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OTT & Multiscreen • Digital Video Series • 12 • Turning Piratez into Consumers, V

2015 September 22 / Gabriel Dusil / 12 Comments

A Subscriber’s Wish List

After sixty-plus years of healthy growth in the entertainment industry the internet has significantly disrupted this ecosystem. Broadcasters struggle to find their role in the digital generation as they continue to play catch up to rapidly changing user behavior. Even the film industry finally stopped manufacturing film cameras[i] in 2011. A notable victory for digital video. Regardless, the proliferation of video streaming over the past decade is still in relative infancy.

Modernizing the distribution of entertainment is still needed in order to reduce problems such as internet piracy. This has been extensively discussed in the first parts of the “Turning Piratez into Consumers” series: Part 1[ii], Part 2[iii], Part 3[iv], and Part 4[v]. This final paper in the five part series is an open letter to the industry on how to improve digital entertainment’s playground. It’s a subscriber wish-list outlining high level functionality that addresses the evolving needs of today’s consumer. Here we go:

Figure i – A Subscriber’s Wish List for Digital Entertainment

Portability (Anytime, Anywhere, on Any Device)

Multiscreen accessibility is an industry goal, but it’s far from ubiquitous. The ability to access content is often discussed in the context of anytime, anywhere and on any device. Even though the industry continues to move in this direction there are glaring disconnects.

Consumers today are severely restricted in their ability to watch content on all of their devices. Apple has their own walled garden. There are several competing gardens, mostly represented by broadcasters – and none of them are connected. Google at least tries to promote a more open approach. Content portability should be about shifting from a content-centric entertainment culture to a consumer-centric one. Television adopted that vision, but internet entertainment seems to have taken one step backward.

UltraViolet’s Digital locker[vi] is a move in the right direction with support for multiple devices, operating systems, and allowing family members to share in the rights to purchased movies. The ability to purchase a title once and then play it on any device is still hindered by the content owners that wrap their arms around their assets, scowling at potential attackers. The digital world continues to be a new frontier where Hollywood is not completely comfortable[vii].

Figure ii – Multiscreen Portability, Cinema to Multiscreen

(Platinum) Accessibility

An actively debated approach is to significantly shorten release windows for movies. Entertainment libraries are often segmented by premium verses long-tail content. Retailers and Internet streaming providers should evolve their business models to offer a third category of “platinum content”. To better illustrate, the value proposition is based on segmenting the target audience:

Retailers would release a “platinum” Blu-Ray version to be sold at the same time as the theatrical movie. This would be a special 4K version (with the necessary digital rights protection developed specifically for 4K Blu-Rays). Shortly after the theatrical release the standard Blu-Ray disc would be available, including all bonus footage like behind the scenes, and deleted scenes.
OTT providers would offer standard Video on Demand (VoD) users the option to watch the 1080p movie immediately after the standard Blu-Ray release. “Platinum” subscribers, on the other hand, would have the option to watch the 4K version of the movie during the theatrical run. These subscribers could either pay a higher monthly subscription (SVoD) for the privilege of accessing 4K titles, or it could be translation based (TVoD).

Consumers open their wallets based on these clearly defined behaviors. Each target audience has unique wants and needs that does not cannibalize the other viewing choices:

Home theater enthusiasts want the satisfaction of ownership and the excitement of unwrapping their newly purchased Blu-Ray,
Internet subscribers are motivated by the flexibility of instant access from the comfort of their living room, computer screen, mobile or tablet, and
Movie-goers want a night out on the town. They want an immersive experience on a large thirty foot silver screen, with 22.2 THX sound, and a bucket of popcorn.

Figure iii – Collapsing the Release Window for Movie Titles

(International) Availability

There is little consistency in the release windows for movies after appearing in theaters. Delays are typically long for Blu-Ray and longer for Internet streaming services. And that’s just for US domestic markets where the most expensive movies originates. For some international markets the delay is much longer, or in some cases non-existent. This delay fuels an internet piracy market that has an insatiable appetite for entertainment and has little patience for delayed releases in their local city.

Hollywood often use a trickle-method approach to exposing international audiences is their movies. The mantra “Think global, act local”[viii] is poorly adopted by the entertainment industry, and applies to only a few blockbuster releases. Lack of content availability internationally has been identified as a key contributor to piracy[ix]. Consumers should be deciding how they wish to enjoy their entertainment, not content owners.

A programmatic[x] and synchronized global launch means that subtitles, dubbing services, and marketing can’t be an afterthought. In-scene advertising or product placements that accommodate international brands require planning at the pre-production stage.

There are early signs that OTT services – domestically and internationally – give consumers what they want, at a price point that is acceptable. A study by Ericsson (Figure iv) shows that services such as Netflix have resulted in a persistent reduction in P2P downloads in America. When comparing these figures to an earlier study in Spain, it’s clear that P2P downloading dominates in markets where an OTT service is absent. According to Ericsson, “those who turn to digital piracy do so because on-demand content is simply not available through legal sources”[xi]. A similar survey by Ericsson in the Nordics reported that, “over half the people who previously downloaded music illegally no longer do so after they [were] given access to a streaming service”. The borderless spirit of the internet needs to apply to entertainment as well.

