Smart TV and Digital TV: a quick SWOT analysis

Geoffrey Laloux – May 2013 – © @Synaptic_be
Connected TV and Digital TV.
A quick SWOT Analysis
Definitions, strengths, Weaknesses, opportunities, threads ...

A short word about the author:
Connected TV and Digital TV
A quick SWOT analysis
Geoffrey Laloux
Consultant in Digital Strategy (Digital Transformation)
Since 2015 – Senior Consultant @ Initio.eu (Square Group)
2007-2014 Founder of Agence Synaptic
be.linkedin.com/in/geoffreylaloux
@Synaptic_be

Table of Content
2. A disruptive model
• Evolution
• From one business model
to a new one
3. SWOT analysis
• Strengths
• Weaknesses
• Opportunities
• Threats
4. Conclusions
1. Concepts Definition
• Connected TV (Smart TV)
• Digital TV
• Apple TV, Google TV etc.
• Content Providers

Concepts Definitions

Connected TV (Smart TV)

• A device (TV screen) connected by wire or WiFi to internet
• Also know as “Smart TV”
• Access to the internet content is done via widget and integrated software
Benefits:
• Browsing the Web (with the remote control)
• TV Widget to access to video channels like
Youtube or else
• Specific Digital TV channel and VoD like
Qriocity, HBO, HuLu or Netflix (where
available)
• Specific content provided by local TV
Broadcaster.

Embedded software
(Samsung, Sony) no need of
third party software or
hardware
Case where the TV device is fitted with RJ45 connection and
embedded software (high end devices from Sony, Samsung, LG,
Panasonic, Toshiba and Philips)
SMART TV
Internet Router
Internet access provided by
local ISP. Not necessarily
linked with Digital TV service
offer
VOD providers
TV
broadcasters
Free Web
content
Niche
content
Games, apps
and Social
Content
Owner
Pay TV
operators

• Smart TV can access to dedicated Appstore to improve the service offer.
• Services offered by App Stores are different in each country and are highly
dependent of the local regulatory framework and market potential.
• From technical point of view Smart TV may offer almost same services as
Digital TV but without the need to use Set Top box or additional paid
subscription
Examples of most common service offer of Smart Tv platform:
• Skype, Facebook, Twitter (with no direct and automatic
relationship with the TV content watched)
• BBC iPayer, Digital Theatre (live recordings of stage
plays), Eurosport, ESPN etc. In most cases we talk about
limited samples of content more than real TV channel.

No more compulsory syndication, content can be accessed directly from content
producers and rights owners without passing through a third party platform

Digital TV

Digital TV
From technical point of view,
the name “Digital TV” refer
to the transmission of audio
and video by digitally
processed and multiplexed
signal, in contrast to the
totally analog and channel
separated signals used
by analog TV.

Digital TV (Interactive Digital TV)
• Digital TV is often (mainly in France & Belgium) used to design the Interactive
Digital TV (IDTV or ITV) experience provided by “Box” like FreeBox, Belgacom
Box etc.
• Interactive TV is a form of media convergence, adding data services to
traditional television mostly thanks to a digital tuner (Set Top Box).

Most common features of Interactive TV:
• More TV channels
• Some with paid content
• Electronic Program Guide (EPG)
• Smart recording (automatic start of recording based on watermarking embedded in content
signal)
• Online VOD catalog (provided by the paid tv operator)
• Content Preview
• Catch Up (replay) TV provided by TV broadcaster: review a content already broadcasted.
• Widget like weather, Stock Exchange information etc.
• Additional content related to currently broadcasted program (bonus, making off etc.)
• Possibility to broadcast content on second screens like PC, Smartphone, tablet etc.
Linear content broadcastingTV Channel
Scheduled
broadcast
Preview
(Pay per view)
Replay
(usually free)

Internet
Router
Set Top Box
Digital Personal Recorder
(optional)
Internet router. Generally
integrated in the Set Top box
VOD providers
TV
broadcasters
Free Web
content
Niche
content
Games, apps
and Social
Content
Owner
Pay TV
operators
IP Managed
Network
ContentSyndication
HDMI compatible TV set,
Not necessaily
a connected or connectable TV

Apple TV, Google TV etc.

