The majority of video service providers are looking to Android TV to play a pivotal part of their future set-top strategies, as the traditional pay-TV players will eventually have to wave goodbye to the closed set-top environments which they have controlled for so long amid the transition to open platforms.
According to a report from UK consulting firm Ovum, commissioned by Dutch security specialist Irdeto, 72% of video service providers are considering Android TV or Android Open Source Platform (AOSP) on their set-top roadmaps, while 63% say Android technologies are the most likely to be deployed on their new lines of set-tops.
However, there should be some cause for concern that more respondents believe their organizations will roll out Android security updates annually on set-tops, compared to the recommended period of fortnightly. This apathy towards security certainly doesn’t bode well for the future of piracy from the perspective of content providers.
The report, ‘Is Android the future of the set-top?’, published last week, finds that the key driver for video service providers adopting Android is not price, but the wish to embrace an open ecosystem to give their subscribers the freedom to download apps from Google Play. This suggests that having their own content apps for creating additional revenue streams is a priority for video service providers, whether it be ad-supported or subscription-based.
The larger companies to take part in the survey will likely have rolled out their custom-built apps some time ago, but the smaller video service providers may just be beginning to get their standalone app plans off the ground. Of the video service providers with over 1m subscribers, 43% cited an open ecosystem as a main reason for choosing Android TV, while 34% of companies with up to 1m subscribers opted for this reasoning.
Naturally, 30% of video service providers voiced concerns that a shift to Android will encourage subscribers to cut the cord, but the same 30% also said it would be easier to reconnect these subscribers who have jumped ship once they have come to the apparent realization that Netflix on its own is not sufficient.
We think this is a rather optimistic stance. Perhaps these companies could entice subscribers back with skinny packages or bundling in broadband with pay-TV subscriptions, as many players are doing today, but once the cord has been officially cut, there is very little chance of fully rebuilding it, and a partial reconnection is likely to come at the cost of far lower ARPU.
An additional 29% of respondents believe Android TV will act as a way to reduce subscriber churn, due to the availability of choice offered by Android. But only 12% of respondents confessed that subscribers will cut or shave the cord no matter what platform is used.
While cost efficiencies of Android TV ranks surprisingly low among driving factors with 21% of responses, lower overall operating costs is voted as the main benefit with 57%, followed by fewer developers required to create a customized UI at 42%, good support from the various forums given open source nature at 41%, and a greater resource pool of developers as Android is Java-based at 34%.
The report takes a while to delve into Irdeto’s vested interest of security and what concerns come with the implementation of Android TV. Unsurprisingly, the overall message is that the changing set-top environment, from operator-controlled to open platforms, is a cause for concern in terms of piracy for video service providers.
It found that the chief concern is an increased attack surface due to users being able to easily install other applications on the set top, with 43% of video service providers ranking this as their top security priority. This was followed by 41% saying installing applications used for illegal streaming is a worry, and 32% have concerns for both open source vulnerabilities and pirated content risks.
To address any potentially harmful security implications, 30% of respondents believe their organizations will roll out Android security updates as and when feature updates are released, whereas 25% say monthly, 19% quarterly, 16% annually, but only 7% said fortnightly – which is in line with the Android release heartbeat.
The latter suggests that the majority of respondents are unfamiliar with the workings of Android. Currently, the Android Open Source Project (AOSP) maintains the open source elements of Android, which are free to use and form the core components of the OS. However, the Google applications like the Play Store, Chrome, Gmail, and YouTube are licensed to Android developers by Google – on the condition that if one app is desired, all the Google apps have to be included in the OS that is eventually sold to consumers.
Obviously, this allows Google to get its foot through the door of nearly all set-tops deploying Android in developed economies, not to mention the volume of Android phones sold – which tend to use basic versions of Android, as opposed to China which favors heavily modified versions of AOSP and native Chinese apps.
Security vendors have developed systems which can broaden security support with an open set-top environment by coexisting with legacy cable systems, without duplicating bandwidth. Nagra recently developed such a system in partnership with Altice USA, as cable operators in the US are backing a shift in technologies towards open set-tops, despite the FCC’s open set-top initiative appearing almost dead and buried.
The Android set-top survey was conducted on a sample of 301 organizations across North America, Western and Eastern Europe, MENA, and both mature and developing markets in APAC.