IPTV: The New PMS?

The recent China Hospitality Technology Alliance (CHTA) Reload conference in Shanghai was once again a great opportunity to catch up with technology developments  in the hospitality sector. There were some interesting presentations, too. One on wearables, for example, put the recent hype about Smart Watches and their applications firmly in its place by pointing out the current shortfalls, such as battery life, being tethered to a 'mother' device and, most importantly for the hospitality industry, the lack of standardisation and adaptability which is always the greatest impediment whenever consumer electronics enter the enterprise space.  

Needless to say that I found the presentation on IPTV the most relevant.

IPTV Slide Presented at the CHTA meeting

The message from the chair of the IPTV Standardisation group was clear: IPTV is a key customer service platform and as such is just as important for a hotel as PMS. This is quite an exciting shift from just a few years back when IPTV was seen as 'nice to have' as opposed to 'essential'.

The PMS system is of course the holy grail of a hotel operation as it facilitates hosting hundreds of different people, night after night, smoothly and efficiently - albeit by predominantly operating at the backend. IPTV on the other hand, being the connection between hotel backend and customer facing frontend, is the point where enterprise and consumer interface - the holy grail of guest communication if you like (post check-in, naturally). The two together are a powerful package that, if done properly, combine hotel operation and guest communication on one integrated platform.

Standardisation: walking a fine line

The important point with any attempt at standardisation is that it shouldn't curtail the inherent flexibility of an IPTV system. This is a very fine line to walk indeed. Network set up, cabling constraints, content and features - where do you draw the line?

Also, equally important as defining what IPTV should be is to define what it should not be. IPTV is not a computer, and it is not a mobile device - although it should interact and enable both, and across operating systems. But this is why mobile- and computer oriented services such as We Chat, Skype and social media sites should have no room on it, at least not in their original formats. A hotel we have deployed recently, for example, is curating posts from their Twitter, Facebook and Weibo pages and putting them as images on their IPTV platform on a monthly basis. That's perfect: it's entertainment and it has been customised to work on the TV screen.

But with 72% of web page views now done on mobiles, why try and squeeze 

Share of webpage views, January 2015.
Source: wearesocial.net/blog

the square peg of (say) Weibo into a round hole like IPTV, specifically if the user experience can never be as good as on a mobile (think on screen keyboards...)? And let's not forget the myriad security and bandwidth issues that come with turning the TV into a web browser. Again, it may be ok at home, but a hotel is an all together different environment where rules are set by the lowest common denominator: the worst possible scenario, such as someone downloading masses of pirated movies, clogging the bandwidth for everyone else, or people browsing onto dubious sites infested with viruses.

Here IPTV plays a key role as the facilitator that fits the spare pegs into round holes by integrating guests' own devices, rather than trying to replicate them. 

No doubt these points, and many more, will be mulled over as the IPTV Standards group is preparing its recommendations. But no matter what the final document will look like, let's hope it will contribute towards drawing the lines clearer as to IPTV's role in hotels for all parties.   

The Trouble with COAX

At a recent initial meeting with hotel clients, we discussed the general requirements for their newly built 4-star resort-type property, how many rooms they had, whether they wanted VOD or not and what other features were of interest for their in-room entertainment system. Almost casually, we threw in the question “You have Cat 5e or 6, right?” to which the perplexed answer was no.

While the Asia-Pacific region as a whole is in terms of connectivity and technology innovation outpacing many more developed regions, there are significant differences within the region when it comes to connectivity.

In more mature markets like Hong Kong and Singapore COAX has been long replaced by UTP cabling, and sometimes even fiber, but developing countries such as Indonesia, the Philippines, Malaysia and particularly China remain a COAX stronghold, even for new builds. So why this lingering attraction to COAX?

The Cost Factor

Economics usually drive customer decisions and for a long time, COAX was considerably cheaper than CAT5e or CAT6, specifically in developing countries where broadband speeds were low. The reasoning went something like “Why pay for something that you won’t be able to get any time soon anyway”? But this cost argument no longer holds up. COAX pricing has remained constant for many years while UTP pricing has dropped consistently over the past 10 years to the point where it is now on average 20-25% cheaper than COAX (and fiber is yet cheaper again due to the higher cost of copper used in UTP).

And given that the demand for UTP remains strong, this price gap is likely to get even wider, making the COAX proposition even more unattractive to the bottom line.