Figure iv – Real Time Entertainment Usage, USA vs. Spain

(Technology) Longevity

There are three types of consumers today: those that want to own, those that want to rent, and those that want to license. In the ownership camp users should have the ability to pay for entertainment in the same way as software. When a better version is available – a 1080p version, 4K, or even 8K in the future – then just an “upgrade” cost should apply. In addition, ownership should be active through the title’s useful life. The frustration of buying the same movie over and over again should be relegated to the history books.

The future is cloud storage. We live in an age where millions of copies of movies and songs exist on individual hard drives, discs, or servers. It’s a waste of space. Today’s digital society has evolved to where cloud storage only needs a single instance of a movie to be accessible by millions of subscribers. A ‘title master’ paradigm needed for entertainment, where one ‘file’ containing all versions of a movie (eg. theatrical release, director’s cut, extended versions needed to meet various censorship requirements). This title master would accommodate all language tracks, subtitles, or additional commentary tracks (Figure v). Alternate cuts could be interleaved to accommodate geographically specific in-scene advertising.

The user requests a specific version of a movie, the language track, subtitles, etc. Then the streaming platform prepares that version for streaming
The service then identifies the type of device the subscriber has – formatting the video and the audio appropriately.
The movie is then transcoded on-the-fly as it is served to them.
Advertising is interleaved at the network or server level as per the service offering
Adaptive bit rate then ensures smooth viewing experience based on the current networking conditions.

With an anticipated explosion of video content over the next decade, this title master would significantly help with the efficiency of content management. All titles would also be preserved in the cloud with enterprise level high availability and redundancy.

Figure v – Title Master, Future of Cloud Delivery

When content becomes “virtual”, then the line between ownership and licensing is blurred. The owning community just wants the flexibility to access their content anytime or anywhere and on any device. If a new mobile, tablet, or multiscreen device is purchased, then content rights can easily be extended in this family library.

(Library) Breadth

Offering a deep library of titles continues to be a challenge. Breadth of content is not only about having a sizable library; it’s about offering that library on a global audience. Geo-location restrictions limit the ability for subscribers to view content in remote markets. Such restrictions may also apply to the type of device they are using. In broadcast speak a ‘blackout’ screen is displayed when a user is out of the designated geographic region – or they may be served alternate content. In some cases these restrictions make little sense to consumers, but are likely implemented because they are outside of the advertiser’s border. For example, broadcaster’s will blackout their live news to international users. International users could be easily watch the same news broadcast by substituting international advertising – thus extending the broadcaster’s geographic reach. It’s a lingering reminder of the highly localized and segmented television from the past.

Restrictions also apply to OTT services. Video streaming services differentiate their offering through exclusive content. For example Netflix led the industry with their decision to become a content creator in 2011[xii]. They began with the Emmy award winning series House of Cards, recently renewed for a fourth season[xiii]. Now tech giants AOL, Microsoft, and Yahoo are hedging their bets on exclusive content, hoping that subscribers will be swayed towards their service[xiv]. But this further limits the internet consumer’s ability to access a single source in a way that resembles linear television. The entertainment industry has a long journey ahead to mimic the borderless and global nature of the internet.

(Immersive) Quality

As internet speeds increase, users around the globe want higher quality video. YouTube began supporting 720p in November 2008. One year later 1080p was announced[xv] while also switching their content to the more efficient H.264[xvi] codec. Ericsson reports that consumers are willing to pay for extreme quality 4K UHD video. These are early signs that consumers are willing to open their wallets for a more immersive experience beyond high definition.

Figure vi – Services Most Worthwhile Purchasing. Seven Markets: China, Germany, Spain, Sweden, Taiwan, UK & USA.

Demand for higher quality continues with 4K UHD (3840 x 2160 pixels) which will use the HEVC H.265[xvii] codec. Ubiquitous 4K won’t happen until H.265 is implemented in consumer electronics hardware. By the end of the decade subscribers should have the ability to stream 4K video at speeds ranging from 12 Mbps to 20 Mbps.

Price (Sensitivity)

Disc purchases typically cost significantly more that rentals – rental services cost more than subscriptions. Digital consumers have come to realize that ownership of premium content is no longer rational: What is the practical value of owning a movie when it is only watched once or twice in a lifetime? What is the practical value of a song if it’s listened to no more than 50 times in a lifetime? Subscription services target users that are aware of their entertainment’s useful life.

(Fun & Engaging) Experience

As content becomes more competitive on a global scale, entertainment providers need to attract subscribers through an exciting and fun user experience. Content is still king, but the interface where the user interacts is the kingdom. This is the playground where subscribers will stay and play. If the user is having fun, they will stay longer. If they stay longer there is a higher propensity for them to spend more money.

Figure vii – Search & Discovery, A User centric model for recommendation engines

Social engagement is at the center of this playground. It’s where friends post suggestions, rate content, and show viewing statistics. The subscribers buying behavior, as well as their peers, are monitored and correlated so that different content could be suggested. These are titles that are otherwise undiscoverable though traditional means (Figure vii). This is only part of the virtual playground surrounding the world of entertainment. An environment where consumers enjoy themselves – before, during, and after content is consumed.

The value of social media in entertainment should not be underestimated. According to Ooyala, “Personal testimonials are one of the most powerful influences on all types of consumer action… By learning what their trusted friends have enjoyed, and by comparing that to their perception of how much they have in common with the recommender, viewers get a very personalized and motivating impression of what to check out.”[xviii]

It’s not just content that’s important. It’s about a bi-directional dialog and relationship with subscribers. The consumer is no longer an anonymous viewer to entertainment. Instead, the entertainment provider needs to facilitate a personal and engaging dialogue with each and every subscriber. A better understanding of the subscriber’s behavior needs, and buying habits results in better engagement. It’s always more fun going to a playground where people know who you are.

