Market Watch

Technicolor Pulls YouView U-Turn


Display Driver IC Forecast

French set-top box (STB) manufacturer Technicolor has ruled out producing boxes for the upcoming UK free-to-air (FTA) platform YouView, closely following the release of YouView's core technical specifications in April. In March 2010 Technicolor were named, along with Cisco and Humax, as a device partner for the platform, before being joined by Huawei, Manhattan, Pace and Vestel.

YouView is a joint venture by the BBC, ITV, Channel 4, Channel 5, BT, Arqiva and Talk Talk to produce a set of hardware and technical specifications for an open hybrid FTA platform in the UK. Initially scheduled for release in December 2010, YouView STBs and TVs are now expected to be available for retail in early 2012.

Analysis
In the UK in 2010, there were 700,000 internet-enabled TVs (IETVs) and 3.3m hybrid pay-TV STBs sold. In recognition of the increasing market for consumers to access web-based content through the TV, YouView represents an attempt to create a base set of specifications that will enable FTA services such as Freeview and Freesat to emulate this success, free of platform fragmentation.

Yet with technical issues delaying the commercial launch of YouView by over a year, rival platforms have been able to release earlier, and YouView now faces competition from both proprietary and open platforms. Of the 3m Freeview STBs sold in the UK last year, 10 per cent were connectable, many containing a dedicated BBC iPlayer App, whilst SkyPlayer from BSkyB is also available through Humax's Foxsat HDR STBs. Virgin Media also deploy iPlayer over broadcast VOD to their STB range, whilst Freesat have recently announced plans to release a range of receivers based on Hybrid Broadcast Broadband TV (HbbTV), a European open platform used in France and Germany. Finally, TV manufacturers such as LG, Samsung and Sony have been increasing IETV shipments, based on the proprietary Netcast, Internet@TV and Bravia Internet Video platforms respectively.

In addition to the increased competition now facing YouView, the decision of Technicolor to withdraw as a device partner is also in part likely due to the high hardware specifications of the platform. With first iteration launch devices requiring dual DVB-T2 tuners, a 300GB internal hard disk drive and a HDMI 1.3 port, YouView products will be erring towards the high-end of the market for a few years, and product differentiation amongst the cheapest receivers will be minimal. Technicolor, who traditionally provide boxes for pay-TV operators rather than for FTA retail, shipped 12.9m STBs to operators in 2010 at an average of selling price of €67 - positioning themselves as high-volume manufacturers of mid-range STBs.

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