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I caught up with Andrew Kippen, VP of Marketing at Boxee, earlier this year at OTTCON 2012 to talk about the future of television and how Boxee is reinventing broadcast TV. In January 2012, Boxee Inc. released Boxee Live TV, a new product that added live TV content from the big networks: NBC, ABC, Fox, CBS to the Boxee experience. According to Kippen, this $50 add-on solution to the Boxee Box combined the best of everything available Over-the-Top and live broadcast TV.
However, since my conversation with Kippen, Boxee discontinued the original Boxee Box it released in November 2010, to make way for a new streamlined $99 Boxee TV box, which was met with strong criticism from both Boxee users and technology blogs like Streamingmedia.com and Popular Science.
The new Boxee TV includes an an antenna to pick up live HD channels and added a subscription-based cloud DVR with "no limits" and built-in Internet apps like Netflix, VUDU, YouTube, Vimeo and Pandora. Boxee also struck a deal with Walmart to sell the new Boxee TV device direct to consumers in time for the holidays.
Kippen says that Boxee's major consumer markets are the U.S., Canada, Sweden, Germany, the Netherlands and is available in 35 countries, giving it a much broader footprint than other companies in the space.
In his recent article, Tim Siglin points out, that two main features of the new Boxee TV aren't even available in all markets.
"For the company to avoid disappointing customers again, it would make sense to have the most important features -- the USP, or unique selling proposition -- ready to go at product launch. Yet, the two primary features still aren't available, almost a month after launch: live television pause and cloud- or network-based DVR (nDVR).
Those two features, which the company touts as part and parcel of the "Boxee Rebellion" on its packaging, are not ready for widespread use. In fact, the nDVR functionality that Boxee calls unlimited DVR is only available in beta in eight cities in the United States: Atlanta, Chicago, Dallas/Fort Worth, Houston, Los Angeles, New York City, Philadelphia, and Washington D.C."
Siglin added that there's also a mismatch in the Boxee-Walmart retail strategy, because Walmart has a limited presence in many of those urban markets and faces a big hurdle to sell to sell the Boxee TV to its rural markets, where the unlimited DVR service is not yet available.
"As we begin service in these markets we assume there’s going to a few growing pains so we’re marking the service as BETA, but most users should have full functionality (and it will be FREE during this period)."
While Boxee continues to innovate its product and strike deals with content providers, many of its early adopters have expressed their frustration at being abandoned. The company started with an agnostic business model and a free software-based OTT social media center and devoted user community, but has phased out the software platform, and locked out popular features and development as the Boxee platform matured over the last few years.
"Our small team has poured our hearts and souls into the Boxee Box and it has been great to meet users from all over the globe. Some loved it, some wanted more features, others complained, but everyone was passionate. We hope you have enjoyed it and will continue to use it in your living rooms, dens, bedrooms or wherever else you set it up."
Kippen says that Boxee's focus has been to extend the feature set, streamline what they do to make it simpler and easier to use, and bring in as much content as they can. He says that the company has always seen Boxee as an ecosystem play.
"We want to be the experience that you have on your TV, on your mobile device, your tablet," Kippen says. "We could be on a set-top box, Blu-Ray player or game console. We really see Boxee as a great way to access all that content that's coming from the Internet, and now from your antenna or cable system. We do a great job of bringing that all into one place. So I think for us, we would really like to see Boxee in a lot of those different devices, and also powering more innovative experiences between different screens."
According to Kippen, it all comes back to storytelling, which has grown beyond the traditional linear narrative into a transmedia experience.
"How do we take storytelling to the next level to where it's more than just a TV show, more than just a website or an iPad app," asks Kippen. "How do we create a story arc that goes across all these different platforms?"
Kippen is confident that Boxee can be a great way to experiment and build those experiences out.
About Boxee
Boxee Inc. is helping people fall in love with TV all over again. We believe TV should be personal and delivered on your schedule. That’s why we created the world’s first cloud DVR that allows you to record an unlimited amount of TV programs to the Internet, and then watch on your TV, computer, iPad…pretty much anywhere. Boxee also lets you watch shows from broadcast TV channels and shows & movies from online services like Netflix, VUDU and YouTube. Boxee is made with love in NYC.
The future of television, as Roku Founder and CEO Anthony Wood sees it, is not as futuristic as you'd think, where we'll be able to watch every movie ever made, in any language, day or night. Wood says the future is getting close. I caught up with Wood earlier this year at the Over-the-Top Conference, OTTCON 2012, where he delivered a keynote, "Future of TV: Why OTT is a Game Changer." Well regarded as a pioneer and innovator in the TV and digital media industry, Wood has had an influential hand in shaping the future of television, as inventor of the digital video recorder (DVR) and the popular Roku streaming player. He discussed the different themes in what's going to happen to OTT over the next few years, and noted the skepticism around the OTT industry when the OTTCON started 3 years ago.
