Digital TV Europe
The
concept of Internet of Things (IoT), or a truly interconnected world,
where every device and system is smart and can communicate with other
devices and systems without human intervention, has been in
development for a number of years and is already present in some
industries. IDC
has somewhat wildly forecast the IoT to be worth over $7
trillion by 2020.
Entertainment
is arguably the first sector to push a digital ecosystem closer to
consumers in
the areas of wearable technology, smart homes and smart cities.
While the context today is narrow, the combination of these devices
with information gleaned from sensors in cars, thermostats, lighting,
or doorbell opens a myriad of possibilities.
“For
instance, with wearable technology we can finally understand who an
audience is and use the combination of their presence, plus other
environmental indicators that the devices are communicating, to give
content recommendations,” suggests Charles
Dawes, product
marketing senior director, Rovi.
“Other
simple examples are already possible, such as controlling your
connected lights so the ambience of your living room matches the mood
of the film you’re watching.”
To
capitalise on the
IoT opportunity there has to be a base level of ubiquitous
connectivity ensuring that devices are able to communicate no matter
where they are. Assuming this infrastructure is in place, then the
opportunity is one of building products and services on top “so
that consumers can be provided with more personalised, targeted and
value added services than ever before,” says Dawes.
“Service
providers have the opportunity to move outside of the areas they’ve
been traditionally bound to. For instance, as smart metering and the
connected home takes off, the service provider can build new services
around it that integrate the existing voice, data and video solutions
with new ways to grow their business.”
Google
competition
Multiple
System Operators
(MSOs)
will face stiff competition from
internet and CE giants. Through
its connected home division Next, Google acquired Revolv
(a hardware hub packed with radios for syncing various smart home
devices with each other)
and security
camera company, dropcam.
These will be
linked to the Android operating system.
Apple
is making a similar play with Apple TV, iWatch and iPhone linked to
IoS
platform HomeKit. Even
Facebook is getting in on the act. Its acquisition
in January of voice-recognition start-up Wit.Ai is
considered its first major foray into IoT.
Samsung
spent $200m on SmartThings, a Washington DC-based start-up which
allows
people to sync connected gadgets to a single smartphone app and
hardware hub.
Google
et al are spending billions of dollars to acquire entry points into
the home but MSOs
- particularly
cable, telcos and to some extent CE companies - are already there.
They've amortised investment in remote controls and set top-boxes and
are now extending their reach with other devices, such as dongles and
Wi-Fi extenders,
into
multi-service residential gateways. What's more, with existing,
trusted, billing relationships with customers, they are better placed
than a Apple or a Samsung, to deliver additional services into the
home.
“This
is not a natural evolution of TV everywhere strategy,” explains
Guillaume De Saint Marc, snr director, chief technology and
architecture office at Cisco. “They [MSOs] have to continue to
invest in the cloud since a lot of the business intelligence for IoT
will be housed there. Security of the home gateway is another
significant issue and an elegant and very powerful way for them to
capitalise on their already considerable investment in security for
set-top boxes.”
According
to Irdeto, operators
are best positioned to play a leading role in the connected home,
because of their deep awareness of the subscriber base and
demographic/market data to determine the 'right' or 'killer' IoT app
for their market.
“Operators
also have experience with multi-service offerings delivered through
gateways and complementary devices and an ongoing
desire to increase subscriber loyalty and longevity through new and
varied services,” says Greg McKesey, vp technology.
“The
'screen,' whether fixed big screen or mobile, will be a focal point
for virtualizing (and visualizing) all kinds of consumer IoT
systems,” McKesey says. “The question each operator has to ask
themselves is: should they deploy and offer these services; form
partnerships to allow third parties to use their subscriber base as a
channel of distribution or simply allow third parties free reign over
their subscribers?”
Pay-TV
operators could even look to integrate some basic home automation
functionality into their offerings. For example, by making the 'smart
home' know what to do when an on-demand movie is being played as
opposed to live TV, suggest Irdeto.
“Perhaps
because the on-demand content is available for a fixed time, the user
may want the house to be on complete 'do not disturb' for example
with phones automatically forwarded to voice mail,” says McKesey.
“For live TV, perhaps when a call comes in, the show is paused and
once the call is complete, the show could automatically rewind before
resuming.”
Cost
value equation
According
to ARRIS, early security and home automation systems have struggled
to gain hold because the cost / value equation didn't add up.
“Consumers might like a service which enables them to tune home
heating ahead of arrival but they are not prepared to pay $30 a month
for it,” says Charles Cheevers, CTO
customer premises equipment.
A
residential gateway has typically meant a device that provides
households voice, video and internet services, but new devices fitted
with radios are being created to support IoT protocols from ZWave and
ZigBee. This enables the service provider
to
synchronize
with other devices in the home and to perform physical installation /
maintenance on third party connected devices with minimal capex. In
theory this reduces the cost to the operator and the value passed
onto the customer.
“The
trick is to make sure the MSO is always in the value chain,” says
Cheevers. “If
they don't do it, then the likes of Google will go over the top and
service providers won't be able to add value.”
Service
providers like Comcast are already employing product teams of
specialists in medical and assisted living solutions and experts in
smartgrid and energy management to build its XFinity Home platform.
“The
bottom line is that operators’ subscribers are being approached by
cable providers, ISPs, telcos, utility companies and others with IoT
multi-service offerings,” says McKesey.
“Operators need to invest in IoT to not just remain competitive;
but to remain relevant.
The
core focus for monetisation for operators will be with incremental
subscriptions and a move away from being a dumb pipe provider for the
customer.”
