San Francisco - While compelling new solutions for bringing TV programming to the living room via the Internet appear to be a looming threat to the businesses of managed service providers, including cable, telco and satellite TV operators, few members of a multi-industry panel on the future of interactive TV systems seemed too worried about any looming disruptions to the existing delivery systems.
The discussion was part of the "TV of Tomorrow Show" presented here by the interactive TV business publication ITVT, and brought together representatives from a wide cross section of technology developers in the interactive TV industry.
Panelists representing platforms, solutions and services from the managed services community, now developing Enhanced TV Binary Interchange Format (EBIF), and those from the so-called Over The Top (OTT) IPTV community that is bringing new Internet delivered services and widgets to CE devices squared off to assess the longevity of the existing system of TV delivery.
Most panelists seemed to express the feeling that new interactive TV systems and services will bring new enhancements and business opportunities to both areas, and won't necessarily displace the service operator that exist today, although many consumers are less than satisfied with the status quo of the business models they have been forced to accept.
Bob Perry, Panasonic senior marketing VP, drew the biggest applause of the afternoon when he summarized the situation:
"There are over 100 million households yearning to be free - that's a little bit facetious," Perry, whose company is now marketing Viera Cast-enabled TVs, began. "Cable, in terms of their capacity and what they deliver, is a little bit underrated. However, I'm not that sure in a popularity contest who would win more - would it be a Wall Street banker or a cable executive. Because if you asked the American people what they are getting and what do they like, you can imagine what the results would be. Specifically, we don't deliver to the American consumer everything they would like to have in the way they would like to have it. Everybody realizes that. So, the basis for this argument is, "'Will, in fact, some business models evolve fast enough, whether it is over the top (OTT) both arms or whatever that will disrupt the existing structure of the marketplace and allow consumers to get what they want, and will their votes directly impact what's available?' It certainly happened in the music business. So now everybody is wondering what is going to happen next. Will a la carte really happen and will the consumer gain control and have the purchasing power?
"For us in the consumer electronics business, we build devices that let the consumers get this amazing content that we understand has to be paid for and is expensive," Perry continued. "But if you ask the average consumer who gets to vote with their dollars, today the business model they have to pay for is a business model they don't desire. They actually are compelled or forced into these packages and into this business model that they don't care for.
"Ultimately, if that's the only way the business model will survive - it will not survive. So for all of us, whether we vote on either side of this issue, we have to figure out what the consumer wants and what they are willing to pay for. And there is a lot of opportunity."
Responding for the managed services community, Arthur Orduna, chief technical officer of Canoe Ventures, which is a company founded by the nation's largest cable operators to make cable's advanced advertising solutions easier to buy, use and measure, said: "I think what Bob said is right on, but I don't understand why that would be a argument against having managed platforms and services. In fact, I think that is one of the biggest endorsements for having a managed platform, managed service open standards and a way for providing a new set of tools to the creatives in the industry.
"Why the hell are we doing interactivity in the first place? It's not because we like to pass bits across a wire. It's because at the end of the day there is this form of entertainment called television, and we would like to be able to give folks on the creative end new colors for their pallet for of creativity ... I feel for people wanting to develop EBIF applications for Tru2way trying to find a means to sell it, and I think that is what we are trying to do.
"Call it the new generation of cable. We don't have all of the right forms right now. That is absolutely correct, we don't have all of the business models in place yet, that's very true, we are starting to do that, but don't we have to have the infrastructure in place first? First, let's make sure we have a platform there. Let's make sure we have a national footprint and then we've got a market and can turn around and say, â€˜How do we innovate this?' "
"There really hasn't been a compelling business model for interactive TV, except for games and maybe gambling. We've got to change that. If everything you do with the TV is just about somehow making it easier to find linear programming or new sources of linear programming, it won't work. You have to start thinking of this as another screen you can do other kinds of interesting things with that happens to be in your living room that can talk to your phone and can talk to your PC," said Shari Barnett, applications marketing director for Microsoft Mediaroom.
Perry said the emergence of OTT services will ultimately force the cable and satellite TV industries to adopt new business models and to speed up innovation in their own interactive systems, "but it is very unlikely that we are going to have consumers coming to us saying, "'I don't want cable, I don't want satellite.' "
Edgar Villalpando, marketing senior VP for ActiveVideo Networks, which is a leader in the development of cloud-based interactive services that use a network-centric approach for expanding programming, navigation and advertising, said his company will help both environments succeed. He added that, ultimately, much of the horsepower being installed in CE devices, set-tops and TVs will move out of the home and into the cloud so that manufacturers no longer have to make risky hardware investments in innovating their products and features and consumers have less risk of purchasing products that will become outdated in a few years.
Villalpando said that as technologies advance, it will not be a complicated proposition for most consumers.
Finding content on the Internet using OTT systems "will not be a complicated proposition for the millennials or Gen-X and Gen-Yers" and CE manufactures are now developing solutions that are plug and play.