The personal video recorder (PVR), a device that has hit the US by storm but terrifies advertisers and television channels, will be introduced in SA and neighbouring countries in late 2005, says Nolo Letele, CEO of MultiChoice South Africa.
"The PVR is a device that looks like a regular decoder, but includes a hard disk drive," he told journalists gathered in Nairobi, Kenya, in advance of the CNN/MultiChoice African Journalist of the Year Awards. "A PVR allows viewers to pause, replay, bookmark and record television programming, and can include a function to skip traditional advertising."
Since the company launched digital satellite television in Africa in 1995, analogue TV has seen a sharp decline, although the overall market has grown by only about 25% in terms of user numbers.
Though digital TV continues to grow sharply, at the cost of analogue market penetration, the total number of television viewers has been largely flat since 2000.
In this context, Letele gave a broad glimpse into the future of the company`s technology offerings. He told ITWeb that the company has been working on a PVR offering for over a year, but staff were under strict instructions to keep it very quiet because of the far-reaching implications such a device will have on television content providers and advertisers.
"If we don`t launch it, someone else will," he says. "There are already some 'rogue` PVRs in SA, so we have to be innovative in responding. By 2007, DataMonitor estimates that a quarter of all homes in the UK will own a PVR, and Forrester says there will be 40 million PVRs in US homes."
No more TV ads
According to Forrester Research, of the top five features television viewers want, the PVR offers four: skipping commercials, recording one show while watching another, pausing live TV, and recording all episodes of a show. The fifth, an on-screen programme guide, is already part of the functionality of a regular decoder.
"Fifty percent of owners rate skipping adverts as their favourite feature," says Letele, but adds: "We won`t initially activate the ad-skip feature."
He says content providers will have to become increasingly innovative in how they deliver advertising, and will need time to adapt. "The only way we can determine demand, usage patterns and so on is to actually trial technology, and put it in front of people. Some, like interactive TV, may not work, but others succeed beyond expectation. We don`t think our advertising is as interruptive and badly made as US advertising in any case," he notes.
The PVR will be introduced to the rest of the African market in the first half of 2006.
Since MultiChoice derives much of its revenue from subscription fees, the impact on its own revenue model will be far less serious than the potential impact on TV channels, which will need to become more innovative in how they reach audiences with advertising message - even if the ad-skip feature is only introduced later.
Letele points to interactive adverts designed for interactive platforms by BMW and Hugo Boss that have done well in terms of generating sales, as well as a Pepsi spot featuring Britney Spears which was so popular that US PVR owners replayed it almost as often as they did the final play in the Superbowl game during which it was broadcast.
Benefits for the Internet
According to Forrester, the foremost beneficiary of ad spend that may be diverted by the advent of the PVR is the Internet, with 73% of advertisers indicating that this is where they would go if consumers can skip regular television advertising.
Another in the string of MultiChoice technology announcements was that August 2005 will see a trial of mobile television delivered via the handheld digital video broadcast standard (DVB-H), which Letele described as more bandwidth-efficient than narrowcasts via regular 3G.
DVB-H will require special handsets to receive broadcasts sent by digital terrestrial transmitters. Letele points out, however, that sceptical users were found to change their minds about mobile television once they could see it in action. The ability to watch programming tailored to handheld devices in queues, traffic jams or during work breaks makes it a complementary offering to television, with very different prime times and usage patterns.
"In three years, mobile TV will be all over the place," he promised.
HDTV 'on the radar`
High-definition television (HDTV) also found space on the agenda. Though Letele says MultiChoice is only keeping this on the radar for now, he promises that just as Germany will launch HDTV by the 2006 FIFA World Cup, SA will have at least one channel before the 2010 World Cup.
He warns that the cost of such a switch is far higher than its other initiatives. Content providers will have to upgrade their camera and studio equipment, MultiChoice will have to "completely overhaul" its broadcasting systems, and viewers will need new televisions, capable of displaying the four-times better clarity and wide-screen format of the broadcasts.
IPTV across ADSL, which uses telephone lines to distribute television programming to PCs and television sets, will also go on trial in August, to determine demand, user requirements, technical viability and to assess potential partnerships for MultiChoice.
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