This post has been on my TODO list for four years. It started as trying to clarify the role of the STB: Is it a Platform, or is it a Product?? I now feel this debate needs to be extended beyond the STB domain, and instead focus on the bigger picture - the end-to-end video technology stack. And in order to do this, one has to start right at the beginning - understanding the future design of a PayTV business...This blog post is a work in progress, my thoughts are not fully structured and far from complete...I needed to get this thing off my Trello TODO list because it was starting to burn a hole in my screen, so here goes...
The topic of what drives innovation in software companies in terms of understanding the differences between a Product versus a Platform is not a new one. It has been discussed since the early 90s in lead up to the evolution of PC Operating Systems & Applications, early 2000s on the dawn of the Internet age, mid-2000s on the rise of mobile platforms and the resurgence of Apple. Citing a few articles that discusses this topic of Platform/Products, by Michael Cusumano, a leading expert on the subject:
I believe the days of the STB as a unique device for viewing content, the primary means of interaction, and the constraint of being stuck in the world of broadcast TV - are over.
Customers don't care what a PayTV operator labels & markets its device as. The STB is simply, a means to an end - a thing that lets you connect your TV to access a world of content provided by a PayTV operator through a transport medium (satellite, terrestrial, broadband, whatever). And that in the connected world of the internet, customers expect to access the same experience on any mobile device (because it is possible and it's expected).
So initially, in isolation, just looking at the STB alone - I view the STB as providing platform software, just like iOS or Android.
From a hardware perspective, the STB device hardware too, is also a platform that allows the PayTV operator to incrementally add features over time. The hardware usually shares future-looking capabilities that STB software can realise over a period of time (usually 5-7 years, but this time is being reduced to more like 3-5 years shelf life).
This may sound like commonsense, because it is what consumers are used to with more modern iOS & Android platforms, right? Yes, but in the world of PayTV, I've seen how technology implementations can go wrong, costing PayTV operators lots of time, money and energy, lost opportunities, lose market share, etc - due to not taking time to properly assess the nature of their products and services as well as the underlying technology ecosystem needed not only to satisfy their current business needs, but also the systems to power & drive future growth (at little cost, avoiding long development cycles, re-work and silo'ed ring-fenced deployments making maintenance a nightmare).
I also believe that we need to go further than just thinking in the STB-world - we need to think about a platform world, a world of re-use. The same applications and user experience must exist on all devices, regardless of technology domain. If the customer is expecting this unified seamless experience, in the same way the software components need to be shared across the architecture domains. I don't expect there to be separate application development teams per device. What usually happens is a PayTV operator has separate vendors, with their own stacks, a development team for STB, another development team for iOS, another team for Android, another team for PC/Web - all implementing pretty much the same thing. And similarly, separate infrastructure services teams (broadcast headend, internet online backed teams) usually fragmented, working in silos, often with duplication of services.
So the question for me has evolved: it is no longer about the STB being a product or a platform. It is about the End-To-End PayTV Technology Platform - how should a Video Technology Ecosystem be structured today?? Out with the old, in with the new is what I say ;-)
Is this not the pattern a Video Entertainment Platform stack could follow then?
The topic of what drives innovation in software companies in terms of understanding the differences between a Product versus a Platform is not a new one. It has been discussed since the early 90s in lead up to the evolution of PC Operating Systems & Applications, early 2000s on the dawn of the Internet age, mid-2000s on the rise of mobile platforms and the resurgence of Apple. Citing a few articles that discusses this topic of Platform/Products, by Michael Cusumano, a leading expert on the subject:
- The Evolution of Platform Thinking
- The Platform Leader's Dilemma
- Platforms and Services: Understanding the Resurgence of Apple
However, in the context of Digital TV, Pay TV or what the market is now calling "Video Entertainment", I feel not much has been written about this subject. This is probably because of the largely historical nature of these technology & architecture platforms being proprietary, in what has been quite a much-guarded and competitive landscape by technology vendors traditionally in the Set Top Box middleware space.
I believe the very same challenges that existed twenty years ago in the PC-world are really no different to the challenges Pay TV software systems face today. Whilst Pay TV exists to generate as much revenue from its subscribers as much as possible (one really can't argue with that bottom-line), one cannot ignore the fact that there is an enormous amount of software systems that power the business (consumer devices, broadcast systems, security & encryption software, billing & subscriber management systems, and more recently internet-backend services that deliver digital services on additional devices other than just set top boxes) so much so, that one could even argue that Pay TV is fundamentally, a software technology-driven business - and since this is pretty much the reality of today, then the topic of Product v Platforms in PayTV is all the more relevant!
I believe the very same challenges that existed twenty years ago in the PC-world are really no different to the challenges Pay TV software systems face today. Whilst Pay TV exists to generate as much revenue from its subscribers as much as possible (one really can't argue with that bottom-line), one cannot ignore the fact that there is an enormous amount of software systems that power the business (consumer devices, broadcast systems, security & encryption software, billing & subscriber management systems, and more recently internet-backend services that deliver digital services on additional devices other than just set top boxes) so much so, that one could even argue that Pay TV is fundamentally, a software technology-driven business - and since this is pretty much the reality of today, then the topic of Product v Platforms in PayTV is all the more relevant!
Historically, the medium of consumption of PayTV, was through a device called a Set Top Box (STB). A piece of hardware that allowed a customer access to the content broadcast. The STB offered rudimentary user interface (an application / electronic program guide) that primarily allowed users to find content to watch - and this basic use case can still be considered the primary use case for PayTV, despite the bells and whistles that come with flashy graphics. The interface exists to allow users to find and watch content, period.
I believe the STB, in terms of software architecture, has to evolve from the once historic notion of being viewed as a standalone product, to instead becoming part a platform ecosystem, just like any other modern operating system (iOS, Android, etc.) that exposes a set of capabilities that allows for re-use of software components across devices. That, with the increasing convergence of mobile/internet/broadcast, the STB can no longer be considered its own island, with its own unique software stack (some might argue that these stacks are archaic), somewhat silo'ed & isolated from more modern technologies as in the case of platform software driving pretty much the mobile (smartphone / tablet) devices.
I have worked in the STB world for pretty much most of my career. I've always felt that we were really reinventing software systems, architectures and design patterns that was pretty much known since the sixties (really). In the last eight years, we started moving to the converged world, merging broadcast-and-internet TV, and in doing so, the constraints of the STB world start to reveal itself, especially when it came to inter-networking features, light-weight components and services-based design patterns and the challenge of essentially re-using software components across different devices. I've seen companies and teams struggle to adapt to this new challenge, especially when it came to the topic of truly understanding what it means for differentiating a Product or a Platform?
I have worked in the STB world for pretty much most of my career. I've always felt that we were really reinventing software systems, architectures and design patterns that was pretty much known since the sixties (really). In the last eight years, we started moving to the converged world, merging broadcast-and-internet TV, and in doing so, the constraints of the STB world start to reveal itself, especially when it came to inter-networking features, light-weight components and services-based design patterns and the challenge of essentially re-using software components across different devices. I've seen companies and teams struggle to adapt to this new challenge, especially when it came to the topic of truly understanding what it means for differentiating a Product or a Platform?
Is the Set Top Box a Product, or is it a Platform??
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| An example STB Platform |
Customers don't care what a PayTV operator labels & markets its device as. The STB is simply, a means to an end - a thing that lets you connect your TV to access a world of content provided by a PayTV operator through a transport medium (satellite, terrestrial, broadband, whatever). And that in the connected world of the internet, customers expect to access the same experience on any mobile device (because it is possible and it's expected).
So initially, in isolation, just looking at the STB alone - I view the STB as providing platform software, just like iOS or Android.
From a hardware perspective, the STB device hardware too, is also a platform that allows the PayTV operator to incrementally add features over time. The hardware usually shares future-looking capabilities that STB software can realise over a period of time (usually 5-7 years, but this time is being reduced to more like 3-5 years shelf life).
This may sound like commonsense, because it is what consumers are used to with more modern iOS & Android platforms, right? Yes, but in the world of PayTV, I've seen how technology implementations can go wrong, costing PayTV operators lots of time, money and energy, lost opportunities, lose market share, etc - due to not taking time to properly assess the nature of their products and services as well as the underlying technology ecosystem needed not only to satisfy their current business needs, but also the systems to power & drive future growth (at little cost, avoiding long development cycles, re-work and silo'ed ring-fenced deployments making maintenance a nightmare).
