Medientage 2011: German TV industry faces changes

Jörn Krieger ©RapidTVNews | 21-10-2011

The prospects of HDTV, 3DTV and over-the-top services (OTT) in Germany were central questions at the panel discussions of the Medientage München conference on 20 October 2011 in Munich.
The panellists agreed that high-definition television will establish itself in the mass market as the general TV standard. For many analogue TV households HDTV is also the driving force for the transition to digital television - in particular after the purchase of a flat-screen TV set as the improved picture quality is especially noticeable on their screens.
It's also clear now which direction the development of 3DTV is going take: The media industry expects that the three-dimensional format will mainly be used at single events, but not become the new general TV standard following HDTV. In particular in sports, documentaries and music concerts, 3D provides additional value, but not much in news broadcasts.
Wolfgang Elsäßer, managing director of Astra Deutschland, announced that the satellite operator will launch a 3D showcase channel on its main orbital position 19.2° East in December 2011. TV broadcasters and other content providers can use the platform to screen selected 3D programmes such as documentaries or concerts. Elsäßer stressed that Astra's free-to-air 3D channel would not be competition to the 3D offering of pay-TV broadcaster Sky Deutschland, but act as an open 3D platform which could also be used by Sky to raise awareness for its own 3D content.
A lot of discussion surrounded OTT services which use the internet connection of hybrid flat-screen TV sets and set-top-boxes to reach TV screens. Solon Management Consulting expects strong growth: For 2015, the consulting company predicts 23 million connected TV sets in German households. In 2010, there were just 3 million.
Through OTT, the providers of on-demand content such as maxdome, Videoload or LOVEFiLM which have so far mainly been used on PCs as well as sole web-TV channels can enter the living rooms, thereby competing with conventional TV channels for viewers. At the same time, a gate is opened for foreign companies such as Apple, Google, Hulu or Netflix to enter the TV screens in German households.
Also, local TV broadcasters, smaller pay-TV operators and foreign-language channels can use OTT solutions to smoothly get to viewers. The advantages: They don't have to work out carriage deals with cable operators and don't have to pay carriage fees. They also don't have to rent satellite capacity.
Germany's largest cable operator Kabel Deutschland doesn't fear this as competition to its own business model, though. "OTT is the best thing that could have happened to us," said chief operating officer Manuel Cubero. It would make clear to customers why they need high internet data rates such as 100 Mbit/s which are offered by cable operators. The more customers sign up for internet and telephony at Kabel Deutschland, the better it is for the company's turnover, explained Cubero. While the average revenue per user (ARPU) is only €16 for a TV customer, it amounts to €30 for telephony and internet customers. "If all our customers switch over, then our corporate value will double!"
An example of how cable operators can use OTT services to their own advantage is provided by Eutelsat's direct-to-cable platform KabelKiosk. With the white label solution KabelKiosk Choice based on the HbbTV standard, network operators can offer a multimedia world to their customers which complements conventional linear television through interactive services such as on-demand movies, TV recommendations and local information.
Instead of leaving the business with its own customers to third parties, network operators can thereby become active players in the OTT world themselves. As further advantages Martina Rutenbeck, head of Eutelsat in Germany, sees the strengthening of customer retention and the possibility to establish new business models and revenue sources. A benefit for network operators is their existing customer relationship which they can use for billing services, for example for VOD movies, while new OTT players have to build this up first.
Thomas Eibeck, director technology, products & services at cable company PrimaCom, welcomed Eutelsat's initiative. Such an offering would be a "must have" for cable operators. It wouldn't be possible to do everything on your own in future, he said, so companies should be open for collaborations. Wolfgang Heer, managing director of Bundesverband Glasfaseranschluss, the industry association of fibre-optic network operators, was also open minded as such as service would enable companies to gain more value out of their networks.
According to Rutenbeck, the first trials with KabelKiosk Choice are currently underway. At the market deployment in early 2012, the first partners to use the service will be announced.