A s pay TV service providers push their capabilities into the cloud, the market is beginning to see the emergence of the cloud user interface (UI).
The traditional UI, which includes the program guide, metadata and other navigation tools, historically resides on the set-top box (STB). Service providers are intrigued by the potential cost savings and network efficiencies offered by moving the UI to the cloud. However, intrigue alone has not been enough to move the market. There have been a few high-profile deployments, but the overall number of pay TV households using a cloud UI is small. As of mid-2016, we estimate fewer than 12 million global pay TV households are using a cloud UI.
There is a general consensus across the pay TV and technology industries about how a cloud-based UI should perform and what capabilities it should support (i.e. navigation, the programming guide, programming information, search and discovery, etc.); however, there are marked differences when pinning down a specific definition. Many of these revolve around a single issue: Are the graphics supporting the user interface rendered fully in the cloud or on the STB?
A common, but relatively narrow, definition of a cloud UI is one that is fully rendered in the cloud and then served on an STB or some other client device. A broader definition allows for a UI to be served from the cloud and then rendered on the device, which would require more processing power and on-board memory. A prime example of the first cloud UI definition is Charter Communications Inc.'s Spectrum Guide, which is based on ActiveVideo's CloudTV platform. Comcast Corp.'s X1 platform is an example of the second type, as it renders the UI's graphics on the X1 hybrid IP gateway.
Our operating definition of a cloud UI is one that does not reside fully on the STB, which catches both definitions. This essentially means that if any portion of the UI is hosted in the cloud, it is a cloud UI.
So, why deploy a cloud UI? Most elements of a traditional pay TV UI rely heavily on the STB. Moving the UI into the cloud decouples the user experience from any potential limitations imposed by the host STB or client device. For example, even if an installed STB has limited processing power or on-board memory, it should still be able to serve an advanced cloud-based UI.
Other potential benefits of deploying a cloud UI include:
- A faster time-to-market with any services tied to the UI, including the ability to update the entire UI without replacing any installed customer premises equipment (CPE).
- Increased personalization: A cloud UI can potentially provide a unique UI for each viewer or family member, something that is difficult to offer with an STB-based UI.
- Increased functionality of the UI, such as voice recognition and new apps-based packages.
- The ability to conduct remote maintenance and diagnostics across an entire subscriber footprint.
- The potential virtualization of the STB could offer service providers significant capital expenditure and operating expense savings.
With the worldwide pay TV subscriber base exceeding 950 million in 2015, 10.7 million households with a cloud UI underlines that this is a market still in its infancy. Based on discussions with both platform vendors and pay TV service providers, we are projecting decent growth in cloud UI households through 2018. Deployment rates will increase more rapidly in 2019-2020, especially in the emerging pay TV markets of Asia and Latin America.
We are forecasting cloud UI households to reach 69.6 million by 2020, although over 70% of those households will come from just two regions: North America and Western Europe.
For further insight into cloud UI deployments, forecast of pay TV households with a cloud UI by region and other market dynamics, see the full article here (SNL subscription required).