Technicolor’s
Digital Life suite of apps (IZE), for example, is an open-source IoT
platform aggregating different services. Explains Benoit
Joly, SVP, marketing, smart home & solutions integration:
“Each of these services is delivered by a digital concierge (the
Nurse, the Doorman, the Caretaker, etc.) as you know them in real
life. So you know exactly which service you are subscribing to, and
you can add services as you need, you just pay what you use, exactly
just like in the real life. Everyone knows this way to buy services,
everyone knows how to use a TV. All of this is extremely simple to
understand, hence to adopt.”
Revenue
potential
While
there is incremental value to be had in providing a service which,
for example, displays and controls a connected home's internet
devices on a single dashboard on the large living room screen, there
is larger revenue potential in verticals such as energy management
and health.
In
the US in particular, there is a trend toward the monitoring of
patients at home
rather than in the more expensive environment of a hospital. Wider
even than this is 'ageing at home', a somewhat euphemistic
term for tending to the growing ageing populace outside of a hospice.
The idea is that connected devices in the home, from a wristband to a
fridge, could assist in remote monitoring and diagnosing a resident's
health, even prompting them when to take medication.
“An
MSO could develop an app today to tell if someone had died in home,”
suggests Cheevers. “They could do this by taking usage data from
the broadband router, the number of connected devices and changes in
traffic. Is the STB on? If so have channel switching habits changed?
With this knowledge you could tell if somebody different was in the
house, or if someone had died. I'd pay $1 a month for a service that
monitored my parent's home in that way and alerted me of any
significant usage change. And there would be no capex for the service
provider.”
The
economics will take time to build but service providers and the
technology companies that traditionally service them such as Rovi,
Irdeto, ARRIS, Cisco, Technicolor and Nagra to name a few are working
on business cases.
There
are predictions
that IoT services could
bring extra monthly ARPU in the range of $10
- $35
for up to 30% of a MSO's subscriber base.
Ageing in place, or for instances when someone is sent home for
monitoring after a hospital visit, could could add $300 a month onto
MSO turnover, reckon ARRIS.
“As
is ever the case, owning the network or the STB is no guarantee that
consumers will buy new types of services, or actually buy these
services from their incumbent broadband or TV provider,” says Simon
Trudelle, senior product marketing director at Nagra.
“While
ARPU may only add up to a fraction of the media and network access
services revenues that incumbent operators currently enjoy, there is
definite potential for accelerated growth at some point in the next
18 to 24 months.”
Interoperability
will be key
For
the IoT to become a significant revenue stream then IoT services have
to be as easy as plug and play from a consumer's point of view.
ARRIS,
for example, is working to push what it believes are the more open
standards into its devices. These include Open
Interconnect Consortium OIC) with
Intel and Samsung as founder members, and the
AllSeen Alliance, which uses an open-source implementation of
Qualcomm's AllJoyn framework to connect devices to one another.
That
Qualcomm is a competitor to Intel is seen as one reason for the dual
approach, although the OIC wants to broaden the scope from the
connected home to include in-car and workplace settings.
Technicolor,
a member of the AllSeen Alliance (with Microsoft, Sony, Panasonic,
LG, Cisco), contributes Qeo, an open source software language for
connected objects and has designed IZE is with Allseen in mind.
Other
attempts at macro platform provision include cloud-based networks
Ayla Networks and Arrayent. Groups
below these IoT
frameworks include
wireless protocol ZigBee, Smart
Things (now Samsung), and
Thread which includes Samsung, ARM and Google. Their aim is to
promote a single networking standard for the connected home.
Apple's
Homekit
probably falls somewhere in between. “High
level standards may evolve; but this will take years to iron out and
the market won’t sit around idly,” says McKesey.
“We
have a lot of perfectly mature standards already,” says Cisco's
Saint Marc. “It's not
happening as an ecosystem but as a sum of independent quite
successful applications at the device level. How we get to the next
stage is an order of magnitude more complex. It will need to connect
everything together and yet be very simple and secure for the end
user. It's simple to say but the only way it's going to happen this
decade is by open source momentum and the wider development
community.”
IoT and content
There
are also opportunities for broadcasters and content owners to
capitalise on the IoT.
This
ranges from crowd
sourced weather forecasts to
building
information from the IoT into talent show formats to judge the
emotional response to a contestant.
“Some
content owners may synchronize the overall viewing experience with
the home, potentially controlling your lighting system in sync with a
movie, TV show or live event,” suggests McKesey.
“There
may be unique merchandising opportunities where content owners sell
branded IoT devices to enhance the watching experience.” For
example, lighting for any kind of movie, vibrating seats for an
action movie, a device that releases aromas for kids content.
“Some
content owners may also synchronize the overall experience with the
home, potentially controlling your lighting system in synch with a
movie, TV show or live event. There
may be unique merchandising opportunities where content owners may
sell branded IoT devices to enhance the watching experience (for
example lighting for any kind of movie, vibrating seats for an action
movie, a device that releases aromas for a kids movie, etc.)”
A
toy Dalek in the living room could be activated to move in familiar
Dalek fashion by an audio trigger embedded in an episode of Dr
Who.
The spookily realistic interaction was demonstrated by BBC Future
Media in 2011 and suggests other possibilities where content could
take on a literal third dimension.
Rovi
observe that the
opportunity to understand who is actually watching based on
information from other IoT devices is also crucial to the advertising
world. “While privacy considerations should remain at the top of
the agenda, getting the right advertising content around our
favourite shows offers a huge business opportunity,” says Dawes.