Distribution Models are Changing
Wood says the industry is maturing and distribution models are changing. Once a upon a time there were 3 networks, but OTT has changed all that.
"Over the top is really about distribution. It used to be television was distributed over networks, ABC, CBS, NBC, and then there was cable and VCRs, and satellite, now television is moving to the next phase, which is distribution over the Internet," says Wood. "And it's creating a lot of opportunities and risks for some of the incumbents, and a lot of opportunities to create new brands, like Netflix and Roku."
He uses a 1999 commercial by Qwest Communications, Qwest - Every Movie, to illustrate his point.
Description: "A tired man goes into a cheap motel in the middle of nowhere and asks about amenities. When he asks about entertainment, the girl responds "all rooms have every movie ever made in any language anytime, day or night." This Qwest ad aired in 1999 and 2000 and was before website such as YouTube or cable services such as OnDemand were available. It was shot at Roy's Motel and Cafe, a historic Route 66 landmark in Amboy, California, in 1999." http://www.youtube.com/watch?v=UZ9qcp6Lcno
As Content Increases, Usage Grows
Roku has sold more than 3 million boxes to date. Wood says sales of Roku boxes tripled in the last year as the demand for Netflix increased, and as traditional models of distribution like Blockbuster died and quickly faded away. He expects his company to sell 19 million Roku devices over the next 3 to 4 years. Wood also predicted the end of Blu-Ray in 4 years at the recent "TV of Tomorrow Show" in San Francisco last month, as the industry and consumer trend is shifting to streaming devices and smart TVs.
"But like all television, the most important thing is the content, the television show. If there's not a lot of great TV, people won't watch it."
Content is available on Roku through it's channel store. Netflix was the first channel available on Roku, and now the list has grown to over 500 channels with new ones going live every day.
"As we've added more content, the usage on our platform has grown as well. So, what used to be about 6 hours a week on average people used Roku has been growing consistently to 12 hours a week, and that's going to keep growing until we get to 35 hours a week, which is the average amount of TV people watch in the United States."
Wood described the emerging content packages available to consumers through OTT platforms. One category of content, OTT Bundles, are available from new brands like Netflix, Amazon and Hulu, who have taken existing and back cataloged content and bundling it into new low cost packages over the Internet. There also new companies he calls, New Brands, like Glenn Beck TV, YouTube and Revision3, that are creating content just for OTT distribution where they don't have to go through a cable company. (Note: Revision3 was recently acquired by Discovery Communications and may create an even newer category of content bundles across all screens.)
There's a third group of content that's just starting to come onto devices like Roku, and that's the incumbents like ESPN, Disney and HBO. As an example, the entire HBO catalog is available on Roku through authentication, or through a "TV Everywhere" subscription. Disney has recently signed a 10-year agreement with Comcast to bring ESPN to all it's platforms, but, when can we get ESPN without all the extras for $9.99/month? Wood, says, "Probably, never." Companies will try packages, prices will come down, but, everything is based on bundling, and will not be changing anytime soon.
OTT Platforms are Shifting
So, how are most people getting their OTT content?
Wood says that game consoles and PCs lead in streaming hours and that content owners attempt to be platform-agnostic to reach consumers. That's because there are so may game console out there. But the future trend is that game consoles will decline, and inexpensive Smart TVs and streaming players will be on the rise. As more and more of the general population gets into streaming, they're looking for simpler devices.
Wood notes that we'll continue to see rapid consolidation within the space as it continues to get more complicated to maintain all the R&D that goes into the streaming platform software. Everything under the hood is always in development, and will cause a shake out in the platforms. He predicts that there will be only a handful of players within 3 to 4 years.
Who Will be the First Virtual MSO?
Will it be Xfinity? Verizon FIOS? Direct TV? Intel? Wood says that there is some hesitancy in the industry to be the first, but we'll probably see one emerge later this year.
"I think another big question people have is, when will I be able to get that package of content and not have a subscription to my local cable service? Something the industry calls, Virtual MSO, and that's a good question" says Wood. "No one has said they're launching that kind of service, but my guess is, I think maybe sometime this year that could happen."
The Virtual MSO (Multiple System Operator) model, or online cable company, and is based on the bundling of TV channels and delivering them to consumer over the Internet without any geographic restrictions that confine traditional cable operators. While there's been some skepticism in the media about the emergence of a Virtual MSO, Boxee CEO Avner Ronen, shared Wood's his prediction that a Virtual MSO shall rise later this year.
The Future of Television is a Squiggly Mess
In the final slide of his keynote presentation, Wood uses a simple graphic to describe the present, future and end state of television, which he defines the current state as a squiggled mess. He says the future of television is coming faster than you think.
Wood pointed out that a lot of industries have been revolutionized by the Internet, for example, music, books and e-Commerce. But video took a little bit longer because bandwidth requirements are higher.
"But now we're at that point where video distribution over the Internet is a real possibility, and it's happening mainstream," says Wood. "So, now we're in this squiggly mess part where there's a lot of stuff happening, a lot of different things being tested, but over the next 4 years there's going to be some big milestones. I think Netflix will pass 50 million customers. We'll see fairly soon, the launch of the first virtual MSO, over-the-top cable package. Most TVs will start getting their content delivered over streaming over the Internet instead of a cable or satellite box. All these things are going to happen over the next 4 years and what comes out of this is the new world, where all TV is delivered over the Internet and every TV show ever made is available on demand, and customers have an incredible amount of choice and options with their TV viewing."
Why OTT is a Game Changer
Wood says that most of the industry incumbents are embracing the change and seeing more value in getting their content on more devices and more places inside and outside the home. They've seen what's happened in other industries and they don't that to happen to them.
"The industry as a whole is very engaged and I really don't see any major obstacles. I think this is happening now."
Wood says, “Roku is about being an open platform," and that future development of will be focused on further enhancing the user interface and creating upgradable devices like the new Roku streaming stick unveiled earlier year, which is a small USB flash drive-sized Roku streaming player that simply plugs into a TV equipped with a Mobile High-Definition Link-enabled HDMI port to transform it into a Smart TV. The company has not been caught in the latest Internet IPO craze and continues to expand into new markets, launching earlier this year in the U.K. and Ireland and in Canada and signing a deal with DISH Network to bring more than 50 international programming channels to the platform. The 150-employee company did about $100 million in sales last year, up from $46 million in 2011. But it has yet to turn a profit, due to huge investments in product development and marketing. But Wood says the company will probably be profitable in 2013.
About Anthony Wood
A pioneer and innovator in TV and digital media, Anthony Wood is the Founder and CEO of Roku, a name that means “six” in Japanese to represent his sixth company. In the early days of Roku, Anthony also served as the vice president of Internet TV at Netflix, where he developed what is known today as the Roku streaming player, originally designed as the original video player for Netflix. Prior to Roku, Anthony invented the digital video recorder (DVR) and founded ReplayTV, where he served as President and CEO before the company's acquisition and subsequent sale to DirecTV. Before ReplayTV, Anthony was Founder and CEO of iband, Inc., an Internet software company sold to Macromedia in 1996. The code base developed by Anthony at iBand became a central part of the original core code of Macromedia now known as Adobe Dreamweaver. After selling iBand, Anthony became the vice president of Internet Authoring at Macromedia. Earlier in his career, Anthony was Founder and CEO of SunRize Industries, a supplier of hardware and software tools for non-linear audio recording and editing. Anthony holds a bachelor's degree in electrical engineering from Texas A&M University.
About Roku Inc.
Roku is a leading streaming platform. Delivering entertainment to millions of customers in the U.S. and in a growing number of countries around the world, Roku streaming players are affordable, are easy to use, and feature the best selection of streaming entertainment. Channels on Roku vary by region and include Netflix, Amazon Instant Video, Crackle, Hulu Plus, HBO GO, MLB.TV, Pandora, Facebook, Disney, Angry Birds and many more. Based in Saratoga, Calif., Roku was founded by Anthony Wood, inventor of the DVR. For more information, visit www.roku.com and follow Roku Player on Twitter and Facebook
We're in the end game of the of the great unbundling of video services, says Jim Louderback, CEO of Revision3, as next generation television channels shift from traditional models to IPTV video networks. Experts agree that the overall TV experience and PayTV business model will see dramatic changes over the next five years. The emergence of cloud-based services, OTT (over-the-top) content delivery, multi-screen entertainment, and the unbundling services are all driving that change.
I caught up with Louderback recently at the TV Next Con 2011 where he spoke on the executive panel session, Executive Panel Discussion, "MSO, Satellite and Telco Operator 2.0 – The Rise of the Next Gen Service Provider". He shared some of his thoughts on the changing video landscape and the great unbundling of services.
The Great Unbundling
The internet is all about unbundling, says Louderback and the print and music industries have been unbundled. Why buy the entire newspaper or magazine when you can read it for free online, or buy a CD when you buy the track online you want from iTunes or Amazon? According to Louderback, Cable TV is next.
