April 15, 2019
At an NAB 2019 panel moderated by the organization’s vice president of advanced technology So Vang, Jason Brush detailed the case for why today’s set-top box needs to die. Brush, who is the global EVP for experiences and innovation at WPP’s flagship digital agency known as POSSIBLE, has designed interfaces for set-top boxes (as well as the Sony PlayStation 4 game console and Sony Xperia X10 mobile phones among others). His perspective on the topic arose from an epiphany he had looking at his cable bill.
“I saw I was spending just under $7 to lease the box, which went up about 50 cents in November,” he said. “It’s not a huge amount of money, but it’s a big jump percentage-wise.” With a DVR, he realized, his total monthly fee is $20.49. “What I’m really paying for is the ability to skip ads, restart some live broadcasts, and access content not easily available through OTT app. Is it really worth $20/month?”
He also realized that the STB he has is 1080i. “I end up streaming through Showtime Everywhere to watch ‘Billions’ in 4K,” he said.
He did some research and found that, among consumers of all ages, Netflix is the most popular platform; with the Gen Z and millennial cohort, Netflix “crushes” the competition. “YouTube is more important than basic cable,” he reported. Looking at content, he found that one-third of all scripted TV series are from online series — a number sure to skyrocket once Apple TV+ comes online.
More research showed that 74 percent of U.S. households have at least one connected-TV device. “The increase in the number of devices correlates with the increase in streaming services,” he said. “That means there are many more connected-TV devices than STBs in peoples’ homes.”
However, Brush notes that the three benefits of paying for an STB still hold: better quality; exclusivity to content you can’t get anywhere else; and tools to improve and manage your experiences, such as DVR or programming guide. But there’s a caveat: “Today, none of those things are exclusive to cable anymore. You can get all those things elsewhere. There is amazing design work [for the platform] being done at cable companies, but compared to what’s happening in the OTT environment, those tools are falling behind.”
All the evidence leads Brush to a single conclusion. “Broadband is the asteroid that hit the earth,” he said. “The STB needs to evolve from a tool to decode the cable signal to become a platform for entertainment innovation. The only question is if the dinosaur is going to evolve to become a bird — or a fossil.”
He pointed out the developer kit for the iPhone has resulted in over 2 million apps in the app store, which enjoys 500 million visitors per week and $100 billion in payouts to developers. “The innovation that’s happening with entertainment and how we consume content is happening elsewhere, outside STBs,” he said. “There are smart dedicated people in the cable industry, but there will be a lot more bloodletting before the change comes because they still make so much money off of STBs.”