Here in the Big Issue column
we take a regular look at the current issues that surround Sky+ and give
our comment and analysis.
|This Month - A View of the PVR Now & In the Future
by Callum MacFarlane
on Thursday 8th May 2003
A Question of
asked by a student at Middlesex University for help in answering some questions
about PVRs I expected the usual questions such as: "What is a PVR?" and "What
is the difference between Tivo & Sky+"
But in fact what was asked of me, was a
set of the most thought provoking questions I had seen in a long
Who's to say if the answers are what is being sought, but
as a piece of work I thought I'd like to share with Plusworld readers, the
questions put to me, and the answers I gave.
like to thank Kelvin Tan, whose research this is for kindly agreeing that
Plusworld could publish his questions along with my responses:
1. Why do you think that TiVo, a similar service to
Sky+, did not turn out to be as successful as expected, whereas Sky+ has? Is
the way TiVo was marketed (with BSkyB) one of the reasons?
|Tivo was and is the world's most advanced video hard
disk recorder, but it failed in the UK for very specific reasons:
name Tivo means nothing to the man in the street
2) Thomson, the sole
manufacturer of Tivo was also completely unknown in the UK.
3) The high buy
in price of £300 plus £300 lifetime subscription or £10 per
month forever, proved too much for people who did get the Tivo message.
|This Tivo pricing model was rigid, but
interestingly in 2002 when the electrical superstores that decided to cease
selling the Tivo units, discounted the units to £99, the sudden increase
in demand was noticeable, even if it was current Tivo owners who were buying
the units as presents for relatives and friends, and it was those buyers who
were realising the true value of the product and the enjoyment that could be
received from such a "gift".
||Sky+ has not yet been proved successful,
either in total sales, or in it's ability to meet all the requirements of the
user, (you can't live pause a radio programme, or record another ITV region
available under "Other Channels" because the software doesn't allow it). The
Sky+ marketing slogan "Never Miss A Thing" is so untrue in relation to real
time EPG updates and occasional non functioning 'series links' it's surprising
Trading Standards haven't been at Sky's door!
The marketing campaign for Tivo was obtuse and
poorly coordinated. And despite its "backing and support" from Sky, it was as
if Sky was holding back endorsing Tivo fully, and of course there was good
reason, Sky+ was soon to be launched.
And strangely Tivo works best
with terrestrial channels, as it has its own inbuilt analogue tuner, so that
you can record one channel and watch another. Tivo working with Sky is fraught
with difficulties, channel changing isn't foolproof and you can't watch one
digital channel whilst recording a digital channel. Also the Tivo EPG doesn't
use the Sky dynamically updated EPG at all, so late programme changes are
The chiefs at Sky knew that Tivo was a great product, but they
felt rightly confident that Sky+ had some "killer features". And there was a
small matter of the £10 per month for Sky+ all going to BSkyB, so why
promote a product like Tivo when the greatest profit for Sky would be in Sky+.
The demise of Tivo was guaranteed the day that Sky+ was launched.
|2. TiVo and Sky+ are competitors, so what is the impact on
Sky+ with TiVo having licensing deals with Sony and Toshiba?
and Sky are competitors in the same way as Ford and Vauxhall. They both sell
similar concepts, but the products are a lot different, and the service they
back that up with varies according to what you buy and whom you deal
Sky will not bat a "corporate eyelid" at anything that Tivo does
in the future. The Sky customer base for their Standard Digibox service is so
solid, and still growing that the "potential customers" who Sky can aim Sky+ at
are just "sitting ducks".
Any Tivo marketing campaign in future based
on new product will be extremely difficult to make a dent in the lead that Sky+
has grown to. They have no direct marketing strategy to the households that
might be most interested in an alternative VCR solution. And with a brand as
unknown as TiVo, all marketing is going to be an uphill struggle.
|The likes of Sony & Toshiba have not made
agreements with Tivo for fun, they see the future of television, and the future
is Personal - Personal Television Recording.
Why watch live when you can watch through your
"home entertainment command centre" with pause, multi channel record, slow
motion, rewind, and not forgetting zapping through the adverts.