Read Additional Articles in this Series

I. Consumption is Personal

https://mykoddi.com/dusilcom/2013/02/28/consumption-is-personal/

In the days of linear television, broadcasters had a difficult task in understanding their audience. Without a direct broadcasting and feedback mechanism like the Internet, gauging subscriber behavior was slow. Today, online video providers have the ability to conduct a one-to-one conversation with their audience. Viewing habits of consumers will continue to rapidly change in the next ten years. This will require changes in advertising expenditure and tactics.

II. Granularity of Choice

https://mykoddi.com/dusilcom/2013/04/01/granularity-of-choice/

The evolution from traditional TV viewing to online video has been swift. This has significantly disrupted disc sales such as DVD and Blu-Ray, as well as cable and satellite TV subscriptions. With the newfound ability to consume content anytime, anywhere, and on any device, consumers are re-evaluating their spending habits. In this paper we will discuss these changes in buying behavior, and identify the turning point of these changes.

III. Benchmarking the H.265 Video Experience

https://mykoddi.com/dusilcom/2013/04/22/benchmarking-the-video-experience/

Transcoding large video libraries is a time consuming and expensive process. Maintaining consistency in video quality helps to ensure that storage costs and bandwidth are used efficiently. It is also important for video administrators to understand the types of devices receiving the video so that subscribers can enjoy an optimal viewing experience. This paper discusses the differences in quality in popular video codecs, including the recently ratified H.265 specification.

IV. Search & Discovery Is a Journey, not a Destination

https://mykoddi.com/dusilcom/2013/05/13/Search-and-Discovery-Is-a-Journey-not-a-Destination/

Television subscribers have come a long way from the days of channel hopping. The arduous days of struggling to find something entertaining to watch are now behind us. As consumers look to the future, the ability to search for related interests and discover new interests is now established as common practice. This paper discusses the challenges that search and discovery engines face in refining their services in order to serve a truly global audience.

V. Multiscreen Solutions for the Digital Generation

https://mykoddi.com/dusilcom/2013/06/24/multiscreen-solutions-for-the-digital-generation/

Broadcasting, as a whole, is becoming less about big powerful hardware and more about software and services. As these players move to online video services, subscribers will benefit from the breadth of content they will provide to subscribers. As the world’s video content moves online, solution providers will contribute to the success of Internet video deployments. Support for future technologies such as 4K video, advancements in behavioral analytics, and accompanying processing and networking demands will follow. Migration to a multiscreen world requires thought leadership and forward-thinking partnerships to help clients keep pace with the rapid march of technology. This paper explores the challenges that solution providers will face in assisting curators of content to address their subscriber’s needs and changing market demands.

VI. Building a Case for 4K, Ultra High Definition Video

https://mykoddi.com/dusilcom/2013/07/15/building-a-case-for-4K-ultra-high-definition-video/

Ultra High Definition technology (UHD), or 4K, is the latest focus in the ecosystem of video consumption. For most consumers this advanced technology is considered out of their reach, if at all necessary. In actual fact, 4K is right around the corner and will be on consumer wish lists by the end of this decade. From movies filmed in 4K, to archive titles scanned in UHD, there is a tremendous library of content waiting to be released. Furthermore, today’s infrastructure is evolving and converging to meet the demands of 4K, including Internet bandwidth speeds, processing power, connectivity standards, and screen resolutions. This paper explores the next generation in video consumption and how 4K will stimulate the entertainment industry.

VII. Are You Ready For Social TV?

https://mykoddi.com/dusilcom/2013/08/12/are-you-ready-for-social-tv/

Social TV brings viewers to content via effective brand management and social networking. Users recommend content as they consume it, consumers actively follow what others are watching, and trends drive viewers to subject matters of related interests. The integration of Facebook, Twitter, Tumblr and other social networks has become a natural part of program creation and the engagement of the viewing community. Social networks create an environment where broadcasters have unlimited power to work with niche groups without geographic limits. The only limitations are those dictated by content owners and their associated content rights, as well as those entrenched in corporate culture who are preventing broadcasters from evolving into a New Media world.

VIII. Turning Piratez into Consumers

IX. Turning Piratez into Consumers, I

https://mykoddi.com/dusilcom/2013/10/25/turning-piratez-into-consumers-i/

IX. Turning Piratez into Consumers, II

https://mykoddi.com/dusilcom/2014/07/15/turning-piratez-into-consumers-ii/

Content Protection is a risk-to-cost balance. At the moment, the cost of piracy is low and the risk is low. There are no silver bullets to solving piracy, but steps can be taken to reduce levels to something more acceptable. It is untrue that everyone who pirates would be unwilling to buy the product legally. It is equally evident that every pirated copy does not represent a lost sale. If the risk is too high and the cost is set correctly, then fewer people will steal content. This paper explores how piracy has evolved over the past decades, and investigates issues surrounding copyright infringement in the entertainment industry.

