OpenTV: TiVo, We’re Not in Kansas Anymore


The lobby of Open TV’s corporate headquarters in San Francisco, California.

by Davis Freeberg, Staff Writer

Recently Tom and I interviewed Marc McCarthy, Vice President of Corporate Communications and Wesley Hoffman the General Manger of the North American Cable Division at OpenTV about their middleware services and the features that they are providing to some of their international customers. As the PVR industry continues to mature, it is becoming increasingly important for television providers to offer new services and features to their customers. This process has been painfully slow in the North American markets, but providers in Europe and Austrialia have been remarkably progressive with their offerings.

While many people may not have heard of OpenTV, over the last ten years they have created an impressive niche behind the scenes in the set top marketplace. They currently offer service to Foxtel in Australia, British Sky Broadcasting in England & the Dish Network in the U.S. Earlier this year OpenTV announced plans to develop an interactive solution in the Netherlands and Europe for UnitedGlobalCom. In total their middleware solutions exist in one form or another in 96 different countries globally.

While OpenTV provides different levels of functionally to each operator, I was most impressed by OpenTV’s 2.0 PVR that is currently available to Foxtel subscribers in Australia. Those lucky Aussies who happen to live in the land of Oz are able to experience interactivity in a way that Tivo and Media Center users can only dream about today. Their 2.0 PVR allows viewers to not only choose amoung 4 -8 camera angles on select programming, but even more exciting they are able to choose from 4 – 6 audio streams as well. Recently during a Rugby match they not only miked the tradional commentators, but also hooked up some die hard beer drinking hooligans to their audio streams as well. While FCC regulations might restrict what fans say or do on air in the U.S., because of Austrialia’s progressive censorship policies, fans were able to enjoy true color commentary from like minded fans.

The 2.0 PVR supports HDTV, live stats, interactive weather reports, karaoke & even interactive gaming for their customers. They have also begun to pursue partnerships to provide VOD directly to their customers and recently signed Playboy as a content provider. While Playboy has choosen not to broadcast their programming in HDTV, Marc did say that they had the ability to begin offering HDTV on demand if content providers will allow them.

In addition to their middleware and PVR software OpenTV also currently hold 417 patents worldwide. Unfortunately Marc and Wes were not geeky enough to give us the specific details on their patents, however it’s been clear for some time that a strong patent portfolio will be important to any television operator going forward.

While some in the blogosphere have been concerned about TiVo’s privicy policies, Foxtel’s policies are much more controversial by comparision. When users sign up for service and as they interact with their device Foxtel and OpenTV are able to track this information and digitally insert 30 second ads over the traditional ads that one would see through normal programming. By knowing a little bit about your viewing habits combined with your demographics it may mean the difference between a sports car or a mini van commercial. This can be great or it can be really scary.

By allowing advertisers to more effectively address their target audience, advertisers are able to bring more compelling ads to their viewers. Currently, I would estimate that about 10% of the ads I see on TV are relevent to my interests. Because I could care less about learning how to stop that not so fresh feeling, I will typically fast forward any advertisment that I see, regardless of how compelling a product might be. If on the other hand, advertisers knew about my weakness for game shows, I’m sure that they could lure me into a commercial by offering me the ability to play a round of poker against the pros or to participate in various contests that I can’t seem to resist.

On the other hand… I’m not sure that I want advertisers to know about my weakness for the show Cheaters or Blind Date out of fear that I might start recieving all kinds of solicitations to join various matchmaking services.

It’s a tough situation for consumers, but the opportunities for couch commerce will undoubtably cause many middleware and PVR providers to think more seriously about the benefits and drawbacks of collecting this information. While TiVo’s stand alone business has prevented them from taking more radical measures when it comes to advertising, OpenTV’s relationship with the cable and satellite industry has allowed them to pursue a more controversial strategy because of their focus on the content providers. As CEO James Chiddex (formally of Mystro TV) put it in their most recent conference call, “our real customers, in most cases are network operators, in the context of deals between network operators and programmers or advertisers we can certainly provide services, but we’re clear who the primary customer is.” Whether this focus on operators and advertisers vs. the end user of their products pays off is yet to be seen — but this focus is clearly a distrubing development in the PVR industry and one that is unlikely to change as advertising revenues become a more important part in the PVR industry.