Americans say "it's a no brainer". And the truism that is most regurgitated in
the industry about PVR/PTR owners is this: "Once you've tried a Tivo or Sky+
you'll never want to go back to watch normal TV again!"
So Large screen
TVs with built in TiVo, DVD, VCR, PVR Hybrid products housing all the latest
consumer technology, all branded and sold together as complete solutions. This
is how the Americans/ UK market leaders are choosing to compete with the South
Koreans and the Chinese manufacturers. The move "upmarket" to produce "high
value", "high profit" products is no accident, it's all in the design and PVR
is at the centre of that design.
How do these Sony & Toshiba's
equate "high value" and "high profit"? Simple, create a business model that
allows you to sell the hardware cheaply as a loss leader, so that the consumer
is perceiving a "bargain" compared to standard TV, DVD, VCR, and then as part
of the deal the buyer must sign the "service provision" contract that says they
will pay a monthly fee for ever more, or a lifetime fee, so that the "high
profit" aspect of the deal is the ongoing revenue generated from the service
provision, of Daily Electronic Programme Guide listings, Future software
upgrades, or just to use "the advanced options of the hardware" - like Sky+.
Only in this way, as part of their TV & DVD product set can Sony,
Toshiba and the like hope to get a slice of the multi million pound market that
will be PVR/PTR subscription income.
|3. I read about the incident where subscribers had their
TiVo recorders record shows on the Discovery Channel in the US after something
similar happened with the BBC downloading the show Dossa and Joe last year. Is
this a big issue? Is there a chance of Sky+ subscribers going through something
similar? Is this a big issue?
Yes, it's one of the biggest. Tivo
had the right idea with adding value to the users service, what they forgot to
do was to ask the user if it was ok on an individual basis to download
programmes to their devices.
|The Tivo incident created upset amongst users, some
thought their personal hard disk space was being taken up by a non requested
programme, the truth was that Tivo had put aside space on the hard disk that
wasn't part of the users own quota. But there were problems with the UK auto
record of Dossa and Joe.
For one, the BBC didn't run the show to time, so
Tivo didn't catch the whole episode, and incredibly Tivo, a family product
recorded an after watershed TV show that any child could have played back,
without a parent knowing about it!
There was no advance warning about the
programme to be recorded and Tivo staff were shocked by the scale & how
vocal users were in their unhappiness.
Will Sky customers also get
automatic downloads of programmes they haven't asked for? The current answer is
"No", but the future should be optional.
Some customers would
absolutely love content to be pushed to them and some would hate it. The
solution lies in asking each owner what their personal preference is. This
could be set in the Services menu of Sky+ for example as a changeable option,
with the default being "no content to be pushed to the users Sky+".
However if I subscribed to the "push content" I could expect lots of exclusives
that I wouldn't get anywhere else. e.g. next weeks The Simpsons delivered a
week early, the new UK Top 10 videos pushed to met at 7pm each Sunday with
automatic bookmarks. I could get exclusive offers, information and value added
content. The limit is only your imagination, if this would not be exciting
enough, the commercials that could be delivered to you, in your location with
special offers, but more of that later.
The key to all of this is
content management, something that hasn't really got off the ground yet. Each
and every programme and element within a programme should be described with
Meta data, tagged so that it can be identified.
|e.g. each news item within a bulletin should be
selectable within the EPG, so I can go straight to the sports news without fast
|each act on Top of The Pops should similarly be
selectable. If I want to watch Robbie Williams and Liberty X only, why should I
have to search manually for them? The artists should be listed as selectable
|The goals from my favourite teams should be getting
recorded from Sky automatically, just games involving, Carlisle or Alloa for
The guests on This Morning or Des & Mel should
be ready for me to access straight away without watching or searching the whole
show. You get the idea...
If we had all this data coded and linked to
shows and parts of shows it would make selecting and playing back particular
items of interest much much easier.