About the Author

Gabriel Dusil was recently the Chief Marketing & Corporate Strategy Officer at Visual Unity, with a mandate to advance the company’s portfolio into next generation solutions and expand the company’s global presence. Before joining Visual Unity, Gabriel was the VP of Sales & Marketing at Cognitive Security, and Director of Alliances at SecureWorks, responsible for partners in Europe, Middle East, and Africa (EMEA). Previously, Gabriel worked at VeriSign & Motorola in a combination of senior marketing & sales roles. Gabriel obtained a degree in Engineering Physics from McMaster University, in Canada and has advanced knowledge in Online Video Solutions, Cloud Computing, Security as a Service (SaaS), Identity & Access Management (IAM), and Managed Security Services (MSS).

All Rights Reserved

© 2015, All information in this document is the sole ownership of the author. This document and any of its parts should not be copied, stored in the document system or transferred in any way including, but not limited to electronic, mechanical, photographs, or any other record, or otherwise published or provided to the third party without previous express written consent of the author. Certain terms used in this document could be registered trademarks or business trademarks, which are in sole ownership of its owners.

References

[i] “Side by Side”, Company Films, Directed by Christopher Kenneally, 2012, http://www.imdb.com/title/tt2014338/?ref_=nv_sr_1

[ii] OTT & Multiscreen • Digital Video Series • 8 • Turning Piratez into Consumers, I, by Gabriel Dusil, dusil.com, 25^th of October 2013, https://mykoddi.com/dusilcom/2013/10/25/turning-piratez-into-consumers-i/

[iii] OTT & Multiscreen • Digital Video Series • 8 • Turning Piratez into Consumers, II, by Gabriel Dusil, dusil.com, 15^th of June 2014, https://mykoddi.com/dusilcom/2014/07/15/turning-piratez-into-consumers-ii/

[iv] OTT & Multiscreen • Digital Video Series • 8 • Turning Piratez into Consumers, III, by Gabriel Dusil, dusil.com, 12^th of May 2015, https://mykoddi.com/dusilcom/2015/05/12/ott-multiscreen-digital-video-series-10-turning-piratez-into-consumers-iii/

[v] OTT & Multiscreen • Digital Video Series • 8 • Turning Piratez into Consumers, IV, by Gabriel Dusil, dusil.com, 26^th of May 2015, https://mykoddi.com/dusilcom/2015/05/26/ott-multiscreen-digital-video-series-11-turning-piratez-into-consumers-iv/

[vi] UltraViolet DRM, Wikipedia, http://en.wikipedia.org/wiki/UltraViolet_%28system%29

[vii] “Hollywood is still obsessed with breaking the internet”, by Russell Brandom, 15 December 2014, http://www.theverge.com/2014/12/15/7396639/hollywood-is-still-obsessed-with-breaking-the-internet

“MPAA Exec Admits: ‘We’re Not Comfortable With The Internet’”, techdirt.com, 27 January 2012, https://www.techdirt.com/articles/20120127/10005717568/mpaa-exec-admits-were-not-comfortable-with-internet.shtml

[viii] Think globally, act locally, Wikipedia, http://en.wikipedia.org/wiki/Think_globally,_act_locally

[ix] MPAA Foreign Trade Barriers Report, 29^th October 2014, http://www.mpaa.org/wp-content/uploads/2014/10/MPAA-Foreign-Trade-Barriers-Report.pdf

[x] Programmatic, Wikipedia, http://en.wikipedia.org/wiki/Programmatic_media

[xi] “TV & Video, Changing the Game”, Ericsson, 2012, http://www.ericsson.com/res/docs/2012/consumerlab/consumerlab-tv-video-changing-the-game.pdf

[xii] “Netflix’s “House of Cards” secrets: The real story behind Kevin Spacey and Frank Underwood’s meteoric ascent”, by Donald Sull & Kathleen M. Eisenhardt, 26 April 2015, http://www.salon.com/2015/04/26/netflixs_house_of_cards_secrets_the_real_story_behind_kevin_spacey_and_frank_underwoods_meteoric_ascent/

[xiii] “‘House of Cards’ Renewed for Season 4 by Netflix”, by Todd Spangler, 2 April 2015, http://variety.com/2015/digital/news/house-of-cards-renewed-for-season-4-by-netflix-1201465561/

[xiv] “The Best Online-Original TV Shows 2015”, by Rebecca Jane Stokes, 11 February 2015, http://www.tomsguide.com/us/best-online-shows,review-2598.html

[xv] YouTube, Wikipedia, https://en.wikipedia.org/wiki/YouTube

[xvi] H.264, Wikipedia, https://en.wikipedia.org/wiki/H.264/MPEG-4_AVC

[xvii] H.265, Wikipedia, https://en.wikipedia.org/wiki/High_Efficiency_Video_Coding

[xviii] “Connecting Consumers with Content”, Ooyala http://go.ooyala.com/rs/OOYALA/images/ooyala-content-discovery-whitepaper.pdf

OTT & Multiscreen • Web Seminar • 1-12 • Complete Series

2015 August 25 / Gabriel Dusil / 0 Comments

• OTT & Multiscreen • Web Seminar Series ’14 & ’15

• This post links to all presentations from our 2014 & 2015 Web Seminar series. Enjoy!

1 • Setting the Stage for Over the Top Video Services

• This presentation sets the ground work for the terminology surrounding OTT & Multiscreen services, and sets the stage for future presentations that will explore the digital video landscape and corporate portfolio of Visual Unity Global.