The Need for Speed… and Quality

The other factor is speed. While it’s true that COAX, through various methodologies, can provide higher speed than UTP, the reality is that the speed comes at the cost of quality. COAX uses analogue modulations which doesn’t provide background noise resilience and means the overall quality will not match UTP’s digital modulation.  

Then there’s future proofing. There is this saying that bandwidth precedes data rates just as highways come before traffic. As streaming media applications such as video and multi-media become commonplace, Ethernet is the highway that will facilitate these services now with higher reliability and will enable higher bandwidth in the future, when the next generation of applications demand a smooth thoroughfare on the data highway.

Can’t rewire? Try Smart TV

Of course, sometimes rewiring an existing hotel is not an option for cost reasons, at least not in the immediate future. The good news is that there are solutions that will enable these hotels to install attractive technology innovations to wow their guests – at least until the next re-wiring renovation.

Smart TVs today offer a great alternative in cases where no UTP cabling is available. In this scenario, the TV channels can be delivered analogue to the Smart TV, and the hospitality features, such as in-room dining, messaging, facilities, and other interactive services can be delivered wirelessly through the SmartTV’s in-built wireless AP. Given that all TVs will eventually be Smart TVs, investing in this type of set up is certainly a very viable alternative where re-wiring is not possible. And once the hotel can finally run UTP to the back of the TV, they can easily cutover the analogue TV channels to IPTV channels.

So why has COAX managed to hold out this long? With cost and quality significant factors to decide against COAX, the reason COAX-based TV systems are still being deployed today could be due to a lack of awareness.

The Real Value of IPTV for Hotels

Too many times when we talk to hotels the question comes up whether the hotel will be able to recoup the investment in an IPTV system through VOD receipts, so I think it is high time I set the record straight on where the true value of an IPTV lies.

To say it upfront: it’s not ROI, or at least not first and foremost. As I have written about in a few previous blogs, VOD revenues are declining steadily for a number of reasons, and while some hotels have bigger hit rates than others, there is an inevitable trend away from VOD being a major revenue contributor. In fact, we see more and more hotels adopting the Free to Guest model (FTG) when it comes to VOD. These hotels understand that providing movies for free creates intrinsic loyalty and is another building block for creating lasting brand value.

And that’s the key word: brand value. That’s exactly what IPTV allows hotels to create, and in an ever increasing competitive landscape, this is more important than ever.

Scanning through industry research, you can sense that guests increasingly select hotels by price which puts hotels in danger of being commoditised. A recent report by Cornell University School of Hotel Administration titled Eight Trends for the Hotel Industry 2012, found that:  “Given the strength of third-party distribution portals and the push toward commoditisation, the hotel brand will become more important than ever, particularly in the context of developing customers’ loyalty”. 

So in a nutshell, IPTV provides differentiation and can turn a TV into a hotel brand ambassador that helps in building a loyal customer base that will be there, even when times are tough. It is not only the on-brand look and feel of the User Interface when guests switch on the TV. It’s the variety of services and features a hotel offers, and how they are tailored through the system, that will ensure a personal and unique experience that guests will come back for.

On the supply and demand side, if hotels are interested in giving their customers what they want (and en route increasing their loyalty),they need to take heed of consumer expectations and  going without an IPTV system is almost impossible. Here are the items respondents ranked items as either “important or very important” to be available on the guest room television for the HFTP Guest Survey from June 2011:

•       Room controls — lights, weather, temperature, etc. (49 percent)

•       Connections that allow guests to play own media (48 percent)

•       Television shows on demand (29 percent)

•       In-room messaging (29 percent)

•       First run movies (27 percent)

•       Subscription services — Hulu, Netflix, Pandora, etc. (22 percent)

•       Closed captioning in multiple languages (10 percent)

All of these services and features can be supplied with an IPTV system – and then some. Let’s not forget the additional opportunities guests traveling with their own connected devices pose. Being able to integrate a tablet or connected device on an IPTV network gives hotels the opportunity to provide innovative new services as well as improve operating efficiency. And yes, due to its interactive nature, an IPTV system can also deliver revPAR generating services that will add to the bottom line. 

