Thursday, March 10, 2011, 9:56 AM ET|Posted by Will RichmondPay-TV technology provider NDS is introducing two products this morning that aim to turbocharge new content and applications offerings from pay-TV operators. The moves are further evidence of how the line between traditional TV and over-the-top content/apps continues to blur. Last week, NDS's SVP of Advanced Products and Markets Yoni Hashkes and VP/Chief Marketing Officer Nigel Smith walked me through the two new NDS products.
The first, dubbed "Infinite TV Exchange" creates a marketplace for content creators/curators to interact with pay-TV operators who want to add specialized channels to their linear and VOD line-up. With Infinite TV Exchange, professional content providers can upload individual videos, which either they, or third-parties, can then curate into cohesive, branded programming packages or "channels." NDS has initial commitments from National Geographic, Revision 3, SPEED channel, Watch Mojo, Red Bull Media and others, totaling up to about 100,000 hours of content to be uploaded to the market.
I use the word "channels" loosely because whereas traditional linear channels are centrally controlled and programmed, with the Infinite TV Exchange, the curation process feels more akin to the idea of assembling a playlist from various sources, according to editorial sensibility of the curator. The notion echoes themes explained in the timely new book, "Curation Nation" by Steve Rosenbaum. Yoni uses the example of a celebrity like David Beckham (or his staff more likely), sifting through uploaded soccer videos and pulling together "shows" on trick shots or defense tips, with a thin layer of transitional glue that makes the experience feel polished. The channel can then be branded as "David Beckham's World of Soccer," for example.
On the other side of the Infinite TV Exchange equation, pay-TV operators would be able view the available channels and use transactional tools to engage and negotiate with curators. Agreed upon channels would be carried by the pay-TV operator via NDS's Distribution Management System (DMS) to either digital set-top boxes or to connected devices. Since NDS is a large set-top box software provider, to 75 different pay-TV operators around the world, Infinite TV Exchange is a bid by NDS to add significant new value to those relationships (an imperative given the sharp drop-off in set-top box sales, most recently evidenced by Cisco's soft Q2 results).
As with any exchange, there needs to be a critical mass of both suppliers and buyers, and they need to materialize in parallel for Infinite TV Exchange to succeed. The easier part should be with content providers, many of whom are willing to experiment. The bigger leap is with pay-TV operators. For them, Infinite TV Exchange is a completely new paradigm to source content vs. the traditional, and highly structured negotiating process with cable network owners. It will take plenty of evangelizing by NDS, along with a few early adopter pay-TV operators eager to blend online content with traditional. Infinite TV Exchange is a bold play which will be interesting to watch unfold.
Meanwhile, the second new product being introduced today, NDS Service Delivery Platform, provides an API for app developers that serves as a go-between for pay-TV operators' set-top boxes and devices with apps, social networks and other online content. SDP addresses the growing issue that as apps become available directly on connected TVs, pay-TV operators are being cut out of the user experience. By incorporating apps into their experience that may already be available on other platforms, pay-TV operators would have a strong, new consumer value proposition.
Though it is still very early days for TV apps, a lot of industry people I talk to see TV apps as a natural evolution from apps' success on smartphones and tablets (and this line of thinking also leads to speculation on when Apple might introduce its own version of a Smart TV). As with Infinite TV Exchange, SDP adds new value to the NDS set-top box software.
Taken together, Infinite TV Exchange and SDP are additional proof points of how big pay-TV technology providers are creating products that unify traditional and over-the-top delivery. And there is a lot more technology to come, further enabling pay-TV operators to compete with over-the-top entrants. Anyone who thinks pay-TV operators are inevitable roadkill in the online video era is being far too premature in their judgment.
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