The Future of Television

Google TV: The next step in the evolution of the television market?

Presented by Brett Petersen

December 2010

INTRODUCTION

1. Overview of the OTT TV market

2. An introduction to Google TVi. Key Featuresii. Problemsiii. Recent news

3. Google TV’s main competitorsi. Apple TVii. Yahoo! Connected TViii. Roku

4. Multi-tasking and interactive TV

5. Conclusion

Brett Petersen OVERVIEW OF THE OVER-THE-TOP TV MARKET

Overview of the Over-the-top TV market

OVERVIEW OF THE OVER-THE-TOP TV MARKET

Definitions

Over-the-Top TV (OTT TV): delivery of web video content directly to TV sets.

IPTV (Internet Protocol TV): consists of packaged Pay-TV offers similar to those on satellite and cable but offered over an Internet connection.

Catch-up TV: online services from TV broadcasters or TV operators that allow users to “catch- up” on TV series on demand.

Transaction Video-on-Demand (T-VoD): a service that allows users to rent films and/or TV show on demand, charging a fee for each rental.

Subscription Video-on-Demand (S-VoD): VoD service that charges a flat monthly subscription fee for viewing of films and TV shows.

OVERVIEW OF THE OVER-THE-TOP TV MARKET

Three main factors that are key to OTT TV diffusion:

1. Increased penetration of broadband connections

2. High-quality online video content (i.e. catch-up TV, VoD)

3. Replacement of old devices with those that are Internet-connected (i.e. Smart TV sets such as Google TV)

5

10

15

20

25

30

2004 2005 2006 2007 2008 2009

OVERVIEW OF THE OVER-THE-TOP TV MARKET

BROADBAND PENETRATION IN THE UK, GERMANY, SPAIN, FRANCE AND ITALY (EU-5) - 2004 TO 2009 (broadband access lines per 100 inhabitants)

Source: Eurostat

OVERVIEW OF THE OVER-THE-TOP TV MARKET

SPREAD OF ONLINE VIDEO CONTENT

Catch-up TV User-Generated Content

T-VoD S-VoD

OVERVIEW OF THE OVER-THE-TOP TV MARKET

Have you accessed the Internet via your TV set?(% of respondents answering yes in each country)

Source: GWI Wave 3 data

GermanyUK

Italy

Spain

Netherlands

France

China

Japan

USASouth Korea

Russia

India

Mexico

Brazil

Canada

Australia

Malaysia

Poland

0%

1%

2%

3%

4%

OVERVIEW OF THE OVER-THE-TOP TV MARKET

FORECAST DIFFUSION OF OTT TV

Broadband-enabled TV households worldwide (million)

130

360

2009 2014

Number of active OTT TV households worldwide (million)

40

170

2009 2014

Source: The Diffusion Group

Note: Broadband-enabled TV households refers to those with the basic infrastructure to enjoy OTT TV services

+177% +325%

OVERVIEW OF THE OVER-THE-TOP TV MARKET

What types of people are accessing the Internet through their TV sets?(% of global sample)

Source: GWI Wave 3 data

25 - 34

16 - 24

35 - 44

45 - 54

55 - 64

31%

31%

20%

12%

5%

65%

35%

Male Female

University Trade / technical school or college

Post graduate Schooling until age 18

Schooling until age 16

50%

20%16%

10%4%

GenderBreakdown

Educational Achievement

Age Breakdown

OVERVIEW OF THE OVER-THE-TOP TV MARKET

Social media usage: comparing Internet TV users to the overall market(% of global sample)

Source: GWI Wave 3 data

Watched a video clip

Uploaded photos online

Manage your social network profile

Left a comment on a story on a website

Post a comment on a forum / message board / bbs website

Uploaded a video online

Written your own blog

Edited/managed own website

Written a news story / article

Used a microblogging service

0%

50%

100%

Internet TV Users Total

OVERVIEW OF THE OVER-THE-TOP TV MARKET

Interest in future technology products regardless of cost(% of global sample that is interested in each product)

Source: GWI Wave 3 data

52%50%

49%46% 45%

43%41% 41%

32%30%

42% 41%

35%

39%

29% 30%

15%

29%

22%

16%

Internet TV Users Total

OVERVIEW OF THE OVER-THE-TOP TV MARKET

Summary of consumers using the Internet through their TV set

Source: GWI Wave 3 data

The are generally young adult males that have achieved higher education.

They are more likely to use social media to communicate with the world around them than the average global consumer.

They are generally more interested in new consumer technologies than the average global consumer.

Internet TV users are also nearly four times more likely to be early adopters of new technologies than the average consumer, and they almost always have a more positive outlook on the effect the Internet has on society.