I also believe that we need to go further than just thinking in the STB-world - we need to think about a platform world, a world of re-use. The same applications and user experience must exist on all devices, regardless of technology domain. If the customer is expecting this unified seamless experience, in the same way the software components need to be shared across the architecture domains. I don't expect there to be separate application development teams per device. What usually happens is a PayTV operator has separate vendors, with their own stacks, a development team for STB, another development team for iOS, another team for Android, another team for PC/Web - all implementing pretty much the same thing. And similarly, separate infrastructure services teams (broadcast headend, internet online backed teams) usually fragmented, working in silos, often with duplication of services.
So the question for me has evolved: it is no longer about the STB being a product or a platform. It is about the End-To-End PayTV Technology Platform - how should a Video Technology Ecosystem be structured today?? Out with the old, in with the new is what I say ;-)
Why understand the difference between a Platform & Product?
I think it's becoming increasingly important to get the terminology across the business defined and standardised, even if the operator does not necessarily own the software stacks, relying on third-party technology providers (like end-to-end software component vendors).
I had asked this question on a LinkedIn group I manage, it was interesting to see people's different views on the subject (see last section for screenshots of that conversation).
Suppose we separate Business, Technology & Content
- As a business, we provide products and services to customers to allow customers to pay a subscription for the content as well as value added services. The products on offer are the packages based on tiering or segmentation (Pay more to watch more). The services we offer are additional capabilities to supplement your viewing experience, like Pay-Per-View, PVR Recordings, Catch Up and Multi-Room viewing. Access to these services may incur additional subscription charges. We allow customers to access on multiple devices (STB, PC, iOS, Android, Smart TV, Game Consoles, etc.)
- As a business, we provide a platform through our various distribution mechanisms (Satellite, DTT, IPTV, Internet), for advertisers to market their own products. We charge advertisers for air time, generating advertising revenue for the business.
- As a business, we provide a delivery platform for content providers to reach audiences in territories usually inaccessible. We pay for this content, thus enabling our customers to world-class content they wouldn't get from other PayTV providers. We own the distribution pipes and infrastructure, thus a sought-after content delivery resource for channel / content providers.
- As a business, we rely on robust, cost-effective & efficient technology platforms to deliver this experience to customers. We build applications on our technology platform that delivers the enable our products & services to be consumed on a variety of devices used by our customers. Our applications are built on a common ecosystem, promoting software re-use, ensuring faster times to market, and consistency of user experience across devices. We provide the same user experience by building apps run on STBs, Mobile Devices, PCs, etc.
Is it possible to create such a simple definition to run a PayTV business, I wonder? I've seen companies get confused with terminology, with people often talking across each other, referring to different things. If a business is unable to define in simple terms:
- What is the core business model?
- What do we mean by Value Added Services (VAS)?
- What is a Platform?
- What is a Product?
- What is a Service?
- What is an Application?
- What is a Device?
- If we create a new version of a STB, does this mean it is a new product or just another device?
It gets more confusing when it comes to roles and responsibilities within the business:
- What does a Business Product Segment Owner mean?
- What's a Product Manager?
- What's a Platform Manager then?
- What's a Product Owner?
- Do we have an Application Owner?
- What about a Component Owner?
- What's a Business Owner?
- What's a Project Owner?
- What's a Platform Architect?
- What's an Enterprise Architect?
- What's a Component Architect?
Taking a page from Apple
With Apple, it is simple, yet elegant - no confusion. Apple creates products, powered by a single ecosystem, a technology platform. Apple's platform allows for millions of third-party applications (the application developers themselves might consider their apps as "products" in their own speak). For example: iPhone, iPad, iPod are seen as distinct, unique product offerings (with variants based on device capabilities) all driven by the iOS platform, ecosystem being powered by iTunes, App Store & iCloud. iOS is the common platform. Similarly, MacBook, iMac powered by the same core OSX.
