Standing on the shoulders of giants
S05E10: Game of Streams (Standing on the shoulders of giants)
Our Media Solution Specialist, Magnus Svensson, is sharing his reflections on the online streaming industry in this post. This is part of a monthly series so make sure to follow us here if you don’t want to miss an episode.
In a letter to Robert Hooke in 1675, Isaac Newton made his most famous statement: “If I have seen further, it is by standing on the shoulders of Giants”. In the world of smart phones, we have two giants when it comes to controlling the operating system and user interface, Google with Android, and Apple with iOS. When developing apps for smart phones you need to stand on the shoulders of these Giants.’
On the television and online video side it has been more fragmented. Many parts of the industry are looking for the attractive spot as gatekeepers and home for online video viewing. And with the increasing cord cutting this is becoming more important and this is where the real “streaming wars” is fought.
Traditionally television has been distributed in closed networks, owned and operated by various network operators and distributors. The way of distribution has been terrestrial, satellite, cable, or IPTV. Networks and content owners needed the distribution and paid distribution fees to reach the viewers. This model is used to reach millions of households across the world.
With the internet the game has changed. The pay-tv operators are no longer needed to reach the audience, video can be distributed efficiently across the open public internet. By that we saw the rise of new video services starting with Netflix back in 2007 until todays never-ending number of video streaming services.
The pay-tv operators try to keep their pole position as the go to place for video entertainment and as a complement to the bundling of linear channels in to packages they add streaming services to their offering. It could either be that they offer streaming services content as part of their service, or that they offer the content discovery tool for the content, but the actual viewing is done through the streaming providers environment or app.
The real Streaming Wars
When television moves online, the need for the traditional set top box is gone. Instead, we use smart tv’s or streaming devices as the hub for television on big screen. The device that is used to watch television will sit with the control of the playing field. It is the operating system that dictates the rules. The operating system and their app store control what applications can be downloaded and influence how the services are monetized by taking a piece of the subscriptions or ad revenues. They also control the goldmine of data from the users.
And as for the smart phones, the most probable outcome of this “war” will be two giants. The same two giants as for the mobile phones, Google with Google TV using Android TV and Apple with AppleTV using tvOS.
They two giants already control big parts of the viewers environment with mobile phones, tablets, speakers, voice control and app stores. Most households already have a billing relation with either Google or Apple, already user their music service, storage, and other services. They have already established themselves as part of your life. And without even noticing, they have become your TV hub.
There are for sure other vendors in this space including Roku, Samsung, and Amazon. But they all lack at least one piece of the puzzle including the app stores. And the pay-tv distributors will still play a role in the world of television for a long time. But the content aggregation role will be limited, and more focus will be on broadband connectivity and making it easy to access the popular service.
The advice to the pay-tv distributors would be to see how they can create the best experience, standing on the shoulders of the two giants. As with mobile subscriptions they could offer TV sets or streaming devices as part of their subscription to broadband connection. If you subscribe to broadband, you get a TV set running Google TV, or an Apple TV device, with preinstalled apps for the popular services and discounted subscriptions. And leave the content aggregation part to the giants.
“If I have seen further, it is by standing on the shoulders of Giants”
To watch out for the coming months…
November is filled with interesting online conferences and events. First up is Streaming Media West Connect with a great lineup of great panels, two led by me as moderator. A bit more than a week later OTT Executive Summit starts with an equally great agenda, also with two panels led by me. A lot of opportunities to be educated and inspired by industry experts.
Magnus Svensson is a Media Solution Specialist and partner at Eyevinn Technology. Eyevinn Technology is the leading independent consulting company specializing in video technology and media distribution.
Follow me on Twitter (@svensson00) and LinkedIn for regular updates and news.
