Historically, the pay TV industry has found it difficult to respond rapidly to changing market forces that impacted the set-top box user interface. With monolithic legacy middleware stacks and less-than-flexible development environments, many pay TV operators felt unable to innovate quickly enough at the user interface (UI) level.
In parallel, the over-the-top (OTT) video market had attracted consumers with its flexible offerings, affordability and innovative rate of change. However, pay TV operators are now embracing new technology and non-traditional methods of video delivery, and they too are attracting consumers with new OTT-style flexible services.
Thanks to the launch of Google's Android TV Operator Tier, pay TV operators have been provided with a new platform to drive change in their industry - both to the UI on the set-top box, as well as to their business models. Android TV has become an attractive entity, both to the providers and to their consumers.
Pay TV has been popular for generations, with providers such as Sky, Virgin and DirecTV offering an appealing service with unrivalled premium content. If viewers are looking for their favourite weekly soap operas, or the live coverage of the Olympics, they head straight to their set-top box. Not only that, but pay TV has proven itself to be a reliable source of high-quality news and entertainment that provides routine to its consumers.
While this established environment has proven successful in the past, in the current market it now is crucial that pay TV operators meet the demand for a personalized service. Android TV-based services have the ability to do this, while still maintaining the core services for pay TV providers, as now viewers can pick and chose their own set of OTT apps in addition to the core pay TV operator's offering.
Changing the face
Android TV is now gaining momentum in the pay TV landscape since the launch of the Operator Tier, as operators are now able to personalize the platform, prioritize their content over third-party content, and launch a fully customized UI for Android TV. This personalization of the platform and ability to meet the demand for OTT through a pay TV subscription is a significant step in the market as we are finding that consumers respond better to personalized platforms.
The ability to launch a custom user interface on Android TV gives operators the best control over their brand, and over the presentation and delivery of their premium video content, all while retaining access to the benefits of the underlying Android TV operating system including downloaded apps, games, YouTube and other third-party OTT services.
The ability for operators to customize this well-received platform has resulted in its rapid adoption by pay TV operators, in Asia and Europe particularly. Kagan predicts that worldwide shipments of all Android TV devices, including set-top boxes and smart TVs, will increase from 7.6 million in 2016 to 40.1 million in 2021.
Developing the traditional
The arrival of a new operator-led Android TV-powered set-top box platform can greatly help the pay TV operator to compete with the OTT market, and can drive increased consumer loyalty. By adopting Android TV, the provider allows the consumer to take advantage of third-party content, delivering flexibility. And yet, the operator is still at an advantage, as it retains control of the main HDMI input, the remote control, and the billing relationship with the customer. Finally, operators can promote and prioritize their own premium content as an integral part of their custom UI.
This ability to aggregate and deliver the best offering of high-quality TV content, across linear, on-demand, and now also third-party OTT services, allows the operator to retain the viewer's trust as the best provider of video entertainment, while still offering the consumer variety, flexibility and good value for money.
The Android TV Operator Tier has unleashed positive change for pay TV operators and offers the ability to deliver an operator-designed custom user experience which can compete with OTT offerings via speed of innovation, quality of service and user personalization.
Simon Leadlay is director of pay TV business development at Accedo.