Convergence - new dog plays old tricks
Convergence – it’ll put everything where you want it, your devices will work in synch and everything will be rosy. Great name, great concept, but where’s the product? All that has been available so far are a few web-mail accounts that are too fiddly to use and a couple of PDAs that only work on Wednesdays.
But with the advent of digital TV and the desperation of marketeers, things are looking up. Recently, European satellite ISP Europe Online launched a music channel, Musaik, which uses both the internet and the ASTRA (Sky TV) satellite network to deliver downloads, streaming video and features to your home. Sounds good? It bloody well should be after all this time, but these things are never simple...
The company is launching further ‘channels’ this week and next, bringing the total number of streamed channels to ten – film, music, sport, adult, games, travel, news, lifestyle, reality and betting. This may sound a familiar line-up, but remember: this is not a pure-play TV or internet proposition -- a user logs on via a dial-up connection, but receives the stream from the satellite. Although this seems the worst of both worlds -- watching films on your PC and paying for both dish and ISP -- this is only the first incarnation of the service, according to John Morris, Europe Online chief executive.
‘We are planning to launch an alternative service provided via a set-top box [STB] in Autumn this year, providing VOD [video-on-demand] services through the same infrastructure. While the trailers and adverts will be streamed, the films will be stored on the STB and simply refreshed regularly from a central point.’
Some may recall a satellite ISP that launched a few years ago, as internet mania neared its zenith -- one with a rather similar name. What happened? Apparently the broadband ISP business just didn’t hold water: ‘It’s an equation: number of users times speed you want to offer times your total capacity. These numbers didn’t really add up for us, but by providing content-driven services via satellite, we can present a better offer. We believe the TV market will be bigger than the PC market of the next five years, in this area at least,’ says Morris.
Another technical point is that satellite broadcasts are managed through multicasting -- so the number of users is immaterial to the quality of the broadcast. This begins to make sense from a business point of view, and consumers are certainly buying it -- the company claims 20,000 users across Europe, in spite of the somewhat awkward set-up process. Previously, internet chat groups were full of concern over the ISPs bandwidth, but protest has quietened down, seemingly due to the shift in emphasis and the multicast element.
As Morris points out: ‘There are two factors in terms of the speed of convergence here -- consumers need to be comfortable with the technology and what they can get from it, and content providers need to be aware of the potential of different platforms.’ He says there is a big split between content providers licensing content for TV and for the PC. ‘There is a perception of the PC as the platform for piracy -- this is not true, but content owners are very concerned and they have to protect their investment.’
It’s not all bad news, however: ‘Content producers we have spoken to realise that the consumer is changing, that they are aware of new technology and are willing to use it, and this has prompted many of them to experiment with new technology and payment solutions. It’s like the old pirate radio scenario -- it was irreverent and consumers wanted it, so eventually the broadcaster [the BBC] was forced to acknowledge the problem and take steps to resolve it. This shows clearly that either you as a business come up with the goods, or the market will do it for you.’
Too right. As Napster has shown (where have those X million users gone?), there is demand and that demand will be supplied -- the only question is whether your old-school recording companies will be there. Convergence raises all these problems again, even before they’ve been solved offline. Looks like EMI et al have a lot of thinking to do...