2 • Origins of Over the Top Video Services

• To better understand where we are going, it helps to know where we came from. This presentation investigates when OTT video services began to emerge, and the market landscape that made it happen. We also look at how different regions around the world will be implementing OTT, based on their infrastructure capabilities, and where they reside in the OTT adoption curve.

3 • The Future of Over the Top Video Services

• This presentation discusses how OTT continues to evolve. This is presented in the context of how technology and consumer behavior is shaping OTT, such as content discovery services, and social networking. We conclude by presenting a vision of where OTT could potentially take digital video, into the future.

4 • Corporate Services Overview

• In this presentation we provide an overview of Visual Unity Global and our service portfolio. This year our marketing department stepped-up its game yet again, and completely redesigned our corporate presentation for 2014, to better communicate our stellar capabilities of the vuMedia™ platform, and adjacent services.

5-7 • Return On Investment for Video Streaming

• ?Investing in video streaming services requires a solid understanding of the Return on Investment (ROI) for such a platform. In this presentation we breakdown the value proposition of Over the Top content (OTT) platforms, used to generate new revenue streams from entertainment assets. Understanding ROI, requires a breakdown of cost savings, new revenue streams, feature enhancements, and other intangible benefits. This web seminar looks into various aspects of content management, delivery and consumption, and how cloud-based services such as OTT not only generates new revenue streams, but also opens new doors to monetize entertainment libraries.

8-12 • Entertainment Streaming

• Building a new Video Streaming service starts by understanding the market landscape. We’re all familiar with the SWOT analysis: Strengths, Weaknesses, Opportunities & Threats. But dissecting the challenges in the Video streaming industry is about understanding problems, before a solution can be formulated. Creating a gap-analysis is the next step in recognizing opportunities in this rapidly changing market space. Then, examining subscriber behavior ensures that we look through the lens of the consumer. Once those steps are completed, we can formulate a strategy to build an innovative and competitive video streaming service. This presentation takes a modern market approach for video streaming through an assessment of Challenges, Opportunities, Behaviors, & Strategies (or COBS).

• Tags

2nd Screen, Broadcast, COBS, Connected TV, Digital Rights, Digital Video, DRM, dusil.com, Entertainment Streaming Behaviors, Entertainment Streaming Challenges, Entertainment Streaming Opportunities, Entertainment Streaming Strategies, Gabriel Dusil, Internet Video, Linear TV, Multi-screen, Multiscreen, Online Video Platform, OTT, Over the Top Content, OVP, Recommendation Engine, Return On Investment, ROI, Search & Discovery, second screen, Smart TV, TCO, Television, total cost of ownership, TV Anywhere, TV Everywhere, Video Streaming

Digital Trends Video Opinions • The 5-Foot Viewing Experience is a Missed Opportunity

2015 June 23 / Gabriel Dusil / 1 Comment

The entertainment and computing industries differ in what is referred to as the two-foot versus ten-foot experience[i]: Users that are two feet away are typing away at their keyboard in front of their computers. When they’re ten feet away they’re watching movies or television. What if there was a new type of experience, based on an evolved viewing habit? What about a lean-back-feet-up experience, where the viewer is five feet from the screen? There are a growing number of users watching entertainment from tablets, mobiles, and computers. Some of those users don’t even have pay-TV anymore. They’re called cord-cutters[ii]. Display manufacturers haven’t yet targeted their products to fit the needs of these consumers. These are people that use their computer display like a TV, computer, and a communication platform – all in one. This is a missed opportunity. Let’s break down why. But before I get into it, let me explain my own setup. I don’t have a traditional living room where a TV sits at the epicenter and a sofa across from it. My living room consists of a computer and a monitor. It’s both my workplace and my place of entertainment. I have a relatively large 30″ monitor, so watching movies ten feet away on the sofa isn’t too bad, but it’s not ideal. I want to upgrade. But the product that I’m looking for doesn’t exist. I’m looking for a display that accommodates a five-foot experience – I want a 48” 4K monitor at 21:9 display aspect ratio[iii].

Why 4K?

Why should you invest in a 4K television if there’s no content? It’s the classic chicken and egg dilemma: Buy a 4K TV and wait for content, or wait for content first. Computer users don’t see it that way. They don’t see 4K technology as a TV but as a monitor. So what’s the difference? If the display is a TV, then it’s an entertainment vehicle. When consumers buy a TV with new technology such as HD, 3D, or 4K, they expect to use those features immediately. In the mid-2000s HD movies were promoted around the same time as HD televisions. Blu- ray discs began shipping in June 2006[iv], roughly the time that 1080p monitors were released. Despite only a few titles, there were enough of them to enticed early adopters. With 4K it’s different. There are no Blu-Ray 4K discs, there are no 4K movies for consumers, and TV stations aren’t broadcasting in 4K yet. Lacking content makes it seem like 4K has come to market too early. I write extensively about the readiness of 4K, “Building a Case for 4K, Ultra High Definition Video” [https://mykoddi.com/dusilcom/2013/07/15/building-a-case-for-4k-ultra-high-definition-video/]. From an entertainment perspective, the release of 4K TVs looks like an industry fail.

