Gali Michaeli Issue: Asia-Pacific II 2015
Article no.: 8
Topic: The Pay-TV experience: It’s time.
Author: Gali Michaeli
Title: VP, Business Development
Organisation: Comigo
PDF size: 395KB

About author

Gali Michaeli is the vice president of business development at Comigo, a cutting-edge pay-TV platform provider which offers an exciting TV experience on any device. Gali is the force behind Comigo’s strategic alliances, managing business development and partnerships within the ecosystem.

Before joining Comigo, Gali was vice president of strategy at Applicaster, where she led the company’s strategic and tactic initiatives, alongside long-term business development and new market penetration. Prior to that, she was a manager at TASC Consulting & Capital, leading the TMT vertical and managing projects for telcos, broadcasters, MNOs, and cablecos.

Gali served in the IDF intelligence top technology unit and holds a Bachelor of Arts in economics from Tel Aviv University and a Master of Arts in law from Bar Ilan University.

Article abstract

Smart and connected TV sales are growing rapidly (researchers are expecting over 20 percent annual shipments growth), and people are increasingly connecting their TVs to the Internet, but it is still a fragmented market. The large amount of vendors and operating systems leads to a world where most providers are still hesitant about developing Smart TV apps, if only for the sheer size of the investment needed to capture a significant portion of this market. 

Full Article

For many years, discussions about TV viewing have centered on whether it is a lean-back vs. lean-forward experience and what role mobile and tablet devices play in terms of video viewing and as companion activities. Recently, the TV industry has evolved drastically. Viewers have more choices than ever before, from legacy cable and satellite offerings to online SVOD, dongles, antennas, and gaming boxes of every sort. Piracy has also changed, becoming so abundant that it is an issue in and of itself. Tech-savvy users are finding content they want, but not always with the most comfortable user experience. Most viewers, however, are still settling for a traditional multichannel offering, perhaps complementing it with Netflix or a popular online video offering in their country.

It is clear that, even today, content is still king. Viewers will not pay for TV services unless the content is compelling, up-to-date, and local. Furthermore, as competition increases, price plays an increasingly important part. Taking into account high-quality, relevant content at fair prices, the true differentiator for operators, service providers, and broadcasters remains a third aspect — experience.

What is experience?
Experience can mean different things to different people. The user experience can be an integrated part of a TV program; this is especially relevant for live events and prime time shows. In these cases, the content may include elements of participation, such as voting, prize contests, and more. Usually, this kind of experience can only be offered by the content creators in real time. It can create significant differentiation for content, and has been known to establish global brands like “American Idol” or “The X Factor.” However, this type of experience hasn’t, thus far, been available to most service providers in the business of offering content to home viewers. For these service providers, the goal has always been to bring content to the user.

Still, the industry has come a long way. There used to be only one, maybe two, channels, and people had to actually get up from the couch to change the channel. Can you imagine?! Then, even more channels emerged, enabling people to watch what they wanted, not just what was available. After that, lo and behold, the remote control was invented! From there, for a few years, it felt like things were moving forward. Cable and satellite providers came out with set-top-boxes with program guides that showed viewers the names of scheduled programs and additional information or metadata, VOD offerings, start-over TV, and various other features, all of which made for a better viewing experience, giving viewers more choice, information, and control. Control and information are especially important. The advent of Smart and connected TVs enables users to combine the traditional multichannel TV experience with next-generation content options like online video.

