Cable Technology Feature Article
Europe Cable Operators Fight Over-the-Top TV Platforms
By Madhubanti Rudra, TMCnet Contributor
An increasing numbers of households in Europe are dumping cable television for more sophisticated Internet TV, or IPTV, where content is available directly through Web browsers. This trend has left the European cable operators largely insecure, but they are focused on keeping their customers. Now, a corporate war has been waged against heavy weight video content aggregators such as Google, Inc., Apple (News - Alert), Inc., and Amazon, according to a Bloomberg article.
“With companies like Apple, Google and Amazon entering our markets, the stakes are rising and we need to step up to the challenge. The TV market is ours to lose,” said Adrian von Hammerstein, CEO of Germany’s largest cable operator, Kabel Deutschland Holding AG, while delivering a speech at the Cable Congress in Lucerne, Switzerland.
According to industry estimates, Europe’s cable operators’ TV revenue rose more than 10 percent in 2010 and is projected to grow to 13.2 billion euros in 2014. However, TVs with cable feeds saw a significant drop of 0.4 percent last year, and this number is projected to drop another 0.5 percent by the year 2014. According to Bloomberg (News - Alert).com, the decrease in cable TV users has corresponded to a rise in other services demanded by users, such as Internet and telephony.
“It is not about Google. There are hundreds of over-the-top platforms and there will be more. As customers are faced with a vast amount of choice in a fragmented market, the question is how do we become their guide?” said Andrew Barron, chief operating officer of Virgin Media (News - Alert), Inc.
According to industry experts, the integration of gaming and social media features can improve the cable operators’ position compared to IPTV providers to a large extent.
“Cable has to look over its shoulder in a big way. People love the choice that cable operators provide,” said Tom Rogers, CEO of digital-video recording provider TiVo. “Cable operators are the largest providers of content and choice, but it wouldn’t take a whole lot for the consumer to go elsewhere if the amount of that choice or the presentation of it would excel somewhere else.”
TiVo, Inc., is reportedly in talks with European and U.S. cable operators to bring set-top boxes to market, which will incorporate social networking capabilities such as Facebook (News - Alert), in addition to content organization.
“How it is packaged is going to be critical,” said Rogers. “They have to be worried that if they don’t develop that role sufficiently, they will be overcome by Google, Apple and others who want that customer relationship that the cable operators have built up over the last couple of decades.”
Interestingly, a box that integrates standard video-on-demand and recording features with Internet video viewing is in the works by Liberty Global, Inc. (News - Alert) However, the company has not yet reached to a conclusion whether to block Google or not.
According to Kabel Deutschland’s von Hammerstein, the tricky part is bringing “over-the-top, video-on-demand and linear TV into one user interface,” according to the Bloomberg article. Von Hammerstein said he would also consider partnerships with providers that offer such an Internet platform, including Germany’s ProSiebenSat.1 AG and Bertelsmann AG’s RTL, as well as the German public broadcasters’ Mediathek.
Kabel Deutschland just announced the acquisition of the entire share capital of BMH Berlin Mediahaus GmbH, a cable network operator, from GSW Immobilien AG. All three companies are based in Germany.
Madhubanti Rudra is a contributing editor for TMCnet. To read more of her articles, please visit her columnist page.
Edited by Tammy Wolf