Of course advocates of the Tivo
system would say that to a degree, Tivo already does some of this advanced
feature set by allowing key word searches, wish lists, record by actor,
But however good it is, it doesn't go into enough detail,
to allow in my example for me to see a list of topics on the news bulletin and
view just the relevant part. It doesn't know that Patrick Stewart is a guest on
This Morning, because the EPG isn't detailed enough. It doesn't help with Top
Of The Pops because the search facility is only based to programme level and
not within a programme & not time coded to that actual second when an act
This is where the next 5 years is going to take us with
content management; the question is who is going to provide the service and who
is going to pay for it? So far Sky+ has steered away from searchable options on
its hard disk, but with version 3 and onwards of Sky+ this functionality may
|4. Other than the economic reasons, such as having to pay
£10 per month, do you think there is anything else holding backing more
BSkyB subscribers to join Sky+? Maybe Sky+ does not have enough features the
customers want? Or is Sky+ a difficult concept to sell to
There are number of issues holding back Sky+:
Ordinary people in the street do not know, and quite frankly care what Sky+ is
and what it can do for them.
Ask anybody in the street about Sky+ and
they will likely just shrug their shoulders. "Something to do with Sky" would
be a common response.
The concept is difficult to sell because Sky has
to strike a balance between explaining the features and explaining the
benefits. In the most recent commercials for Sky+ on Sky, the benefits of Sky+
have been pushed to the fore, and the technicalities of what the Sky+ system is
capable of is rather overshadowed.
But for mass-market appeal, Sky is
working in the same way as mobile phone operators, selling the experience, not
Once Sky hit miss market appeal with Sky+ the word of
mouth should then help Sky move Sky+ units off the shelves like hot cakes. And
what constitutes mass market? Once one million units of Sky+ are out there
being used, then there will be 1 million ambassadors of the most advanced and
liberating product since the invention of the aforementioned mobile phone.
2) The price is still prohibitive, with standard subscriptions,
installation, mirror subscriptions, Sky+ subscription, and optional services
such as Box Office, the total cost of ownership is high, and overly complex to
many people. People know that consumer electronic goods come down in price over
time and remember the high priced Sky digiboxes when they were launched that
were soon given away "free". They expect the same to happen to Sky+.
Pricing structure is a complete mess and causes confusion and
resentment amongst potential and new customers.
In an ever changing
world, commercial savvy consumers expect value for money and do not like to
feel that they are being told that today's price is a bargain when tomorrow's
price will be cheaper.
The way to get around this is for Sky to bite
the commercial bullet, they will choose to anyway sooner rather than later, but
in the meantime £199 is the cost of Sky+. At that price point maybe only
10% of potential interested parties will take up the offer, if the price was to
drop to £0 - free as with a standard digibox, then a huge proportion of
interested parties would take up the offer of Sky+ with a £10 per month
3) Sky+ does have enough features to sell itself to
the majority of TV viewers in the UK, but the majority of viewers cannot
understand a feature that is being marketed to them until they have actually
used that feature for themselves. It's only then they are hooked.
trials of Sky+, videos of the product & its benefits posted to prospective
customers. Roadshows to shopping centres, and schemes to introduce a friend as
with standard Sky will all help consumers understand the product being offered.
Sky has made a start with demonstrations on the web at
www.nevermissathing.com and by showing a demonstration of Sky+ on their own
barker channel 998.
One feature which will turn a "why have" product
into a "must have" product is the soon to arrive new ability to Dual Record to
the hard drive of Sky+, so allowing a viewer to record say, Sky One, Record Sky
Movies 1 and watch a pre-recorded programme from Sky+, all simultaneously.
Crystal Ball gazing, with Sky+ version 3 will it be possible to swap
programme between Sky+ boxes with broadband? Why not? Just add a 50 pence
transfer fee per programme swapped and before you know it another huge revenue
stream, the revenue could even be shared with the programme providers if there
was any copyright wrangle.
However Sky+ appears today, it is certainly an
early version of what will appear on the roadmap of home entertainment, expect
very big changes and enhancements over the next 5-10 years
5. Is it too soon to consider PVRs a success and start
considering its potential implications such as the end of primetime television
or personalised advertising based on the audience's viewing preferences?
It's a success for those who have and use it. Because we are not at
mass-market stage yet the implications seem slight for the advertising industry
or scheduling controllers.