Louderback says, "We’re in the early days of a great unbundling of services from transport. Over the past 30 years, TV services and the cables they run upon have been inextricably linked — you paid your cable bill, and got wire and channels together… I see these unbundled cable services giving way to direct relationships between video content providers and customers." (from How YouTube Wins in the Great Unbundling of Cable TV : Jim Louderback)
Louderback maintains, that within the next few years most of the video we consume will be delivered over an open IP network, ending the long monopoly of proprietary services delivered through cable, satellite and broadcast streams. But even though our favorite shows will be delivered mostly on-demand, we'll still have bundles of services - but it will just be offered in new ways.
"Every screen, every glowing rectangle in your life is a television. You're going to want to watch television on it, and the viewers that watch Revision3 very clearly tell us that they don't care about the screen size."
Viewers are going to watch video on the best screen available. When they're on the go, they may want to watch Epic Mealtime on their cell phone, but when they get home they'll want to watch it on a big screen. Louderback says that those two things – all video delivered over IP networks, and on any screen – leads to what he call "the great unbundling."
All these video services will be delivered direct to all these screens wherever they are all around the world that provides, "anytime, anywhere, any device, any session, so session shifting joins time shifting and place shifting and devices shifting." But the really interesting thing Louderback sees happening is that everything is going direct to consumer.
Super-Premium Channels, Super-Premium Bundles and Premium Independents = The Future of TV?
Louderback sees three distinct services emerging that he calls: Super-Premium Channels, Super-Premium Bundles and Premium Independents.
"Right now," he says, "your video services, your channels are bundled to the transport. So you get cable, you buy the network and you buy the video channels – that's all starting to break apart. In this IP world, I believe we're going to have types or three tiers of services."
Netflix is one Super Premium Channel, he says, and HBO is well positioned to be the second. "These single brand services provide libraries of unique and aggregated content to consumers for between $8 and $20 a month." He thinks Showtime, Epix and Amazon have potential and Hulu's future is uncertain.
Louderback says that as TV Everywhere matures, Super Premium Bundles will emerge and be offered directly to consumers from the likely suspects: Time Warner, ABC/Disney, NBC/Comcast, Viacom and Fox. These five companies will build direct billing relationships with consumers and offer a broad set of networks and shows that will appeal widely across all demographics, "and will deliver a mostly on-demand service over traditional broadband networks - with live sports, news and other events serving as anchors."(From MediaPost Publications Get Ready for the Great Video Unbundling 09/21/2011)
He says YouTube now wants to be the sixth Super Premium Bundle of services delivered direct to the consumer via IP, sitting at the same level as Time Warner, ABC/Disney, NBC/Comcast, Viacom and Fox. YouTube has been reinventing itself for some time, with its recent announcement of new channels of original entertainment coming to YouTube by A-lister stars and content producers from the TV, film, music, news, and sports fields Hollywood, its complete overhaul of the site today into a more TV-centric channel design, and that it now serves 3.5 billion videos each month, it's clear that Google wants to take on the traditional broadcast and cable networks. According to Louderback, "They want to be the Mall of America for video, with folks like us and the other independents as anchor tenants."
Louderback sees a huge opportunity for Premium Independents to build billion dollar businesses as content becomes unbundled from transport. These are companies like Revision3, Blip.tv, Ion, BBC America, the Hallmark Channel and others, that offer free programming over IP direct to consumers and they look very different from today's independent cable networks.
"In the end it's all about shelf space. All of us are racing to build a session-shifting experience that lives as an icon across everything from the smallest smart-phone to the biggest smart TV. Because in the next five years if it's a glowing rectangle, then it is a video consumption device - or what we used to call a TV." (From MediaPost Publications Get Ready for the Great Video Unbundling 09/21/2011)
About Jim Louderback Jim Louderback, Chief Executive Officer, Revision3
Launched and managed operations at cable channels, magazines, websites and online video companies including Ziff-Davis, TechTV, PC Magazine and ExtremeTech.com. He started his career at JPMorgan Chase, and has also done work for Pepsi, National Semiconductor and Citibank. He's been CEO of Revision3 since 2007, and has guided the company to profitability and more than 40 million views a month. Jim has an MBA from The Stern School at NYU, and a BS in Mathematics from the University of Vermont. He is a fan of cooking, music, movies, companies with extraneous letters in their names and anything with a 3 in it. Follow @jlouderb
This week in a keynote address at the OTTCON Over-the-Top TV Conference 2011 in San Jose, Scott Puopolo, Vice President and Global Head of Cisco's Internet Business Solutions Group (IBSG), presented Cisco's predictions on what the future of television might look like in 20 years. Puopolo and his team developed the predictions based on interviews with more than 50 television industry and academic thought leaders who all agreed that almost every aspect of TV will be transformed – from how we interact with the TV; how channels will go away; how the remote control will disappear; how screens will do anything, anywhere and will become the nexus for all our connected, interactive and social video experiences – and move us away from the traditional linear "lean-back" TV viewing experience towards an immersive, collaborative experience in the future that goes beyond the Jetsons cartoon.
