Multiscreen TV & VoD: the big picture · identified as triple-play operators, 7.9% as IPTV service providers, 5.4% as cable operators, 3.7% as DTH operators, 6.6% as pay TV channel

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Multiscreen TV & VoD:

the big picture

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Multiscreen TV & VoD: the big picture

2

Contents

IntroductionMultiscreen TV has been the big story of the last year, withpay TV operators as well as OTT service providersextending the reach of their content by targeting devicesincluding tablets, smartphones, smart TVs and gameconsoles, as well as traditional set-top boxes.

While multiscreen TV is now common in advancedmarkets, there remains uncertainty about the potentialscope of services – including whether they shouldencompass live as well as on-demand content – and abouthow to make money from them.

Other questions facing service providers include howmany and what type of devices to target, how to improveaudience measurement techniques, and whether to buildtheir own platform, outsource it to a third party or selectbest-of-breed components.

DTVE recently surveyed 242 senior industryparticipants from 65 countries, 16.1% of whomidentified as triple-play operators, 7.9% as IPTV serviceproviders, 5.4% as cable operators, 3.7% as DTHoperators, 6.6% as pay TV channel operators and 9.9%as free-to-air broadcasters, with the balance composedof a mix of producers and content providers, mobile TVand VoD operators, executives of industry associationsconsultants, technology vendors and others.

We sought their views on a range of key topics related tomultiscreen and OTT video distribution, enabling us tobuild a picture of industry perceptions, priorities andconcerns.

Takeaways:

● Multiscreen and VoD providers are targeting a widerange of devices with a mix of free, subscription andtransactional models. However, operators are continuingto prioritize fixed network devices, including the set-topbox and laptops as well as tablets, with less emphasisbeing placed on mobile and game consoles. Smart TVs arealso surprisingly popular, despite concerns about how tomonetize them.

● Service providers are concerned about a range ofchallenges and in particular by the fragmentation of thedevice and platform landscape. Despite the proliferation ofvideo-enabled devices, operators continue to regard set-top boxes as more secure than other categories of devices,including mobile.

● Few operators believe that they are making the most ofthe commercial opportunities of multiscreen video. Onlyset-top box-based services are seen as a proven route to aprofitable business. Operators believe mobile apps canalso deliver returns, but have much less faith in therevenue potential of smart TVs and game consoles.Audience measurement is seen as a key challenge, andoperators view monetization in general as the mostchallenging aspect of launching multiscreen and on-demand services.

● Multiscreen and OTT service providers do not want tobe technology companies, but favor retaining control ofthe integration of technology in partnership with best-of-breed suppliers. Flexibility is seen as key, with the majorityof service providers looking to launch services based onnew technologies such as MPEG-DASH and H.265.

● Service providers believe a compelling user experienceis the most important element to get right in multiscreenand OTT delivery, with content security, cost, scalabilityand ease of management also seen as important.

2 Introduction

3 VoD and multiscreen reach

5 Service providers’strategic priorities

6 Operational and strategic challenges

8 Forward planning

9 Conclusion

Delivering non-linear content to multiple devices hasbecome part of the core offering of progressive serviceproviders in advanced markets. However, there remains alack of clarity about the kind of business model thatmultiscreen delivery can support, about the type ofservice that should be offered, and about the range ofdevices that it makes sense to target.

Our survey shows that Multiscreen and VoD providerstypically target a wide range of devices and offer a mix offree-to-view, subscription and transactional VoD content,with no clear winner emerging in terms of the businessmodel for content monetization, or in terms of the mostpopular category of devices targeted.

However, the survey also demonstrates that ‘fixed-line’devices – desktops and laptops, smart TVs and set-topboxes – remain highly favored, despite growth in mobilebroadband.

Asked to list which of five categories of service theyoffered, a majority of respondents say they offer free-to-view, subscription and transactional paid content, while asignificant minority also say they provide streaming of liveevents on their platform. A slightly smaller minority – stillamounting to two in five respondents – offer connectedTV apps to reach viewers (Fig.1).

In terms of devices targeted, the continued strength of‘traditional’ IP video devices – desktops and laptops andset-top boxes – is evident. Three in four respondents to thisquestion say they offer video content via set-top boxes,with a similar number offering their content via desktopsand laptops.

The rise of the tablet is also evident from our survey, witha large percentage of respondents – just over three in fiveor 62.8% – offering their content on tablets. Mobile appsare targeted by 58.9%, while services are offered via themobile web by under half of respondents.

