The Future of TV

Considering this is the last generation to have experienced the “old” linear TV devoid of any interactivity or ubiquity, they will likely be a major part of TV paying subscribers in the years to come. However, they are not alone, and an even more demanding generation will rule: the born-digital generation, for whom the past of TV is irrelevant and customer loyalty resembles more of a lock-in that their parents had to face to lower costs of TV subscriptions.

In this challenging context, service providers (which include Telco operators) will have to seamlessly tackle service personalization, TV anywhere/anytime viewing, content production and aggregation, amongst other key initiatives aiming to bridge the gap with the consumer, both as an individual or in a group. At a high-level, this seems to be a very attainable endeavour, if no constraints exist. However, constraints are all over the place. In the TV of the Future, disruptive and engaging experiences will have to be built over unconsolidated technologies and new infrastructures using ground-breaking delivery paradigms, under fierce non-traditional blue-ocean competition. Unsurprisingly, in the end, the total cost of ownership (TCO) and ultimately cost-to-serve efficiency will dictate, as always, the TV business model feasibility.

More practically, the TV of the Future will likely face several paradoxes (e.g. simplicity vs service extension) and challenges (e.g. new consumer habits vs traditional TV delivery), but ultimately, it should include some of the following features, requirements and constraints.

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The Future of TV Services is not so far away

• Voice Control is beginning to emerge and will likely be a core component of User Interfaces (UI) and User Experiences (UX), to streamline and boost content discovery and service configuration and customization. Currently, voice control is still a promise and has the potential to be a key differentiator, but few good implementations are in place by service providers. However, it would not be strange to see voice control as a commodity in the future, being a natural component of any future TV experience.

• Adoption of machine learning algorithms to significantly enhance content personalization, recommendation and monetization (e.g. through AI-based target advertisement). In particular, targeted ads have been widely adopted in the online domain, but not so much (and not so effectively) on the “traditional” TV domain. In addition, if leveraged on AI breakthroughs, targeted ads seem to have an untapped market that will surely be a key success factor for the TV of the Future.

• Metadata enrichment and TV extensions will be very relevant, such as audio and video tracking to trigger non-TV events such as fetching and rendering cast metadata, related content, purchase options, targeted discounts.

• Augmented and Virtual Reality (AR/VR) to further extend TV reach and immersion experiences. However, the industry has mixed feelings about VR as 3D TV was very promising at first but then resulted in a well-known flop in a recent past. So, steps are carefully being taken to fully take advantage of what technology now enables us to do.

• Linear TV will survive, at least for live events. More specifically, sports events. But for other event types, Linear TV will most likely be replaced by non-linear viewing, either Catch-up, Subscription Video On-Demand (SVoD) or even YouTube streams. As a sign of the times, in the end of 2018 Netflix launched a fully-interactive episode in the context of the Black Mirror series, where the viewer chooses the course of the story while watching the episode. The user faces a UI prompt at times and is asked to select one of two options, to further advance in the episode. As such, Linear TV consumption, as we know it, faces the risk of being greatly shortened and partially (or even fully) replaced by customized on-demand viewing.

• Progressive yet global transition to more immerse video services and services, leveraging on 4k and High Dynamic Range (HDR) content (technically feasible today, but not rolled-out at scale). This is not as surprising as hard to deploy globally and may likely be leveraged on ultra-broad band mobile (5G) and next generation fixed networks.

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Content as a game shifter

• Content exclusivity is likely to be one of the cornerstones of a winning TV service offering. Original programming is already a hot topic in the content industry, especially after significant investments from huge OTT players such as Netflix and Amazon Prime. To face this threat, it will be interesting to see how “incumbent” content providers, such as Disney or Time Warner, will strike back and what will Telco operators take on this matter. One thing is certain: “surf the wave or die watching”.

• Content aggregation emerges as a reinforced business model to be exploited by Telco operators, as they are not content creators by nature. As of today, TV customers must independently subscribe Netflix, Amazon Prime, Hulu and other OTT services, to be able to watch the content they enjoy most. This is a great opportunity for Telco operators and seems to be an untapped market by other entities. However, it may raise an identity crisis for a Telco Operator: What is the core business of a telco operator? To provide Network connectivity? To aggregate content? Other?

• Subscriptions will rule: Transactional Video-on-Demand (TVoD), i.e. one-time purchase is stalled, non-recurring revenue and convicted to die due to high price and low-user engagement (no binge watching, no season, no series). The future of TV will be associated to a new world of content consumption, where users are fully in control.

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New purposes for “legacy” devices

• Set-top-Boxes that sit on customers’ premises will be repurposed and emerge as “the orchestrator device” that will enable “smart home” implementations, by integrating traditional features and controls with voice assistant services such as Amazon Alexa, Apple Siri or Google Assistant.

• Bring-your-own-device policy will be a given. The TV service will natively be agnostic to the device that will be playing out content. The user / customer may benefit from TV services ultimately on any screen, from traditional STBs to OTT devices (e.g. Apple TV) or other devices such as Chromecast, with the same Quality of Experience (QoE) and Quality of Service (QoS). Backbone networks and TV backends and also frontend apps will have to guarantee seamless experiences across the board.

• Compatibility with legacy devices will likely be more intense in the future, not only due to ever-growing breakthroughs on hardware (e.g. chipset, memory, screen size), but also to increasing software fragmentation (e.g. O.S families and versions).

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Evolution from monolithic architectures

• The TV of the Future cannot live without reframing and converting existing, components, sub-systems and architectures into micro-services. This will decouple service logic in “atoms” to increase flexibility, maintainability and scalability, while reducing side-effects of code changes, code merges and code deprecation.

• The TV of the Future demands for simplification and consolidation of backend platforms (e.g. Unified Content Management Systems, API Gateways) to reduce architecture complexity and mitigate vendor lock-in. It is not cost-effective to have monolithic systems that are unmanageable or require Einstein to operate them.

• Predictive and prescriptive insights on TV platforms’ usage and performance will be indispensable and will allow: 1) to forecast new consumer behaviours; 2) actively (not reactively) monitor service and equipment degradation; 3) boost preventative maintenance (e.g. predict when legacy STB’s will have disk problems and when would the time be appropriate to swap the customer’s STB). However, this will not scale by just building every “brick” of the platform; the industry believes that it has to be leveraged on new components and services.

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Infrastructure Revolution will be required

• The TV of the future will, have to migrate infrastructure onto the Cloud (e.g. AWS or Azure), which will allow trading CAPEX over OPEX, increase agility and lower the time-to-market of service providers.

• Significant increase in the demand of managed cloud services will be required to support TV services, to allow the operator to focus on network connectivity and eventually content aggregation, while outsourcing non-core activities to specialised providers. Building every bit of the solution is not cost-effective.

• Increase scalability, security and resilience of TV platforms, by adopting hybrid cloud TV implementations, in addition to traditional on-premises deployments will continue to be on the agenda of service providers, especially Telco operators.

• On-the-fly creation of new software environments to allow instant A/B testing and decision-making, following a Netflix approach.

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Bottom line

The TV of the Future seems promising for TV consumers, but simultaneously very challenging for service providers. The era of incremental innovation is about to end, and existing paradigms will not be a safehouse for the future.

But as we know, with great threats come great opportunities and the players most adaptive to change will thrive... as always.

Thankfully, at Celfocus, we’ve been part of this journey and will continue to successfully help Telcos all over the world create, adapt and reinvent their TV solutions to cope with the increasingly demanding TV viewers of the future.