Ericsson is promoting is vision of ‘TV as a service’. The concept of a headend in the cloud is potentially transformative but the complexity of the television industry and market fragmentation have so far made it difficult to deliver.
The term television as a service echoes the approach to ‘software as a service’ through which centrally hosted software is generally licenced on a subscription model.
Elisabetta Romano, head of television and media at Ericsson, said Ericsson would introduce its vision for television as a service at IBC.
“As the entire media value chain undergoes enormous change, Ericsson’s transformative solutions and services will enable our customers to thrive in this new Internet age of TV,” she said.
The concept of television as a service is potentially attractive to media companies, allowing them to concentrate on producing and promoting programming and letting others deal with the dirty details of distribution.
Television and radio have always historically been seen as services. The promise of television channels and radio stations is of continuous provision of entertainment and information.
Pay television operators are often characterised as service providers, increasingly providing television and video as part of a suite of communications services.
People typically pay for the service, the availability of these services, rather than the programming itself.
More progressive service providers recognise that people want more flexible and personalised access to media on demand, hence the success of services like Netflix.
The challenge for the traditional television industry is to offer such flexibility within the constraints of well-established rights models for television and video distribution.
Ericsson is packaging its proposition as MediaFirst, from virtualised video processing and media management in the cloud to playout and publication services and distribution over multiple networks.
Television is long overdue for transformation but the industry structure makes that problematic.
The television experience is aggregated from multiple service providers, programmes, channels, networks and modes of delivery. No single service provider owns the experience.
Pay-television operators come the closest to packaging it as single service proposition, but even they are mainly aggregators of other services.
Many of those services are seeking broader distribution and are fundamentally opposed to having them aggregated and repackaged by potentially dominant service providers.
The challenge for the television as a service proposition is that there are multiple service providers all seeking to have a direct relationship with their users and viewers.
Another problem is that the market is fragmented. As the informitv Multiscreen Index shows, while broadcasters and channels can have enormous reach, there are only a dozen or so pay-television services with more than 10 million subscribers.
Even AT&T, which is now the largest pay television operator in the world, outside China, only has 37.82 million television subscribers across its services. It has nearly 90 million mobile subscribers.
According to Ericsson there were 3.2 billion smartphone subscriptions in 2015, with a forecast of 6.3 billion in 2021.
Television is a very different business to mobile, but there is a massive market opportunity to transform the multiscreen video experience, but there is still a long way to go.