Well-known industry analyst Alan Wolk is publishing his popular Week In Review columns first on FierceVideo every Friday. This means that FierceVideo readers are the first to get all Wolk's insights as they navigate the fast-moving television business.
1. Google gears up for streaming wars
Google, which seems to have been left out of the streaming wars after Chromecast crashed and burned, is trying to make a comeback on two fronts: a revamped Android TV ecosystem that includes an operating system they can sell to TV manufacturers, and a revamped Chromecast that actually has a remote. (The lack of said remote being the key thing that caused Chromecast’s aforementioned crash and burn.)
Why it matters
Google is realizing that “They Who Control The TV Set Also Control The Rest Of The In-Home Ecosystem,” and if they’re not happy about Amazon taking the lead there, they are doubly unhappy about upstart Roku’s position--according to data from Conviva, as cited by Lightshed, 44% of “connected TV viewing” happens on Roku, versus 19% on Amazon, 10% on Xbox, 8% on Apple, and 6% on Chromecast. (NB: Those stats are at odds with survey-based stats from other sources that show Amazon and Roku running neck and neck, but I’m more inclined to believe the Conviva stats as they are based on actual usage.)
Google has one advantage here (for now, anyway) in that it can bake its well-regarded YouTube TV into its new interface and offer viewers a mix of live and OTT that integrates with Google Home and Nest, which Google also owns. (Take that, Alexa!)
They will face a lot of headwinds, though.
First and foremost is that the new product has to be significantly better than their existing devices for viewers to decide to switch. Viewers have few complaints about their Roku and Fire TV devices, which are fairly long lived, which means most existing OTT viewers aren’t really looking to switch or upgrade. Overcoming that is going to be a huge uphill battle for Google.
Then there’s the Interface Thing and the Perception Thing.
The Interface Thing is that while the Roku OS won’t win any beauty contests for its UI, it looks pretty much exactly like an iPhone and is thus super simple for users.
(Side Note: That design also would seem to push users to default to a Flix’s native app, as it’s just as easy to open HBO as it is to open the Roku Channel. Compare that with the Amazon UI, which seems designed in the other direction--you need to seek out the apps you’re looking for, and the omnichannel Channel Store layout is front and center. Which is important because it may make it easier for AT&T and Comcast to strike deals with Roku for HBO Max and Peacock, given that most viewers will default to the native apps anyway. But I digress…
At present, the Android interface is nothing special and mostly looks busy. They can clean that up in the reboot, but if they’re adding in YouTube TV and an overriding device-wide interface, it’s going to make it tough to wind up with something as clean as Roku.
Then there’s the Perception Thing, which is that Android TV is the TV tech equivalent of the store brand sneakers your parents made you get when you really wanted Nikes. That’s a big mental hurdle they’ll need to get viewers over, especially given that viewers are already comfortable with their Roku and Fire TV devices.
Or, to put it another way, if Apple were to roll out a $49 Apple TV stick, they’d face none of these issues. (And as for why Apple, which had great success 15 years ago with the Nano and the Shuffle, does not do that, I am truly at a loss.)
Google’s advantage in this arena, of course, is that by not having any sort of Channel Store play, they can easily strike deals with AT&T and Comcast for Max and Peacock, which would give fans of those services a reason to switch devices.
“Fans of those services” is the issue here though.
It will be a while before either has a full raft of new original programming and current HBO subs still have ways to watch HBO programming. And there are five other Flixes, six if you count CBS All Access, and so it may be awhile before audiences get peeved enough about the absence of Peacock and Max to go out and begin to think about ordering a new device. (There’s also the whole pandemic thing, which means for now it’s more likely they’ll have to order said Google device online and well, Amazon might not make that the easiest of processes.)
So, there’s all that.
What you need to do about it
If you’re Google, more than anything, you need to remember that design and UX matters. This has never been your strong suit and when you’ve succeeded, it’s been in spite of the UX, not because of it. But TV viewers are all about the optics and if your interface reminds them of why they hated their old cable company, then you are going to have trouble breaking in, no matter how many deals you strike. I mean yes, you can win some on price, but pricing on TVs and streaming devices is so low right now, that saving an extra $5 or $10 is not really going to make a difference.
If you’re AT&T and Comcast, think about that point I made earlier about how Roku’s phone-like interface sort of pushes viewers towards your native apps, and how Conviva’s study shows way more viewing is done on Roku. Which means that divide and conquer is your best strategy right now, especially given the limited number of originals you have on offer and the limited leverage that gives you.
If you’re everyone else, keep your eyes on stats around the sale of TVs with the Roku, Amazon and Android OS baked in. It will be interesting to see if one develops a clear advantage over the other or if the sale pricing during Best Buy’s Labor Day Extravaganza is what actually wins out.
2. Amazon integrates vMVPDs
Amazon began integrating various vMPVDs into its Fire TV home screen. Hulu + Live TV, YouTube TV and (eventually) Sling TV will join Philo and Pluto in powering Amazon’s “Live” tab.
And in a related(ish) move, the Amazon Fire TV cube device will now be able to support over the air channels, tuning in and adding them to the “Live” tab too.
Why it matters
Amazon’s goal is to create an overriding interface for viewers that combines all the services they subscribe to and gives them both live and on-demand options.
This is great for Amazon, for most viewers, and for advertisers, who can run ads against larger audiences using Amazon’s own massive amount of first party data.
It is not very good, however, for the companies behind all those apps, the Flixes in particular, who lose out on subscription fees, ad revenue, and, most valuable of all, viewership data. Which is why so many of them are not happy about the way Amazon treats them.
It also seems to be a sign that Amazon is doubling down on linear, a potentially risky move at a time when more viewers are realizing they mostly only watch the Flixes and FASTs and when over 40 million Americans are unemployed and looking to cut back on expenses.
That said, old habits die hard and it will be many, many years before all those viewers who still watch traditional linear pay TV give it up. So, if Amazon can carve out a niche for itself around those viewers (and their online shopping habits) their gamble on linear will turn out to be a wise move.
What you need to do about it
If you’re a vMVPD, Amazon will make an excellent partner, helping to drive awareness, stickiness and new subscriptions. By pushing live TV, they’ll also make it more likely that viewers will tune in to your service, rather than trying to find something to watch on OTT.
If you’re an advertiser, Amazon has incredible amounts of data on consumers and can really help you find your target audiences. They’re beefing up their ad teams considerably, so it will be well worth it to see what they’ve got going on.
If you’re a viewer and you watch a lot of linear TV and are not afraid to switch to a vMVPD, Amazon’s fully integrated interface may be the TV experience of your dreams. Or not, if you’re looking to watch TV over the air. I’m very curious about how the Fire TV Cube performs, given how awful over the air reception is in most of the U.S., especially with an indoor antenna.