Commentary

Set-Top What?

  • by July 16, 2013

None of us get to pick which set-top box we want or which interface we like.  But Microsoft, Roku, Apple, LG, Sony, Samsung, with its recent acquisition of Boxee, and countless other connected TV platforms are giving consumers some element of choice.  What impact will the continued adoption of these devices have on the consumption trends of traditional and digital video sources?  Will more online video sources finally break into the TV?  Content is undoubtedly the key factor influencing consumption, and recent months have shown us that original programming isn't just for big nets. 

But something else is going on.  So far, the swath of options available hasn't really helped the online video industry at large. Audiences aged 18-24 still watch over 20 hours of television per week.  It's lower than other demographics, but TV remains far and away the leader in time spent with video.  Next to traditional TV, the most time spent with video may be something that's not reported by any industry body at all -- Netflix --with some sources pegging average daily usage at around 90 minutes or 10.5 hours per week.  Falling far behind in third place are all other online video sources combined (regardless of which measurement vendor's data you prefer).  If device manufacturers and online programmers have any hope of changing that ratio, they've got one of two options.  Either continue to look for that elusive, disruptive play; or pull from the playbook of the traditional television ecosystem and Netflix -- which have a lot more in common the anyone thinks.

advertisement

advertisement

Devices available today, whether a gaming console or an over-the-top set-top box, are not designed to encourage true, lean-back living room-style entertainment.  People will talk about great UIs, discoverability, and speech or gestural recognition as if they'll change the game.  I disagree.  That's what everyone has been focusing on, and it certainly has not made an impact.  But take a look at how TV and Netflix operate.  They've established a curated experience for viewers that's tightly married with content.

Say what you will about having a hundreds of channels and nothing to watch -- I would bet most of us can readily recall the channel numbers we frequent.  Even though we've gone from three to 500 channels, the infamous grid, channel numbers and DVRs have continued to support billions of hours of TV viewing.  As for discoverability in TV, it's a pretty well-oiled machine backed by millions in promotions on air and off.

Netflix is no different.  We've heard similar gripes about content -- either they don't have the newest seasons or the newest movies; or they lost one deal or another.  However, their decision not to always buy into bundles is a testament to their understanding of the importance of the user experience.  And just like programmers promoting similar shows in their lineup, Netflix goes one step further with suggestions.  Devices can be a meaningful player in the evolution of online video, but to do so means being more than just a conduit for the programmers.

Everyone talks about fragmentation, but consolidation is key when it comes to TV.  It's about creating a single experience -- not supporting tens of hundreds of unique apps.  Apple TV is limited to just a handful of content sources, and they've sold roughly 10 million units. Roku has hundreds of choices and they've only sold around 5 million.  

The app model clearly isn't working for television.  What is?  You might be able to make a case for Pay TV VOD.  Usage is still small, but rates are finally accelerating, thanks in large part to improved interfaces.  Are they apps?  Of course not.  Navigating between ABC, HGTV and HBO is exactly the same process  That's the point.  It's why the Fan TV set-top box has so much potential. It's why Microsoft is betting big with the XBox One.  And it's why device OEMs have started moving beyond hardware innovation and started focusing on software.  It's also why a Bittorrent box should scare the hell out of everyone.

The further we can abstract the content sources from the user experience, the greater chance there is that the content being consumed won't just be coming from one place anymore.  That's great news for online programmers, as well as the traditional media companies that are snatching them up.

1 comment about "Set-Top What?".
Check to receive email when comments are posted.
  1. The digital Hobo from TheDigitalHobo.com, July 16, 2013 at 4:07 p.m.

    Don't get to pick our box or interface? Who is your cable company? Bedrock ISP? FiOS and Cablevision both offer their customers the ability to rent a cable card and use whatever device they like. My livingroom is running off of a Windows Media Center, and occasionally XBMC.

    The cable companies are doing an excellent job of protecting their business. HBO Go and every series that is airing on a premium channel is available on demand. You just have to be a subscriber.

    It doesn't matter what device you use. If you're watching Game of Thrones or Sons of Anarchy, you're watching TV.

Next story loading loading..