The Battle for the OTT Box

Apple_TV_2nd_Generation_backAmazon this week finally announced the fireTV, an OTT settop box. It’s been rumored for years that they would launch one, and considering how popular AmazonPrime is it’s surprising how long it took for them to do this. But this announcement highlights the giant battle going on in households for control of the OTT market.

And of course, boxes aren’t the only way for homes to get OTT content. In my house we don’t have a television and we watch our content on PCs, laptops, tablets and smartphones. This works for us. And then there are smart TVs. There are decent smart TVs from LG, Samsung, Sony, Toshiba, Philips and Panasonic. Each of these comes with a different system for giving access to web channels. The best of them offer a lot of customization to make your line-up what you want to watch. All come with some modest amount of web gaming.

But the big battle today is with the boxes, primarily between the new Amazon fireTV, Apple, Roku and the dongle from Google Chromecast. This wide array of options must have the average household scratching their head. Every box is different in look and feel, price and features. They vary widely in what you can watch and in the ease of using their interface. And they all are all hoping to control a large chunk of the market

The Amazon fireTV is an interesting platform. They have built in 2 GB of RAM and a dedicated graphics processor. With an add-on $40 game controller this is going to give them the ability for higher quality gaming than the other boxes, although not near the capability of the dedicated game platforms. For non-hardcore gamers who just want to play games on their big screen it should be a good alternative to buying an expensive gaming box

Many of the boxes now have voice activation. With smart TVs you normally have to shout across the room to the TV and this is widely reported to be clunky. The fireTV puts the voice control in the remote. Roku 3 has taken the path of making their remote motion controlled.

The real competition between boxes comes with the programming choices they have built in to the channel line-up. For example, the ROKU 3 line-up has grown to over 1,000 channels and apps. The Amazon fireTV is launching with only 165 and has some clear major omissions such as HBO Go. But one has to suspect those deals will all be made and that they will quickly catch up.

And perhaps the real winner will be the box and company that finally makes a deal for some regular programming to go along with the OTT content. The first one that can bring in the network channels, HBO without a landline subscription and popular programming like ESPN and Disney could be a major competitor to cable companies. Recently an email from Steve Jobs right before he died showed that Apple was hoping to add this kind of content when they release the next generation of Apple TV, and it might be the lack of such deals that has held off that release.

The Amazon fireTV is announced at a price of $99, the same as the Roku and the Apple TV, although both are widely available today for around $95. The Google Chromecast is available today for only $35. I have to be honest and say that if I buy a TV, which I am considering, that I will have a hard time making a choice between these options. I read a lot more about this stuff than the average household and it makes me wonder how people make such a choice. They probably just go with the brand that they feel the most comfortable with rather than making the hard side-by-side comparisons.

The Future of TV – The Sets

English: Various remote controls fot TV-set, D...

English: Various remote controls fot TV-set, DVD and VHS. (Photo credit: Wikipedia)

I think everybody agrees that television viewing is changing rapidly, and everybody in the industry has been thinking about how these changes will impact the cable business. I am going to do a series of blogs for a few Mondays looking at where industry experts think the business is moving. I will start off today looking at the future of the television set and then move on to other aspects of the business such as advertising, content production and viewing habits.

For the first time in many decades the purchase of new television sets is down. This seems to be due to two primary factors. First, 11% of homes now say that they now watch all of their video from computers, laptops, tablets or smartphones. So some households have given up on the communal nature of having a centralized set that everybody can watch together. However, the communal nature of TV viewing probably means that most households are going to want to keep a TV set of some sort. Second, TVs are being upgraded less often and people are treating them as a screen more so than a standalone device. When somebody connects a Hulu or Goggle Chromecast device to their TV they have in effect upgraded without the necessity of buying a new monitor.

So I looked around to see what experts think will happen to the TV set over time? Here are some guesses for both short-term and long-term.

Short-Term.  In the short term TV sets are going to get glitzier and have even more functions than they do today. Of course, not all big TV innovations succeed such as the fizzle that came with 3D TVs in 2010. But before TV manufacturers agree that the future of TVs is dead they are going to try to sell new sets by pushing new features. Some of the features being seen on new TVs now include:

  • Split screens. This takes the idea of picture in the screen and creates up to four separate pictures on the screen at the same time. Thus, a sports fan could watch four football games simultaneously. This has to be giving nightmares to companies delivering IPTV over DSL if each set can be asking for up to four HD channels at the same time.
  • Ultra High Definition. There are not TVs being made with 4k resolution which provides 4 times as many pixels with a 3840 X 2160 pixel grid as compared to today’s 1920 X 1080 grid.
  • OLED (Organic Light Emitting Diodes) TVs. These are ultrathin TVs made of layers of sprayed on materials that create a new kind of diode. The diodes emit their own light and turn black when not being used. The Koreans have made an OLED screen that is flexible and only 4 mm thick.
  • IGZO (Indium Gallium Zinc Oxide). Sharp has introduced a new LCD screen that is much brighter and also that can change colors much faster than older LCD screens. This ideal for gaming but also makes a superior TV screen.
  • Smart TVs. It is being rumored that Apple TV is almost ready to release its iTV, or the next generation of smart TV. A smart TV is really a new kind of smarter settop box combined with a screen. Apple will probably include Siri and iSight and other computer and smart phone features into the box. The smart TV will no longer be just a tuner and recorder but will be a full-functioning application machine that can bring the web and cellphone apps fully integrated to the TV set.

Long Run. In the long run it is likely that the TV settop box functionality will be completely separated from the display. The OLED flexible and transparent displays will mean that a TV will be able to be installed anywhere by laying a film over an existing surface. And so there could easily be an inexpensive TV display on the side of the refrigerator, on every mirror in the house or on any wall. These TVs will be operated using the combination of a smart box along with very fast WiFi in the house that will let all of the TVs be integrated into one system. This will allow for interesting new features such as ‘follow-me’ TV where the TV signal would follow the person from device to device and from room to room as they move throughout the house.

TV is also likely to become far more personal to each person in the household, a topic which I will look at in a future blog.

One small detail I almost forgot. The lowly TV remote is likely to die soon. The remote we have today is largely still needed due to a rule at the FCC called the integration ban which requires cable settop box manufacturers to produce a removable tuner, called a cable card. And so the current remotes still work on ancient infrared technology.

Remotes are starting to be replaced by smartphones and there are apps which can take over many of the remote functions. But in the not-too-distant future the smart TVs are going to do away with the need for any device and you will be able to control the TV by voice commands or by gestures. I know this will save me the five minutes it takes me every time I go to watch TV and try to remember where I left the remote!