Breaking Out of The Box

The humble set top box – or STB – has come a long way since it was first introduced over 20 years ago.  Originally just a device intended to decode broadcast signals, many in our industry dismiss the discussion of the STB as a ‘tech’ issue.  However, the STB has emerged as one of the most important device classes in the consumer media landscape and once again is driving disruption and strategic change.

In the early years, viewers used content from pay boxes as a complement to their ‘normal’ TV viewing, just turning on the box when they wanted to access their pay channels. But over time set top boxes morphed a number of times into a new and much more influential driver of change in our industry. 

The first big change was when they moved from decoding ‘analogue’ to ‘digital’ broadcast signals. This brought new software allowing on-screen menus (what became known as the ‘electronic programme guide’ or EPG) to emerge.  This first big innovation drove a massive change in viewer behaviour, with a majority of users staying in the STB to watch the free-to-air public broadcasters for the first time.

This established a couple of important principles that still affect the TV market today. The ‘platforms’ established the consumer perception that they deliver and manage the free-to-air channels (even though technically they don’t). This has been the source of major chagrin to the broadcasters ever since.

The second principle was that, by delivering improved user functionality (in this first case – an EPG) the platforms could affect viewer behaviour around TV content.  This has put the platforms in the driving seat in delivering TV innovation.

The second major evolution was the introduction of the ‘personal video recorder’ – the PVR. These first arrived 15 years ago and immediately the doomsayers declared that they would kill TV.  It took a long while for people to realise that, if we could solve the commercial issues, then PVRs could actually be symbiotic to broadcast.   Initially, PVRs were the sole province of the pay world, but the functionality quickly spread to the free boxes like Freeview and Freesat.  Their wider impact was felt in the world of TV measurement and audience evaluation, with the market realising we had to account for what became known as ‘timeshift’ viewing.  A new science emerged looking at ‘how’ and ‘when’ people watched recorded shows and the acronym ‘viewed on same day as live’ or VOSDAL was dumped onto the industry.

Around this period we also saw the arrival of TV innovation away from the STB.  Taking their destiny into their own hands, the broadcasters began to build on-demand players on websites that you could access via your PC or laptop, outside of the control of the platforms.  This meant that the audience measurement industry had to add a ‘where’ to the ‘why & when’ of the viewing it was reporting.

In response, the platforms built on-demand capabilities and launched catch-up services within their systems.  In the UK we have ended up with two distinct types of these services.  On Sky and Virgin these are closed systems where the platform controls the software and the functionality (with a couple of exceptions).  On the free boxes, these systems have been open and browser-based so that the broadcasters own players appear in the STB.  Neither is currently utopian and until the recent set of boxes it was fair to say that on-demand on the pay boxes looked terrible but worked well, while on-demand on the free boxes looked better but didn’t work very well.

During this period, there emerged a misguided consensus that on-demand capability would mean we no longer needed PVRs in the boxes.  However, this has not proved to be the case for a couple of reasons. Firstly, consumers continue to prefer their PVR to on-demand where both are available.  Research shows that this is about control and selection, with consumers stating that they view PVR content as ‘theirs’ and the selection in the PVR to be their personal favourites list.  The second reason, as stated above, is that PVRs just work better. They provide quick and easy access to content without the start-up and play problems that on-demand systems are still plagued by and they allow fast forwarding through ads.

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This post first appeared as an article in the RTS Magazine ‘Television’ in July 2016

Now posted at Decipher on 26th July 2016