Rough Evolution of PayTV Technology in Lay-Man Terms
PayTV business model as well has remained fairly static of this period of 30+ years. Essentially, the PayTV operator exposed a tiered-content pricing models or segmentation: Tier One (access to everything), Tier Two (Tier 1 minus some channels), Tier Three (Tier 2 minus some channels) and so on. Customers would select a package based on the Tiers, and pay a monthly subscription to access the service. This was the early days of broadcast TV, known as Linear TV - the customer views whatever is airing at the time. Then came the concept of Pay-Per-View, where still on linear broadcast timeline, the customer could pay to view a piece of content, or have access to content that's not part of the standard package, by unlocking a window to view additional paid content. A few years later, we replaced the VCR, with a STB that could record live TV, called a PVR or DVR (Personal/Digital Video Recorder), also known as Time-Shifted Viewing (that is, users are constrained by linear time, and can shift their viewing to a time that suits them because the recordings can be watched at a later time). Initially the technology allowed for one single record and single viewing (that is, you could record the program you were watching because the early STB came with one tuner), then the ability to watch one channel, and record another (2 or more tuners), and some STBs allowed you to watch one and record two program simultaneously. Basically, to scale, the more tuners a STB had, the more recordings one could set.
The PVR changed the game & viewing experience of TV. In terms of business models, Pay TV providers viewed this enhancement as way of charge more, because the PVR gave users access to an additional viewing environment, something they didn't have before. The STB cost incurred a hard drive to store the recordings, so users had to pay an access fee for this additional environment. Customers also wanted to have a single PayTV subscription, but be allowed to view content in additional rooms in their homes, the multi-room feature. Again, multi-room implies another viewing environment, so in addition to the PVR, one could have other STBs not necessarily a PVR (a Zapper), which meant another access fee.
This was still the age of broadcast TV, the primary medium being Satellite DTH (Direct To Home) broadcast. Satellite broadcast as a medium, as time went by, saw improvements in compression & encoding profiles, which meant revisions of STB hardware, with the challenge of maintaining backwards-compatibility for infrastructure already invested by PayTV provider.
Then came a feature called Video-On-Demand (VOD), PushVOD or Broadcast Download (BDL). Following Moore's law, the cost of hard drives got cheaper every 18 months, so PayTV providers could expand their STBs with bigger hard drives, which meant for space for recordings. This technology provided additional features, or value-added services (products?): Catch Up TV (allows users to watch past shows on linear that they didn't need to record on their on, with the rule being that the program must have aired on a linear broadcast schedule), and Paid Viewing (Box Office Movie Rentals).
Then came the Internet - so connect your STB online (the era of the Connected STB), and users could get additional content over the internet, where you can download and watch later (like a PVR recording), or stream and watch on-demand (like linear, but the content is fed through the internet (IPTV) instead of satellite broadcast). With the internet, STBs also evolved as internet-only devices (no satellite tuners), where PayTV operator provided the same linear broadcast but over an IP connection. Exactly the same software would reside in both devices, just the mechanism of input, that is, the source of the data was different (Satellite for DTH, Ethernet for IPTV). And similarly for other broadcast mediums like DTT (Digital Terrestrial), 3G or LTE nowadays. Whilst the STB hardware capabilities would be different based on the transmission medium, from a software perspective - the software components & EPG / application are not necessarily different. Which is why I say we need to be careful about naming what the STB is: is it a product or a platform??
Now we're in to the connected world, with a multitude of devices: Smart TVs, Smartphones & Tablets - these devices have the same capabilities of consuming content as a connected STB. Customers expect to consume content on any device, the user experience needs to be seamless. So the PayTV operator enhances its services by exposing Apps on these platforms (Web/PC, iOS, Android), in addition to the STB. Now that we have multiple consumption devices, what becomes of the STB - is it still a product or platform or just another device??
My View Simply
The STB can no longer be seen as a separate standalone a product. It is simply just another plain old consumption device. The software stack in the STB needs to evolve to share common components with other device stacks, itself can be designed as a "platform" allowing independent STB applications to co-exist on its stack. Ultimately I envisage an end-to-end technology video platform that offers infrastructure & services any device can consume, a common user experience "EPG", implemented by one Application team, instead of having an application development team per device...What other PayTV Professionals had to say about this topic?
Here's screenshots of the conversation on a LinkedIn group I manage. I paste it here for people who are not members:
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