However there will soon come a day when,
like the Internet, there will be those who are plugged in and those who aren't.
For those people who are not part of PVR revolution, life will go on
pretty much as normal, for the rest of us life will be a "high octane", self
serviced, customer focussed, individualistic and "time constraint free"
experience of selecting content and playback options giving us what and when we
Primetime television does not really exist in a PVR home, and
with Dual Recording for Sky+ coming soon will matter even less in future.
The Programme schedule on Sky+ is made of nearly all pre-recorded
material ready to be played out at any time. Why watch live when you can do so
much more with pre-recorded material?
The only way to break this cycle
from a scheduler's point of view is to involve the viewer in the programme real
time, so that the viewer can vote real time & find out the result real
time, in the same way as I'm a Celebrity or Big Brother is appointment TV for
its viewers. Sports events also have a benefit in being watched live.
Personalised advertising is the ONLY way that
advertising on TV is going to work in a PVR household. Our household is
interested in photography, cinema, eating out, pop music and the Internet.
Adverts targeted at our household would be welcome - showing us great
deals on digital cameras, trailers for the latest releases at our local cinema,
restaurants in our area with special offer discounts to be quoted from the
advert. Pop music adverts, "this is J-Lo's latest single, and to request a
video of this to be recorded to your Sky+ please press Red now. To purchase the
single press Green, to purchase the Album press Blue."
||Another example of an advert might be:
Internet access - type in your e-mail address now and we shall send you an
e-mail with a clickable programme shortcut for your PC for a free120-hour trial
that you can click on and use straight away.
You could perhaps get a "free Box Office film"
every month for agreeing to watch the adverts, if you wanted to take part.
The advertising opportunities are endless.
A simple advertising
opt in / opt out would be controlled from the Services menu of Sky+ and the
default would be no advertising.
|6. Are PVRs just experiencing an initial hesitant market
like any other technologies such as the Internet and DVDs? Would you say that
if the last decade was the revolution of multi-channels, the next decade will
be the revolution of PVRs?
Yes the PVR market is embryonic at the
moment, but with funds available for a marketing campaign, that will be bigger
and better than anything gone before the general public will all have an
awareness of Sky+ by Christmas 2003 even if there isn't a huge buy in at that
Because a PVR is so personal expect 1 unit per household
initially, but once the usefulness really hits home, every home will want one
wherever there's a TV.
Because the Sky+ is so intrinsically linked into
the Sky EPG an operates exactly as a standard digibox would, there will come a
point in the lifecycle of production of Sky+ that when a new customer wants a
standard Sky digibox, they will be given Sky+ for the same price, because the
buy in factor once it's in your house, and you have remote control that can
record and play programmes, and all you have to do to enable it is phone up Sky
- well then you really do have a mass market product.
The Nineties were
about choice on Sky Digital, this decade is all about control on Sky+.
Think of it as before you had a choice of hundreds of buses on predefined
routes and timetables, but now with your car you can go wherever you want,
whenever you want. That is the control that Sky+ brings.
generalisation, as a nation as we get more cash rich, and more time poor,
devices like Sky+ & Tivo open up a whole new world of personalisation and
control, giving us back the time we lost in the linear world of TV
|7. A previous similar type of technology to a PVR is Video
Plus, where instead of using a VCR, a hard disk is now used. Do you think
customers are put off, as what they might think is just another Video
Videoplus is a great benefit to technophobes everywhere, but
it still is rather limiting in the that it only programmes the VCR with a set
instruction and no ability to change tapes, pause a live programme or do any of
the host of things that a PVR can.
There is obviously a great deal of
confusion from consumers between VCRs that use videoplus and Hard Disk
Recorders that use software only solutions.
The solution is not to
mention VideoPlus and to then concentrate on the message "You're in complete
control" when extolling the virtues of PVRs.
|8. In the April 2003 edition of What Satellite &
Digital TV, it offers a DIY Sky+ upgrade from the current offering of 40GB of
hard drive space. If it is technically possible to upgrade, why is it that Sky+
has not yet made it available to subscribers?
