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Connected Homes August 2019 Viewpoints

Technology Analyst: Christian Feest

Fragmenting TV-Streaming Services

Why is this topic significant?

Several companies are launching new TV-streaming platforms. Many of these companies own the rights to particular content catalogs and will restrict access to this content to their proprietary platforms, resulting in a more fragmented TV-streaming-services market.

Description

In the United States, the vast majority of the TV-streaming market is currently served by three operators: Netflix, Amazon Prime Video, and Hulu. Netflix, the market leader, serves approximately 140 million subscribers worldwide, who are able to access an extensive catalog of TV shows and movies—the rights to many of which are owned by several competing media companies.

Several new players—including Apple, Disney, NBC, and HBO—are entering the TV-streaming market in 2019. Disney's Disney+ service is due to launch in November 2019. In addition to owning the Disney films, Disney owns the rights to the Marvel and Pixar films, 20th Century Fox content, and all ABC content. This content, much of which has been available on Netflix, will now be available on Disney+ only. Similarly, WarnerMedia, which owns the Lord of the Rings and Harry Potter film series as well as all HBO shows, is launching its HBO Max streaming service in spring 2020. NBC Universal plans to launch its streaming service in April 2020. The service will include the TV series The Office, which some industry analysts have reported as accounting for over 7% of Netflix's total views in 2018. Apple is also launching its own streaming service—Apple+—in fall 2019. Although Apple lacks the back catalogs of its competitors, the company plans to invest heavily in new original content and has recruited several big-name directors and actors to contribute.

Implications

The availability of an extensive content catalog for a low price (Netflix's basic streaming plan costs $8.99 per month) has been a significant factor in Netflix's success. Now that Netflix has grown in value off the back of this content catalog, the content owners are looking to reclaim some of this value for themselves, which will likely result in a more fragmented TV-streaming-services market.

Impacts/Disruptions

An increased number of the TV-streaming platforms could see the total number of streaming subscriptions increase as customers subscribe to multiple platforms. For many existing customers, however, much of the value of a TV-streaming subscription such as Netflix comes from the ability to access many TV shows and movies in a single place. In the short term, the fragmentation of the TV-streaming market could slow the trend of households' moving away from cable-TV subscriptions to streaming alternatives. However, in a longer time frame, streaming subscription growth is likely to continue to outpace growth of traditional cable-TV subscriptions.

As TV-streaming services become more fragmented, providers lacking a sufficiently desirable content catalog are likely to struggle to attract customers who already subscribe to other services. In order to stimulate demand, TV-streaming providers will face pressure either to procure popular offerings (such as The Office) or to produce their own engaging original content. Failure to do so means that a lack of demand for some streaming platforms could pressure their operators to reduce subscription prices—or move to monetize platforms via advertising.

Scale of Impact

  • Low
  • Medium
  • High
The scale of impact for this topic is: Medium

Time of Impact

  • Now
  • 5 Years
  • 10 Years
  • 15 Years
The time of impact for this topic is: Now to 5 Years

Opportunities in the following industry areas:

Media, film, TV, advertising

Relevant to the following Explorer Technology Areas:

Gesture Interfaces

Why is this topic significant?

Gesture interfaces in the home have typically been limited to gaming. Ongoing innovations and price decreases in gesture technology could enable new applications.

Description

Gesture interfaces use sensors to detect physical movements—such as finger pointing, hand waving, and head nodding—and interpret these movements, converting them into commands for controlling electronic devices. At present, gesture interfaces are far less common methods of controlling connected home devices than are touch interfaces (for example, touch screens and buttons) and voice interfaces (for example, smart speakers). Nevertheless, a handful of commercially available connected-home devices utilize gesture interfaces.

So far, gaming has been among the most common applications of gesture interfaces in the home. Devices such as Sony's EyeToy and Nintendo's Wii remote controllers have enabled gamers to use gesture interfaces since at least the early 2000s. Microsoft developed its Kinect depth camera to enable Xbox users to play games via a gesture interface rather than a conventional controller, but the Kinect gained little commercial traction for this purpose. Instead, the advanced and inexpensive sensor features of the Kinect made it popular among third-party developers, who have developed various applications that could potentially find uses in connected homes. For example, researchers from the Massachusetts Institute of Technology have demonstrated a gesture-controlled picture-scrolling interface. In the demonstration, a researcher scrolls through, moves, and zooms in and out of various pictures. Microsoft has discontinued the original Kinect, but recently released Azure Kinect: a cloud-connected sensor kit to enable developers to create new applications using Microsoft's AI and cloud technologies.

Google's latest smart display—the Nest Hub Max—incorporates a camera with gesture-interface functionality. The gesture interface enables Nest Hub Max users, for example, to play and pause videos with hand gestures. Interestingly, Google opted not to include a camera in its previous smart display, citing privacy concerns (as "Smart Displays and the Future of Virtual Assistants" in the November 2018 Viewpoints covers).

Implications

Much of the technology for gesture interfaces already exists, but limited applications and potential privacy concerns may inhibit widespread adoption in the near term. Remote controls and voice interfaces, for example, already enable users to play and pause videos as they can do using the Nest Hub Max's gesture interface. Further, gesture interfaces may require constant monitoring and remote processing of video feeds, which raises potential privacy concerns. Without must-have gesture-specific applications or local gesture processing, the costs of gesture interfaces may outweigh the benefits for many consumers.

Impacts/Disruptions

For some specific applications, current gesture-interface technologies could enable important new products. For example, gesture interfaces could enable speech-impaired individuals to interact with virtual assistants using sign language.

Further out, continued evolution of gesture interfaces through advances in computer vision and AI could enable a range of new applications. Artificially intelligent home-automation systems could recognize subtle, unintentional, gestures and adapt the user's environment accordingly. For example, if a user is squinting at a screen far away, a virtual assistant could recognize this gesture and make the screen larger or brighter. Similarly, a virtual assistant could recognize body language associated with stress, say, and adapt the lighting or recommend music or movies to the user on the basis of the user's emotional state.

Scale of Impact

  • Low
  • Medium
  • High
The scale of impact for this topic is: Medium

Time of Impact

  • Now
  • 5 Years
  • 10 Years
  • 15 Years
The time of impact for this topic is: Now to 5 Years

Opportunities in the following industry areas:

Artificial intelligence, machine learning, sensors, user interfaces, gaming

Relevant to the following Explorer Technology Areas: