Data is starting to pour in supporting the long-held thesis that video-on-demand usage on set-tops will climb rapidly once MSOs break away from stodgy, gridbased guides and begin to embrace fancier, cloud-based user interfaces with advanced search and recommendation engines.
Offering thousands of VOD choices is critical to drawing in more viewers, but also creates a paradox of choice for consumers confronted with the annoying chore of finding something to watch on-demand using scroll-based guides with limited search capabilities.
Comcast has yet to release much consumer data tied to X1, a new Internet protocol-capable video platform that relies on a media-rich, cloud-based interface, but the MSO confirmed that it is already seeing positive usage trends during the early deployment phases.
X1 is already producing a double-digit increase in VOD usage, a Comcast spokesman said, noting that the MSO is witnessing those gains even before it has had a chance to tie in a “barker channel” that touts what’s new and popular on the VOD service.
GETTING PERSONAL IN D.C.
Those numbers should improve as Comcast gets ready to add personalized recommendation engines in the next version of its cloud-based guide, internally dubbed X2, which will be formally introduced next month at The Cable Show in Washington, D.C.
ThinkAnalytics, a U.K.-based company that has developed recommendation engines that can be used on set-tops, tablets and other types of devices, noted that its MSO customers are seeing VOD sales increase by an average of 20% to 50%. ThinkAnalytics’ system is in use by more than 40 operators around the globe, including Liberty Global, Cox Communications, British Sky Broadcasting, Virgin Media, Swisscom, Telenet Group and ZON Multimédia.
Among them, Cox is using the ThinkAnalytics platform in tandem with its NDS/Cisco Systems-made Trio guide to generate recommendations and unique preference profiles for up to eight users in a given household.
The new product has been on the market since December, but customers are already telling Cox that the revamped user interface is making a difference. According to a recent survey, 56% of respondents said the new product has made them aware of content they hadn’t know about, 32% said they enjoy watching TV more and 75% said they “strongly agree” that it makes it easy to find recommended shows and movies.
AT&T U-verse is looking to beef up VOD usage with a refreshed VOD “Storefront” that is now available in dozens of markets and should be offered in all U-verse systems by the end of May. In addition to jazzing up the UI with jacket art, the new Storefront spotlights VOD discounts and special offers, lets users build their own VOD viewing queue, and bakes in an enhanced search function can find content by actor and other variables besides the title.
AT&T isn’t divulging specific data yet, as the new Storefront was launched in a big way last earlier this month, but anecdotally the new UI is producing “upward spikes on [VOD] usage,” vice president of U-verse marketing GW Shaw said, noting that AT&T’s IP infrastructure allows the telco to push the new interface across its video platform rapidly. “This new UI absolutely does drive the results we are looking for.”
NEW TRICKS FOR OLD SET-TOPS
But, unlike AT&T, most cable operators are just now starting to add IP capabilities to their pay TV platforms, meaning they need to figure out ways to get millions of old quadrature amplitude modulation (QAM) boxes up to snuff without an expensive forklift. Companies like ActiveVideo Networks are pitching cloud-based processing systems that can convert and stitch fancy, Web-like VOD interfaces written in HTML5 into cable operators’ QAM fabric.
Ziggo, the Dutch MSO with almost 2.2 million digital- TV subs, is giving its QAM-locked platform a VOD refresh on a broad scale, using ActiveVideo’s CloudTV system and its existing SeaChange VOD back-office platform. As a result, the MSO’s VOD usage has surged early on.
During phase one of the project last September, about 350,000 customers using Humax- and Samsungmade receivers were alerted that they could upgrade to the new UI at no charge.
Within one month of the commercial launch of the system in March, 60,000 unique users had registered for the new interface and, despite representing just a sliver of the customer base, accounted for roughly 30% of all Ziggo VOD activity, according to a new case study provided to Multichannel News. In its first-quarter earnings report, Ziggo also noted that it has seen an 80% jump in overall VOD transactions versus the yearago quarter.
The key discovery was that the VOD interface could be upgraded on the old devices at scale without requiring the operator to endure a long migration path and massive box switchout. “The net effect could take years,” ActiveVideo senior vice president and chief marketing officer Murali Nemani said. The “breakthrough,” he said, “is decoupling the UI from the device itself.”
Comcast is also using ActiveVideo’s system to bring an X1-like VOD experience to QAM boxes in Chattanooga, Tenn., but has not released results of that work.
The early returns are in on next-generation VOD interfaces, and they seem to be drawing in more viewers.