Market Insight

July 2012 launch for Youview in the UK

July 04, 2012

Daniel Simmons Daniel Simmons Executive Director, Enterprise & Residential Communications Technology, IHS Markit

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YouView, the hybrid broadcast and internet video platform backed by Arqiva, BBC, BT, Channel 4, Channel  5, ITV and Talk Talk, will launch at retail with a digital video recorder (DVR)  set top box (STB) by the end of July 2012.

The first STB, from South Korean STB manufacturer Humax, will be available from Amazon, Argos, Comet, Currys, Euronics, John Lewis and Richer Sounds with a recommended retail price of £299. Youview's internet service provider (ISP) partners, BT and Talk Talk are expected to offer subsidised STBs bundled with broadband subscriptions later in 2012. Talk Talk will announce its Youview plans on 26 July 2012.

Initially the service will offer a combination of the broadcast Freeview HD digital terrestrial channels and internet video content from the broadcaster Youview partners and aims to integrate it within the same user interface. Examples of these source agnostic interfaces include a backwards electronic programme guide and a text-input search box which searches across both broadcast and internet video content. Partner ISPs will make their own additional content available when a Youview STB is connected to their network.

Non-Youview-partner content providers are also being sought.  According to YouView, more than 300 content providers have already expressed interest in joining the project. Sky's TV everywhere service (Now TV) and the Northern and Central Scottish ITV franchisee (SVT) will be the first of these to make content available on Youview.

Internet video will be available in both SD and HD formats.  With a minimum recommended broadband speed of 3Mbps, HD quality content will be available for users on networks with higher speeds.

YouView trials have already been implemented in 2,500 homes across the UK with a positive feedback from participants.

Youview's tight integration of broadcast and internet video from all of the UK's major terrestrial broadcasters makes it the most accessible and user friendly connected or smart TV platform to date. Unfortunately, it has arrived late in a crowded market where internet video content is currently a value added differentiating feature rather than a direct driver for purchasing a device. Connected TVs, Blu-Ray players and games consoles are widely installed in UK homes and offer - to varying degrees - much of the same content as Youview.

A retail price of £299 makes Youview a high end product. Cumulative sales of less than 600 thousand Freeview HD STBs since its launch in mid-2010 to the end of 2011 demonstrate that the Freeview audience is not generally willing to make significant investments in dedicated hardware.  A non-DVR version of the STB is being developed, which will have a lower price and may help drive Youview sales. Youview will need to be able to clearly demonstrate its benefits and value if it is to succeed as a standalone retail product. Like Freeview HD, Youview's best chance of reaching a large audience, as a platform, will likely come from its integration in TV sets rather than standalone devices.

Nonetheless, the combination of over-the-top and linear content in a single interface and the potential to add additional linear streaming channels in the future with IP multicast make Youview a compelling proposition. But regardless of the interface, its success will rest firmly with the content offer. We are maintaining a conservative outlook for uptake of Youview based on the relatively high buy-in cost and the initial lack of content. Sky is likely to be a key player in the success or failure of the content proposition. A fully integrated pay TV, Freeview and OTT offer is certainly of interest, but our current view is that it is early days for what is a next generation platform that, only if done right, has the potential to show the way forward for TV bundles of the future. The lag in initial take-up will relate to the speed at which delivery technology at a platform level and content access keeps pace with consumer device and service.

Geography
UK Western Europe
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