Only hours ago, Ericsson unveiled the future, as it sees it, of the humble TV, and if you believe the Swedish tech company, the TV set will be transformed from what is virtually now a dumb terminal to the controlling apex of our home and mobile communications and entertainment.
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And we are not talking about some low-res, grainy and dodgy sound Internet TV here – this is the whole enchilada – full HD across all devices and instant, real-time access to a the information superhighway, regardless of what device is being used or from where for that matter.
The television experience, and the way in which consumers regard it, is changing rapidly. Ericsson says it has identified this new individual or personalised TV experience – “watching television, anywhere, anytime, on any device – as a strategic shift for the industry and a key business growth area for telecom network operators over the coming decade”.
IDC global research commissioned by Ericsson forecasts that the global market for consumer digital multimedia presents a massive revenue opportunity for service providers, growing from US$27 billion in 2006 to US$149 billion in 2011.
TV/video will surpass VoIP as the largest revenue source, and the global TV/video market will grow from US$3 billion in 2006 to US$35 billion in 2011. In Australia, the consumer multimedia market will grow from US$154 million in 2006 to US$975 million in 2011.
According to Kursten Leins, Strategic Marketing Manager – Multimedia, Ericsson Australia, the opportunities presented by television will require new business approaches, models and technologies.
“Video services, such as IPTV, WebTV and Mobile TV, will account for the vast majority of network traffic in the near future. However, this will pose significant challenges for Australian broadband networks, both fixed and wireless, as the delivery of high-quality video services requires new network capabilities such as broadcast and multicast, as well as guaranteed Quality of Service,” said Leins.
“Operators are already today seeing their networks swamped by file sharing and video traffic, such as in the UK with the BBC’s recent launch of the iPlayer. These trends, combined with massive capacity growth driven by video and TV, will require operators to re-architect their networks for the new individual TV experience,” he added.
As the company says, there will be a “content explosion” with this new model of converged home communications and entertainment
And for advertisers and content providers this provides some mouthwatering opportunities in terms of bundling and other marketing issues.
For example, currently, if we look at a simple Pay TV monthly plan of around $35, the provider receives only about $13 of that in revenue, with the rest going to other costs as well as to the carrier.
In Ericsson’s model, the same monthly plan would add an extra $25 per month to the provider through advertising and other marketing opportunities, basically meaning that the service itself costs nothing and the provider making a nice profit on top.
But wait, as always there is a caveat to such new and potentially disruptive technology.
All these advances hinge on one vital factor- getting the network up to capability for all this content, which Ericsson admits may mean another 3-5 years of waiting, or in this country, may well mean more as we have seen how both federal and state governments suffer from capital projects spending lethargy when they want to.
So assuming that the National Broadband Network goes off without a technical hitch, court challenges or funding shortfalls, the TV we have today will certainly not be the same one, in terms of applications anyway- we will have in 2015.
As the company itself points out, the technology to do this is here already, however “Network operators and service providers will be significantly challenged by the emerging ‘Individual TV Experience’ and need to develop new business strategies”.
