The right platform OS wins new customers for pay-TV operators, says Sky

Katherine Wen, director of commercial strategy and development at Sky, has outlined how Comcast Entertainment OS — the technology platform developed to run a next-generation user experience across set-top boxes and TV sets — is enabling pay-TV operators to extend their reach into new consumer segments.

Speaking at Connected TV World Summit last week, Wen highlighted the way Entertainment OS enabled Sky in the UK to create a streaming-first pay-TV offer. It has also helped Comcast in the US and Foxtel in Australia in different ways.

In the UK, Sky built Sky Glass (the groundbreaking operator-supplied smart TV) and Sky Stream (the streaming-only “puck” set-top box) using Entertainment OS  — branded Sky OS in Europe — as a way to strengthen and grow the existing pay-TV business.

“Sky leveraged it to ensure a streaming-first experience while maintaining the core strengths of pay-TV, so it appeals to both existing and streaming-first customers,” she explained.

“We made that work by preserving the best of traditional TV: an EPG [electronic programme guide] that means live channels are easily accessible in an order viewers are familiar with and a playback feature that mimics recordings so you can save content to watch later.”

The user experience ensures viewers engage first with content they are entitled to watch without additional subscriptions, while recommendations highlight major new content releases.

Comcast’s broadband targeting

Comcast used Entertainment OS to target a more obviously different customer segment: households taking its Xfinity broadband service that are not interested in a pay-TV package.

This cohort is offered the Xumo Stream Box, which delivers streaming TV to existing TVs via HDMI. It comes with 300-plus pre-loaded apps spanning an array of free content and subscription services for users who already take, or then sign up to, premium offers.

Wen pointed out: “Xumo Stream Box creates the opportunity to expand reach, increase broadband stickiness [reduce churn from broadband-only customers] and explore new revenue streams beyond traditional pay-TV.”

The new revenue opportunities include targeted advertising within free ad-supported TV (FAST) and what the connected TV market generally calls home-screen advertising, meaning paid placements that are usually taken by media and entertainment companies to promote their shows and apps. These promotions are data-driven and so relevant to users.

Meanwhile, Comcast can use this streaming- and apps-focused environment to encourage uptake of its own content services including, for example, subscription streamer Peacock Premium.

Foxtel partnership

Wen offered Foxtel as the final example of how a pay-TV operator can diversify its go-to-market strategy using Entertainment OS (with Foxtel one of the growing number of international partners using the platform).

Last year, Foxtel launched Hubbl as a standalone brand to offer Australian consumers a streaming set-top box and smart TV called Hubbl Glass, with the aim of pulling together a growing array of content sources into one user interface where it is all easily discoverable.

Foxtel owns popular subscription VOD (SVOD) services including Kayo (for sport) and Binge (for drama, documentaries and wider entertainment).

Wen noted how Hubbl “helps drive increasing uptake of Foxtel SVOD services and facilitates bundling, with the same experience from the television set and streaming boxes. They have simplified content discovery and encouraged multiple [SVOD] subscriptions.”

Owning the experience

Entertainment OS was built using the common source RDK specifications that remove complexity when developing non-consumer-facing device functions so that product engineers can focus their efforts on user interface innovation.

The resulting agility is now on full display, with US cable operators Charter and Cox, and Canadian cable operator Rogers, also using the platform.

Wen said Entertainment OS was developed to navigate the various challenges facing the pay-TV operator market: changing consumer behaviours towards on-demand and streaming, more content creation, the fragmentation of content across more services and increasing volumes of advertising-supported VOD and FAST.

“Operators need to protect and grow their video business and balance investment costs,” Wen noted, arguing that the right platform allows them to deliver an improved user experience that in turn drives engagement and loyalty, leading to reduced churn.

“It is really important [for pay-TV operators] to own the experience so they have better prominence for their services, better branding, more data ownership and a direct customer relationship.”

Wen was referring to the ongoing debate about whether pay-TV operators must keep investing in their own operating systems where they can be the default application and home screen when consumers turn on their TVs, or whether it is possible to perform the aggregator role successfully as an app-among-apps.

With the latter model, the operator typically cannot control the start-up screen or navigation menus, or expect to provide the content discovery functions (except once viewers are inside their own app).

Wen said pay-TV operators need a platform that can support multiple business models so they can expand monetisation options beyond the classic pay-TV subscription.

“They should be able to serve different customer segments,” she told the audience. “We believe it is not just important that the pay-TV platform delivers on these priorities but critical for long-term success.

“We believe that Entertainment OS is not just a platform but a strategic enabler that allows pay-TV operators to own the customer experience, drive engagement and maximise revenue.”