Yahoo-Intel Widget Engine Gives Broadcasters Pause for Thought

The first TVs fitted with Yahoo-Intel’s widget engine have begun to ship in Europe amid speculation about their potentially disruptive impact on the TV landscape.

On the one hand web-enabled TVs retailing over £1000 (US $1600) are unlikely to attract a mass market, outside early adopters, given that over the past 18 months the industry has made a pretty successful attempt to encourage people to upgrade to flat-screen HD screens as digital switchover gathers pace.

Yet the no-fuss plug and play internet access that widgets provide, albeit in limited ‘walled garden’ form, will give broadcasters and platform owners pause for thought.

“It’s not a slam-dunk competitor but a development that chips away at the edges of the pay-TV business,” says Nigel Walley, managing director of media strategists Decipher. “Pulling up a widget on the Samsung TV pushes the broadcaster’s EPG to one side, potentially delivering on-demand content outside its control. Widgets will raise the appetite among consumers to use the main screen for more activity, putting pressure on STB manufacturers to raise their game.”

Samsung TV was first to launch in April with a six-month exclusive deal to market Yahoo TV Widgets software in its Internet@TV branded displays. Yahoo's UK channels include widgets for news and sports reports, Flickr and, as of mid-July, YouTube.

Panasonic (Vieracast), Sony (Applicast), Philips (Net TV) and Sharp (Aquos Net) will follow with similar functionality. In the US Yahoo’s widgets are currently available on Samsung, Sony and LG Electronics hardware and from October on VIZIO.

Samsung says it has talked with UK broadcasters about incorporating their on-demand players into its widget gallery. Yahoo has named the BBC as a forthcoming developer (an iPlayer widget is anticipated) alongwith US brands CBS, Showtime, Amazon, and CinemaNow.

“We are trying to bring relevant branded online applications into the TV environment,” says Robert Shaw, general manager at Samsung. “Samsung’s aim is to grow hardware sales but we understand from Apple’s experience that access to content via hardware resonates with consumers.”

Hopes To Replicate App Store/iPhone Success
The Apple analogy is pertinent since the Yahoo-Intel platform has been designed to replicate the phenomenal supporting role that the App Store has had on sales of the iPhone. A Widget Development Kit allows third parties to relatively easily and inexpensively code for the constrained hardware capabilities of connected TVs using standard internet scripts JavaScript, XML and HTML. Yahoo aims to have 100 widgets in the gallery by the end of the year and says that over 1000 developers have requested its WDK.

Advertisers could experiment with branded content affiliated to or embedded within programmes. Content providers may seize the opportunity to create and monetise their own widgets featuring their own content.

The applications which will cause most concern to broadcasters are not those offering weather reports, stock updates or Twitter chat but those streaming longform, professionally produced VOD.

The obvious implication is that viewers will be distracted from the main screen, but more acute for pay-TV providers is the thought that TV and movie rental services like Blockbuster, or perhaps widgets from Warner Bros. or Paramount, might offer viewers VOD which circumvents their own premium subscription services and existing contracts.

BSkyB – by far the UK’s leading payTV provider with 9.4m subs—is keeping a watchful eye on the situation.

Potential Conflict With Broadcasters
“We’ve seen this coming,” says Sky’s head of product design and innovation Brian Lenz. “It’s part of an overall growth of broadband connected devices delivering internet content directly to TV. If there is content that we can’t provide then there may be potential conflict but it is ad-funded broadcasters who will be more affected.”

Sky’s Sky+HD box has an Ethernet port for a pull-VOD service which is earmarked for launch within the next year.

Lenz adds, “We’ve looked at whether we could do away with a STB and go straight into TV’s but the fact is that TVs don’t have the processing performance of a STB, the capability to keep content secure, manage individual customer entitlements or present a user experience which is of high enough quality.”

Yahoo hopes widgets will capture the imagination of the significant number of people that its research says are consuming TV content while interacting with the internet from a laptop. However it’s unclear that combining the two functions on one screen will tempt a mass audience.

“A Flikr app is attactive because it’s a whole screen proposition but applications in which one person interrogates information in a sidebar or screen overlay are only going to interrupt the immersive experience which the majority of people want from TV,” says Chris Rourke of user experience consultancy User Vision.

Consumers are unlikely to appreciate TV screens cluttered with apps, yet they may appreciate access to great content delivered over the top of the dominant broadcast players. Essentially consumers won’t care how content is delivered, so long as they can comfortably find what they want.

Widget developers may be advised to work hand in hand with broadcasters and content owners in order to maximise their application’s impact around specific programming; while broadcasters or platform owners could head off the risk that widgets pose as disintermediaries and grasp the opportunity to fold them within their own EPG.

“Broadcasters pay thousands and in some cases millions of pounds to Sky and (cable platform) Virgin to get specific placement within the EPG,” notes Angel Gambino, advisor to social TV service MediaFriends. “Pay-TV providers like them will need to find innovative new ways to retain affiliate revenue for EPG placement when IP based search, recommendation and brand driven EPGs become part of the audience controlled landscape.”

All UK Eyes on Project Canvas
In the UK all eyes are on the BBC-led Project Canvas, a software proposition for next-generation IP and on-demand connected set top boxes. Currently in an industry-wide consultation period ending in September with a consumer launch scheduled for next year, Canvas will have the priceless cross-media promotional support of the BBC (and partners ITV and BT) and may well give connected TVs, in the UK at least, a short lifespan.

“The question is should the BBC support a dozen different consumer electronic brands or should we help shape the industry so that there is one common standard?” says BBC Head of Digital Media Technology Anthony Rose. “We think there’s a vacuum in this space for some leadership so that the internet hits the living room in the right way, rather than in a fragmented way.”