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11 September 2019

Android TV becomes major force after five years, thanks to Operator Tier

Android TV is now approaching full throttle after five years of negligible impact following the 2010 launch of its ancestor, Google TV. It could be a case study of how powerful companies can resuscitate a failing project or strategy by listening to their potential customers and it was the Operator Tier version that finally started lifting Android TV’s fortunes from 2016, with initially a few poster child deployments in Europe and Asia-Pacific.

These included Swedish cable company Com Hem and Vodafone Australia, but this still left Android TV shut out of Tier 1 accounts and also the USA, where the alternative RDK platform radiating initially out of Comcast had gained traction among the leading MSOs.

At one stroke, Android TV Operator tier has at the very least established a firm base in both those camps through AT&T’s adoption of the technology for the set-top with its recently launched AT&T TV service. This is different from – and offered as an alternative to – AT&T TV Now, the rebranded version of DirecTV Now whose name we mocked just over a month ago.

The differences spring from the incorporation of Android TV Operator Tier in the set-top, which gives subscribers access to the Google Play Store and its expanding app collection including Netflix and Hulu. There is also Google Assistant enabling AT&T to proclaim users’ ability to control lighting and other aspects of the experience. The well touted ability for operators to customize the UI features comes in here with AT&T’s remote control including a branded button for Google Assistant dedicated to its service.

AT&T TV started trialing in 10 US cities around California, Kansas, Florida, Texas and Missouri in August 2019 ahead of a wider roll out. The box with Android TV is bundled free with the service at $59.99 a month for the TV alone or $89 with internet access as well, so it is not a throw away OTT offering but billed as a serious alternative to traditional pay-TV.

Operator Tier is one of three Android TV options for service providers. One other is the option of taking a retail box or smart TV with Android TV already incorporated, but that comes with strict rules requiring use of almost all Google software, with little control over the UI or data collected. The appeal was that the device was both certified, so the operator could guarantee it would work out of the box with its service, and likely to be cheap with multiple set-top sources. It was also quite highly specified, able to support voice control and video processing.

This then appealed to some smaller operators, but at the other end of the scale was Android Open Source Platform (AOSP), which allows complete freedom over the UI, content and apps by building straight off the Android code base, which could be used for a walled garden IPTV service. Swisscom was one of the few to do precisely that, but this is not for the faint hearted because most of the middleware has to be built from scratch and while there is an established base of developers as Android is written in Java, time to market will be around 18 months or more and this is only an option for the largest operators.

Google soon realized therefore that it would gain limited ground with AOSP while too many smaller operators were deterred by the control Google would exert through Android TV. It therefore came up with Operator Tier as a compromise that squared the circle, allowing full customization around a branded managed service where users can keep control of their data and use relatively inexpensive set-tops. At the same time, they can harness the Google Play store. While operators no longer need to build from scratch, they can still readily integrate their own DVR and VoD offerings with third party apps such as Netflix and YouTube that can be made to appear as part of a single coherent service.

Its appeal to smaller operators, now including a fast growing number in the USA, has been heightened by support from leading video software vendors, including Amino, TiVo, MobiTV and Evolution Digital, which have made their end-to-end IPTV SaaS packages compatible with Android TV. This, coupled with the AT&T endorsement, is helping Android TV gain penetration in the US and take its customer base towards 200, compared with 100 at the start of the year.

Opposition from the big cablecos such as Comcast, Charter and Liberty Global promulgating RDK cuts little ice with smaller providers because of the faster time to market the Operator Tier now enables with little obvious drawback other than concern over Google’s future intentions, given that certification is still required. Even that concern seems to be fading given Google’s obvious interest in avoiding any negative publicity.

Indeed, Google is playing a long game, aiming to establish Android TV as the defacto standard platform for streaming media services that will eventually pay back through data, analytics and advertising. These comprise Google’s blessed trinity for revenue generation and on those three fronts it has to tread carefully to avoid annoying both its operator customers and the ultimate consumers. Currently Google gets the data from use of its Store, while anonymized data generated through use of the operator’s app goes to the pay-TV provider.

There may be scope for collaboration with its operator customers over data sharing, analytics and advertising, but the consumer is a key party. Ultimately Google knows it must accumulate a massive installed base through Android TV to exert leverage across all three of these key ingredients.

Meanwhile Android TV has also made inroads in some other key markets, including India where Airtel, one of the country’s biggest telcos with over 320m subscribers, has announced its Xstream streaming stick and also set-top with Android TV inside. The stick version is an HDMI dongle running over the Android Oreo mobile platform but in similar vein to Operator Tier supports the Play Store alongside popular apps such as Netflix, Hulu and YouTube, as well as Airtel’s own Xstream app for accessing content from ZEE5, Hooq, Hoi Choi, Eros Now, HungamaPlay, ShemarooMe, and other providers in India.