While new service launches and original series often grab headlines, much of the value a pay-TV provider can offer is around the packaging and presentation of the content, the improvement of the user experience, and of course, in the introduction of new technologies.
Telco Transformation joined Clara Mai Kunstmann, senior director and head of OTT & VOD Solutions at TDC Group , to talk about new video technologies and creating new experiences and packages in the TV/video world. Kunstmann is responsible for developing OTT and IPTV products for all TDC's platforms (mobile, web, connected TV, STB, gaming consoles etc.), from identifying and strategizing new services all the way through development and rolling them out.
Kunstmann is also a founder member of the VTAB -- Telco Transformation's video advisory board, and helps us with orienting our coverage of the industry and providing insight into major trends in this space. (See Introducing the Video Transformation Advisory Board .)
In Part 1 of our interview, Kunstmann talked about VoD services offered by TDC under the YouSee and Blockbuster brands. Here she addresses the user experience, UHD, virtual reality (VR) and new content packaging strategies. (See TDC's Kunstmann on VoD in Denmark.)
Telco Transformation: Beyond the video services you offer, are you also looking at innovation in other areas of the TV experience?
Clara Mai Kunstmann: Our main focus has been providing TV customers with a broader choice. Most customers watch between seven to ten channels. But they may have 70 channels. So how do you show them that they can get value out of the full package?
We are conducting a huge project at the moment, to enrich metadata with a new metadata team, looking at how to implement recommendations. We want to change the user experience to have more recommendations.
We are also looking at enabling global search even including content we don't have. We want to try and let people find the content they want even if we aren't carrying it. It's very frustrating for people to have to go from app to app, trying to find out where a movie or show is. For example, if I was the Internet Movie Database (IMDb) I would look at ways to provide that information to users, because I think it would be valuable.
TT: Are you looking at UHD?
CMK: Yes, we are looking at it. The new box we are launching for the network DVR service is 4K ready. We don't have a timeframe yet for launching services -- content is limited still. And it is an expensive investment, especially in the beginning. And you need to be sure you have the network capacity.
I think it will ramp up -- special events, especially sports, will be 4K to start with, then maybe it will become broader. But we have also seen in our research that if you don't have a large enough TV, the difference isn't that much.
It's also content -- the content has to be compelling, it has to create demand, and make us go in the direction of the new technology to satisfy that demand. We want to do it, but with the right content, and we have to be sure our system is ready for it.
Today we are getting questions about UHD, mostly from tech-savvy, early-adopter users, but it's still a comparatively small group compared to the total user base.
TT: What about virtual reality (VR). Are you looking into that as well?
CMK: We are maybe not looking into it yet, but following it. I think this what is going to happen with VR: It's being used in porn, and gaming is really going forward with it. I think some events will look at VR but I'm not sure most people want to see normal TV in VR, like news and TV shows.
In fact, at the South by Southwest (SXSW) event this year, a neurologist talked about it. He said it was good that people were looking at VR, but the human brain can't comprehend VR for more than 35 minutes. It gets disoriented, gets motion sickness.
I think it will probably be led by gaming, and maybe porn as well. And then it will be events and special content, but I don't see it replacing regular TV. It creates a lot of pressure on the mind and eye -- VR demands a lot from people [physically]. I think it is something you choose for specific events, not for standard viewing.
TT: We hear a lot about cord-cutting in the US, and even the UK. Are you seeing it ramp up sharply in Denmark?
CMK:Cord-cutting is definitely happening, though slowly. We are not seeing a major tendency, but we do see a tendency towards downgrading from full to medium packages. That's probably more worrying. But that's why we want to follow an aggregator strategy and give people choices, not only for linear TV channels but for SVoD as well.
Cord-cutting is a fact. Downgrading is a fact. But if we look at minutes of TV being watched, it's just down eight minutes this year, and it was flat last year compared to the year before. So people aren't watching less TV, even though streaming usage is growing rapidly. It's all additive -- streaming is additive viewing.
At the same time, I'm not sure you can entirely trust these numbers. The way we measure is how we have measured for the past 30 years. Does it really match the media consumption picture today? I think a lot of this will be changing in the coming years, and we will have different ways to measure and track TV viewing.
Looking at [cord-cutting in] the US, I also think TV packages are very expensive, and there is a lot of competition. Their content is also very busy. Denmark has a very different tradition of making content. Here -- and also I think in the UK -- it's not just "busy" [content] all the time. It's also something you gather around, in the home.
But yes, if broadcasters and other companies do not give people convenience and value then people will start to drift away. Today, most broadcasters are doing their own services, and I think that's great. If I was in their place, I would also like to do the same thing. But users don't look for content that way. They don't go from place to place trying to find what they want. If they don't find it, they just watch something else. A bundle, offered by an aggregator, gives people what they need.
TT: We're seeing skinny bundles in the US. Are you also looking at different ways of aggregating and presenting content?
CMK: We are seeing some changes in packaging of channels, like you have now an NFL channel. I think we will see more of that but also with more flexibility. The NFL channel will only show one sport, but if you are interested in one sport, maybe you are also interested in other sports. Like cycling -- the Tour de France, for example.
We are trying to create a more free package selection process for our customers, and allow them to shift channels on the fly. And we also want to include SVoD services as well -- we see Netflix and HBO as channels. More expensive perhaps, but basically channels.
So we are working on developing à la carte: basically giving customers free choice. If you are on the full package or the basic package, each channel has a price and users get vouchers, which they can use to pick their preferred channels. But also, they can use them to pick Netflix and HBO.
I don't think [the timeline is defined yet], but we would like to implement this. It would be interesting.
— Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation