Europe : Examining the collision between broadcast TV and broadband video, involving multiple markets, the report makes sense of: what new - and potentially disruptive - innovations are at play for scheduling or distributing video; what it means for the existing value net structure and incumbents, how competitive pressures are increasing; and what the shifting of time, place and media (via P2P) trends mean; etc.

Findings
P2P marks a radical shift in the architecture and availability of broadcast video assets, and severely reduces competitive entry barriers for video distribution. Using P2P networks, both video creators/producers (that create and fund content) and content packagers (that commission and aggregate it) can reach and sell to end users directly; the former disintermediating the entire value web, while the later disintermediates traditional distributors. However, instead of P2P being framed as an alternative to broadcast TV, it’s more likely an augmentation, an additional route to market; albeit, one with the potential to disrupt a fragmenting TV viewing constituency, and enabling firms and amateurs alike to become asset creators/producers/distributors.

Conclusions
1. The current state of broadcast TV
TV channels are undergoing a simultaneous confluence and fragmentation, a Pareto principle perhaps, resultant of consolidating large channel packagers coalescing around more populist – commodity – fare, while new digital entrants package ever more niche – differentiated – channels and programming. An increasing array of TV platforms and end devices affords users real diversity in how they choose to consume and/or create video.

2 The current state of broadband video
High-level convergence of media, telecoms and datacoms, where any TV/video service can be sent across any network (fixed/cellular/wireless), is fragmenting the distribution market, increasing competition and speeding commoditisation. Channel packagers have additional distribution options, creators can bypass packagers and distributors, and users have more video access and control (push, pull, P2P). Intelligent edge devices enable user generated video, and – faster than real-time – file distribution via efficient, swarming P2P networks; further augmenting millions of concurrent P2P users. Residential gateways that control data access and services, and multi-purpose flat-panel displays, are the eye of the – home environment – storm between multiple markets.

3 Traditional broadcast TV value net structure and pressures
The broadcast value net will continue to grow, featuring far more segments and increased complexity, from iTV to IPTV, from channel packagers to distributors. New entrants and substitutes will threaten incumbent business models and put aggressive pressure on margins, and innovative new products they diffuse into markets will change technology performance dimensions and customer buying criteria. Firms will need to embrace new offerings in order to find new growth and remain competitive, and explore ever more niche content demands, i.e. look to the margins, to aggregate higher volume, more personal, smaller transactions.

4 Innovations that are sustaining or disruptive, and to whom
P2P, being the most likely disruptive innovation for video distribution, will enable new firms to threaten distributors which fail to compete on content granularity, volume of sources, and cost. The ability to media shift may be one characteristic customers use in adopting P2P-based video services. New P2P video distributors will force the broadcast value net structure to expand, and increasing competition margin pressure.

5 Shifting of Time, Place and Media
As sustaining innovations, DVR systems will reside within incumbent services or as augmented features of STBs, online VoD providers, etc. Commoditisation of basic features will be accelerated by multiple, competing value players rushing to diffuse them – consequently forcing some players towards evolved features, premium markets, and modularisation of previously interdependent interfaces within the value net. Freeing users from the TV/home constraint will be achieved with place shifting solutions via streams, downloads and device transfers. Adoption characteristics will differ to iTunes/iPod, as video place shifting requires a user’s total attention, most appropriate for nomadic scenarios; of which a manifestation may be a preference for short – bite size – video clips. End-to-end systems with rich content libraries may prove difficult to negotiate and offer. Media shifting and P2P blur the professional/amateur divide, making possible point-to-point distribution of video content and user-generated videos. In combination with the explosive popularity of blogging, syndication, and ‘long tail’ economic models, will create a virtuous circle. Video professionals and niche markets now have a viable distribution alternative to broadcast, providing them with a direct sales route and zero costs.

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Table of Contents

- Broadcast Market Overview
- Trends
- Digital Television
- Appliances
- Digitisation
- Summary of Findings

- Broadband Market Overview
- Access Methods
- Network Evolution
- Trends
- Peer-to-Peer (P2P)
- Telecom TV
- Appliances
- Summary of Findings

- Broadcast TV Value Structure
- Broadcast TV Value Net
- Accelerating Complexity
- Embracing Innovation
- Summary of Findings

- Innovation: Which Distribution Technology is Disruptive
- Buyer Performance Criteria
- Distribution Comparison
- P2P Distribution: A Disruptive Innovation
- Summary of Findings

- Shifting: Time, Place and Media
- Service Comparison
- The Home Environment
- Time Shifting
- Place Shifting
- Media Shifting
- Decentralised Media
- Metadata

Founded by Stephen Griffiths, strategist to global telcos and ex-Director of AGENCY.COM, Breakthroo was set up to identify and assess new digital product opportunities, in order to help brands find new business growth.

Breakthroo apply a sophisticated innovation methodology and set of predictive diagnostics to identify and assess new product opportunities, because when no product or market already exists, there’s no data to rely on. With 10-years interactive and telecoms expertise, Breakthroo has provided global brands with strategy and new growth ideas to exploit multiple digital channels, i.e. Web, Mobile/Wireless, Interactive TV and TV.

About Stephen Griffiths
Stephen has led global firms in Mobile, Web, iTV and broadcast TV; strategised for clients in Europe, US and China; and, designed and managed Europe’s 1st: multi-device Portal, and multi-device Downloadable Product.