GOOGLE TV

What is it and is it important?

GOOGLE TV

SEARCH THE TV SET

Allows users to search the Web, EPG, DVR for any given TV show, actor, genre, etc.;

Problem: DVR search is completely integrated only with Dish Network in the United States;

Problem: reports of inaccurate and unexpected search results;

Still, the concept of being able to search the entirety of the Web for any given programme or film using keywords is a powerful tool.

Images from Logitech

Website owners have the option to build dedicated websites that are adapted for TV viewing;

GOOGLE TV

THE INTERNET ON THE TV SET

Google TV users now have the entirety of the Internet available on their TV set;

Using the Google Chrome Web browser users can access any website and even play flash video using Adobe Flash 10.1;

Images from Google

Google Chrome Web Browser

Problem: browsing the Web is a personal activity as opposed to TV, which is often viewed in the company of others. A laptop or tablet PC is more conducive to TV viewer multitasking.

GOOGLE TV

APPS ON THE TV SET

Images from Logitech

Apps on the TV set offering everything from video content (S-VoD, T-VoD, Web video) to Web radio to social networking;

At first, apps for Google TV come preloaded, but beginning in early 2011, apps will be available from the android market;

Apps are a key to making Google TV work. If they run smoothly and don’t detract from the viewing experience, they will be an excellent addition.

GOOGLE TV

ADDITIONAL GOOGLE TV FEATURES

Images from Logitech

Dual View

Personalized Home ScreenUse a smartphone as a remote

GOOGLE TV

CURRENT GOOGLE TV HARDWARE AND USABILITY

Images from Logitech and Sony

Logitech Revue

Sony Internet TV

GOOGLE TV

RECENT GOOGLE TV NEWS

American broadcasters block Google TV users from accessing their online web video services.

The catch-up TV and VoD service Hulu (joint venture between News Corp., Disney, and NBC Universal) has also blocked Google TV, and Hulu Plus is still not available.

More hardware partners have recently been announced.

GOOGLE TV’S MAIN COMPETITORS

Google TV’s main competitors

GOOGLE TV’S MAIN COMPETITORS

APPLE TV

Images from Apple

Apple TV allows users to download content from the iTunes store (walled-garden business approach);

Apple TV comes with a selection of built-in apps:

Apple TV allows North American users to access Netflix;

The Apple TV can also be controlled with an iOS device and content viewing synced using AirPlay.

GOOGLE TV’S MAIN COMPETITORS

YAHOO! CONNECTED TV

Images from Yahoo!

Yahoo! Connected TV runs most of the same devices as Google TV:

The platform is centered around Yahoo!’s Konfabulator widget engine, which was originally developed for the PC. This means that widgets are easily written for the TV using existing code;

Yahoo! has recently announced that it is launching a Yahoo! Connected TV store and has already released the SDK;

Yahoo! TV Widgets can run discreetly on the TV set.

GOOGLE TV’S MAIN COMPETITORS

ROKU

Images from Roku

The Roku player is a set-top box that is simple and cheap compared to other devices with similar spec (starting at $59.99);

Roku has, arguably, the best line-up of online content available:

No social networking apps other than photo apps including Facebook photos and Flickr;

Likely the best value option for consumers looking just for OTT TV services.

MULTI-TASKING A BETTER OPTION

Images from Roku

Multi-tasking and interacting with the TV via other devices

MULTI-TASKING A BETTER OPTION

MULTI-TASKING A BETTER OPTION FOR CONSUMING WEB CONTENT WHILE WATCHING TV?

Source: Thinkbox and DecipherNote: Survey conducted among 3,000 UK “digitally enabled” households

(% of survey respondents)

Survey found that social media actually encourages linear TV viewing so as to avoid spoilers from friends.

60%

52%

44%

37%

19%

9%

Regularly watch TV and go online at the same time

Shopped online while watching live TV

Used social networks such as Facebook and Twitter while watching TV

Chatted online about TV content –programmes or advertising

Have shared TV content on a social network

Joined a TV-related Facebook group

MULTI-TASKING A BETTER OPTION

Images from Endemol and ABC

OTHER WAYS TO INTERACT WITH THE TV USING WEB BASED CONTENT

Interactive TV Gaming

Interactive applications providing additional info and extras

CONCLUSION

So the future of television is...

CONCLUSION

Not Google TV in its present form

A less intrusive model such as Yahoo! Connected TV is better for delivering non-video Web content to a screen being viewed by multiple people.

A walled-garden system such as Apple TV or Roku offers content providers security and a guaranteed revenue stream.

Multi-tasking will continue to grow, and using social networking services such as Facebook or Twitter while watching TV are more suited to individual use on a separate device (i.e. tablet PC or laptop).