Enthusiasts of Sky+
& Tivo have trebled their hard disk capacity to 120GB - approx 60 hours of
recording. This hard disk upgrade is not impossible by any manner of means, but
it does take someone technically literate to do it, and of course it does
invalidate any warranty that you may have on the PVR.
Sky are likely to
make authorised hard disk upgrades available within the next year or two,
another revenue stream for them.
At some point in the future bigger
hard disks will be the norm anyway. 40GB today - 1000000GB in 10 years time?
|9. If Freeview succeeds, so too would digital television.
Without digital television, there would not be much point in having Sky+, since
there are only 5 channels. Is it important to the growth of PVRs in the UK for
Freeview to succeed in getting more viewers?
|Freeview is almost an irrelevance to Sky+. The only
thing that Freeview has in its favour is that because its free, any PVR like
the Pace Twin PVR can record programmes without a subscription fee, making the
ownership cost much cheaper.
||If Freeview does not succeed, the main terrestrial
channels will continue to digitally broadcast and the analogue signal will
still eventually get switched off.
All that Freeview gives is choice
and competition, both good qualities, but compared with Sky, it is a 2nd rate
Conversely in this household 80% of programmes
recorded are from the Big 5 channels (BBC1, BBC2, ITV1, Channel 4 and Five) -
live viewing is reserved for Sky Sports channels, News channels and music video
channels for relevant "mood" music.
Sky will dominate the market come
what may, and will have the leading brand in Sky+. What the uncomfortable
thought for some might be is that despite al these channels, Sky+ users might
downgrade their channel package to "non-subscription" because the value of the
PVR function at £10 a month means there is plenty of suitable content on
the main non-subscription channels. In fact you can buy Sky+, pay your
£10 a month and never subscribe to Sky programmes, in effect almost a
duplication of the Freeview service, and with Sky+ you get dual tuners and ever
improving software features.
| 10. Is there room for a Pay As You Go type of system in
the PVR market?
PVR Rental or Pay As You Go would certainly have
advantages on the "big purchase" scenario, where the customer has to spend a
substantial lump sum in one go.
|The Prepay option worked well for ITV Digital, and
would work well in conjunction with standard payment terms as the other option.
Flexibility in the price model and ways in which people can pay for the
PVR service would assist take up to a significant degree.
When the Sky+ system is given away "free" (sometime
before 2007) to people who sign up for the top Sky subscription package and
subscribe to the Sky+ subscription, there will be no substantial lump sum and
this will allow all people who can afford the monthly fees to use Sky+.
Of course, if you don't want to spend a huge sum of pounds a year on
Sky+, then alternate PVR solutions such as the Pace Twin PVR will come into its
own, the choice and control may not be quite the same as Sky+, but the
economics and money saved over the year really come into its own.
|11. To enjoy Dolby Digital 5.1 sound quality from Sky+,
that means having to get amplifiers, in addition to getting widescreen
television. Is Sky+ just a luxury? How soon before it becomes a standard?
|Dolby Digital 5.1 maybe a bit of a luxury at the
moment, the majority of Sky customers polled recently, said that they owned a
widescreen TV. Sky+ is a luxury in many people's eyes, as it is perceived as an
expensive digital version of a VCR.
It will become standard when the
Sky+ subscribers reach 1 million homes, and then it will be the "must have"
item of this decade.
The 2 scenarios that will effect how quickly
mass market penetration happens is:
1) When Sky+ becomes "free"
Sky+ is the new standard Sky digibox, i.e. everyone will get one whether they
want one or not. (do you think everyone asked for Sky Box Office, or Sky Games?
Or did they just get them thrown in with the digibox as part of the default
It all depends how quickly the manufacturers can push down
production costs, and with new PVR microchip being created all the time, the
cost to create such devices is falling rapidly.
|12. Should the advertising industry be worried about
|Worried? They should be terrified! In this household,
advertising watching has decreased by 99% ! It's the main time saver of having
as PVR - skipping the adverts. If the advertising execs can be bothered to get
off their corporate lazy asses and target this family - download dynamic
researched adverts that we would be interested in, then they would have a
||Until then, "the brand" is dying in PVR homes and what
matters is convenience and understanding the consumers needs. A whole new world
of advertising is possible with Sky+ and other PVRs, just ask us to opt in and
we might just do it!
|13. Is it too soon to worry about the way forward for
PVRs, such as capability to record interactivity, or should the industry just
worry about getting more customers?
