Following on from that, can I ask Ian whether the consumer wants a connected home?
Ian Valentine, Miniweb
It's very interesting trying to understand what a consumer wants. The most important aspect of any product in retail is that it has to satisfy a consumer demand, and yet consumers don't know what they want. If you were to have asked someone ten years ago whether they wanted to carry around their complete music collection in their pocket, they would have said no. Had I been asked, I would absolutely have said no because I was very happy to sit listening to my vinyl music in my favourite armchair. So it is very difficult to predict what consumers will want but the answer to the question has to be a firm ‘yes'. Consumers do want a connected home, and the reason is that they will never become slaves to a single device. It is not a question of the Set-Top Box being the hub of the home or of the PC being the hub of the home or even the mobile phone being the hub of the home. What matters is that content that you want can be used when you want it, at the point where you want it. People, by and large, are time-poor and cash-rich an they will buy bits of equipment that give them their entertainment in their own way and that's what is at the heart of the connected home. Being able to use your time and your places in the home in the right way to consumer the content you want, whether it be interactive or conventional entertainment, consumers want this.
Chris Forrester
Paul, can I ask you, do consumers want the connected home?
Paul Entwistle, Pace
Yes! I totally agree with Ian. Consumers, however, do not want to invest in a network infrastructure. They don't want an IT system in their home but they do want all the benefits that come from a home that is networked and the devices that are connectable. They want the simplicity that will allow them to actually use the services that a networked home gives them. Just imagine the simple case that I have recorded all my favourite programmes on my PVR in the living room and I want to watch some of them elsewhere in the house. This is a simple task but it requires a network connected home. So in our view, absolutely, the consumer wants a networked home and the benefits that come from that.
Chris Forrester
Huw, is this the same dream in the IPTV space and for Amino?
Huw Price-Stephens, Amino
Absolutely. People do look at us and sometimes say that Amino is only a Set-Top Box company interested in delivering boxes which connect services directly to TVs. This is not the case. The STB brings those services into the home to the TV and at a reasonably low cost. But we have to do things which are meaningful to consumers especially those who have no interest in technology and just want the convenience of being able to access their material wherever they are. In our view, consumers are interested in the connected home but if you were to ask them, they would not express it in those terms because it is about the experience they can get through these devices that is important.
Chris Forrester
We all know how successful Sky+ has been in the UK, with some 4 M connected homes, yet the message initially was a very difficult sell. It was difficult for the consumer to understand the benefits they would get, although they absolutely understand now. So, to what extent does consumer education come into the challenge that has to be overcome?
Huw Price-Stephens, Amino
This is critical. The first time I personally experimented with PVR-type services was some 12 to 13 years ago and it was a question of seeing is believing. It doesn't much matter what you told people about the experience they were going to be able to have, even if you showed them the type of control they might be able to enjoy, they didn't actually understand it until they themselves sat down with the remote control, pressed the button and said ‘ah, it actually does this'. In our view the education portion is absolutely key. Consumers have an enormous capacity to accept an evolutionary change of the TV experience but they cannot express what they might want from it very easily.
Paul Entwistle, Pace
The PVR is a really good example of a complete revolution of broadcasting. Had you gone to someone and told them you could now rewind live television, that would have required a huge leap of understanding but once you have tried it, it is a phenomenon. We will see this with the connected home, although there are many services that people want to make work together and to understand better and the technology is coming up to meet that challenge.
Chris Forrester
José, you are putting services into every digital television in a home. You don't have to worry about the connected home, do you?
José Luis Vázquez, Mirada
Think about the successful services and yes, broadcasting does get into every TV set in our home but it is interactive services that make the entertainment more attractive. Interacting for gaming, or voting or playing along, you need the connected home. Responding to the question ‘does the consumer want the connected home?, what they do want is access to their entertainment when it suits them and at every device. Stopping and recalling programmes from a PVR is great but generally consumers do not want to invest time on learning about new technology. Humans are strange animals, we lay back to enjoy our technology and it is difficult to sell technology to people. They don't want to learn, they don't want to invest time, because time is the most precious thing they have. If you are able to demonstrate in some way, or by word of mouth, that this new technology saves time or increases their enjoyment, this then is the way to succeed.
Chris Forrester
Ian, I don't necessarily want you to put a BSkyB hat on but being cynical just for a minute, isn't the PVR just a very useful mechanism to make your subscriber sticky?
Ian Valentine, Miniweb
Absolutely. This is terribly important and the churn figures at Sky, within a Sky+ home, is reduced to an almost non existent level. Once viewers have Sky+, they do not want to live without it. Unless you can offer just as good a TV experience they will not switch. But there is a lesson to be learned and that is that the PVR is one of those rare technologies that totally replaces what has been there before. The fax machine did not replace the letter. The video call has not replaced the voice call and television has not replaced radio. But the PVR to all intents and purposes replaced the VCR. The reason for this is because it is taking the functionality of a VCR and integrating it into the television experience. We saw this very much when we moved from TIVO which was a fairly complicated early adopter product, to Sky+. Initially at Sky, we were criticised for not having all the features that TIVO offered.
However the reason it became mass market and became a ‘must have' was because it maintained the simplicity of television. You could look at something on a grid, you could select it from the EPG, you could watch it, pause it, or record it, all from a device that made it just as easy as changing channels. Bringing that simplicity to the consumer made it easy for viewers to embrace it. This is a lesson to be learned in home networking and this is why I see it taking three to five years. It will take time for the quality of the product to become so reliable that you simply pick up a remote control to use it and it works 100% reliably, all the time, and the network admin experience is as simple as television. When it is as simple as television is when it will become mainstream.