Smart TVs are surprisingly popular amongst videoproviders, given the strong degree of scepticism abouthow many people connect and use these devices, with57% of respondents offering services via smart TV. Gameconsoles are by some measure the least popular device formultiscreen on the other hand, with just over one in fiverespondents offering their services to this category ofdevice (Fig.2).


3

VoD and multiscreen reach

Free

to v

iew

cont

ent

Subs

crip

tion

base

d co

nten

t

Tran

sact

iona

lpa

id c

onte

nt

Live

eve

ntst

ream

ing

Conn

ecte

dTV

app

s

63.3

%

64.7

.8%

57%

42%

39.6

%

Fig 1:VoD services offered

Des

ktop

/La

ptop

Mob

ile a

pp

Mob

ile w

eb

Tabl

et

Gam

es c

onso

le

Smar

t TV

Set-T

op B

ox

73.4

%

58.9

%

45.9

%

62.8

%

23.2

%

57%

74.4

%

Fig 2: Availability of service providers’video bydevice type


4

Challenges

For service providers delivering content to various devicesover multiple networks, the top concerns are thefragmentation and security of the end devices andplatforms.

Quizzed on their attitudes to these challenges, a significantpercentage of respondents show concern aboutfragmentation of the device landscape – meaning toomany different devices need to be addressed – with almosthalf giving it a high score (5 or 4 on a sliding scale of 5-1). Asimilar proportion say that platform fragmentation – suchas the use of a range of different operating systems – is asignificant problem (Fig. 3).

On the vexed issue of content security, respondents favorthe set-top box and the smart TV over the mobile web andapps as offering a superior level of security.

Over two in five respondents give set-top boxes top marksfor security on a scale of 5 (with over three in five giving ascore of 5 or 4). A majority of respondents also give smartTVs a score of 5 or 4. Respondents exhibited moderateskepticism about the security of other devices. Gameconsoles are regarded as relatively secure, with over threein five respondents giving them two or three marks out offive. Respondents had similar views of the security-worthiness of desktops. Mobile apps are next mostfavored, with the mobile web trailing slightly (Fig. 4).

Mobile apps Set-top boxes

Games consolesSmart TVs

12345

Scale 5-1 (5 = very secure, 1 = not secure )

9.9%

29.1%

40.1%

17.4%

3.5% 8.0%

43.4%

21.1%

16.6%

10.9%

Desktop Mobile web

15%

25.4%

37%

17.3%

5.2% 5.2%

24.3%

45.1%

19.7%

5.8%

17.2% 16%

33.7%34.9%

10.7%4.7%

34.5%27%

15.5%5.7%

Devices Platforms

12345

Scale 5-1 (5 = major problem, 1 = minor problem)

21.7%

26.9%22.3%

16.6%

12.6% 18.2%

29%27.8%

16.5%

8.5%

Fig 4: How secure is video content on thefollowing platforms?

Fig 3:To what extent is fragmentation of devicesand platforms causing you problems withdelivering a consistent content experience?

Though service providers have fully embraced multiscreenand on-demand services due to clear demand for suchservices from subscribers and due to competitivepressures from OTT providers, monetization ofmultiscreen services is still seen as a challenge, or even amissed opportunity.

Most respondents to our survey say that they are well-advanced in developing and launching multiscreen andon-demand services, but few believe they are making themost of the opportunity commercially.

Asked if they are maximizing the value of their contentacross a range of devices, respondents said that only set-top box-based services offer an effective way to monetizecontent, with over half of respondents giving set-tops ascore of 5 or 4 on a scale of 5-1. Mobile apps are seen as OKfor monetizing content – though much less so than set-

tops – while the desktop and the mobile web are seen asmoderately successful.

Respondents are, however, less satisfied with smart TVs andgame consoles. Two in five respondents give gameconsoles the worst possible score for monetizing content (1on a scale of 5-1), while almost three in ten also gave smartTVs the worst score on this question (Fig.5).

Lack of faith in certain devices feeds into service providers’priorities. When asked what they saw as more important forvideo service providers over the next 12 months, a majoritygive a high score to the secure delivery of content to set-top boxes and smart TVs (three in five giving this a score of5 or 4 on a sliding scale of 5-1), while the secure delivery ofcontent to game consoles is seen as less important (Fig.6).

Providers’ strategic priorities


5



12345

Scale 5-1 (5 = very advanced, 1 = not monetising at all)

13%

16.6%

30.8%

16%

23.7%10.5%

31%

26.3%

24.6%

7.6%

Desktop Mobile web

10.3%

18.4%

28.2%19.5%

23.6%9.9%

21.5%

27.3%

16.9%

24.4%

11% 10.4%

9.8%

25.8%

12.9%

41.1%19.8%

26.7%14.5%

27.9%

Fig 5: Are you successfully monetising contentacross the following devices?

Secure delivery to smart TVsand set-top boxes

Secure delivery togames consoles

12345

Scale 5-1 (5 = most important, 1 = least important)

5.5%14.9%

21.7%

33.5%

19.9%

9.9%

44.8%

24.5%

15.3%

9.8%

Fig 6: How important will the following be inyour strategy over the next 12 months?

Video service providers face a number of operational andbusiness challenges as they roll out on-demand andmultiscreen services.

Most providers deliver free-to-view as well as transactionalservices, and advertising is therefore likely to be animportant revenue opportunity. However, operators facechallenges in realising advertising revenues as theyexpand the reach of their content to new devices.

Respondents to our survey express strong confidence inaudience measurement techniques only for the set-topbox, and only average confidence in audience or usagemeasurement for other devices. While desktops andmobile apps perform moderately well in deliveringaudience measurement, there is less confidence in theability of the mobile web and smart TVs to do so. Least

effective of all, in the view of respondents, are gameconsoles. (Fig. 9).

Overall, operators identified monetisation as the singlemost challenging aspect of multiscreen and on-demanddistribution, with a third giving this a top score of 5 on ascale of 5-1 for degree of difficulty, and over three in fivegiving it a score of 5 or 4.

Respondents also see security issues and the overallchallenge of delivering content to multiple devices asdifficult, with over half of respondents giving both aspectsa high score of 5 or 4 on a scale of 5-1.

Operators also find having an overall strategy forconnected TV to be moderately challenging (Fig. 10).

Operational & strategic challenges

Asked if they have concrete plans in place for the deliveryof content to these categories of devices, the vast majorityof survey respondents – over four in five – say they haveclear and cost-effective plans for the delivery of securedcontent to set-tops and smart TVs, while a clear majorityhave no plans to deliver to game consoles (Fig. 7).

Live streaming

Set-top boxes and smart TVs are seen as key devicesalongside tablets, and operators are looking tocomplement their current on-demand offerings with livestreaming services.

Three in ten respondents give live event streaming a topscore on a scale of 5-1 as an important strategy for videoservice providers in the next 12 months, while three in fivegive it a score of 5 or 4.

A clear majority – three in five respondents – also say theyhave a clear and cost-effective plan for the delivery of livestreaming services. (Fig. 8).


6

Live Eventstreaming

We have clear cost andeffective plans for secure live

streaming across multiple platforms

12345

Scale 5-1 (5 = most important,

1 = least important)

7.9%

YES59%

NO41%

30.9%

28.5%

17%

15.8%

Fig 8: How important is live event streaming inyour plans for the next 12 months?Secure delivery to smart TVs

and set-top boxesSecure delivery togames consoles

YES42.6%

NO57.4%

YES81%

NO19%

Fig 7: Do you have a plan to deliver content tothe following over the next 12 months?

Technology solutions

Given that they see many operational and commercialissues as challenging, it is no surprise that multiscreenproviders are no longer looking to build their owntechnology infrastructure. Asked what they believe is thebest strategy for acquiring video delivery technology, only13.9% of respondents say they think a ‘build it yourself’approach makes sense.

While service providers clearly do not want to becometechnology companies, a clear majority – 63.9% –nevertheless express a desire to take ownership of theoverall design of their distribution platform by acting as thesystem integrator for best-of-breed technology solutionsthat they choose. A significant minority – just over one infive respondents – say they are happy to turn over

infrastructure design and implementation to a third partyby choosing a single turnkey technology vendor themanage the project (Fig 11).


7



12345

Scale 5-1 (5 = very effectively, 1 = not very effectively)

20.5%

21.2%

31.4%

12.8%

14.1% 10.4%

29.9%

24.4%22.6%

12.8%

Desktop Mobile web

20.6%

23.8%

26.3%

11.9%

17.5% 17.7%

22.8%

29.7%

12.7%

17.1%

18.2% 11.9%

13.9%

23.2%17.2%

33.8%

23.3%

27.7%

13.8%

17%

Fig 9: How well are you measuring usage acrossthese platforms?

