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Intel’s reported exit from connected TVs: long live STBs

I feel like I've had the discussion on whether the future of TV includes STBs a thousand times at least. I seem to conclude yes about half the time, then no the other half.

I joined geekdom in the late eighties so my technological world vision was built around the Wintel duopoly. Remember when Microsoft brought out windows 3.1 (the first version that really worked). Most PCs needed to be changed. Then again when Intel came up with a new chip, twice as fast as the one 18 months ago, software vendors like Microsoft, Adobe, or game developers would quickly bring out « great » new features using all that power.

Asked whether the TV has an STB in its future, my answers always refer back to those simple old Wintel days: as long as people like NDS can come up with hungry UIs that require ever more processing power under the hood, then yes. Indeed the NDS latest Snowflake UI is reputed to be just one such power hungry killer-application.

Upgrading the TV’s processing power has always been harder than to swap out an STB. Traditional business models usually have it that a 500€-1000€ TV set belongs to the subscriber whereas the 50€-200€ STB belongs to the operator. In the days before connected TV and IP, the shelf life of a box was about 7 years. If the accelerated rate of change means that this has to be shortened to say 3 years, so be it. Lowering hardware prices will absorb a good part of the extra cost and the business model can take on the extra 10-15€ a year that shortened amortizations adds.

We had a changing world that I made some kind of sense out of with my Wintel analogy. But Intel then goes and exits connected TVs. How can that fit into the picture?

Despite their vested interest to sell to every part of the value chain, Intel have basically told the market that they believe their future is in the STB and companion devices, not the TV itself. The extra shelf life of TVs could be the culprit here. I'll be looking out for the roadmaps of other silicon vendors to see if they agree. But Intel carries so much weight that their analysis will affect the market even if they are wrong in the long term.

Thank you Intel for helping me to treat my split-personality disorder. I am no longer wavering and clearly do see an STB in the TV's future at least for the next couple of years. Other stakeholders were already pointing in this direction like Microsoft's with their big X-Box push in the TV space and Apple's non-entry into TV sets despite persistent rumors.

Jamie Beach of IPTV News recently pointed out to me how Google's Android strategy seems to be heading towards some kind of convergence with the TV. In the short term that will probably mean that Google's role in the TV will be played out on android companion devices only. It'll still be a couple of years before they get the lean back STB or TV OS sorted.

If anybody at Samsung, Philips, LG, Toshiba, Sony or any other set maker was worried about Intel's move, they are wrong. Their Connected TV strategies may need to be scaled down, but as soon as I have some spare cash I can now go and buy a new TV, based on its screen qualities and stop worrying about its OS, processing power or Apstore... I worry about the connectedness of my TV set itself when I next upgrade in 2 to 3 years.

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My plans for IP&TV World Forum 2011

Like many attendees, this year I’ll be wearing several different hats again during the show. I’ll start as a blogger and a bit of a twit (@nebul2), then put on the independent expert & analyst attire. I shall finish off the conference wearing my active IP&TV / VoD consultant’s hat.

On the exhibition floor, I’ll be milling around and peeking at everything. Last year was notable for the fancy UI demos based on Intel chipsets. This year I expect the other chipset vendors to respond. So I’m looking forward to Sigma Design’s G.hn demos and whatever is new from ST and co. I trust Pace, ADB and the other STB makers will oblige.

I’m proud to have got my 3D prediction right: last year was too early for the 3D bonanza, and it looks like this year is already late enough to avoid it again, so I don't expect to waste much more time looking at puny 3D demos.

Last year’s OTT and connected TV demos were still mostly just concepts despite several of them having already been around in 2009, but I expect to see more live services demoed this year. I’ll be especially attentive to any booths that are showing OTT services that, beyond looking desirable to the end-user, make business sense. I suppose a holy grail while going from OTT demo to OTT demo will be anything that looks like it could become a connected TV Esperanto, but that’s probably just wishful thinking; I must save some expectations for 2012’s show.

Now for the conference.
Day one: I’ll head off to the OTT breakfast hosted by an interesting ecosystem of companies, three of which I often write about. For OTT to make a difference, cooperation is central that’s why I find this initiative interesting.
Awox’s Olivier Carmona is technical marketing director of a small company with a big vision that dared to nail its colours to the DLNA mast way before it was hip.
I’m looking forward to a scheduled interview with Steve Christian of Verimatrix.
Unlike most competitors in the security business who still only really care about today’s CAS cows, Steve also gets fired up about what’s coming. He often leaves me with a “why didn’t I think of that” feeling.
Next comes Thierry Fautier who is Harmonic’s IP convergence guy. His forceful views on the way the industry is heading always take me by surprise.
Then I’m looking forward to getting the views of Minerva, Real & Heavy Reading whom I know less well but will be there too.

Thus I’ll miss the opening keynote plenary. The main conference room is usually packed with journalists so if anything interesting comes out of those presentations I’ll pick it up on twitter (@julianclover usually tweets if its really breaking news so I recommend following him as well as the #iptvwf hash tag). The only operator in the opening session is Virgin Media. IP&TV WF still has this bizarre UK focus on keynotes in spite of the fact that this is supposed to be a WORLD forum and that the UK is a long way from the centre of the IP&TV universe. As an expat Brit, I can’t help wondering if it’s an unconscious remnant of the British empire: when my Austrian grandparents got married in the 20s, they went to the centre of the world for their honeymoon, it was Nelson’s column. But that was almost a century ago.

Anyway, back to IPTV, I’ll then spend the rest of day one between the 4 conference streams and the exhibition floor.
As I’ve always been fascinated how marketing genius creates brands like Häagen-Dazs or Red Bull out of absolutely nothing, I’ll try and get to the Red Bull presentation at 3:10 in the Content stream.

Wednesday morning’s plenary seems more promising with speakers from both YouView and HbbTV, so I’ll be looking forward to some sparks flying there and a debate beyond the confines of the UK market.
If I still have fee time in the morning, I’ll be going to the Network optimisation stream, which is about adaptive rate streaming, one of my hobby horses from 2008. Huw Price-Stephens, the stream chair is probably the best chairman I’ve seen at IP&TV WF. He’s witty and provocative, so even when the speakers disappoint, he raises the standard. I’ll certainly be staying in his stream later in the afternoon, as a panellist at 15:10 on video delivery for the last mile.

I don’t know if that’s a demotion or a promotion, but for the first time, I’m not invited to the awards ceremony, which is held this year at the end of day 2. I never like Madame Tussaud’s and in any case I’ll be going to an exclusive Warner & Grey Juice screening that evening instead.

Day three will kick off for me at 8AM as I’m hosting an analyst breakfast on the commoditization of IPTV. So far we’ve had an exciting LinkedIn debate with 60 contributions so far. It came in response to a blog on the death of IPTV in France that I published on my site.
Then for much of the last day I’ll be wearing a consultant’s hat talking to clients.
I’m not too worried about missing the Google & Netflix talks during the plenary session. I’ve only ever been disappointed when listening to these big guns. Note that that may be because my expectations are set wrongly.
I’ll try and catch some of the CDN stream, which focuses on where operators are either in pain or see opportunity today as opposed to yesterday or tomorrow for the other streams.
IPTV WF have had to fight so hard to get credible speakers from the network operators (I remember being one of the first in 2004 or 2005), that now the pendulum has swung the other way: in the whole day on CDN’s almost all speakers are network operators. I’ll make a point of trying to attend the presentation from Astro, the Malaysian DTH platform at 3:30. It’s always better to start by understanding the market needs before the offers.

Then it’ll be a rush back to St Pancras station to catch a Eurostar, and hopefully write up some notes to publish here on the journey home.