Haggai Barel is the Deputy CEO of Viaccess-Orca, “a game changing partner for content service providers.” He co-founded Orca Interactive Ltd in 1996. In June 2012, Orca Interactive merged with its parent company, Viaccess, to form Viaccess-Orca. Haggai holds a Bachelor’s Degree in Computer Science from Tel Aviv College, and prior to launching Orca Interactive, he served in the Israeli Defense Forces for more than four years.
Given all this, IP&TV felt confident enough to confront Haggai with one of the real billion dollar issues in the industry: the relationship between telcos, OTT, and monetisation. We weren’t to be disappointed…
IP&TV: Hi Haggai. How suspicious do you think telcos are of next generation TV? Is it that telcos are just frightened that the future will lead to customers getting too much for too little?
Haggai Barel: Telcos are, to some extent, suspicious and concerned about the next generation of TV, but the real challenge for them is to transition into a competitive, open minded service provider. They need to move faster, but currently they are afraid of losing control and losing subscribers, not only to existing competition but also to new entrants like the pure OTT players (e.g. Netflix). Telcos need to better understand the new expectations of their users and adapt what they provide to them accordingly. The question is not about providing too much for too little, the question is about providing only what’s really needed and expected – for the right price.
But you think it can be effectively monetised? What should be the guiding business philosophy going forward?
The business philosophy has to be guided by the users’ preferred ways of consuming content. Telcos need to engage their subscribers, and our vision is all about engaging users: we call it the engagement model. This model is constructed of different layers, allowing operators to offer an efficient multi-screen service.
We first need to have business rules around premium content. We must have protection, DRM capabilities, and anti-piracy services to make sure this premium content remains premium. The whole idea of the word ‘premium’ is that it’s protected and its use is controlled by the owner or provider. This layer, from the engagement perspective, applies to the security part.
When we add another layer – interactivity - we are talking about the service platform aspect. The first layer is the content itself, the second layer being the interactive part of the service platform – what already exists today: program guides, PVR capabilities, VOD, catch-up, etc. All of these are already standard in the market today and they form the foundation of our engagement model.
What we introduce next is personalization. This phase involves taking the service and personalizing it. It has to be about the end user – take into account who he or she is, what his or her views are, what his or her preferences are, and start tailoring the service accordingly. Provide content he or she will like, and show what friends are consuming.
The final part of the engagement model is immersion. Here we focus on complete engagement. It’s a different way of navigating. It’s a different way of consuming content. It’s obviously not through old-fashioned program guides or catalogues.
One way to implement this immersive experience would be by using next generation metadata to produce an endless number of digital magazines, each containing content about what is being watched, personalized for each viewer.
When you look at these layers together, the one piece that is missing is providing all these layers in a multiscreen environment.
We see this model as a ‘Northern Star’ for service providers looking to offer the best value for subscribers and, in turn, increase their revenue.
What link is there between user engagement and revenue?
The engagement model really simplifies the user perspective, defining what is needed in order for the user to be fully engaged with the service. So how does this relate to the business perspective of the operator?
Each one of the layers offers a variety of business models, some more used and understood than others. By adopting this approach, operators can start experimenting with new offerings and business models for their subscribers. Our customers are adopting some of these models and are seeing great growth in their services. For example, the recent launch of Orange Spain’s TV Everywhere service allowed them to start providing their service to new subscribers, as part of a quad-play package in which the multi-screen TV service is only 10 Euros per month.
They are not only upgrading their existing subscribers to this package, they are also reaching out to new ones, offering the freedom to consume personalized content over the top on any device.
Another thing we have started to see are new business models, referenced in other markets. For example, digital magazines can be automatically created to represent an operator’s catalog, exposing viewers to more content and increasing the chances of them purchasing more content from the operator. Targeted advertising and T-commerce can complement such services and increase revenues.
Operators should be prepared for some trial and error. Trying to adjust when it comes to monetization and advertisement around engagement is part of the process, whether content is consumed on PC, TV or any other device.
Previously, operators were creating walled gardens. Whilst I’m not suggesting that operators should be breaking down their walls or gardens, staying within these walls, completely indifferent to the world, is not a good idea. I believe it’s about time that operators start creating a few holes in these walls and expose themselves to Internet content which complements their service.
It is possible to let some light shine into the walled garden without breaking down the walls completely. This will be sufficient to retain subscribers and start monetizing in a new way with new business models.
How do you monetise multiscreen?
The growth in the entertainment industry is possible thanks to an effective business model. One major question today is: “How do I monetize OTT services?” The OTT revolution has opened the door for new monetization opportunities and business models. At Viaccess-Orca we recently introduced some of these models, such as context aware monetization, branding opportunities via T-commerce (TV commerce), and advertising. The goal of these monetization methods is always to increase content consumption by the users and extend the purchasing offer through a personalized and engaging experience.
Who should the telcos be looking to partner with? What should be guiding them in this area?
Telcos should be looking to partner with those who offer an end to end solution to their needs. They need a responsive, agile partner that has an in depth understanding of how users behave, what they expect, and can offer the relevant technological solutions. Telcos should always remember to keep their content protected from piracy and partner with those who have the expertise in detecting different forms of intrusion and the ability to take the necessary actions.
You’re going to be speaking at the OTT TV World Summit? What is the attraction of the event?
I think everyone has their eyes on the next moves from companies like Netflix, Amazon and the likes. After grounding themselves well in the US pay TV and OTT markets, they are certainly helping to set a new competitive landscape in Europe. Service providers are starting to be aware that they need to equip themselves properly for the battle.
Haggai Barel will be speaking at the OTTtv World Summit (19-22 November). For booking and more information, go here.