Google TV
• A Smart TV platform from Google co-developed by Intel, Sony and Logitech
• The interface is (will be) embedded in Sony TV devices (Samsung and LG are expected to
participate)
• Google TV is more a feature integrated in some Smart TV than a device.
Benefits:
• Accessing to Google services (ie Gmail) directly on TV
screen.
• Accessing directly to specific content provided by third
parties like HBO or CNBC, Netflix etc.
• Surfing the web on Tv screen.

Apple TV
• A wireless device to broadcast on screens (TV or else) content from specific
content providers. (iTunes, Netflix, YouTube, NBA & NHL leagues etc.)
• The Apple TV is a digital media receiver (and transmitter) IT’s NOT a content
provider like classical TV channel or a TV Tuner or even a content recorder.
Benefits:
• Viewing YouTube video on TV screen or on
any screen compatible with Apple standards
like AirPlay.
• Accessing directly to specific content provided
by third parties.
• Allowing to access to internet via TV screen
even if the TV device is not fitted with
Internet connection.
Apple TV is like a Set To Box…

Archos TV (Android TV)
• Archos TV is a set top box, that can be compared with Apple TV… but for
Android world.
• It’s an external device to be connected between TV screen and internet router.
• It’s different and not integrated with Google TV.
Benefits:
• Accessing the web even without native smart TV
• Accessing the Google Play Store
• Can be used also as media center

Game Console & Blu Ray players
• Modern Blu Ray Players and Game Console like PS3 or XBOX propose also
“Smart TV” alike functions.
• Some Blu Ray allow access to specific online content like bonus, 2nd movie etc.
Usual Benefits:
• Accessing the web even without native smart TV
• Accessing the Google Play Store
• Can be used also as media center
• Extra interactive content and/or second screen
application

Web TV
• Original content produced for broadcast via the Internet (UGC or professional content)
• Not to be confused with Television content reformatted to be broadcasted also
on internet.
• Some successful web tv content may be "promoted" and then be broadcasted
on classical Television channel
Examples:
• Youtbe, DailyMotion etc.
• http://tv.dassault-aviation.com/web/
• http://fr.int.renault.tv/
• “Capsules” like Remy Gaillard, Bref etc.
• Fan films made to give second life to famous TV shows,
films, books etc. http://bit.ly/11o2kkO
Field of Shadows,
a French Star Wars Fan Film

ContentFeature / Application
ServiceDevice
Digital TV
Smart TV
Google TV
Apple TV
WebTV
Interactive TV
IDTV
TV Numérique
IPTV
Archos TV Android TV
Connected TV
VoD
Catch Up
OTT*
* Over The Top content
Etc.
Synonyms
French equivalent
Bravia Internet Video
Set Top Box (STB)
BBC iPlayer
MyTF1 M6 Replay
FOX Now
Hybrid TV

In short…
There is 3 type of players who can give you
access to Internet via your TV set
TV manufacturer
(Smart Tv)
Via embedded connectivity,
operating software and TV apps.
The content is not proprietary and
not provided by the manufacturer
Managed Network
(Digital tv)
Via set top box and paid subscription.
Service is mostly provided by ISP, Telco
operators and Cable operators
The content may be partially
proprietary and provided by the
network operator
Third Party Devices
(Set Top Box)
Via a set top box and eventually
additional subscription.
Service is provided by operators not
affiliated with Managed Network
operators or TV manufacturers
The content may be partially proprietary
and provided by the device operator

Content providers
Content that can be accessed (in theory) by
Smart TV owners or STB service subscribers
VOD providers
TV
broadcasters
Free Web
content
Niche
content
Games, apps
and Social
Content
Owner
Pay TV
operators
They propose their own content and syndicated content which is also
available on the air as well as Catch Up, Replay, PPV etc.
They provide online content catalogs and paid download or streaming.
They may be independent or related with Cable or Internet operators.
Web content directly accessible via embedded Browser interface or
TV widget
Niche content (extreme sport, anime, news) provided by local
broadcasters or banded content syndication channels.
Examples: Gmail, Skype, Online games, Facebook, Twitter etc.
Including content and apps provided by local / national players.
Broadcast rights owners like sport league or international contest,
but also like HBO, Movie studios etc.
Local or international Cable and satellite operators. They propose
syndicated content and sometime their self-produced content

