It is 20 years since the birth of video on demand (VoD). Time Warner was pushing the envelope in Orlando, US, over cable networks. BT in the UK made Colchester the VoD capital of Europe. All this was driven by the vision that interactivity would change our approach to video/TV consumption. Ericsson’s first major broadband push was around Residential Interactive Broadband Services. What can we learn from the first 20 years of interactive/on-demand video, and why will the next five years in the Networked Society be very different?
In the initial VoD era, later labeled iTV, it was all about turning the video rental market into a networked revenue stream. Before it even started in volumes, internet access became the market maker for DSL and cable. Switched Video Broadcast was introduced as an innovation for delivery of broadcast services across copper-based networks. Finally, VoD and broadcast TV became part of a triple play bundle before the market took off.
Access to attractive content offerings has always been a key issue for on-demand video, to a point where the original services’ VoD offerings could be referred to as “very-old demand.” The worlds of the operators, content owners and consumer electronics manufacturers collided at the triple-play intersection, and a dual vision emerged for managed IPTV services in coexistence with over-the-top video. This pioneering work has resulted in the big boom for the sales of smart TVs or internet TVs during the last three years.
The missing links in the large-scale adoption of interactive/on-demand video are now clearly visible. Interactivity/on-demand and personalization goes hand in hand. Interactivity is not a family experience. Interactivity is not only about video consumption. It is about taking national advertising through local to personal ads as an instrumental part of the business model transformation. Users have historically considered the internet and voice as commodities and paid a premium for mobile and video. The center of gravity for interactivity will be where mobile and video meets. The big question is how quickly will we move toward such a “video-all-demand” world?
Here are my predictions for the future of interactive video:
* Any video offered on-demand has a higher value than linear video. This applies to users as well as advertisers. With live sports being the big exception.
* Personalization of video is here to stay. We have quickly moved from one TV per family toward two to three screens per individual.
* The interactivity has become multifaceted and involves complex relations between multiple screens across ecosystem borders.
* With powerful networks and high-resolution screens in a variety of sizes, two of the main innovation risks are eliminated. Now we can focus on the on multiscreen interactivity and the business model transformation for user fees and advertising revenues.
* The initial vision will be realized. It just took us 25 years to get there, with the next 5 years being the most interesting part of the journey.