User Experience, Voice Navigation Are Challenges to MVPDs in IPTV Age, Panelists Say

On top challenges facing MVPDs in the changing IPTV landscape, Thun said TiVo's research lab finds it’s “increasingly tough to get through a usability session without the main point of comparison” being Netflix. In testing of video services, consumers inevitably bring up Netflix features and functionality, said Thun, and a typical comment might be: “I don’t see those in my pay-TV experience.”

Frequency of interaction accounts for much of the preference, due to familiarity, Thun said. A typical video customer might interact with two or three pay-TV interfaces over a three-to-five-year period compared with “dozens, perhaps even hundreds” of app experiences on mobile devices, he said. The combination of wider exposure and app innovations creates a “much broader landscape” that’s influencing consumer perception of where innovation is happening and how fast it’s moving, said the TiVo executive.

An already disrupted MVPD market affected by new devices, content distribution options and competitors -- which didn't exist 10 years ago -- has been shaken again over the past 18-24 months by user experience trends, Android TV and cloud services, said Parks analyst Brett Sappington. Parks data shows that nearly 70 percent of U.S. households in Q3 subscribed to one or more video services with the fastest growing segment having three or more subscriptions.

Sappington cited a “plateauing” of smart TVs and streaming media players this year, with more than 40 percent of households having at least one smart TV and just under that owning at least one streaming media player. “Consumers now have a broader set of players that affect their perception of the consumer experience,” he said, and they can assess all of their options vs. being locked into traditional pay TV. Beyond a channel guide and search functionality, consumers expect more personalization, discovery and for their service to adapt to their preferences and viewing experience, Sappington said.

TiVo is “extremely bullish” on voice as a navigation tool, but TiVo believes a deeper focus on TV viewing is needed to make it successful for the video viewing experience, said Thun. Platforms from Apple, Amazon and Google that take a “broad approach” to voice control don’t translate well to “detailed use cases that the living room user needs to navigate the TV” -- and “aren’t necessarily as robust,” he said. TiVo is pushing the “ideal solution” as a combination of a vertical entertainment solution from TiVo combined with broader ecosystems.

At the same time, voice has had a “fairly slow ramp” over the 10 years since Siri went live, said Thun, attributing it to disappointing experiences. “When a user gets a failure, whether it’s on try one, try three or try 10, it causes them to pause and think twice about trying it again," he said. "You have to get to sufficient quality so that you don’t have that doubt in the solution." Operators, he said, “need to nail the experience from a deep entertainment vertical search perspective” for a solution to have credibility.

Android TV, once shunned over concerns of reliability and security, is finding more adoption among operators, Sappington and Thun said. MVPD chief technology officers are “all looking at it very closely and analyzing how it fits in to their road map and their plans going forward,” Thun said. He credited Google’s “major efforts in revisions to the Android TV approach," giving the operator “full control” over the user experience and boot screen programming. That, in effect, enables operators to “create their own” user interface while still being able to tap into the power of Google Assistant and Google Play, he said. Google “prioritized the right things” in making Android TV more attractive to operators.

Expanding on Android TV's growing acceptance, Thun cited the growing ecosystem available through Google Play, which he called a way to collectively bring “thousands and thousands of apps” that operators can bring into an offering without having, in many cases, to build individual business relationships with OTT services. “Instead, you instantly tie in through Android TV to a very robust ecosystem, and that’s highly attractive to the operator community,” he said.

TiVo wants to give MVPDs the ability to experiment at their own pace, citing the billions of dollars they invested in legacy infrastructure deploying Linux set-top boxes and other technologies, said Thun. “They can’t transition overnight” and they need to do trials to see the impact of a new platform on their business, he said. TiVo wants to work with operators to map newer technologies -- Android TV, its own streamer platform, Apple and Amazon integration -- to determine the right go-to-market strategy, he said.

On the challenge of MVPDs navigating the transition to IPTV, Sappington said they see where the future is going but have to balance that with a business strategy traditionally built on stability. “Just as digital cable allowed them to do some new and unique things, now they’re looking beyond that to flexibility and new features" with IPTV, he said. They understand IPTV allows them to do more, offers new revenue opportunities and that connected devices and OTT are part of the future, he said. Many MVPDs are looking to chart a path to get to a new infrastructure, but are hampered by costs of repurposing spectrum, replacing set-top boxes, developing software and running separate networks for different delivery mechanisms, he said.

Costs aren’t trivial to a “massive transition,” which has to be done without alienating consumers, Sappington said. “They have to do it in a way that the consumer doesn’t feel it at all because if subscribers end up feeling the pain of transition, they’ll just go somewhere else,” he said. MVPDs need to be able to drive the change to IPTV to open up new opportunities “while minimizing cost and the impact on consumers.”

Sappington also referred to challenges operators face keeping up with “scrum-developed software.” Previously they might revise software quarterly or annually, and now they need to have ongoing development, as frequently as weekly, in a “much more dynamic marketplace.” With more than 200 OTT video services in the U.S. and dozens of connected devices, there’s a “greater need to focus on flexibility” while trying to compete, he said.

Partnerships are increasingly important as MVPDs look to secure a role in the “rapidly evolving marketplace,” said Thun. Operators should “embrace” the rapid evolution because of the chance of fragmentation that could adversely affect the consumer experience, Thun said.

“Instead of forcing a consumer to watch linear TV and DVR on one set-top box and then hit input on the remote control and go to Apple TV to watch Netflix, bring it all together,” Thun said. Providers should “control HDMI 1 so you don’t force the consumer to go search for content elsewhere,” said the executive. “Be the starting point for the consumer’s entertainment experience." If providers can deliver a compelling user experience through voice and discovery, “don’t worry about handing off a consumer to watch a movie on Netflix because they can hit the back button with a single click and come back to your main experience,” he said. “Own the racetrack, not an individual horse.”