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22 November 2018

Android TV Operator Tier ready to invade US at last

When we put together a forecast for our sister service Rethink TV on Android TV, a number of people told us that AT&T was looking to invest in the technology, and it seems the operator’s interest is widely known in the Android community.

Less known about, especially in the US, is the Android TV Operator Tier, something that Google has led with in Europe, essentially a version whereby a separate launcher can be constructed either by the operator or a third party software house (3SS and Accedo are specialists), so that nothing of the Android brand is seen anywhere, and the layouts and functions all use operator branding and are defined by them.

It’s not news, the Android team put this out in September 2016, but it has taken until January 2018 before implementations began to appear in Europe. But the AT&T version which has just gone out to testers on limited release, for a 6-month trial, seems to be the first time it has appeared in the US and suggests it will be launched in anger in the US in Spring 2019.

Operator tier is a compromise to get operator buy-in to Android TV – it has to be configured for voice control and include Play, the Google App store – but none of the other Google apps are obligatory. When retail devices are sold which use Android TV, there are far more strict rules to using almost all Google software. The benefit for operators is that because the two markets sit side by side, an Android TV device is both certified, so you know it will work with your service, and likely to be cheap with multiple set top sources. And the spec is quite a high one, to cope with voice control and high-end video processing.

AT&T now seems to be using this with DirecTV Now, as a consumer testbed. This does not mean that it will be limited to working with DirecTV Now as it is today, but it could be that as early as next Spring, AT&T revamps DirecTV Now, perhaps putting a little more content in it and having a variety of options, and it becomes a mainstream service, pushing towards a higher ARPU when it is fully configured.

The box, as delivered, boots straight into live TV streamed via DirecTV Now and there are other tabs for the Guide, Watch Now, other live options, My Library, for DVR content and Discover (recommendations) and another tab shows Apps. One of the reasons for Android TV being so popular outside the US is because of the change of heart by most pay TV operators around Netflix and Amazon. Whereas once they thought of these OTT SVoD services as the enemy – now they want the easiest way to integrate them into their service – using Android TV means that the app is ready to lock and load, taking all responsibility from the operator. This can, in the US, be extended to include Hulu and YouTube TV.

None of the reviews in the US have mentioned that the AT&T DirecTV Now service has voice control, but we are sure this will be in the system at launch. Reports say it runs on a Broadcom BCM7271 chipset, running Android TV 8.0.

In our forecast on Android TV, out in May this year, entitled “How Android TV finally won the set top wars – Report and Forecast 2018-2022,” we forecast that over 99 million devices would be running this before the end of 2022 globally – virtually all new set tops. In our calculations we have AT&T down as launching on it in 2020 and shipping 1 million devices in the first year, and eventually ending the forecast on 5.4 million devices running Android TV. It looks like we may have to pull our numbers forward by 6 months.

Most cable companies in North America, including Canada, are unlikely to go down this route, certainly not initially, with the possible exception of Altice, as other cable firms have all signed up to use Comcast’s Xfinity technology built around RDK. Other telcos may break ranks, and favorite to do this is Bell Canada, which currently uses Mediaroom (MediaKind) middleware which has already been certified to work with Android TV devices.

In Europe, there are installations which rely on Operator Tier or AOSP (the open system version you have to support yourself) at Swisscom, Bouygues, Free and SFR in France, Telia, Telenor, DNA Oy and Com Hem in the Nordics, and Telecom Italia already and some 4 million devices have already been shipped, as well as LG+ in South Korea which moved to AOSP years ago.