Your browser is not supported. Please update it.

19 September 2019

Android TV advance begs questions over Google strategy, real subs

The headlines for Android TV look great but there are still lingering doubts among many operators over Google’s strategy, causing them to seek alternative options for going forward into the future of IP distribution, while there are also questions over the number of serious commercial subscribers, as well as over launch costs. These may come to be seen just as bumps on Android’s road to supremacy but still deserve scrutiny rather than just lapping up all the marketing rhetoric not just from Google itself but also providers of Android integration services and even some operators themselves.

To clarify, there are effectively three versions of Android from the video perspective. Firstly, there are those Android TV boxes available in retail, such as the Amazon Fire TV stick and the Nvidia Shield TV aimed primarily at gamers. This is a chaotic market with many variants, not all of which access the Google Play Store and some of which are illegal, like Kodi devices with piracy add-ons (Kodi boxes are not illegal per se).

Then there is the Android Open Source Project (AOSP), introduced by Google around the time of the Android OS launch itself 10 years ago. With AOSP the source code is available for everyone with a permissive license and operators taking this route have the benefit of the investment in Android without conceding any control at all to Google. They end up with their own completely independent platform with greater flexibility for customization, but at the expense of effort and investment in expertise.

Thirdly, there is the more recent Android TV Operator Tier, originally launched in December 2016 and which has now galvanized the Android TV field, leading to the spate of deployments this year. Android TV Operator Tier is enabled by certification from Google allowing pay TV operators to launch their own custom set top based on the underlying Android TV operating system code. This has attracted operators because it is a much faster route to market with a proven robust OTT platform than other approaches involving systems integration around the Linux operating system for example. This program allows access to Google’s platform, including the Play Store and AI-based Google Assistant for voice control, while permitting a custom-designed UI.

A growing number of operators have concluded this gives them the best of both worlds, a reasonably fast route to market with access to proven Google technology as well as a huge catalogue of apps, while retaining control over their service and crucially navigation through it. But this very advantage has made some question what is in it for Google and worry about the longer-term implications.

Then in the shorter term, some operators have been concerned over two points, the process of certifying their own custom software under Android TV’s Operator Tier program and the fact that building the custom Launcher as a one-off piece of user interface code is still quite complex. These concerns however have been ameliorated to some extent by the services of companies specializing in Android Operator Tier deployments, such as Sweden’s Accedo or Germany’s 3 Screen Solutions (3SS).

Nevertheless, this friction has certainly retarded Android TV to some extent and prevented its recent growth form being faster than it is. As it is, the current total of around 140 worldwide deployments, while a doubling over the last year, cannot be called explosive as some pundits have intimated. We also heard around the halls of IBC 2019 that not all of these customers will necessarily deploy Android TV commercially across their whole subscriber base, raising the question of how many commercial end users there actually are. Some of these deployments are trials and not all will end up with real subscribers.

The majority of Android TV’s new recruits might be called middle ranking tier two or three operators and so bring in fewer subscribers each than say the smaller number of RDK sites which are virtually all tier one cable companies like Comcast and Liberty Global. But there are a few big ones, with at least Swisscom taking the AOSP route. Admittedly in that case it was because Swisscom was the first major Android TV customer, so the Operator Tier option was not available at the time. Nonetheless, in a recent presentation Swisscom insisted that it would have made the same choice today, suggesting that while Android TV Operator TV is more convenient and cheaper to deploy, AOSP offers greater flexibility and potentially competitive advantage in the long run. So, Swisscom was still contending that operators should turn to AOSP to build their services and provide the best user experiences, even though it was clear few were now actually taking that route, instead turning to Operator Tier.

Swisscom has indicated that Google would have to go even further to make it consider deploying Operator Tier. Google would have to allow it to skip future Android versions for example and not have to display Google Assistant in an overlay. Not surprisingly though, most operators are only too happy to incorporate Google Assistant because there is no way they can match that investment; in voice especially.

Google itself is aware of these lingering concerns and has sought to allay them, although quite explicitly not meeting Swisscom’s demands, such as the part about Google Assistant. Indeed, Google has stated that it is pushing Android TV so vigorously with operators because this expands its content distribution via apps, noting that Play Store, YouTube, and Google Assistant are all integral to the boxes. Furthermore, Google has expressed interest in reducing fragmentation in Android, assisted by that requirement for updates to be pushed out, which again Swisscom has objected to. Google’s strategy is also about improving “stickiness” of the whole Android ecosystem by facilitating connection of multiple Android devices in the home, so it goes beyond video into the IoT (Internet of Things).

To make this strategy palatable to operators, Google has had to go as far as it can in removing obstacles and objections to Android – and be seen to have done so. It has therefore had to scale back its data collection and analytics ambitions for now by making clear it cedes control to the operator and avoids collecting viewing data. It also avoids taking a cut of subscriptions and other transactional content, such as buying or renting SVoD titles, when these are executed within the pay TV operator’s own app through an integrated billing system.

One aim here is to remove a perceived advantage in using alternative retail connected streaming devices from Roku or Apple. In any case most operators have spurned in-app transactional content on those platforms to avoid giving Roku or Apple access to some of their revenues. Google’s gain will be longer term, through access to data and analytics despite not getting the data – usually anonymized – generated when consumers access pay TV operator’s app. That data goes to the pay TV operator using Android TV, but Google does get the data associated with Play Store activity. For this to be valuable Google needs scale and that is what its Android TV strategy is designed to achieve.

Finally, it is worth noting also that Google has taken several steps to allay concerns over barrier to entry, having just launched its operator tier dongle. This is a customizable unit allowing operators to deploy Android TV more quickly. Unveiled around IBC 2019, this 4K was developed with the help of a hardware manufacturer believed to be Askey.