YouView: A simple, easy, revolutionary product
At yesterday’s YouView launch, chairman Lord Sugar referred to the new connected TV service as “simple and easy”, and he couldn’t be more right.
Despite criticism for the delay in getting the product to market, Sugar and the YouView CEO Richard Halton gave an impressive demonstration of the service to a room full of cynical media correspondents in a bid to dispel any negativity.
Halton talked through the new offering, which is backed by partners ITV, Channel 4, Channel 5, BBC, TalkTalk, Arqiva and BT, explaining its ease of use and simple navigation. “It is a great TV experience – real sofa TV, with everything you need in one place” he said.
All-encompassing
And you have to give credit to YouView because it does exactly what it says on the box. It’s a set top box with a basic remote control, with easily clickable content via a simple EPG and most things an average viewer would want or expect – a PVR; the ability to pause, rewind (including “scroll-back TV”), fast-forward and search; and seamless integration with VoD content via “players” (iPlayer, ITV Player, 4OD and so on). It also features archive programming in a library with full series and films.
The box supports HD on-demand and the option to record in HD and has a 500G hard-drive (equivalent to 300 hours of programming). They have trialled over 2000 boxes with positive feedback, according to Sugar.
Importantly, YouView also has the ability to do lots more – for example, incorporate LOVEFiLM and Netflix and integrate into a smart TV without a Freeview tuner. Sugar and Halton promised that this is “just the beginning”, but that all future additions will be available on the same box via an automatic update.
Until yesterday, I was another cynical media correspondent. From a media industry perspective, it’s a very simple proposition that could have and perhaps should have launched two years ago. There are lots of other propositions on the market, some considerably cheaper, which offer some of the same or similar functionality (no doubt some with better functionality). However, from a consumer’s point of view, this is a very attractive offering – it is a simple way of extending your TV to the internet world, which is exactly what YouView set out to do.
Pricing concerns
The cost is still an issue – £299 in retailers including John Lewis, Amazon and Argos from the end of July. However, Sugar admitted that he would not be surprised if the box has come down to £99 in two years time, suggesting discounts will be made shortly. There is also the possibility that the YouView team will launch a cheaper non-PVR version.
The other disappointment is that the Humax box is not WiFi capable. You have to plug in an ethernet cable to connect it to the internet and this could prove to be a real issue for customers who do not have an internet connection in their living room.
TalkTalk and BT are yet to announce their own packages, which will combine YouView with broadband and telephone services. At the event, there was talk of “technical issues” but TalkTalk is due to have a meeting about its “customer proposition” on 26 July. BT and TalkTalk customers will receive additional content via their YouView box, such as films and sports.
If both of these ISPs launch compelling and affordable packages, this is bound to drive take-up. As a Sky customer, I would seriously considering cancelling my subscription if I could sign up to a reasonable alternative, even if there was a one-off fee for the YouView box.
Late last year, there were rumours that BT and TalkTalk would sell the box for less than a £100 to encourage people to take-up their bundle offerings – and enourage a lower churn rate among existing customers, with the ability to upsell unlimited data packages and so on. Together, the ISPs have millions of broadband customers – if they get their proposition right, it is likely to have a real impact on YouView sales.
A wide potential consumer base
The aim is to get Freeview customers to upgrade to a YouView box. There are currently around 10.8 million households who have Freeviews as their main TV service. But if YouView can also attract non-sports fans away from Sky’s pay-TV offering (Sky is in almost 10.3 million homes in the UK) – on the basis that YouView customers will be able to access Sky content on a pay-as-you-go basis from the summer when NOW TV is added to the service – YouView has an even bigger potential customer base.
That coupled with an impressive marketing strategy, which is of course supported by all the leading TV brands including the trusted BBC, and the possibility of discounts/special offers in the lead up to Christmas, will mean it has a real chance of penetrating a mass audience.
It is not perfect but no other connected proposition has stepped up to the mark with a product or service that is this simple. “It brings down barriers to entry by by removing the significant / prohibitive cost of subsidising dishes / boxes / installations or building a cable network,” according to the Bank of America Merrill Lynch (BoAML). “Lower subscriber acquisition costs (SAC) makes lower price points and smaller packages of content viable for the first time.”
“YouView has come up with a very good digital video recorder that combines broadcast and broadband delivered programming in a simple, seamless user experience. Currently missing key features, like WiFi and remote recording, or any form of integration with second screen devices, it’s deliberately basic. It’s a surprise that it’s taken this long to come to light,” said Dr William Cooper, who runs informitv, the broadband broadcast convergence consultancy.
In my view, it is giving consumers what they know with lots of nice but simple extras. It really is the kind of thing your Mum and Dad (or Grandparents) could use. YouView combines all the main brands, content and usability in a subscription-free product, which is going to be improved and upgraded as time goes on.
It has cost its shareholders £70 million and it has taken its time to get to market, but as BBC director general Mark Thompson reminded the audience yesterday, so did the BBC iPlayer. They had to get it right and I think they’ve achieved what they set out to do, in enough time to reach a significant audience.