Many of the predictions are already evolving today with the explosion of connected devices, 3D viewing experiences, augmented reality, transmedia storytelling, advanced technology of touch screen and gesture driven control of screens that we've seen in futuristic sci-fi thrillers like Minority Report. As an example of what's in store for the future, Cisco says that TV will become a broader and more immersive sensory experience that will go beyond the visual and auditory senses to include the sense of smell and touch. But by far the biggest driver that propels innovation is the growth of online social communities and our need to be connected to them. Social interaction is embedded in many of the predictions of which could likely come to pass in the not-too-distant future.
I caught up with Puopolo following his keynote, where he presented 5 of the 10 predictions from the study, The Future of Television: Sweeping Change at Breakneck Speed, which he said, "offers the first holistic vision of the future across all key dimensions of the television industry and sheds new light on the likelihood and timing of innovation."
On the Cisco blog, Puopolo summarized the 5 predictions he presented to the OTTCON audience:
Is It Real or Is It TV? Sensory technology will enable new creative tools for producers and new experiences for consumers. So we’ll not only see Rachael Ray’s brownies -- we’ll smell them, and eventually taste them, too.
Screens Do Anything, Anywhere: Instead of buying TV sets per se, viewers will buy multipurpose screens. A screen in a bedroom could display your favorite painting or change into a teleconference monitor when you’re not watching TV.
Don’t Just Watch, Get Involved: Viewers will break the confines of the TV episode and interact with their favorite characters in everyday life. They could, for instance, collaborate with other fans to help key characters solve a crime or mystery.
Channels Go Away: Soon TV will be customized to your tastes. No more searching through menus to find a show -- the best streaming and on-demand TV will find you.
Viewers Kiss the Remote Goodbye: Consumers will use words, gestures, and devices such as smartphones and iPads to control their TVs. You might raise the volume or choose a different show with a simple flick of your wrist.
The 5 others predictions in the study are:
Ads Get Personal - you can interact with - In the future the majority of ads will be contextual, highly interactive, and laser-targeted to each viewer.
Watch Together, Virtually - TV will be an enabler of social interaction, encouraging group participation at home with remote friends and family. Viewers will experience a sense of community for the duration of the program.
Your TV Follows You - Content will be ubiquitous and available to you on any device wherever you are. Consumers will no longer be tethered to a particular device or network, and there will be limited ties to time itself.
“Regular Joes” Go Hollywood - Semiprofessional and amateur film and TV-making will flourish, and decentralized methods to create, fund, and deliver content to the mass market will thrive.
Creation Goes Viral - Content creators will invite consumers directly into the process.
CiscoIBSG produced this video to describe the 10 predictions for the future of television:
While the views among the experts varied on adoption rates of technology most did agreed that pay TV models will evolve and that consumers will have more control of their content experiences. Cisco IBSG believes that the combination of three key drivers—technology, consumer behavior, and business models – will accelerate our vision of the future and bring about enormous changes within the next 5-10 years that will permanently and dramatically alter our television experience.
For the evolving industry of PayTV operators, content producers, consumer electronics manufacturers, media aggregators and service providers, Puopolo said that competition for the consumer will also intensify dramatically.
So, what's the big message in all of this?
Puopolo summed it up in this way:
"The concept of consumer, controlled, increased, immersive, interactive experience is going to be the future of television and the consumption of our content is going to be ubiquitous. We'll be able to access it anywhere, anytime, from any device in any format."
I caught up with Andrew Kippen, VP of Marketing at Boxee, earlier this year at OTTCON 2012 to talk about the future of television and how Boxee is reinventing broadcast TV. In January 2012, Boxee Inc. released Boxee Live TV, a new product that added live TV content from the big networks: NBC, ABC, Fox, CBS to the Boxee experience. According to Kippen, this $50 add-on solution to the Boxee Box combined the best of everything available Over-the-Top and live broadcast TV.
However, since my conversation with Kippen, Boxee discontinued the original Boxee Box it released in November 2010, to make way for a new streamlined $99 Boxee TV box, which was met with strong criticism from both Boxee users and technology blogs like Streamingmedia.com and Popular Science.
