How big an impact are connected TV and over-the-top content having on the video ecosystem? According to a new study from French research firm Idate: They're huge, and from all indications they're getting bigger.
The research firm said the nascent market, which essentially was "non-existent in 2010" is poised to explode. Idate estimates the market for OTT video services on the TV will be $4.49 billion by 2015, with the U.S. market making up about 40 percent ($1.8 billion) of that total, Europe claiming 24 percent ($1.08 billion) and the rest of the world comprising 36 percent ($1.62 billion).
"Hybrid TV is now a reality," said Jacques Bajon, head of distribution video practice at DigiWorld Institute. "The appeal for OTT video content, amplified by the development of connected TV solutions, is further spurring this trend. These developments are attracting the attention of the big Internet companies who will throw themselves into the trend and surely have an impact on the key segments in the video distribution chain."
Just where connected TVs fit in, and how they'll actually impact OTT delivery, is still unclear. A number of manufacturers already are pushing smart TVs hard, among them Sony, Samsung, LG and Toshiba, to name just a few. And, of course, Apple's (Nasdaq: AAPL) own entry, expected to hit the market later this year, is causing a buzz as well. In fact, as AllThingsDigital points out, Samsung already has fired up its own media machine to downplay the competition an Apple HD TV might bring to the fray.
"We've not seen what they've done, but what we can say is that they don't have 10,000 people in R&D in the vision category," Samsung's AV product manager Chris Moseley told Pocket Lint. "They don't have the best scaling engine in the world and they don't have world renowned picture quality that has been awarded more than anyone else...There is no way that anyone, new or old, can come along this year or next year and beat us on picture quality."
Of course, it is Apple, and a lot of other folks are taking it far more seriously, including operators like AT&T (NYSE: T) and Verizon (NYSE: VZ), which are rumored to soon be getting prototypes of the sets to trial, as Canadian operators CBE and Rogers Communications are already rumored to be doing.
Idate said it sees hybrid solutions positioned in one of four ways. As the researcher says:
- Two-way broadcast: The DTT/broadband or satellite/broadband hybrid network is becoming the leading network for distributing packaged on-demand and linear offerings.
- Cable and IPTV extension: DTT/broadband or satellite/broadband hybrid solutions provide additional coverage to the TV offerings of managed network operators.
- Competition with cable and IPTV: The DTT/broadband or satellite/broadband hybrid network offers an alternative to cable and IPTV services.
- Optimization of wired networks: Hybrid solutions help alleviate congestion on wired networks, which prioritize Internet access quality over the distribution of managed video services. The potential of hybrid TV distribution varies by market. In the U.S., Idate says, trade-offs made by cable and IPTV operators will determine the direction the hybrid market takes. Satellite may still capitalize on this solution to counter these operators' triple-play offerings.
Obviously, there are still many questions to be answered, but aside from the direction service providers take, there's little doubt that there's plenty of pent up consumer energy waiting to drive the trend. All we have to do is overcome inertia.--Jim