The pay-TV industry is under threat. As on demand services continue to grow in popularity, operators should be reaping significant profits. After all, internet-enabled set-top boxes are ideal for connecting viewers with cloud-based content. But today’s consumers are turning to other platforms, namely smartphones and tablets, to watch video on demand. With online content availability at an all-time high, and over-the-top services (like Netflix) encroaching on operator revenues, it’s no longer enough to rely on exclusive content for a competitive advantage. Something else needs to change, and the answer lies with the user experience.
Cloud-based content delivery has led to a change in consumer habits and it’s now easier than ever to access and view content on second screen devices. While the rise of internet-enabled TV technology marks the industry’s attempt to capitalise on this, modern viewers are no longer tied to an operator’s set-top box to access the latest and greatest TV. To keep consumers engaged, operators need to offer more. Although set-top box hardware has evolved to support the growth of online content and video, unfortunately the user experience has not, and this is a deal breaker. As a result, some consumers are now turning their back on TV, with its tired, clunky user experience and archaic remote control design, in favour of smartphones and tablets that provide access to the same online content, but with a better user experience.
Many in the industry see Smart TV as the answer, with some operators choosing to provide their service as a Smart TV app and hoping to win back consumers with the lure of a big screen device that can connect them directly to internet-based content. This makes sense given the emphasis that has been placed on the impact of Smart TV for the future of pay-TV services. Indeed, Smart TV shipments are increasing all the time and new research from IHS predicts there will be 8 billion connected devices by 2018, with Smart TVs representing a large chunk of this. The challenge for operators providing Smart TV apps though is that they cannot change the Smart TV user experience. The hardware is outside their control. There’s no brand recognition. And, in many cases, the technology is no more advanced than an operator’s own set-top box.
Instead, operators should focus on recapturing consumer attention by positioning the set-top box as the main platform for accessing internet-based content. Operators have already invested heavily in set-top box technology and have spent great sums promoting the functionality this platform offers. They have been successful in encouraging consumers to buy and connect these devices, but not to actually use the services they provide. Consumers want to access streaming services on TV from a centralised content hub. They recognise the lower billing threshold that an existing relationship with a pay-TV operator can offer. But the poorly designed user interface has created a barrier to interaction, and if the rise of Smart TV has made one thing clear, it’s that in a world of cloud-based content, it’s the user experience that’s king.
Operators need to revolutionise the user interface on their set-top boxes. By doing so, they can claw back ‘ownership’ of their subscribers and encourage them to use their branded service once again. An operator’s set-top box is built for purpose and has the potential to become an ‘entertainment hub’ for consumers. After all, it offers far more than just access to on demand content available online via smartphones and tablets. Set-top boxes can also provide easy access to subscription content for the viewer who already has a paid relationship with the operator. But this can only happen once the user interface has improved. Yet, the user interface relies on more than the GUI on screen. The remote control is equally, if not more, important. It is fundamental to future operator revenues; it’s at the centre of TV interaction and is the hardware that drives the user experience – whether on a Smart TV or via a set-top box. But it’s out of date, and the button-based up-down-left-right approach to navigation makes using TV services unnecessarily difficult. By introducing new remote control technologies (such as direct pointing and gesture control) to branded set-top boxes, operators can effectively compete with the rise of the Smart TV and put an end to the days where revenues are cannibalised by second screen devices. Ultimately, when it comes to unlocking the potential of set-top box platform, a new control technology is required.