Security of content/DRM Connected TV strategy

MeasurementMonetisation of content

cross platform

5 4 3 2 1

Scale 5-1 (5 = most difficult, 1 = least difficult)

23.5%

33.1%24.1%

12.7%

6.6% 3.6%17.5%

29.5%34.9%

14.5%

Live event streaming Multiple device delivery

19.9%

26.5%27.1%

15.7%

10.8% 16.9%

36.7%26.5%

16.9%

3%

33.1%

10.8%

24.7%

36.7%

19.9%

7.8%

28.3%

22.3%

12%14.2%

Fig 10: How difficult are the following for serviceproviders?

Build it allourselves

13.9%

Select the best of breedtechnologies and integrate them

63.9%

Select a singleturn-key

technologyvendor22.3%

Fig 11:What is the best technology strategy?

Service providers’ lack of willingness to spend time andeffort building their own technology platform may beconnected to their uncertainty about what the futureholds for on-demand and multiscreen video delivery ingeneral.

Asked how confident they are that the currentinfrastructure they have put in place for video delivery willlast the course over the next two to three years, a majorityof respondents – seven in ten – say that it would. However,an absolute majority – 56.9% – add the caveat that theirinfrastructure “needs improving”.

Of the remainder, just over one in five don’t know whethertheir infrastructure will meet their needs over next fewyears, while a smaller minority express little or noconfidence that it would do so (Fig. 12).

The need for flexible technology and ongoing updates tothe platform means service providers need to support agrowing range of standards and formats for videocompression, adaptive streaming, encryption andpackaging standards.

Asked about their plans to deploy services based on fourrelated standards, a majority of respondents say they areplanning to deploy services based on next-generationcompression standard H.265, with a slightly smallernumber saying they have plans for services based on theMPEG-DASH adaptive streaming format. About two in fivesay they will support the Common Encryption Standard,MPEG-DASH’s equivalent of DVB Simulcrypt that enablesservice providers to implement multiple DRMs withinMPEG-DASH streams. About a third say they plan todeploy services based on the Hybrid Broadcast Broadband(HbbTV) standard, which supports MPEG-DASH-basedadaptive streaming (Fig. 13).

Perception of value

Flexibility and a willingness to embrace new technologydevelopments are important to create platforms that arefuture-proof. But ultimately, the value of a video delivery isin how useful it is to consumers.

Asked to rate a range of qualities in an online videoplatform for importance, two thirds gave quality of the enduser experience the top score on a scale of 5-1 – muchhigher than any other quality. Content security is also ratedhighly, as is cost, scalability, flexibility and ease ofmanagement of platforms.

Respondents grant a more moderate – but still significant– degree of importance to the ability to integrate withexisting technology investments and seamless cross-device delivery. The innovativeness of the platform, and itsability to support multiple advertising methods are seenas slightly less significant, as is a responsive player design.Less importance is given to control over branding andaesthetics (Fig. 14).

Forward planning


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Fig 12:Will your current video infrastructuresupport your needs for the next 2-3 years?

Hbb

TV

MPE

G-D

ASH

H.2

65

Com

mon

encr

yptio

nst

anda

rd

33.1

%

46.9

%

53.8

%

38.1

%

Fig 13: Do you plan to support the followingstandards?

Yes - definitely

13.1%

No - no confidence at all0.6%

Yes - but needs improving56.9%

Don’t know22.5%

No -not very

confident6.9%


9

CostEase of

management Flexibility Security of content

Ability to support multipleadvertising methods

Ability to integratewith existing

technology investments

5 4 3 2 1

Scale 5-1 (5 = most valued, 1 = least valued)

44.4%

30.6%

18.1%

4.4%2.5%

39.4%

35%

17.5%

5%3.1%

41.3%

39.4%

13.8%1.3%

4.4%

15.6% 25.6%

33.1%

31.9%

6.3%

3.1%

67.5%17.5%

9.4%1.9%

3.8%

36.3%30.6%

11.3%

6.3%

Seamless cross-devicedelivery

Control over brandingand aesthetics

Quality of end userexperience

Scalability

Responsive playerdesign

43.8%

33.8%

14.4%3.8%

4.4%

37.5%

33.1%

22.5%

3.1%3.8%

43.1%

31.3%

16.9%

4.4%4.4%

22.5%

28.1%33.8%

13.1%

2.5%

27.5%

36.9%

26.9%

5%3.8%

34.4%

33.1%

23.8%

5%3.8%

Innovation

Fig 14: How much do you value the following qualities in an online video platform?

