Calling Canada’s startups: There’s a $200B TV market ripe for the taking

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By Jason Flick

We made a very happy discovery this year at Mobile World Congress (MWC) and the Consumer Electronics Show (CES): There’s a $200-billion market out there for the taking. A market in which almost every customer is unhappy with dated products and overall experience, but expected to tolerate regular price increases.

I’m talking about the global TV market (video on demand, cable, satellite, IPTV), which totaled $137 billion in the first half of 2012, according to Infonetics Research.

There is hope for consumers. Tim Cook, CEO of Apple, said, “When I sit in front of my TV, I feel like I’m back in the 80s.” We all know that when Apple enters a mature market, its primary focus is to innovate the business model and user experience. As Apple sinks its teeth into the TV industry it will create a tremendous amount of pain for the players in the current ecosystem who are already struggling to keep pace.

We certainly agree with Cook; as a user experience and design company, we began investing in this market over a year ago in anticipation of Apple’s inevitable move.

We took our existing user interface framework along with the Android operating system and set off to build a better TV experience we now call FLIPtv. One of the challenges we sought to solve was incorporation of the tablet to improve how you interact with your TV. The average cable or satellite provider gives you access to 500+ channels. Navigation to this day continues to be based on scrolling up and down through a list of channels, as it was more than 60 years ago! You sit in front of the TV and spend an average of 15 to 20 minutes channel surfing. Nearly 80 per cent of the time, you fall back to the one channel you know has something mildly interesting.

For this underwhelming experience you often pay $100 or more a month for what amounts to a few reliable channels. Compare this to Netflix, with its $10/month option and a simple UI that is far easier to navigate than a cable guide.

We launched our FLIPtv product at CES and publicly unveiled it at MWC with our partners Texas Instruments, Freescale and Marvell to demonstrate FLIPtv to the Sonys, Toshibas, and Samsungs of the world. We built FLIPtv for the smart TV manufacturers and we received strong interest from them, but we were surprised by the huge interest from mobile operators and service providers.

The next Netflix

What we learned is that these companies are even more concerned than the TV industry as they have iTunes (Apple), Netflix, Redbox and other content providers eating into their subscriber revenues. Not only are they open to new technology but they are ready and willing to move quickly. These companies fully understand content delivery networks and the value they have in owning the end user, but they struggle to innovate like Apple and Netflix have.

These multibillion-dollar mobile operators and cable providers need a Netflix killer and new ways to generate revenues based on the far more interactive IPTV market. Their problem, thus our opportunity, will be to enable them to compete and innovate in this evolving market. Even a video on demand solution is complex due to the various content licensing, digital rights management, e-commerce and streaming issues. Our piece is helping providers create a UI that will work across all platforms, from game consoles to smartphones, tablets and set top boxes.

Operators must choose from off-the-shelf, one-size-fits all solutions to get to market quickly or build a best-of-breed solution by selecting the best technologies and establishing partnerships that can create adaptive platforms for telcos and carriers.

It’s rare that such a large and known space with such opportunity isn’t being directly assaulted by the usual suspects (Intel, Microsoft, IBM, etc.) with complete solutions. It seems the market has moved far faster than anyone could have imagined and I think that means there is a window of opportunity for startups. I would like to see Canada, it’s carriers, existing providers and new entrants work together and make us the world leaders in this huge marketplace. There is room for everyone but we need to work together to win.

Jason Flick is co-founder and president of YOUi Labs and Flick Software, a successful serial entrepreneur and product visionary. Jason has founded half a dozen companies in the past 18 years and is advisor and executive to nearly a dozen software companies. He is passionate about the disruption mobility has created and how businesses can lever it.

 

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