Figure i – Monitors are Windows to Applications & Services

On the flip side, computer enthusiasts strive for the fastest PCs, better efficiency, and greater productivity. For these users, a higher display resolution means more desktop real-estate – more windows, widgets, and icons. Higher resolutions beyond HD – some that are as high as UHD resolutions – are found already in monitors, tablets, and laptops. None of those consumers are complaining about the content. If the display is a monitor, then the argument about content is moot. As a monitor, the display is an interface to social media, games, productivity, videos, music, and communications (see Figure i). The big picture (pun intended) is that the computer monitor provides a window to connectivity, interactivity, and content – all in one.

Why 21:9?

Consumers have been primed for wider displays over many decades – from 4:3 in the middle of the last century, to the popularity of 16:9 at the tail end of the century. Wider screens eventually migrated from the cinema to the home. Today many movie lovers prefer the wider 21:9 screen[v] because it feels more immersive. With a large enough screen the movie begins to wrap around the viewer[vi]. Samsung’s curve[vii] strategy in their larger flat-screen displays capitalizes on that trend. For manufacturers, 21:9 is still quite new. Some displays are beginning to emerge at this aspect ratio, but haven’t yet grabbed enough consumer attention. This may be due to the fact that 21:9 is associated mainly with motion pictures. Case in point – In my video collection consists of around 40% of movies that were filmed at 2.35:1. 50% of them used 16:9 (or 1.85:1), and the remaining 10% – mainly older movies are in 4:3[viii]. So even in cinema, 21:9 doesn’t represent the overwhelming majority – at least in my collection. In television, nearly all programs are filmed in 16:9 displays, so this aspect ratio will likely remain the dominant champion in display technology for the majority of consumers. A UHD screen has a resolution of 3840×2160 – also called 2160p screens (taken from the 1080p nomenclature of HD TVs). A 21:9 screens could use a resolution of 3840×1648 UHD[ix]. This would result in an aspect ratio of 2.33:1, so movies filmed in 2.35:1 CinemaScope[x], or 2.39:1 would fit nicely.

Why 5-Feet?

Selling the notion of a five-foot experience requires an assessment of screen size versus viewing angle. There are varying opinions on what is considered comfortable to the viewer. SMPTE[xi] recommends no more than 30° horizontal from the viewer’s eyes to either side of the screen. Some retailers and manufacturers recommend anywhere between 28° and 36°[xii]. THX, on the other hand, considers a viewing angle as high as 40° (Figure ii).

Table 1 – Maximum Screen Size for a 40? Horizontal viewing angle

When working two feet away on my 30” monitor, this results in a massive 55° viewing angle. I’m far exceeding the THX recommendation. But it’s not a problem. When I’m working on my computer my eyes are not trying to see the whole screen. I only need to focus on one desktop window at a time (such as when I’m typing this article). For computer users, their eyes only need to concentrate on the window that’s open, which only takes up part of the desktop. Therefore screen that exceeds the THX recommendation for home theatres, doesn’t apply to computer users. Still, it may explain why desktop display manufacturers are reluctant to make computer monitors larger than 34”. Table 1 shows the largest screen that could be accommodated if a 40° viewing angle is maintained at each distance. Leaning five feet back suggests a screen size of up to 48″. At 10 feet away, a much larger 95″ screen could grace the living room. Screen sizes are already approaching and surpassing 100”. Anything over 100″ is compelling for enthusiasts with larger living rooms or custom home theatres. 21:9 also helps with the vertical viewing angle. THX recommends that viewers should not tilt their eyes more than 15° from the horizontal[xiii]. As screens get larger, the vertically narrower 21:9 displays offer a more comfortable viewing angle.

Figure ii – 2 foot, 5-foot, & 10-foot viewing experiences

Want Versus Need

If 21:9 takes off, it will likely remain a niche product. Even as a niche play, it’s still a great differentiator for display manufacturers. Companies such as Panasonic, Samsung, and LG are getting squeezed on margins, as prices continue to decline. Even 4K displays will succumb to tight margins as the market matures. Inevitably the market will be taken over by manufacturers that can tolerate thinner margins at the expense of higher volumes. The need to differentiate will be paramount. If manufacturers are listening, here are a few specifications for guidance:

LCD Technology: IPS (In-Plane Switching)[xiv]
Bezel: none! Let’s finally get rid of it.
Screen Aspect Ratio: 21:9
Resolution: 5K Display (5120 × 2160)
Integrated Speakers: No! Enthusiasts want a separate surround sound audio experience.
Inputs: 3 x HDMI[xv]0, 2 x Display Port [xvi], 2x USB[xvii], 1 x 1Gbps Ethernet, BlueTooth, built-in WiFi[xix]
vSync: at least 120Hz
Wall Mounts: VESA 100mm, 200mm, and 400mm mounts
3D: No one cares!
Smart TV: Yes, please.

There is a growing segment of society who watch their entertainment via computer. These users are willing to invest in 4K without complaining about the lack of content. Regardless, 4K movies and TV shows will likely trickle to market as we approach the end of the decade. The entertainment industry already sits on a vast library of 4K movies that were digitized years ago, for their Blu-ray release. It’s just a matter of time before consumers get to experience them. In the meantime, there’s no reason to wait.

• Synopsis

• Consumers complain that there is no content available to justify the purchase of a 4K TV. But many users already enjoy 4K on their tablets, computers, and laptops. None of them are complaining. At 2 feet away 4K is a display, and at 10 feet away it’s a TV. What if there is a new viewing experience that converges 4K into a single gateway to everything that is gaming, entertainment, and computing? There is a missed opportunity for screen manufacturers – It’s a 4K 21:9 monitor that addresses an evolved viewing experience. The 5-foot viewing experience is the next evolution in display technology.