A disruptive model

Evolution
Analog TV Digital TV / Smart TV Disruption
Linear access
Collective usage of the
TV set
On demand access, any time and
“anywhere” (multiple interfaces)
No more (?)
Prime Time
Consumption
Access
manager
Managed Network is the
provider, TV channel is the
gatekeeper
Digital Managed Network (Digital TV),
TV manufacturer (Smart TV),
TV channels (STB + Smart TV)
Gatekeepers bypassed
by Internet services and
device managers
Services Broadcast TV
Multichannels, catchUp, Vod,
Connected contents (Social TV)
End of classical
TV ads ?
Business
Model
Public funding,
Advertising,
Paid channels
Content or channel subscriptions,
pay per view, in program purchase
Kind of
“performance pay”
Players
TV channels
Rights owners
Users
Rights Owners
Internet services providers
Internet Access providers
Managed Network owners
Device Manufacturers
TV channels
Social Networks and users
More players, a
different pyramid
of influencersDecreasing order of
influence

Analog TV content distribution model
TV Broadcasters
Content Owner & Pay TV
Operators
Content
Premium Content
(Pay content)
Own productions &
syndicated content
BroadcastcontentExtracontent Cable
Converter
Box
Over the air transmission
National
Local
Managed Network
CABLE
SATELITE
Analogic Signal

Content Owner & producers
Money
Monthly subscription +
Extra fee to access to
more content
Public funding
(in Europe)
Brands
TV Broadcasters
National
Local
Syndication
Syndication &
Exclusive agreements
Commercialads
Managed Network
CABLE
SATELITE
Analog TV business model

And now the disruptive model
Content Owner & Pay TV
Operators
Premium Content
(Pay content)
Extracontent
1
Set Top Box
Managed Network
CABLE
SATELITE
3
Owned TV widget
Digital Signal
Smart
TV
IP Network
& ISP
2
Third party
Specific Set Top Box
4
Game Station
1. content owners may still sell their content via
pay Tv operators
2. But they may also sell directly to end users via
third party set top box like Apple TV or Amazon
TV directly connected to Internet, without
passing by pay TV operator.
3. They can even propose direct access to their
content thank to TV widget embedded in smart
TV set (in partnership with tv manufacturer)
4. Content owner like SONY or Microsoft may
propose exclusive access to their own content
catalog via their own game station like Xbox or
PlayStation.

SWOT analysis

Strengths
Opportunities
Weaknesses
Threats
Good installed base in terms of
use, device, infrastructures and
habits
• Heterogeneous offer (i.e VoD)
• Multiple payment systems and multiple
authentication required
• Multiple different experiences
• Disappointing service offer
• Low image quality (replay in Mono and SD)
• Overlap between Smart Tv and Digital TV
services
• Locally produced (or adapted) contents are the
best defense
• For consumers: more direct and fast access to
latest contents
• New commercial formats.
• New advertising formats (i.e Product
Placement)
• Opportunity to develop a new business model
for public TV broadcasters
• Supra National competitors
• Channels vs. Devices vs. Rights Owners
• Risk of disinterest and lack of investments in
economically less attractive areas
• Managed Network (Cable & ISP) as bottleneck
• Increasing power of search engine (dominated
at 95% by Google)
• Proprietary content linked to proprietary
device and/or platforms
© Synaptic 2013

Connected TV, Smart TV, Second Screen
What are we talking about ?
Strengths
23%
% of televisions sold that are connectable
(source: CSA): worldwide: 90% (ScreenDigest)
2012
80%
2013
95%
Penetration rate of
Television in Europe
73%
Penetration of
Internet in Europe
75%
Penetration of
Digital TV
21/27Digital television
(by cable, TNT,Satellite)
will be the standard in
21 EC countries
(over 27) in 2015.

