Author
Joel Espelien
Date
March 7, 2017

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Every legacy pay-TV (LPTV) service has an app these days. I’m not talking about broadband pay-TV (BPTV) offshoots like DirecTV Now or Sling TV, mind you, just the apps designed for use by current LPTV customers. Just this past month, for example, Comcast replaced its Xfinity TV app with a new app called Xfinity Stream. I downloaded it myself this past week and it was pretty awful.

Why are so many of these apps (still) so hated?  And, of course, what does that mean for the future of TV? A few thoughts….

1. LPTV Apps Are Too Focused On What The User Can’t Do
I still remember the first time I played golf on a hole with a water hazard. As an experienced golfer will tell you, the worst thing a neophyte can do in that situation is to focus on “not hitting it in the water.” Thinking this way, as I soon found out, is pretty much guaranteed to result in hitting the ball directly into the water.

Legacy pay-TV apps are the product equivalent of a water hazard. The product teams are given a laundry list of what the user can’t do, rather than a list of what the user actually wants to do.

  • The user is not allowed to use the app on anything but a phone or a tablet (i.e., no Android TV or Fire TV).
  • The user may not watch certain content (e.g., local channels) outside of the home.
  • The user may not access other channels (i.e., HBO) at all.
  • The user may access live content from certain channels, but not prior episodes or on-demand content.
  • The user may not push viewing to the TV using Chromecast or Apple AirPlay.
  • The user may not access DVR recordings unless they subscribe to a cloud DVR feature.
  • The user cannot skip ads in DVR recordings (even though LPTV still allows them to do so on the living room STB).

Let’s be honest. There is no way to fully implement a list like this and build an awesome app. The LPTV apps resulting from this process are successful only in the sense of meeting a set of requirements that restrict usage.

I feel compelled to note here that this has nothing to do with whether LPTV apps look cool. Xfinity Stream looks great, as does the DirecTV app and several others. There is a big difference, however, between UI (user interface) and UX (user experience). Craigslist, to cite a counterexample, looks like crap. The UI is objectively terrible. And yet many users love it. Why? Because Craigslist delivers on its fundamental purpose (selling stuff locally as quickly and cheaply as possible).

This raises some troubling questions for MVPDs about the purpose of having LPTV apps in the first place. Is it purely to “check the box” for marketing purposes, without any intention that the customer actually uses it? Does that benefit outweigh the marketing cost of alienating the customers that actually do try to use these apps (and then post thousands of one-star reviews)? MVPDs obviously seem to think so, but I’m not so sure. In reading many such LPTV app reviews, I have been struck by how many explicitly reference their desire to move to BPTV apps as quickly as possible, which brings us to our next point.

2. Bad Legacy Pay-TV Apps Inevitably Drive Users to BPTV Services
Markets almost always evolve in a single direction. There aren’t a lot of inexpensive restaurants specializing in slow service. Nor are there a lot of handset OEMs specializing in dumb cell phones. The TV market is evolving in the direction of apps and choice.

Broadband pay-TV services respond to both of these elements at once. DirecTV Now, Sling TV, YouTube TV, etc. are available to anyone with a broadband connection, including the majority of existing LPTV households, and the entire service takes the form of an app. App quality is obviously existential for BPTV services. This is simply not the case for LPTV apps, and consumers know it. Broadband pay-TV services certainly have flaws. We talked about some of them just last week. Nevertheless, it’s just harder for a BPTV provider to ship truly lousy apps, or (if you’re a realist) to fail to correct lousy apps once the truth has been pointed out to them.

The likely consequence is a scenario in which BPTV apps are, on the whole, better than the corresponding LPTV apps. (This does, in fact, seem to already be the case). There are two problems with this. First, as TDG has been pointing out for years now, video viewing is gradually shifting to apps. Second, LPTV services are more expensive than BPTV services. This is a really dangerous combination for legacy MVPDs. To wit, LPTV customers are consuming more video on the very platforms that LPTV providers do not do very well (i.e., apps), leading to lower levels of customer satisfaction and perceived value. At the same time, there will soon be multiple BPTV providers out there aggressively marketing better apps at a lower price. This is not a recipe for success. Legacy pay-TV providers need to figure out how to fix this (and fast) or watch a lot of customers to walk out the door.

Conclusion
Legacy pay-TV providers have an app problem, and it’s only going to get worse. Dissatisfied users may prove to be easy pickings for the new crop of BPTV providers.

Stick with TDG and stay ahead of the curve.

Joel Espelien is a Senior Advisor for TDG and serves as an advisor and Board Member to technology start ups. He lives near Seattle, WA.

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