While all of this was happening, smartphones and tablets came along, creating a new expectation that the user experience can, and should, be at the forefront of product managers’ agendas, even for TV content. Suddenly, what used to be a slow-to-respond, remote-controlled experience became quick and interactive thanks to a slick UI (user interface) featuring a modernistic design that involves scrolling, tapping, and generally using natural gestures to reach content. As a result, according to Gartner more than 50 percent of mobile data is video , and more than 34 percent of millennials watch more video online than on TV, according to a survey by The New York Times. Viewers today are used to quickly discovering content and to everything having a state-of-the-art look and feel. TV providers can’t afford to have similar issues. Moreover, they are expected to exceed expectations by constantly innovating and making sure viewers are getting more and more out of their TV experience.
The living room environment
Though Smart and connected TV sales are growing rapidly (researchers are expecting over 20 percent annual shipments growth), and people are increasingly connecting their TVs to the Internet, it is still a fragmented market. The large amount of vendors and operating systems leads to a world where most providers are still hesitant about developing Smart TV apps, if only for the sheer size of the investment needed to capture a significant portion of this market. In addition, in order to provide a truly seamless experience, more than just an app needs to be developed. The operator needs to control the TV operating system to enable simple viewer actions to take place, such as reaching the required home page or channel when the TV is turned on (as opposed to, for example, reaching an apps menu). Clearly, neither the Smart TV vendors nor the existing pay-TV operators are keen on this happening. The operators don’t support this due to the large investment needed and existing investments in various STBs, and the vendors because they cannot afford to lose control over the app markets that their TVs have become.
Thus, operators continue to invest in set-top-boxes. This enables them to control not only the content, but the content-viewing experience. They can make sure viewers reach the right place when turning on the TV, while controlling the look and feel of the entire experience. Well thought out middleware on a high-quality set-top box gives pay-TV operators the ability to truly engage with TV viewers.

Differentiation through experience
In most competitive TV markets, price plays a crucial part. Content, too, is important. Yet in a world where viewers can get content in many ways, it’s likely they’ll choose the option that looks, feels, and is experienced, in the best way. Even when SMS was fully available and functional, the founders of WhatsApp managed to revolutionize how we communicate textually by innovating the one thing that wasn’t good enough — the user experience. Simplicity and functionality were most important. Facebook did the same thing, in terms of differentiating through experience. Yet even before looking into Facebook’s UI, Mark Zuckerberg revolutionized something else — the way that people engage with each other and the types of interaction people are willing to participate in.

Another type of experience that made all the difference is, almost obviously — the PC. The financial and technical ability for almost anyone today to work digitally by gaining access to endless new content optimizes the working experience, while also enabling gaming, socializing, and much more.

In much the same way, differentiation for operators can come from several directions UI, engagement, and access to more content. All three of these are aspects of the user’s TV and content experience, and can be used separately or combined to give viewers something more. For example, UI can make or break content discovery. Even the best recommendations algorithm is not enough if it’s not intuitive and pleasing to the eye.

On the engagement front, social is the obvious go-to today. Users often prefer to watch what their friends recommend than what is popular. Operators need to show users what their friends like to watch, or are watching now, and present it where it’s most convenient — on the screen they are watching. Operators can, and should, also provide users with additional activities that are relevant to the user and to what they are watching. For example, operators can enable discovery during a music video by providing lyrics and links to covers. Likewise, operators can enable users to browse merchandise from their favorite show at the moment when the user is most likely to be thinking about it — while they are watching the show!

Another key differentiator can be access. Users need to be able to reach the content they want — not just long-form video but also short form. They will want to access content a specific operator has licensed, as well as OTT offerings such as Netflix and HBO GO on the operator’s platform. Beyond video content, there also needs to be access to social content, data and information pertaining to the video, and even things that are completely unrelated but provide value to consumers. These may include commerce, shopping and payments, directly on the TV screen and in some cases even overlaid directly on the video. This kind of access can keep users’ eyeballs on the big screen while providing the incentive to stay with a provider that has such a holistic view of the living room. Personalization, too, can play a key role here, providing users with access to the services that are most relevant based on social recommendations and personal preferences. For example, an operator can provide a sports fan access to real-time statistics and data without losing a moment of their favorite team’s match. All of this is provided in one place on-screen and is based on the users’ choice of teams to follow.

Content, price, experience
To summarize, it’s not one but three things that make or break a successful TV offering for industry players. A car needs a viable engine and a place to sit, it also needs to be priced fairly. But the true difference between different brands lies in the design, the strength of the engine, the comfort of the seating and the sound system. We can compare this story to TV offerings — it’s all about the user’s experience.

The TV industry has come a long way in this area. Television has never been more convenient, engaging, or cooler to watch. Despite the presence of mobile and tablet devices, people are still spending significant, even growing, amounts of time in front of the big screen at home. It’s our job to make sure that we continue to provide viewers with ample reasons — beyond just the size of the screen — to continue to do so.