• References

[i] 10-foot experience, Wikipedia, http://en.wikipedia.org/wiki/10-foot_user_interface

[ii] Cord-cutting 101, http://www.digitaltrends.com/topic/cord-cutting-101/

[iii] Display aspect ratio, Wikipedia, http://en.wikipedia.org/wiki/Display_aspect_ratio

[iv] Blu-ray, Wikipedia, http://en.wikipedia.org/wiki/Blu-ray_Disc

[v] 21:9 aspect ratio, Wikipedia, http://en.wikipedia.org/wiki/21:9_aspect_ratio

[vi] “8K is not the future of TV. We think 21:9 Ultra Widescreen is instead. Here’s why… “, by David Shapton, Redsharknews.com, http://www.redsharknews.com/technology/item/1370-8k-is-not-the-future-of-tv-we-think-21-9-ultra-widescreen-is-instead

[vii] Samsung, http://www.samsung.com/us/video/uhd-tv

[viii] Aspect ratio (image), Wikipedia, http://en.wikipedia.org/wiki/Aspect_ratio_%28image%29

[ix] 4K Resolutions, Wikipedia, http://en.wikipedia.org/wiki/4K_resolution

[x] CinemaScope, Wikipedia, http://en.wikipedia.org/wiki/CinemaScope

[xi] SMPTE, Society of Motion Picture and Television Engineers, Wikipedia, http://en.wikipedia.org/wiki/Society_of_Motion_Picture_and_Television_Engineers

[xii] Optimum HDTV viewing distance, Wikipedia, http://en.wikipedia.org/wiki/Optimum_HDTV_viewing_distance

[xiii] HDTV Set Up, THX, http://www.thx.com/consumer/home-entertainment/home-theater/hdtv-set-up/

[xiv] “LCD Panel Technology: IPS, VA, PLS, AHVA & TN Monitors”, http://www.pchardwarehelp.com/guides/lcd-panel-types.php

[xv] HDMI, Wikipedia, http://en.wikipedia.org/wiki/HDMI

[xvi] Display Port, Wikipedia, http://en.wikipedia.org/wiki/DisplayPort

[xvii] USB, Wikipedia, http://en.wikipedia.org/wiki/USB

[xviii] Audio jack, Wikipedia, http://en.wikipedia.org/wiki/Phone_connector_%28audio%29

[xix] 802.11, Wikipedia, http://en.wikipedia.org/wiki/IEEE_802.11

• About the Author

Gabriel Dusil was recently the Chief Marketing & Corporate Strategy Officer at Visual Unity, with a mandate to advance the company’s portfolio into next-generation solutions and expand the company’s global presence. Before joining Visual Unity, Gabriel was the VP of Sales & Marketing at Cognitive Security, and Director of Alliances at SecureWorks, responsible for partners in Europe, the Middle East, and Africa (EMEA). Previously, Gabriel worked at VeriSign & Motorola in a combination of senior marketing & sales roles. Gabriel obtained a degree in Engineering Physics from McMaster University, in Canada and has advanced knowledge in Online Video Solutions, Cloud Computing, Security as a Service (SaaS), Identity & Access Management (IAM), and Managed Security Services (MSS).

• Tags

•? 10 foot experience, 2 foot 10 foot, 2 foot experience, 21:9, 21:9 display, 40 degree viewing angle. 48″ + 21×9 + monitor, 48 inch display, 48″ + 21:9 + monitor, 48” display, 4K 21:9, 4K TV, Broadcast, CinemaScope, cord cutter, cord cutting, Digital Video, display aspect ratio, dusil.com, Gabriel Dusil, gabrieldusil.com, Internet Video, OTT, Over the Top Content, OVP, Panasonic, Samsung, second screen, SMPTE, THX, THX viewing angle, UHD, Ultra HD, 48″ + 21×9 + display, 48″ + 21:9 + display, 48″ + 21×9 + TV, 48″ + 21:9 + TV

OTT & Multiscreen • Digital Video Series • 11 • Turning Piratez into Consumers, IV

2015 May 26 / Gabriel Dusil / 13 Comments

Is it Victory or Defeat for Entertainment?

The success of internet video is attributed to the culmination of several developments, thanks to the internet:

New protocols that were invented to stream video such as Apple’s HTTP Live Streaming (HLS), Adobe’s HTTP Dynamic Streaming (HDS), and Microsoft’s Smooth Streaming[i].
Internet bandwidth grew to the point where it was able to support streaming video.
Cloud platforms were established that enabled an end-to-end supply chain of entertainment – from creation to consumer delivery.
The evolution in consumer behavior: There has been a gradual move away from the ownership of physical media, in favor of licensing (or “borrowing”) content via the internet.

With these developments the global expansion of the world-wide-web has also had its share of blame from the entertainment community. For example, in the development of Peer to Peer networks[ii] (P2P), cyber lockers[iii], and more recently, illegal streaming services. This has resulted in the music and movie industry pointing fingers at copyright infringers, for their revenue underperformance. But is it really doom and gloom for the entertainment industry?

