YouView may transform how television is consumed

YouView merges digital terrestrial television services with video-on-demand

THE TALE of a YouView, the much-delayed UK internet-connected TV service, unfolded the next stage of its plot this week as broadband provider TalkTalk said it would commence an in-house trial in early 2012.

By bringing video-on-demand to Freeview, the nine-year old British DTT service, YouView is one of a number of platforms that has the potential to transform how television is consumed and force marketers to rethink how they try to connect with consumers. YouView is one to watch, because its set-top box promises to combine a number of developments that have taken place in the world of internet on the television, and television on the internet.

A joint venture between the BBC, ITV, Channel 4, Channel 5, BT, TalkTalk and Arqiva, it merges existing DTT services with video-on-demand (VOD). Online catch-up services such as the BBC’s iPlayer will be accessible via the same box as hundreds of content providers, including Sky TV, Amazon’s DVD rental and streaming service LoveFilm (a rival to Netflix) and Guardian News Media. Alongside apps delivering VOD and other media, viewers will find old-school linear television with its electronic programme guide (EPG).

EPGs are undergoing their own evolution, encompassing search and recommendation technology gleaned online, and becoming even better at capturing the eyeballs of TV viewers who are flickers at heart.

YouView will feature what’s known as a “backwards EPG”. Thrillingly, this allows viewers to trawl through the EPG for the previous day, and backwards for up to a week. Diehard linear TV watchers who hit the pub on a Friday night could, say, eliminate Monday morning dread by reliving Friday’s television on a Sunday evening, switching between channels with the usual mix of curiosity and impatience – as if VOD didn’t exist.

A backwards EPG is available in the UK on Virgin’s TiVo platform, while BSkyB has Sky Anytime +, which offers a VOD library to Sky Broadband customers. Other potential competitors come in the shape of smart TVs made by LG and Samsung. Both are believed to be set to launch second-generation Google TV in 2012.

While the BBC is likely to sign up to Google TV, commercial British broadcasters may not play ball if it threatens to dilute the return on their investment in YouView. Major US networks ABC, CBS and NBS blocked their websites from Android-based Google TV devices last year, seeking a better deal on revenues.

“Is television going to disappear? I don’t think so. At the moment, people are still ingrained in linear television. But there will be more mixing and matching by consumers in terms of how they access content,” says Bartley O’Connor, head of advisory consulting with PricewaterhouseCoopers.

“I would be somewhat sceptical about the smart TV opportunity, because to date viewers have been somewhat restricted in what they can see, and there’s restricted online access,” he says.

Apart from the possibility that set-top box services will have a greater choice of traditional TV content, consumers may also be swayed by the ability to upgrade their set-top box without having to upgrade their TV monitors. In an age of dual-screening, the very definition of “set-top box” is set to change – O’Connor says he is working on a “very exciting” project with a client that would see a tablet computer act as the set-top box. This is the direction that would make sense for Apple.

In any case, it’s “too early to tell”, says O’Connor, whether the set-top box services or the smart TVs will “win” the hardware market, or if indeed there will be a definitive winner. But all of this frenzied market activity – the race to lock in eyeballs – is being keenly tracked by advertisers, who have stepped up their volume of online video advertising.

Figures from IAB Ireland, the representative body for online advertisers, suggest there has been what chief executive Suzanne McElligott calls “dramatic” growth in online video advertising over the last six months, with advertisers attracted by its similarity and overlap with TV advertising. However, the tipping point is likely to be still around the corner – McElligott describes the current innovation in the online television market as “a golden egg opportunity”.

It’s a case of broadcasters beware: a new advertising powerplay could soon be at work. Manufacturers could reserve a cut of home screen ad revenues, cable providers could take a slice of EPG ad revenues, the online world could take its slice.

While the UK industry reaches the trial stage for YouView, the Irish one is figuring out how Saorview, the Irish DTT equivalent of Freeview, is going to look after analogue switch-off in 2012. Some would-be owners of channels on Saorview could well be deterred by the high carriage costs associated with DTT and choose alternative, online routes.

“The meeting of TV and online is genuinely happening,” says Philippe Brodeur, a former TV3 executive and director of AerTV.ie, an online television streaming service launched by Magnet Networks and one of those possible alternatives.

“TV is worth upwards of $400 billion a year in advertising, and lots of internet companies are saying ‘I’ll have a little bit of that’. It’s for TV to win or lose,” he says. A cross-industry collaboration such as YouView requires a “really vibrant industry” with good working relationships between the broadcasters, he notes. “In Ireland, we have had 40 years of RTÉ and 10 years of RTÉ and TV3,” he says. “It’s a market size thing. It is what it is. But the web will make it more diverse.”