Strengths
Infrastructures, usages and devices
are already widely widespread

Weaknesses
More than half of Connected TV are…. disconnected from Internet

Weaknesses
• Heterogeneous offer (i.e VoD)
• Multiple payment systems and multiple authentication
required
• Multiple different experiences
• Disappointing service offer
• Low image quality (replay in Mono and SD)
• Overlap between Smart Tv and Digital TV services
• Etc.
Weak usability of Smart TV interfaces…
and of Remote controls.
(Smartphones, Tablet, remote keyboards and
motion control are proposing better
performances)

Opportunities
• Locally produced (or adapted) contents are the best defense
• For consumers: more direct and fast access to latest contents
• New commercial formats.
• New advertising formats (i.e Product Placement)
• Opportunity to develop a new business model for public TV broadcasters

Threats
• Supra National competitors
• Channels vs. Devices vs. Rights Owners
• Risk of disinterest and lack of investments in economically less attractive areas
• Managed Network (Cable & ISP) as bottleneck
• Resistance of TV Broadcasters
• Increasing power of search engine (dominated at 95% by Google)
• Proprietary content linked to proprietary device and/or platforms

Threats Major players such as Google, Apple, Microsoft, etc. have now the
distribution channel and the financial ability to negotiate exclusive
content distribution worldwide directly with producers.
Local TV channel Local VoD operator
(Paid TV operator)
Viewer
TV Broadcast VoD & CatchUp
distribution
Before And Now
Exclusive VoD
distribution
Viewer
TV Broadcast*
* The local TV channel may eventually continue to distribute a translated content

The end of the classical content lifecycle (Movie, then DVD, then
original TV broadcast, then syndication etc.). What Europeans
call “the cultural exception” and “media chronology”.
Threats
Time Line
+ 4 months
End availability in
movie theater
DVD, VoD, Blu Ray
+ 8 months
Paid TV channels
(dedicated to Movies)
+ 10 months
TV channels
(co-producers)
TV broadcast minimum
22 months after movie
release
Now

Time Line
+ 4 months
DVD, VoD, Blu Ray
+ 8 months
Paid TV channels
(dedicated to Movies)
+ 10 months
TV channels
(co-producers)
And then
Threats The end of the classical content lifecycle (Movie, then DVD, then
original TV broadcast, then syndication etc.). What Europeans
call “the cultural exception” and “media chronology”.

Content Owner
Market A
Local TV
broadcaster
Market B
Market C
Local TV
broadcaster
Local TV
broadcaster
End user
End user
End user
New business model
IP Network
& ISP
No more obligation for a content owner to manage specific syndication agreement for
each country. International events like World Football Cup, F1 championship or Olympics
games could be sell directly to international end users.
Threats (or opportunity)
« Old » business model

Threats for some, opportunity for others
Content Channel
Microsoft want to produce new
episodes of « Heroes » to propose them
exclusively on VoD via Xbox and MSN
Amazon is now the producer of
ZombieLand. An exclusive content to be
proposed on next gen of Kindle and
Amazon Set Top Box.
Playstation store give access to the
huge music, game and movie catalog of
Sony media mogul. Connected TV are
expected to propose the same.
The Football – Soccer team ‘Barca’
wants to broadcast its matches on his
own (paid) TV channel only.
(from 2014 season).

Conclusion (kinda)

The full potential of Smart TV / Digital TV will be unleashed once high
quality content will be widely available
High quality content will be produced / available once a new business model
will be defined between public TV broadcasters and managed network
operators
Private TV broadcasters need to diversify incomes sources or at least to find
new advertising formats
Consumers must adopt new ways of consuming TV content (On demand
access, Pay per view, non linear content, multi screen viewing)
Conclusions

Raise
Create
Reduce
Eliminate
• Easy of use / access
• Usability
• Easy to use remote control
(motion control, keyboard etc)
• Open standards (Hbbtv)
• Service offering
• Proprietary technologies
• Bottlenecks (resistance to change)
• Country-restricted content (internet
is worldwide)
• Unique identifier / Single sign on
• Cross platforms analytics
• Unique TV appstore (no more
restricted to some manufacturers)
• Search engine able to browse
Program guide (omni channels)
• Unified payment system
• Devices with no upgrade options
• Services / content with no or low
added value
© Synaptic 2013

Contact
https://be.linkedin.com/in/geoffreylaloux
@Synaptic_be

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