Figure i – USA Box office vs. Ticket Prices

For starters, cinema goers in the USA have seen a steady rise in ticket sales over the years. When compared to attendance, it is clear that the U.S. market is attempting to maintain an increase in box-office sales against a modest 2% annual growth rate (Figure i, The Numbers and Box Office Mojo). But this doesn’t tell the whole story.

Figure ii – Global Box Office Ticket Revenue)

International box office figures in Figure ii show more promising growth. Revenue on a global basis is a healthier 8.3% per annum, to nearly 38 billion US$ in 2014 according to Box Office Mojo. Over 70% of global cinema revenue is generated from non-US releases. Notable markets include China at 3.6 billion US$ which has maintained 35% growth year-on-year, for the past decade[iv].

Figure iii – Top 10 Countries for Cinema revenue)

In broadcast, cord cutters (that are cancelling their pay-TV subscriptions), and cord shavers (those that are reducing their spending), continue to be a cause for concern. Nevertheless, this sector is expected to increase steadily at 5.6% on a global basis, according to PwC (PricewaterhouseCoopers, Figure iv).

Figure iv – Global Pay-TV Forecast)

Informa Telecoms and Media forecast similar year-on-year growth of 3.8% through to 2017 (Figure v). This study looks at a much broader TV and Video market segment. Here the market is expected to exceed 400 billion US$ by the end of this decade. For comparison, OTT services are growing at a whopping 29% per annum. Even though the OTT market will reach 37 million US$ by 2017, it will still be just a fraction of linear television.

The music industry has gone through its own growing pains throughout the internet era. Napster[v] was blamed at the end of the 1990’s for the decline in CD sales. Music had a tough first decade in 2000. Physical media sales were 10.8 billion US$, down from 28.1 billion US$ ten years earlier. Digital sales had grown to 4.6 billion US$, but didn’t compensate for the loss in physical media revenue. In any case, the International Federation of the Phonographic Industry (IFPI[vi]) reported that the overall industry was worth 168 billion US$ at the end of 2010[vii]. This means that over 90% of music revenue was generated from other monetization baskets other than just disc and single sales.

Figure v – Global TV vs. OTT forecast ’11-‘17)

Even more promising, the music industry is expected to growth at 5.3% per year through to 2017, according to PwC (Figure vi). There are now more than 450 licensed digital music services operating worldwide, offering 37 million tracks to consumers, in over 100 territories, according to IFPI’s Digital Music Report 2014[viii].

Figure vi – Global Music Industry Forecast)

Looking at the music industry from the decline of CD sales may show an industry that is suffering, but that’s not the big picture. In the days of vinyl, the main profit center for artists was album sales. Concert tours were meant to promote the album, but alone didn’t generate much profit. These days’ musicians are accepting new business model where success is measured by the number of “followers” and “likes”, on Facebook, Twitter, and other social networking sites. Artists are refocusing their energy on live events and other monetization channels that reach fans directly[ix]. Some artists recognize that services such as YouTube[x], Dailymotion[xi], and Vimeo[xii], fuel social interaction and leads to extending their global reach. “Nine of the 10 most viewed videos on YouTube are music videos,” according to IFPI’s Digital Music Report 2013[xiii].

Business models in the music industry have been redefined by focusing on initiatives that drive multiple revenue streams. “There are over two dozen revenue streams available to US-based musicians,” according to Kristin Thomson, The Future of Music Coalition[xiv].

The global video gaming industry has also performed extremely well over the last decade. According to studies from PwC, Gartner, and Digi-Capital, this segment reached nearly 100 billion US$ in 2014, and expects double digit growth through most of this decade (Figure vii). Video gaming continues to expand, thanks in part to the success of the Android and Apple iOS platforms. Mobile app developers have a cost effective and relatively quick means to publish games. At the top end of the market, game development has rivaled movie production costs, with some budgets easily exceeding 20 million US$[xv].

Figure vii – Global Video Gaming Industry Forecast)

Overall, the entertainment industry continues with healthy growth, whether it’s movies, television, music, or gaming. When all segments of entertainment are consolidated, the overall industry is expected to exceed 2 trillion US$ by 2017 (Figure viii).

Figure viii – Overall Global Entertainment Industry)

Reality Check

The entertainment landscape has changed significantly over the past twenty years. We could thank the Internet for this global expansion, just as easily as point fingers at it for any revenue shortfall. Some will continue to blame internet piracy, but likely no one will thank the invention of P2P file sharing for their successes.

Even though these industries show healthy growth, there will always remain the argument that sales could be better if piracy was eliminated. The journey to reducing piracy will likely be long and arduous. Even if successful, measuring the end result will be controversial and unlikely to meet the entertainment industry’s expectations. A complete eradication of piracy is a lofty goal. Multiple factors must synchronize to minimize criminality, and maximize revenue potential for artists, studios, and those driving the supply chain.

There is no silver bullet. Even with established solutions in place, any measures won’t completely solve copyright infringement with one fell swoop. There will always be a select group that will take any means necessary to download poor quality content, just for the bragging rights of seeing it first. Not everyone is a candidate for the legitimate purchasing models.

A more reasonable approach may be to reduce theft levels down to those found in brick and mortar stores. If piracy levels were brought down to manageable levels, then any calculated loss will be relegated to the cost of doing business. Brick and mortar retailers have built this into their business models since commerce began.

Stay Tuned for Part V

In Part V of this series we will propose solutions to reduce internet piracy from the vantage point of a subscriber wish-list.