European Research Update

Europe’s Top Video Trends of Early 2014

by Brett Sappington | Apr. 1, 2014

As 2014 has moved into spring, Europe’s ever-dynamic video marketplace continues to be a changing landscape for service providers and technologies. Here are a few of the video-related trends that we see emerging in Europe.]

Consolidation in pay TV

Across European markets, multinational giants continue their acquisitions. Liberty Global has added several leading cable operators to its portfolio, including Unity Media and Kabel B&W (Germany), Virgin Media (U.K.), and Ziggo (Netherlands). Recently, Vodafone has also entered the fray, acquiring Kabel Deutschland (Germany) and Ono (Spain).

Combined with existing multinational providers such as telcos DT (Deutsch Telekom), Orange, and Telefónica, the result is the evolution of a new tier of pay-TV operator with unique scale and opportunities. The size of these organizations potentially provides them with more resources for innovation or network improvements and a better negotiating position with vendors and content rights holders.

At the same time, these companies must effectively tie together all of their new additions, including many with differing architectures, technologies, and vendors. Over the next two years, these operators will be making decisions about the adoption of multiscreen, video compression, and content delivery technologies – decisions that will impact standards organizations as well as smaller operators that follow the innovation curves set by larger players.

Operators and OTT services

Netflix continues its march across Europe and other parts of the globe, and new OTT service players are emerging to compete for a share of consumer spending on video entertainment.

Increasingly, pay-TV operators are entering into this OTT space, offering online video services to customers that are not subscribers of their pay-TV services. While Sky’s Now TV service is one of the more well-known offerings, many others are entering the space as well. Terrestrial broadcaster Mediaset launched its Infinity paid OTT service in December 2013. The Viaplay service from satellite provider Viasat offers linear channels, on-demand content, and live sporting events to consumers in Europe’s Nordic countries as well as those in Russia and Ukraine.

Operators in Eastern Europe including Serbia’s SBB, Romania’s Romtelecom, and Turkey’s TTNET currently offer linear and on-demand OTT services to consumers worldwide. Even U.S.-based DISH Networks is getting into this area through its DISHWorld online property. As operators continue to add TV Everywhere / multiscreen delivery capabilities, they are now seeing each other as the future of competition in the OTT space. As more operators add similar services, the pressure to compete in this space will continue to grow.

Dongles and casting

Given the rapid success of Google Chromecast, many in the TV industry have become intensely interested in the movement towards dongles and casting technologies. At the 2014 Consumer Electronics Show (CES) and at the 2014 TV Connect event, CE makers, set-top box vendors, and software companies displayed several solutions that addressed these areas.

Several device makers now offer HDMI dongles, ranging from full set-top boxes to thin-client devices that use cloud or managed network services to support the device features. Others are adding their own flavors of casting technology to move content from one device to another.

The small form factor or thin-client approach to secondary set-top boxes in the home is consistent with trends in set-top boxes overall—to virtualize features into a master box, the cloud, or the operator network. For this reason, this hardware trend is likely to continue. However, the casting trend is in its early stages, and consumer use cases are still emerging. Thus, we are only beginning to see the potential impact that technologies like Chromecast could have on the TV and video services market.

The emergence of 4K

Prices for 4K televisions continue to plummet, falling even faster than they did during the early days of HDTV. As a result, the likelihood of mass-market adoption of 4K grows greater with each passing day and each drop in price.

Content production for 4K is in its early stages. Content producers see value in producing in 4K resolution since a superior quality master file produces better-quality viewing at lower resolutions. However, many studios are still acquiring the equipment and editing tools necessary to produce 4K content. Delivery remains the key sticking point. Currently, Blu-ray discs can accommodate 2K, but not 4K, content. OTT services are planning to stream 4K content, but only end users with very high-speed broadband connections will be able to successfully stream the service. So, while 4K is on its way, there remain a few obstacles that must still be overcome.

Parks Associates will address these and other issues related to the connected consumer and content distribution at our upcoming events:

CONNECTIONS™: The Premier Connected Home Conference, May 13-15, San Francisco

CONNECTIONS™ Europe: Monetizing Strategies for the Connected Home, November 18-19, Amsterdam

Brett Sappington

Brett Sappington

Senior Director of Research

As a director of research at Parks Associates, Brett Sappington leads Parks Associates services research team, including access and entertainment services, digital media, OTT, cloud media, video gaming, and technical support services. Brett is an expert in worldwide television and broadband services. His personal research focuses on the activities and trends among operators and the market forces affecting their businesses. Brett is a regular speaker and moderator at international industry events.

Brett has spent over eighteen years in the industry as an analyst, executive manager, and entrepreneur. Previously, he founded and served as vice president for Teligy, a software company specializing in software for wired and wireless communications systems. Brett established new divisions for networking and audio/multimedia software for Intelligraphics. He has also been involved in the development and marketing of early-market products for 802.11 wireless networking, VoIP, and other technologies.

Brett holds an MBA from the University of Texas at Austin with a concentration in high-tech marketing and a BA in physics from Baylor University.

Industry Expertise: International Digital Living Trends, Television Services (IPTV, cable, satellite/DTH, terrestrial/DTT), Broadband Services, Multiscreen Services, Value-added Services, Cloud-based Consumer Services, Set-top Boxes, Residential Gateways, Electronic Program Guides, Video Search and Recommendation, Video Metadata, Middleware, Technical Support Services

© 1998-2018 Parks Associates. All Rights Reserved.