA they are becoming more popular than the 3D TVs which received a lot of attention last year. The growth of smart TV ownership is expected to continue dramatically as people upgrade their TVs.

Web TV and online video have become recognised as a powerful format for both communicating online and providing a more dynamic experience. Online video over the Internet is being used by many different industries for advertising, marketing, demonstration, entertainment and communication purposes.

With the announcement that Barnes and Noble are launching Nook Video, an online video service which positions the company beyond digital e-readers, we see the Internet Video-On-Demand (iVoD) sector becoming even more competitive. Internationally, there are already a number of large iVoD providers, including Netflix, Amazon, Wal-Mart and Apple iTunes. In addition the user-generated market segment over the Internet remains popular with the continuing success of Google’s YouTube.

A host of new IP connected devices including game consoles; tablets and mobile phones are also becoming platforms over which to stream movies and TV. Many industry commentators have hoped during the past few years that mobile TV, representing a convergence between the mobile and broadcasting sectors, would lead to considerable changes in the way people used the technologies and services offered by both industries.

While the future for mobile TV remains bright there are still a number of barriers which prevent consumers taking to it in sufficient numbers for ‘tipping points’ to be reached. These include sufficient network coverage and a continuing lack of awareness of the mobile TV and video services on offer and their cost. Furthermore video based content is to a greater extent being included within various Apps, and charging for video based services separately is thus becoming increasingly difficult.

A key business model to deliver integrated products such as the features offered by Smart TVs is known as a triple or quad play. These models offer internet access, voice services, video/TV or mobile services to a subscriber via a single connection. These multi-play services require a large amount of bandwidth and as such are typically provided over high speed connections based on fibre optical or hybrid-fibre-coaxial (HFC) cables. In the past the combined package were not priced attractively enough to attract customers, but there are now changes that are leading to a revival of these multi-play models.

The exciting developments occurring in the video-based and television broadcasting sector has resulted in a dynamic industry which is on the cusp of transformation. This report aims to capture the key trends on a global level and provide insights into the regional developments.

Market Highlights

• Digital TV households make up around 45% of all TV households worldwide in 2012;
• Online Video-On-Demand has gained the attention of Internet heavyweights Google and Facebook;
• The US is an interesting market to watch for VoD developments with Hulu, Blockbuster, Netflix and Walmart Vudu just some of the players vying for position;
• There is a movement towards creating online video “channels” over the Internet aimed at target audiences;
• Bundled offers are very popular in parts of Europe with Quad play is the next growth area; a number of countries in Asia are also leading multi-play developments;
• Largely thanks to the success of triple play solutions, Latin America’s television market has been experiencing sustained growth, not even slowing down during the global credit crunch;
• The number of Western European online video and multi-screen services subscribers has grown steadily in recent years.

Data in this report is the latest available at the time of preparation and may not be for the current year.