This is cloud-tv going extreme done by Ziggo. It is based on ActiveVideo (former Avinity) technology that can stream the graphics on top of the video in a one-to-one VOD channel from server to client. Ideal for lower end settop boxes and retail CE devices, where it avoids the complex APIs for running applications locally on the client.
Still: even with a thin client there are some issues: CI+v1.3 based TVs have to provide IP connections to the modules, but unfortunately the response time of some of the TV implementations is poor, leading to sub-par user experience. Ziggo is addressing this with TV manufacturers.
Nevertheless: despite this small hickup, the seamless launching of new applications on a uniform platform will be the greatest asset of this approach.
The most typical alternative to this approach is to use HTML4 or 5 browser technology on the client. That is also coming along of course. But some older clients haven’t got such browsers, and could not even be upgraded to run them. Browser implementations always have their individual quirks however. But browsers mix well with OTT, the ActiveVideo technology cannot work in high latency video environments and needs a direct low latency cable or IPTV connection.