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The French of connected TV

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This article is an appetizer. I'm launching a series on the ecosystem of French connected TV companies. It echoes the white paper onhe opportunities of digital TV published in May 2009, at this European Connected TV Strategy and other articles on connected TV (on Appleon Googleon HbbTV) not to mention my various Reports of the SRC.

I will focus on startups and established companies in the connected TV sector, whether in the development of applications for manufacturers' TVs, for ISP set-top-boxes in IPTV mode, or even for those targeting other screens, especially tablets.

Why this detailed review?

The world of television is a digital sector in turmoil. This sector carries not only technological, but also political and regulatory challenges. As in the cinema or digital photography, the ecosystem of startups in the image industry is flourishing and exciting. There's more to life than social networks, mobility and e-commerce! The 100 or so French exhibitors of the IBC are here to prove it! Besides, it's finally one of my interests and activities.

I'm going to cover these companies with a series of about 50 articles that will be spread over several months if not years. Once the series is completed, I will probably produce a collection. It is likely that I will discover other startups along the way while publishing this series of articles! You are welcome to join us!

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Categories of companies surveyed

In this series, we will cover the following areas:

- Application development multi-screen crans including WizTivi, Hubee, JoshFire and DotScreen. These companies have experienced strong growth over the last three years with the appearance of connected TVs from major manufacturers such as Samsung, LG Electronics, Sony and others. But they also work for ISPs and also target smartphones and tablets that have become essential to the TV experience.

- The Councillservice and engineering with Altran, ATOS Worldline, C2M, Visiware, Mediatvcom, Pixagility and DVMR. They are less well known but employ hundreds of people and develop key applications and infrastructures as we have seen in the case of MesServicesTV and C'est dans l'Air.

- UntyingThe re-linearization of content and VOD with Cognik, PlayTV, Recatch, FairPlay TV, Spideo, Everdig, Plizy and DailyMotion. In addition to VOD solutions, companies have been created that reline thematic content in an original way and make recommendations on the fly. Content recommendation solutions are integrated into these companies.

- Social TV with devantlatele.com, Telequid, Seentalk, WebTV Interactive, RendezVousTV, Parlons TV, TV Planning, WebCastStory with various means of involving viewers in TV consumption, most often from the "second screen". And also the associated means of measurement, such as those of Mesagraph.

- The middleware with Wyplay, Netgem, Vianeos, AWOX, SoftAtHome and Technicolor, which are companies targeting the telecom operator market, particularly in IPTV. Their middleware is becoming multi-screen, they are adopting cloud architectures, and even more than the others, are developing internationally.

- Infrastructure including Ateme, Dalet, Egonocast, HTTV, Powedia, SGT, Sticky Ads TV, B-Stream, Advideum, Technicolor, Cedexis and Witbe. They are less visible because they operate in the lower layers, in content production, distribution, advertising management or quality of service, but they all play an interesting role in powering connected TVs and set-top-boxes of ISPs.

- The equipment with Sagemcom, Netgem and AWOX which bring us back as middleware to the ISP market and/or "over the top" solutions.

tvconnectee

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Are you an unfortunate oblivion of this panorama? Send me an email (olivier@oezratty.net) and I will include you in it.

Organisation of the connected TV market

The TV market is changing. The opportunities are certain but not obvious to evaluate. In particular, there is still a great deal of uncertainty about the enormous technological fragmentation of the market. This is the hallmark of a market capable of generating breakthrough innovations. A bit like the PC before the arrival of the IBM PC 1981 (unrelated to the election of François Mitterrand).

On the applications side, the market suffers from the lack of software development standards. Platforms are highly fragmented. For connected TVs, we develop, depending on the case, with the webkit, in Javascript and CE HTML, with HbbTV and its future evolutions or even in Java. Not all TVs have a local web browser and when they do, the level of interactivity and performance varies greatly. What's more, ISP box platforms are all proprietary. As a result, the connected TV market is currently very local and composed of small players. The largest specialized player has less than 100 people (WizTivi) compared to the world leader in pay-TV software, NDS (acquired by Cisco), and its 4,500 employees, including about 350 in France.

The business model of companies in the sector oscillates between platform creation and service provisioning, although in the latter case, some manage to build recurring revenue streams. There are, however, some interesting and promising platforms that have development potential outside France. Even so, differentiation and barriers to entry are not always obvious, since many software components are commodity components. Moreover, most French technology companies in the sector have a large number of international competitors, each of which is well established in its home market. This is a reminder that in the digital sector, the market is globalised by platform technologies, not by services.

The strategic imperative of these companies is very often to start by succeeding in the French market. Then comes the international market, but unfortunately not often enough, due to a lack of sufficient take-off in France. Those who take off internationally have a "product and platform" approach. Tool-based service approaches are indeed not scalable. Large customers tend to pull their suppliers towards this service company status. Either because they want to master the key technologies of their offers themselves, or because they consume a large part of the bandwidth of these startups, to the detriment of the creation of a solid product offer. I won't give names, but they will recognize themselves. In the booming multi-screen sector, customers have rather limited budgets because audiences are not always there. Connected TV solutions are still an experimental approach because the uses and the market is still in the making.

This fragmented market is probably destined to consolidate. It is even imperative for the survival of some of its players. Without reaching that of the leader NDS, recently acquired by Cisco, a critical size is necessary for the French players to provide fairly complete solutions to their customers, to have the resources to finance their "product" R&D and, last but not least, to enable them to invest in international business development. Who can make Meccano in this sector? The State? Not easy, even if it has the FSI to eventually put its paw in the industrial structure of the market. Private investment funds? Yes, why not. Last viable scenario: the companies of the sector themselves, which would first launch alliances, then joint bids, and finally lead to mergers and acquisitions. Possibly assisted by the precedents in case of need for recapitalisation.

The other feature of this market is the labour market. Software development in the world of connected TV is even more specialized than development on mobiles or tablets, even if it is mainly based on web-type technologies. It is quite difficult to find skilled developers. This gives great opportunities for developers interested in the world of video and television!

The period of Nicolas Sarkozy's five-year term was marked by the large-scale emergence of social networks (Facebook, Twitter), smartphones (iPhone launched in 2007) and then tablets (iPad launched in 2010). During this time, we have been well distracted by the HADOPI law. Admittedly, the period also saw the deployment and generalisation of DTT (started in 2005, switched to HD in 2009, end of analogue in 2011). But connected television and its merger with the Internet is still in its infancy. The TV sector is probably the one that will undergo the most upheavals during François Hollande's five-year term. The upheavals of an industry are, as usual, an opportunity for some to remove barriers, to protect themselves, and for others to innovate and prosper. Let's hope that this revolution will allow a few French players to emerge, and perhaps they are in this panorama that we are going to share!

And now...

This was just an aperitif before a long journey. The first articles in this series will focus on multi-screen development startups. Then, the others will arrive in a bit of a mess as I meet different people. A vast puzzle in perspective!

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{Jacuzzi on}

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