TV operators are embracing multiscreen and OTTdelivery, but remain uncertain about the commercialviability of services. Operators are already targeting awide range of devices, but still view set-top boxes as thebest way to secure and monetize content. Other devicesfavored by service providers include tablets, smart TVsand mobile apps, with the last of these also seen as areasonably good way to monetize content. Gameconsoles are by some measure the least-favoredmultiscreen device.

Over the near term, operators are prioritizing the deliveryof content to devices, including set-tops and smart TVs,with game consoles seen as less important. Operators arealso looking to deliver live TV services to multiple screensto complement their on-demand offerings, with amajority having a clear plan to add live content to theirmultiscreen offerings.

After monetization, service providers see the fragmentednature of the device and platform landscape as theirprincipal challenge. Operators also have concerns about

security, with set-tops still seen as more secure than otherdevices. Other challenges include accurate audiencemeasurement – a majority of survey respondents see theset-top box as the device that can deliver the mostaccurate audience measurement statistics.

Service providers still face uncertainty over the futuredirection of multiscreen services, so they are keen toretain a degree of flexibility about the technical deliveryplatforms they put in place. A majority believe theinfrastructure they have put in place will do the job for thenext two to three years – but that it will need to beimproved. Technical challenges faced by operatorsinclude the need to support new compression andadaptive streaming formats – notably H.265 and MPEG-DASH.

Finally, service providers continue to believe that the userexperience is the most important quality in a multiscreenvideo platform, with content security also seen as highlyimportant.

Conclusion

Cable operators: Companies that deliver video servicesto their customers using hybrid fibre coaxial fixed-linenetworks, typically using broadcast technology based onthe DVB-C standard.

Device: In this paper ‘device’refers to any equipment usedby consumers to gain access to video services – whetherset-top boxes, smart TVs, game consoles, tablets, laptops,desktops or smartphones.

DTH operators: ‘Direct-to-Home’ operators arecompanies that broadcast video services to theircustomers via geostationary satellites. Also known as DBS(Direct Broadcast Service) operators.

IPTV operators: Companies that deliver video services totheir customers, generally over fixed-line copper telecomnetworks or fibre networks, using Internet Protocoltechnology, typically using multicast technology.

Live streaming: The deliver of linear TV services – asopposed to on-demand content – over the internet in realtime.

Mobile apps: These are applications – in this casespecifically those that support the delivery of streaming oron-demand video services via mobile networks or WiFi –that can be pre-loaded or downloaded by users tosmartphones and tablets.

Mobile web: This refers to internet services – in this casemore specifically video services – delivered via mobilenetworks, but accessed via a browser rather than nativeapps (see above).

Multiscreen TV: Refers to the distribution of videocontent to a wider range of screens than traditional TVs,such as tablets, smartphones, PCs and game consoles.

OTT (Over-the-Top): Refers in this context to the deliveryof video services over the open internet rather than amanaged network such as that typically owned andoperated by cable operators or IPTV operators.

Pay TV channels: TV services that are offered for asubscription rather than offered for no charge andsupported primarily by advertising. Generally referred to inthe US as cable networks.

Platform: In this paper ‘platform’ refers to the overalltechnology infrastructure required to support the deliveryof video to one or more devices for playback (viewing) byend users.

Set-top box: A device in the home specifically configuredto decode and convert video for playback on a TV screen.

Smart TV: A television that is connected to the internet,typically using a user interface or onscreen portal providedby the manufacturer, and that provides a range of OTTservices, including on-demand content and internet TVchannels in addition to traditional TV channels ornetworks delivered by broadcasters.

Triple-play operators: companies that deliver video,voice and broadband data services to residentialcustomers.

VoD operators or providers: Companies that offer videocontent on-demand to customers that request particulartitles, VoD operators may also offer a range of broadcastchannels to their customers


10

Glossary


11

About Digital TV Europe

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Multiscreen TV & VoD: the big picture · identified as triple-play operators, 7.9% as IPTV service providers, 5.4% as cable operators, 3.7% as DTH operators, 6.6% as pay TV channel