Trender Research™

Technology meets people.

Here are my stream of consciousness notes from the conference sessions at TelcoTV, and from walking around the show floor.

Roku

• Jim Funk, VP BD for Roku, says online video sites like Netflix make heavy use of CDNs, and encode streams from 500K up to 3.5 MBs depending on the connection that is available. For this reason he suggested that “Internet” video is somewhat of a misnomer, since a lot of effort is expended to improve upon the “best effort” open Internet.

• Jim also notes how surprisingly effective WiFi is at delivering decent video quality to home TVs. He said “We believe in streaming and not downloading… it works fine and saves cost on the box.” He points to the “real HD quality” of Amazon to suggest that OTT video can be just as good as traditional television.

• One third of Roku customers use the player everyday averaging 2.5 hours or usage--- this is way beyond “video snacking.”

• Jim also told us that Roku is opening up the platform to third party channel developers via a new Roku Store and API and will be launching 10 new content channels soon.

• Jim didn’t have a great answer when asked what happens when all the same content (e.g. Netflix) can be enabled by an increasing array of Internet-enabled devices. He suggested that trying to secure exclusive content is not worth the money. He also said that consumers may not want imbedded players in their HDTVs since the cost and development cycles of TVs and Internet STBs are very different. Jim has a point there. There is a reason you didn’t see any successful combo VCR/TVs and why today few HDTVs have DVD players baked in.

Adobe

• Adobe is making a big push for their newest Flash 10.1 version to be the app/interface tool for new forms of video. They want to be the platform that allows the quick transformation of video content from TV to PC to mobile. They now have a fully integrated code base across all devices (no more FlashLite--- too bad because I loved the branding). Newsflash  : Flash is on over 1 billion devices across 400 different models. Check out their www.Openscreenproject.com

• I asked the Adobe guy what the memory footprint is for 10.1 and received a non-answer. As I recall from my IPTV middleware days, it was always a challenge to fit the full client into a STB.

Tivo

• TiVo’s Elissa Lee, VP Research, sees OTT video as mostly incremental to their Pay TV offering, since consumers are using it as a way to find new sources of content or catching up on missed (and non-DVRed) shows.

• Lee also said that there is no one way consumers like to discover content. Some like recommendation engines, others like to do it on their own. Knowing consumer preferences (through profiles) is the best way to ensure an enjoyable experience.

• Typical TiVo users press 200 buttons per day and use the service 4+ hours per day.

• TiVo’s introduction of interactive apps during fast forward has been a success (e.g., Top Chef podbuster dropping out during forwarding).

General Thoughts

• IDC showed off some new research data that suggests 7% of households are planning to “cut the cord” on their Pay TV subscriptions (funny, that number seems strangely familiar). That works out to a very big number if you estimate the potential impact on the $100B+ Pay TV market—even bigger if you include households who don’t cut the cord but instead cut back on their premium subscription packages.

• Zeugma VP Marketing Kevin Walsh suggest that Telcos are in a superior technical position to benefit from the OTT video trend since they can view it as an additive service versus the cannibalization threat feared by cable MSOs.

• Net neutrality regulators are hinting that they might carve out Internet Protocol TV, realizing that some services do indeed need to be managed. Instead they will try to prevent special treatment of basic broadband Internet traffic based on the site of origin.

• Cable networks don’t want disaggregation or ala carte channel pricing… no surprise there.

• Jonathan Hurd from Altman Vilandrie revealed new consumer research that suggests that, if given the choice between different platforms, most consumers preferred getting the same content from their cable service versus sites like Hulu and YouTube. The only major exception, and perhaps a harbinger of the future, is the 18-24 year old demographic who showed no loyalty to cable TV. On a positive note the research showed that consumers are willing to pay extra for HD and also for watching on the TV versus the PC, but they didn’t care that much about targeting advertising.

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