While Marc and Wes were reluctant to reveal the number of subscribers who have access to the 2.0 PVR, they did tell us that they currently have 55 million middleware enabled set top boxes globally and that since the March 2005 launch of Foxtel’s PVR 1.0 & 2.0, they have now sold over 1 million PVR units to customers in Australia. Pretty impressive given that it took TiVo almost 5 years to hit 3 million subscribers and given Microsoft’s disappointing numbers so far

The future of interactive television is sure to be a hard fought battle and as each software provider tries to differentate themselves from brand X, it will become increasingly important for cable and satellite providers in the U.S. to provide a truly personalized and compelling television solution. While TiVo and Microsoft have done a great job at reacting quickly to this rapidly changing market, there will undoubtably be many competitors that will try to seize a piece of this ever-growing pie. While I’m frustrated at the lack of interactivity and progress in the North American markets so far, this is clearly an important decision for operators to make. Whether consumers like it or not, the choice of a PVR provider by the cable and satellite companies will be one of the most important decisions that these companies will make in the near future. I just hope that when it’s all said and done that they will be willing to let Davis Freeberg call a Laker game or two. While the PVR wars still have not been decided, in the immortal words of Chick Hearn “this game’s in the refrigerator: the door is closed, the lights are out, the eggs are cooling, the butter’s getting hard and the Jello’s jiggling.”

As we begin to see increasing in
teractivity in television I hope that the television providers can come to a decision quickly and give consumers the functionality that we so desperatly crave.

Update: We were contacted by OpenTV today with one clarification with regards to the above article:

“…and that since the March 2005 launch of Foxtel’s PVR 1.0 & 2.0, they have now sold over 1 million PVR units to customers in Australia.”

Actually, we announced the launch of our PVR 1.0 solution with FOXTEL (FOXTEL iQ) on March 1 with no 2005 plans to update them to PVR 2.0. The approx. 1 million subscribers is for the full FOXTEL digital service. That number represents subscribers they’ve signed on since the service launched in early 2004. Foxtel has not shared with us any recent PVR distribution numbers. Also, as of the 2Q call we’re now over 57 million set-top boxes deployed with OpenTV-enabled middleware.

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27 Comments

  1. mcg says:

    On the other hand… I’m not sure that I want advertisers to know about my weakness for the show Cheaters or Blind Date out of fear that I might start recieving all kinds of solicitations to join various matchmaking services.

    It seems to me that this is less likely to happen that with traditional ad programming. After all, even if those who watch Blind Date are as a whole more interested in matchmaking services, OpenTV’s system will be able to consider your viewing habits as a whole to conclude that you, in particular, are not. Thus you are less likely to get an ad that is stereotypically associated with an individual show.

    This is just a guess though.

  2. Luke says:

    Australia is spelt.. well.. Australia. Not Austrailia. Ta.

  3. Thomas Hawk says:

    Ah, we misspelled Australia. How embarrasing. Thanks. Corrected.

  4. Anonymous says:

    Ah, we misspelled embarrassing. How embarrassing.

  5. Nemo says:

    It might not be spelt “Austrailia”, but that’s the way they pronounce it.

  6. Anonymous says:

    what the fuck does that mean your not in kansas anymore? cocksucker frisco fag, go blow a goat with a latte in hand.

  7. Thomas Hawk says:

    We’re not in Kansas anymore is a line from the Wizard of Oz.

  8. Thomas Hawk says:

    Did someone from Kansas forget to take their medication this morning?

  9. Anonymous says:

    Haha…apparently he had one too many lattes.

  10. Anonymous says:

    Maybe he’s the scarecrow? o/~ If I only had a brain o/~

  11. Foston says:

    forget the issues he has. He has a lifestime subscription.

  12. Anonymous says:

    It’s spelled disturbing, not distrubing. Nice article though.

  13. Anonymous says:

    Pure comedy.

  14. Anonymous says:

    I laughed at the line about Australia’s “progressive censorship policies”. They may be progressive by US standards, but the Office of Film and Literature Classification are still extraordinarily keen to protect fragile Aussie minds from the dangers of pornography. No X-rated pornography is permitted in most states – only R18 – so anything displaying genitalia is forbidden. This even includes banning educational material about genital reconstruction surgury.

    In 2001, the state of Queensland banned 1541 publications and 933 films. Recently the OFLC banned sales of Grand Theft Auto: San Andreas because of the the hot coffee debacle.

    Hardly progressive.

  15. Anonymous says:

    I laughed at the line about Australia’s “progressive censorship policies”. They may be progressive by US standards, but the Office of Film and Literature Classification are still extraordinarily keen to protect fragile Aussie minds from the dangers of pornography. No X-rated pornography is permitted in most states – only R18 – so anything displaying genitalia is forbidden. This even includes banning educational material about genital reconstruction surgury.

    In 2001, the state of Queensland banned 1541 publications and 933 films. Recently the OFLC banned sales of Grand Theft Auto: San Andreas because of the the hot coffee debacle.

    Hardly progressive.

  16. Anonymous says:

    The “progressive censorship policies” line also had me amused. With possibly the most films banned in the last country of any western country, Australia is hardly progressive. As to television, it’s true we are more progressive than the free to air US networks, but then who isn’t? In comparison to the bulk of Europe, Australia definitely does not have “progressive censorship policies”, as the flood of outrage at recent nudity on Big Brother clearly demonstrates. In a country where a member of the Office of Film and Literature Review Panel can be arrested for screening ‘Ken Park’ (Margaret Pomeranz) and Resevoir Dogs cannot be screened at all on television I would not use the word progressive.

