A new global survey by content protection firm Irdeto and Ovum has revealed that nearly three-quarters of video service providers have Android TV or Android Open Source Project (AOSP) on their technology roadmaps.
In February 2017, Ovum sounded out over 300 TV industry professionals from TV service providers across the world (including pay TV, telcos, OTT streaming services, and network operators) on their organizations’TV and Android OS strategies. Ovum targeted an informed audience with a representative proportion ofC-level respondents alongside technology, content, marketing, and network security.
Key findings
- The majority of today’s video service providers have either Android TV or Android Open Source Platform (AOSP) on their technology roadmaps, with almost three out of four (72%) considering Android implementations as part of their short, medium, or longer-term STB strategies.
- More than half (63%) say Android TV or its open source alternative AOSP are the most likely among today’s major competing technologies to be deployed on their upcoming set-top box (STB) platforms.
- Android is on the radar of all players in the video entertainment space, with more than two-thirds of service providers surveyed expecting it to be the market-leading TV platform by 2025.
- Meanwhile, Google is perceived equally as a partner and either a competitor or a threat by around four out of five service providers, with a majority of individual respondents seeing the company as both a partner and a threat.
- Yet paradoxically, despite service providers’ clear indications of their confidence in Android as the TV platform of the future, only just over half demonstrated an understanding of the important differences between the standard Android TV platform and AOSP.
- Features rather than cost are attracting operators to Android-based STB platforms. The biggest drivers for deploying Android on STBs are those concerning convenience and user experience.
- Opex savings is the most widely anticipated cost benefit associated with Android STB implementation – cited by well over half of the companies surveyed.
- While there are some concerns regarding capex costs associated with the Android TV platform, these are largely expected to be offset by its anticipated operational cost efficiencies.
- Although more than half of operators are willing to pay a premium for Android chipsets, most of these anticipate additional costs to be minimal. Almost a third expect either to incur no additional costs or to make savings against currently deployed chipsets.
- The top security issues are around the open platform’s vulnerability to cyberthreats and its potential for facilitating illegal streaming, although such concerns were cited by fewer than half of the operators surveyed.
- Operators acknowledge the dangers of cannibalization and churn as well as the security issues associated with an open, apps-based platform. But most will accept those risks in exchange for the benefits of service choice, flexibility, and control over the user experience.
What the findings mean for pay TV, broadcast, and OTT:
- Pay-TV service providers. In the age of mobile apps, audience expectations for a frequently improved user experience (UX) place a lot of pressure on STB UXs. The flexibility of Android in customizing the UI for STBs and enabling third-party services can help service providers differentiate their services. As an alternative to proprietary solutions, there is the perception that Android is competitive on price. For high ARPU TV services, audience expectations are extremely high.
- Having already invested in OTT distribution – often via catch-up services and video-on-demand (VoD) offerings of some description – many broadcasters will already have an Android app which can form the basis of negotiations with pay-TV operators using Android. The challenges around ensuring consistent functionality across all platforms will be more commercial than technical. Broadcasters must drive distribution and use of their apps; a key tactic will be to work with pay-TV partners and other aggregators, such as Amazon Streaming Partners, to grow audiences. Ensuring the Android quality of experience (QoE) is on a par with comparable services will mean that broadcasters are well placed to negotiate distribution deals with pay TV, OTT aggregators, and network operators looking to bundle OTT entertainment with broadband.
- Premium OTT streaming providers (global and regional). Similarly to broadcasters, OTT specialists will already have an Android strategy, and the challenge will be to continue driving growth and profitability in a competitive environment where their main cost – content – is rising sharply. We are entering a period where OTT video services will increasingly be bundled and aggregated by companies like Amazon and Hulu in order to drive growth and reduce the pain of the relatively customer-unfriendly process of subscribing to multiple subscription video-on-demand (SVoD) services. Pay-TV operators using Android are hungry for OTT video partners; the next 12 months should be very busy for OTT services.
The survey, Is Android the Future of the Set-Top Box?, was conducted in February 2017 and took the views of 301 TV industry professionals spread across six regional groupings, including APAC, Eastern Europe, Western Europe, Latin America, Middle East & Africa and North America.
In addition to 72% of respondents considering Android implementations as a part of their set-top box (STB) strategies, half of all respondents saw Android as being important for their goals within the next five years. The industry professionals identified several benefits they perceive Android TV offering, including the availability of new features and services, faster time-to-market, an attractive user interface and cost efficiencies. However, only 54% of video service providers were willing to pay more for Android chipsets than traditional chipsets with embedded middleware.
The ability for users to download additional apps was the driving force leading Android implementations. Video service providers with more than one million subscribers (43%) and those with less than one million subscribers (34%) both said that this was the No 1 driver for adoption. However, despite service providers’ confidence in the benefits of Android TV, there remain significant concerns around piracy and cyber threats. By allowing easy installations of other applications onto the STB, 43% of respondents believe there will be an increased attack surface, while 41% are concerned that their subscribers could install apps for illegal streaming.
“Video service providers are feeling pressure to continue to innovate their offerings to satisfy consumer demand for an optimal user experience,” explained Frank Poppelsdorf, director of product management, Irdeto. “These results indicate that Android TV is not only on pace to play a critical role in the future of TV distribution, but are essential for the industry to meet growing consumer demand for new and innovative services. However, the open nature of the technology brings up several security concerns, especially regarding piracy. As the industry continues to shift toward more open platforms for the set-top box, it will be critical for video service providers to implement a robust 360° security approach to ensure their premium content is protected while optimising flexibility and time to market.”
While many expect Android to dominate the TV landscape in the near future, the Is Android the Future of the Set-Top Box? survey revealed that more education on the differences between Android platforms may be needed. Only 52% of those surveyed understand the difference between Android TV and AOSP.
“Education on Android platforms is critical for video service providers to understand the capabilities, benefits and drawbacks of each technology in order to make the best strategic decision concerning their technology roadmap,” added Ovum practice leader Ed Barton.
