Recently, I have found myself debating with the industries great and good how ‘open’ OTT should be. The is both a practical and philosophical issue and boils down to whether OTT TV is really just more television or the internet on a TV screen. So let me first define the parameters of the debate:
Closed OTT is where the internet video experience is managed by the service provider and open web content is chosen and integrated into a walled garden of the best bits (or most lucrative bits depending on how generous we are being)
Open OTT is where the consumer gets to move away from the confines of the service providers editorialised experience and ‘surfs’ the open web unheeded (normally using a browser that handles all the different display and encoding formats)
The ‘closed’ lobby have some compelling arguments:
1) People expect TV to be easy and mass adoption of new technologies is predicated on easy. If you allow the uninitiated to go anywhere then chaos ensues and the proposition becomes a support nightmare
2) Service Providers invest a great deal in creating, marketing and supporting a new service and must control all money-making opportunities within that solution
3) Our customers could access content which is not compatible with our brand and therefore could be a PR disaster
The ‘open’ lobby point to the internet for inspiration:
1) The success of the internet has come from the unbridled growth of eclectic content so, no matter how good a walled garden is, a closed system will never be as compelling
2) True exponential growth of media technology is fuelled by significant content availability
3) Mobile phones tried to restrict open internet access but had to give in eventually to consumer pressure
4) The current lack of OTT regulation will drive faster innovation in content and business models
So what are the degrees of ‘openness’?
1) The ground floor version of OTT is to persuade a number of heavyweight internet video partners to allow you to integrate their content into your tightly controlled, EPG centred, walled garden. Even this has degrees of openness as the content can be stored locally in the service providers infrastructure and delivered in a managed way (more like IPTV) or the device (TV or STB) can do an open call to the internet and pull it in directly. This is the comfortable and low risk approach. The consumer experience is harmonised with a consistent look and feel and traditional television types sleep soundly in their beds happy that nothing has really changed. Advertising and sponsorship is centrally sold and the opportunity for subscriptions is there but almost certainly never realised. Comcast and Dish Networks are both looking to OTT to deliver VoD libraries to the viewers mobile, PC and TV in a closed system and that looks to be a compelling early consumer proposition.
2) The next step to the road to OTT enlightenment is the Application Store. Here the consumer launches a new environment – much like that offered by the iPhone, Moblin and Android solutions – and the look and feel can be unique to that application because it is like stepping briefly into another world where the rules are different but returning to the familiar is only an exit button away. This is the anti-chamber route for OTT, it is still not the open internet but allows more varied content to be made available without significant integration costs. For the service provider it opens up the opportunity for tenancy fees and revenue shares in exchange for a test and validation overhead. This is a great ‘survival of the fittest’ approach where the cream rises to the top with viral efficiency. Expect this to be the main route for Flickr, Twitter, Picassa, Facebook, Skype and the like to hit our TV screens sometime soon. A slight difference on the TV is that we are seeing applications which share screen real estate with televisual content (Yahoo Widgets etc) instead of the iPhone approach of hijacking all the screen. This does present TV UI designers with the greater challenge of keeping viewers in touch with their chosen video whilst enjoying an alternative application experience. I thought Intel’s demo at CES where the graphics screens was ‘peeled back’ to reveal application beneath was a nice visual metaphor to tackle this.
3) The fully open approach adds a door to the open internet. This uncontrolled, Wild West of television allows the consumer to visit anywhere, anytime and liberates the best (and worst) of the internet. Monetising is hard and it takes a real leap of faith to invest in a solution where you lose control of your customer. Not all is lost for the service provider however as good consumption monitoring gives a great indication of which sites should be integrated into their App Stores and ultimately into their main walled garden down the road. Sony’s PS3 in the UK offers browser based access to BBC’s Big Screen version of iPlayer and now has included a purpose built link on the standard menu bar to launch the application more easily. The consumer can be helped here to find compelling content by offering a good TV-centric search and recommendation engine but remember most sites will need a pointer device to be navigated effectively on a TV screen and formatting issues will be plentiful.
So will we get to step 3 and, if so, how quickly? Personally I believe we will but it will be not be immediate. Paradoxically, the early adopters of OTT solutions will be more able to grasp step 3) but mass market will need the ‘easy’. My guess is that competitive pressures over the next 24 months will push service providers to be more and more open helped by the internet generation taking more control of the remote control. Then internet video sites will market both to the TV and PC and true TV innovation will drive exponential adoption. We have seen it with the App Stores on mobile phones and I really look forward to next-generation TV benefiting from the same effect. However, the question of brand integrity and controlling associations will have to be tackled. Today, if unsavoury content in viewed through a PC and browser it does not reflect badly on Microsoft however in the TV environment that separation between provider and content is less clear.
But on the whole I’m voting for open – what about you?
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