Cloud TV is a software platform that can be installed on smart devices such as television sets, tablets, cell phones, media boxes and others. These software platforms eliminate the role of video service providers such as cable operators. Cloud TV platform dynamically converts, graphics, videos and interactive feeds into a single HTML or MPEG feed that is delivered to the set-top boxes on a unicast bandwidth. It is basically a merger of web content and TV into a single stream and is played through set-top boxes using IP connectivity. The cloud TV platform is configured from a remote server or a particular distribution center. With the cloud TV software a customer can view several channels with high definition picture quality. Additionally, these software offer capability to customize the subscription plan, record videos and upload media streams. Other features of a cloud TV include streaming videos on internet, high definition resolution, full function browsing on internet, email, online gaming, and support for social networking sites such as Facebook, MSN, Twitter, and Skype.
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Cloud TV is capable of delivering over-the-top (OTT) content to the customers in which there is no involvement of multiple system operators (operates multi cable and broadcast satellite). This helps the advertisers to promote their brands on television using interactive services. For instance in January 2014, ActiveVideo Networks in partnership with Brightline delivered interactive advertising of brands such as American Express and L’Oreal for Roku devices on quadrature amplitude modulation (QAM) – based set top boxes. Additionally, cloud TV platform are capable of offering video streaming services such as YouTube to their customers on the existing set-top boxes. For instance, UPC Hangary offers YouTube to the customers using cloud TV platform.
The rising demand for rich and high definition picture quality is driving the growth of cloud TV across the globe. Moreover, the growing adoption of smart devices such as smart TV, smart phones and tablets is adding to the growth of cloud TV market. The cloud TV market is currently at nascent stage; however, it has tremendous growth opportunities in developed and developing countries. Television manufacturing companies such as Toshiba Corporation and Koninklijke Philips N.V. have started offering cloud TV apps and solutions pre-installed on their smart television sets. Owing to the demand for value addition in television sets, it is expected that over the coming years several other television manufacturers will install cloud TV services in their smart television sets. Additionally, the growth of 3D content in the television broadcasting is fueling the growth of cloud TV market.
The challenges for the cloud TV developers include lack of high speed network infrastructure and government regulation on bandwidth allocations for providing internet services. Additionally, lack of quality of video content to be delivered on cloud TV is further challenging the growth of this market. Moreover, the vulnerability of internet networks to hacking is a potential challenge for the cloud TV platform providers.
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Active Video Networks is among the leaders in the market. It has a wide customer base of companies such as Comcast, Charter Communication, Time Warner Oceanic and Cablevision System in the U.S, Liberty Global, Deutsche Telekom’s T Lab and Ziggo in Europe and PCCW in Asia. In March, 2013, Ziggo became the world’s operator to offer multi-screen interactive video on demand (VOD) services using cloud TV platform without any built in hardware.