Liberty Global has (again) announced the Horizon Gateway, a ‘next-generation’ set-top box. Already announced in December 2009, the new STB is now ready for a consumer trail at UPC Netherlands. Commercial roll-out will follow, in the Netherlands and shortly thereafter in Switzerland and Germany. The Horizon box has been delayed by almost a year. Various versions will be offered: with or without a hard disk and in 2012 a ‘client STB’, which can be linked wirelessly to the Horizon Gateway to support multiroom functionality.
Liberty Global announced its technology partners in May 2010, and a few more have been added since:
- Samsung: manufactures the box;
- Intel: delivers the processor;
- NDS (owned by Permira and News Corp): middleware and user interface (UI);
- Nagravision (part of Kudelski Group): conditional access;
- ioko (part of KIT digital): service platform;
- thePlatform (part of Comcast): content management system;
- Metrological Media Innovations: app & widget store (for both the Yahoo! Connected TV widgets as well as W3C and HTML5 widgets);
- Enpathy Labs: website design.
It appears that the Horizon Gateway, earlier announced as a ‘Google killer’, will offer an all-in-one TV 2.0 experience. Primarily it will offer broadcast content, as well as broadband (from the web, such as YouTube and Facebook) and personal content (stored for example on a computer). Nearly all the elements that could be described as ‘connected TV’ are present:
- Search;
- Personalised recommendations;
- Multi-screen around the house;
- Multi-room (see above);
- Apps and browsers for a ‘second screen’ (smartphone and iPad), which can also serve as remote controls and control programme recordings. Content can also be streamed from an iPad to the TV, and a social media widget allows users to share and recommend content to contacts;
- Plenty of connectivity choice, with DVB-C and broadband inputs and HDMI, MoCA and DLNA outs.
There will also be a wide range of content available:
- Broadcast: the existing DVB-C offering.
- Web content (over the top, OTT): delivered via apps (currently around 60 content partners); a SDK (software developers kit) will be introduced later for developers to deliver new apps (widgets) for one-click access.
- VoD: the catalogue includes 3,000 titles.
Liberty Global started early and is now profiting. While Ziggo has only made it to a relatively simple iPad app and KPN offers broadcast TV over the iPad, UPC is moving ahead. Initially the services will only be available in the home, but Liberty/UPC (the same as KPN) wants eventually to offer content everywhere, via broadband. To give the full picture, there are still a few small gaps to report, such as real interactivity, where an iPad functions not just as a second screen but also as a companion screen, with additional content (eg, background information during a sports events). American pay-TV provider DirecTV offers an example of this kind of ‘social TV’, via a cooperation agreement with Miso, where the iPad becomes a companion screen to use social media in addition to the broadcast content. Furthermore, it’s not clear yet whether new advertising models are planned or if ‘t-commerce’ will be explored (e-commerce via the red button application).
Liberty Global is also overtaking the competition when it comes to content. The broadcast offering is the same, but the VoD catalogue is huge, although the value of this remains to be seen, depending on the number of recent blockbusters included. By opening up the widget platform to developers, the company can also expect a growing offering of OTT services. Liberty Global, the second-largest cable operator in the world after Comcast, offers developers an attractive audience of 18 million customers in 14 countries. The company is pushing Project Horizon as a platform, rather than a ‘device’, but it’s questionable whether the widget platform will achieve scale. Players such as Yahoo!, Philips and Samsung offer a few hundred apps, which is still much less than the hundreds of thousands in the mobile market. However, it’s all about quality here; the widgets need to offer access to attractive content, such as YouTube, news and a full range of niche subjects in order to place the box firmly in the market.
Liberty Global thinks it has a ‘Google killer’ in house, but that’s still a bit premature. Google is working on version 2 of its Google TV software and has strong partners, including Sony and soon Motorola Mobility. (Note however that the UPC network is only open to ‘UPC certified decoders’). Whatever the case, TV operators such as UPC as well as KPN have competition from a completely different direction: TV manufacturers with their own platforms, such as Panasonic, LG, Samsung and Philips. And there’s also the Yahoo! platform (with several TV makers as partners), the independent providers such as Boxee and of course, Apple.
Conclusion: Liberty Global has announced a nice product and has a strong market position thanks to its existing relationships with both end-users and the content industry. Now all it has to do is market the box in a clever way, without causing any resentment or misunderstanding among customers. This raises the question of how much the Horizon Gateway will cost and if UPC will offer a subsidy. As is usual with UPC, the box will be rented and not sold in shops. The question is furthermore whether the box will contribute to the shift from broadcast to on-demand viewing and result in lower churn, a bigger share of the broadband market and higher ARPU for the company.
