Convergence in the home
Convergence – the delivery of telephony, data and television through a single digital channel – is finally moving from hype to reality.
“We believe that convergence is forcing traditional media companies to adapt their models to offer dramatically increased ease and flexibility to the consumer,” says Peter Gardner, Global Sector Head of Communications, 3i. Most of Europe’s telecommunications companies are already offering access to media content via digital subscriber line (DSL) broadband services.
France Telecom launched its “MaLigne” DSL-based service in Paris in 2004; Germany’s Deutsche Telekom, Spain’s Telefonica and the UK’s Telewest also offer the “triple play” of telephone, television and Internet services. For cable-based distribution, the focal point has been the set top box (STB), while with DSL-based distribution the focal point has been the PC. Increasingly these lines are being blurred, and wider distribution throughout the home, and 122 million of domestic WiFi networks now proves this is a reality.
Internet TV – or IPTV (internet protocol television) – is touted as the technology that will capture consumers' imaginations and create a major global business based on convergent technology. Piracy of TV programmes on the Internet is already happening, but legal Internet TV is due to make its formal debut this year. Microsoft has been developing software to support Internet TV for ten years now, along with US telecoms giants such as Verizon Communications.
However, European telecoms companies have already deployed DSL networks capable of supporting triple play services and this may mean the region will overtake the US in the roll-out of Internet TV. If European providers can make Internet TV as easy and reliable to access as, for example, satellite TV is today, the potential for this new medium will be huge.
The emergence of interactive TV
Internet TV will make it easier for viewers to choose from libraries containing a vast choice of programmes, movies and music videos – the array of options will make today’s multi-channel TV seem restrictive. Advanced Triple Play delivery systems gave users many of these facilities, but Internet TV gives viewers absolute control over their viewing, allowing them to skip ad breaks, just as many owners of personal video recorders are already doing. In response, the advertising industry will need to find new ways of exploiting Internet TV, possibly through the use of sponsorship or embedded advertising. Convergence is also set to drive an increase in interactive TV, already a growing trend in some European markets. The proportion of all digital television viewers in the UK who have interacted with programmes increased from 47% to 54% in the last year, according to the British Market Research Bureau.
Most interactive TV offerings are currently basic, although they are generating revenue. But interactive applications will become more sophisticated over the coming years.
Disney’s children’s TV channel now allows viewers to interact with and control cartoon characters on screen, influencing the outcome of the programme in the same way they would with a video game. Ultimately, interactive TV will provide much higher levels of customisation over other types of programming. Users will be able to control how sports events are covered, for example.