So let’s summarise what IPTV can do for a hotel:

•     BRAND VALUE: Enables delivery of tailored features valuable to the guest that will create a positive brand relationship and long-lasting loyalty

•     EFFICIENCY: Streamlining backroom operations through TV-based housekeeping and concierge functions

•     FUTURE-PROOF technology that enables adding future technologies/devices easily and cost efficiently

•     BOTTOM LINE 1: opportunity to increase revPAR by enhancing features such as in-room dining

•     BOTTOM LINE 2: opportunity to create new revPAR creating features, such as eCommerce/boutique shopping features

But like with many other services, it’s how you do it that will make all the difference. Hotels should focus on their brand and work with an IPTV provider who can customise and create a system that is in line with the hotel’s values and heritage and underpins its brand image. Getting it right will mean hotels have the opportunity to build a long lasting relationship with guests, and that should more than justify the investment.  

The Limits of Using Icons as a Visual Vocabulary

It was just the other day when we looked at coming up with a new set of Icons for our in-room entertainment Graphic User Interface that it occurred to us that while the various technology devices that anchor our lives these days allow us to communicate ever more visually, our collective reference points are more and more fragmented. From the old Egyptians and their hieroglyphs to today’s Apps, mankind has always sought to use pictorial descriptions to communicate. When you study for your drivers licence, you have to memorise the look and meaning of as many road signs as possible in order to pass the test. In order to make it easier, the road authorities around the world came up with pictorial representations of the various signs which over the years were adopted more or less universally in the developed world. But while learning the meaning of these signs came with a clear incentive – i.e. learn them or don’t drive – the visual identifiers and pictorials that guide so many other things in life evolved much more haphazardly.

The windows approach to computing was probably a major milestone for making icons a centre piece of way finding in our daily lives. In the early days of the desktop computing age, these icons were necessarily simple, but not only because of the graphic restrictions, but because of the need for a simple conduit into a complex world that would be understood by the most technically inept person. The artist who created the icons for the original Mac desktop and applications believed that icons should work like traffic signs and convey information without distracting the user. So born was the ‘folder’ icon with the little stub poking out that looked exactly like the ones stacked in everyone’s office desk, alongside the ‘recycle bin’ that looked like Oscar the Grouch’s trash can, the pair of scissors that signaled that you were about to ‘cut’ something and a paperclip that meant you were ‘attaching’ a document. Then, when the internet came of age, the depiction of a neat little house with a chimney wasn’t an advertisement for a furniture shop anymore, but the icon that signified the homepage of an internet site. All of this is of course common sense and has largely managed to align most of us along one common path of iconography that enables us to recognise that a shopping cart icon means “check out” a pad lock means “security” and an umbrella has something to do with the weather.

However, what happens when the corresponding physical object has no longer any distinguishing features that are so important for being both instantly identifiable and minimally distracting? Or what if the activity it is meant to represent becomes too complex for a clear pictorial representation? A house is a house is a house is a home – ok. But take out your mobile phone and look at the symbols on the buttons for making a call and ending a call. It’s the old fashioned banana-shaped head set that was part of the home phone before it was replaced with a very different looking hands free set or a mobile phone. Or try saving something on your computer and you’ll see that this action to this date is symbolized by a floppy disc, something that joined the technology scrap heap more than 15 years ago as other portable storage options such as CD-ROM took over.

But it was when I was sitting with my graphics team to ponder a new set of icons for the User Interface of our in-room entertainment system that it really hit me how little the pictorial representation of our world has changed in the face of the relentless evolution of our communications world. How better to represent TV channels than a box with the old rabbit ears on top? And nothing says “movie” better and clearer than the old 35mm movie reel, even though today’s box offices smashes are more likely a combination of digital video and CGI. Music channels are much better represented by a full blown stereo headset rather than the now more prevalent micro earpieces. And what says better “you’ve got mail” than a good old fashioned letter envelope? It will be interesting to see if these ‘old’ pictorials finally disappear simply because a new generation of users has no longer any memory of them ever being in existence. But what will replace them? The problem is that as the physical part of human interaction and communication gets more complex, so by necessity does the iconography. What was once a clearly defined activity, such as “I watch TV”, has morphed into “I Skype my friend on my connected TV”. “I read the news in the paper” is now more likely to be “I read the news on my smart phone”. The question is at what point finding a universal visual vocabulary for ever complex activities becomes futile. Some icons will move into the abstract space where the meaning is instilled through what is commonly known as branding. We can already see this with Facebook, Skype and Twitter, whose logos have effectively turned into icons describing an activity.

But what about the so-called ‘way finding’ icons? At the risk of sounding a little nostalgic, my bet is that while newspapers may go completely digital and TV’s become multifunctional communication devices, their original form and purpose will live on in the world of icons for generations to come. And as for our User interface? In the end we decided to do a combo of words and icons. Nothing beats a good compromise.