    As to the hard drive recorder/digital cable box offered by Foxtel, I’m not sure I like the idea of the cable provider owning and controlling my media recording centre. It restricts you from recording certain new release films, and I’m not sure if people are aware of the viewing habits data it gathers. Give me a $500 PC and a linux media centre anyday.

  17. Anonymous says:

    “Foxtel’s PVR 1.0 & 2.0, they have now sold over 1 million PVR units to customers in Australia” this I very much doubt as Foxtel only has 900,000 subscribers in total.

  18. Anonymous says:

    umm, Foxtel currently doesn’t use the full OpenTV PVR solution, it is a hybrid of the BSkyB NDS XTV PVR with some extensions provided by OpenTV. As to the monitoring of what you are watching … well that is soooo far off and has so many issues with the Australian privacy laws that it ain’t going to happen real soon. Oh yeah and the drop in interactive advertising – well that isn’t happening either – it is however on several broadcasters roadmaps but there are some major technical hurdles before that is ever released. Last but not least Foxtel has only sold somewhere in the order of 10,000 to 20,000 PVR’s so far. I think that you are confused as to the number of OpenTV enabled set-top units that Foxtel has deployed is > 1 Million. Other than that this is a total factual blog!

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    This is a new type of free software that allows internet users to share their television fare with millions of users worldwide, sharing a TV channel (any channel you may receive) with other internet users.

    The current initiatives (like Cybersky, Videora, Onion Networks, Peercast, Coolstreaming, DTV / Broadcast Machine from Participatory Culture and Kedora) are listed on this site.

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    See more on http://www.TV-FREE.org/

    http://www.TV-FREE.org – Watch free online TV

  20. AV_editor says:

    Just a quick note of clarification. Recently having sold Foxtel packages from a major Australian retail outlet , i can tell you that foxtel does not have 1 million pvrs in Australia. 1 million subscribers to a non recording digital set top decoder…. yes.
    Foxtel IQ (the new pvr)has only at best a 20% penetration of this 1 million.
    As for a more relaxed censorship regulation for tv , you could argue both points.
    On GTV9 its family viewing no breasts shown until 8.30 at night.
    SBS (Foreign content channel) I have watched a gay male couple having full on sex at 4.30 viewing time.
    In some ways we follow the European model and in others we follow the USA. Interesting food for thought….yes?

  21. Anonymous says:

    It is important to note that most of this functionality is in the digital television standard and does not refelect anything new on the part of OpenTV

  22. Anonymous says:

    Opentv also provides the perfect solution for IPTV which is currently a new trend among TELCO’s see SBC, it faces competition from large companies such as Microsoft,Siemens.
    Thomas did you ask OPENTV about their developments in this space
    you might consider an update to the article mentioning OPENTV’s
    IPTV solution!

  23. We actually talked quite a bit about about IPTV and the possibilities for OpenTV. It’s clearly an area of interest for the company and I’m fairly confident that they have approached the telecoms with the idea. My sense was that they don’t have anything concrete lined up with the telecoms, but they have a lot of experience when it comes to managing TV infrastructure and that gives them access to at least pitch their services to the telecoms. Whether the telecoms choose to stick it out with just Microsoft or to add competitors remains to be seen.

    I think that we could have included more information about IPTV, but my sense is that it may be still too early to get that excited about IPTV. I’ve yet to see anything that makes a compelling argument to use IPTV as an alternative to cable & satellite and being the new kid on the block, it’s hard for me to believe that they would get superior pricing from the studios then what cable and satellites get today. Without a significant price advantage or functionality advantage, it’s hard to imagine that consumers would adopt the service in mass. Of course speeding up my broadband speeds significantly could be a little appealling, but I do very little downloading these days and don’t know if it would be enough for me to fire my current cable provider.

  24. Anonymous says:

    Davis, thanks for your reply I would add to your answer, that many cable companies today have high speed internet connections for example Time Warner. If OPENTV provides the connection
    between cable and consumer,it gives the cable company even more advantage over the TELCO with an extra option for the consumer to choose it also makes applications such as t-commerce, targeted advertising immediately possible. If SBC and ECHOSTAR connect and put Opentv between them and the consumer it opens up a whole lot of new ways to compete with the cable or even DirecTV, I don’t believe that NDS (part of NewsCorp provides technology for Directv) has a solution like OPENTV.

  25. Anonymous says:

    opentv PVR 2.0 software is the first PVR solution which records interactivity. This supports timeshifting, not just of the video programming but also the interactive features that go with that programming,and if one believes, as our customers do, that interactivity adds value to television, then that feature shouldbe there regardless of whether customers are watching in real time or on a time shifted basis

  26. Anonymous says:

    Note that that the PVR applic application and underlying technology on Foxtel, BSkyB, Sky Italia, Viasat, etc. is not supplied by OpenTV. It is in fact provided by NDS. NDS is also providing Direct TVs PVR (DVR) technology.