It is not too soon, in some
ways it is already too late. Expectations of consumers are being ignored by the
corporate sloth mentality of "maximum revenue per subscriber models" that mean
nothing to the customer, but mean resting on its laurels for the corporate PVR
|Interactivity is the way forward, if I want to record
my attempt at a personal best in Beehive Bedlam (a game on Sky Gamestar) why
shouldn't I be able to? If I want to record the football with fans commentary
on Sky Sports why can't I? If I want to record a News multiscreen feed, why
can't I? Is it because it's impossible? No, it's because of low expectations
and mass-market appeal. All the talk of control means nothing, if the control
is not there in the first place.
The technology may not be there yet for
simultaneous recording of 8 Sky News multiscreens with interactive choices for
each, but a basic recoding of what's on the screen should ALWAYS be possible,
whether it's a different ITV region in the Others menu, or a radio programme
that you just want to live pause.
|14. Finally, what do you think is the way forward for
Make PVRs that consumers want. A 20GB Hard Drive in this day
and age is an insult to the potential PVR buyer. In the same way tat you can
have a mobile phone package with a number of minutes, allow consumers to choose
how many hours of recording they want as an average and let them pay for that,
40GB for 20 hours, 80GB for 40 hours and 120GB for 60 hours. Allow the consumer
to choose the number of tuners, 2, 3 or 4 so that they can record up to 4
individual programmes at the same time and let them pay for that. One size does
not fit all and the sooner PVR manufacturers realise that the better.
|Enable broadband swapping of programme content between
PVRs. This is probably the most contentous issue for the future of PVRs, but it
will be what consumers demand. It is already happening in the States, with
SonicBlue's ReplayTV. Far too complicated for UK users?
Here's a quote from ReplayTV's FAQ:
"Q. How do I share my recordings with my
A. If your friend has a ReplayTV 4500 or 4000, they can "talk" to
each other over the broadband Internet connections.
From your Replay Guide,
just select the show that you want to share. A pop-up menu will give you the
option to "Send Show" and then ask you to select the person that you want to
share the video with. All that's left is hitting "Send" and the video is sent
the person that you selected. It's that easy!! "
A good business model
could be made on programme transactions if managed properly, but as usual
rights holders will probably stick their heads in the sand.
of PVR is undoubtedly tied up in "push technology" and offering the customer
something above the norm, if they wish to opt in. Be it customised
advertisements, samples of mobile phone ringtones, or a preview of a whole
episode of an up and coming programme that has not yet been aired.
is all about maximum revenue per subscriber and Sky should learn to treat their
top paying customers like VIPs Thomson, the only previous manufacturers of Tivo
in the UK have ceased production of the unit. Tivo do not have a new
manufacturer in the UK yet but that may change and dual tuner Tivos will get to
us eventually. Freeview type PVRs such as the PACE Twin are the cheap and
cheerful way to get into PVR heaven with only one initial cost and no follow up
Other PVR solutions will come to the market, such as Microsoft,
Showshifter, Real Player, etc but only solutions that sit alongside or are part
of your TV will have any chance of success.
The future is all about
control in a relative "cash rich" "time poor" environment, and PVRs of all
kinds deliver big time.
One thing is sure, the digital revolution in
Home Entertainment has only just begun and we are the witnesses to the fastest
rush in history to have the Television of the Future in our grasp,
the same way that mobile phones and the Internet empowered people worldwide,
the Personal Video Recorder will become the control centre for our window on
So in a word, what exactly will make it successful, well the
answer is in the name - Personal Video Recorder, "Personal" is the way we
interact and understand our wants and needs, and the PVR will help make that
"Personal" to you and me.
Footnote: Kelvin Tan has kindly agreed
that Plusworld may publish his research work in full when it is available in
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