YouTube on existing set-top boxes: Successfully scaling streaming services

Arpad Jordan, CTO, UPC Central and Eastern Europe

As companies from Amazon to Zappos can tell you, the line between innovation success and failure is rarely clear. Will consumer interest to a new service be broad enough to justify heavy up-front investment and required scale? How will new products or services affect current customer behavior? Will they be complementary to – or competitive with – existing products or services?

 

At UPC Hungary, we partnered with YouTube and app providers to go where no cable operator has gone before -- using customers’ existing set-top boxes and our managed cable network to deliver YouTube as part of a cloud-based app store. Three months, hundreds of thousands of customers and thousands of hours of YouTube viewing later, here’s what we’re finding and why it’s important:

 

  • Approximately 50 percent of the available subscriber base has accessed YouTube via the STB;
  • >50% of those who have accessed YouTube via their STBs have become repeat visitors; and
  • Peak YouTube viewing times are complementary to linear television’s primetime hours.

 

That last point bears some additional discussion. As the graph below shows, YouTube viewing on our STB platform begins to rise from overnight lows in the waking hours, then remains remarkably consistent throughout the day until the usual prime time viewing hours in the evening. Moreover, because the YouTube streams are using existing VOD bandwidth allocations, impact on our network is low -- even during peak YouTube viewing hours.

 

 

It’s too soon to read too much into the tea leaves, but here are some initial thoughts from our review of available data:

  • The high level of repeat visitors suggests that interest in YouTube on the television is high among our UPC Hungary subscribers.
  • The constant level of viewership during traditionally lower daytime TV viewing hours, together with unpublished usage and engagement numbers, indicates that YouTube is attracting a broad cross section of subscribers.
  • The synergies between YouTube’s peak viewing hours and primetime linear viewing show that our viewers are seeing YouTube as an added value that complements well the existing linear or on demand content.

As our YouTube rollout continues in Hungary, we’ll be asking and answering more questions. How will initial viewing patterns shift over time? What will be the effect of increased marketing on customer behavior? How would inclusion of YouTube as a channel in our guide affect viewer activity?

 

For now, we’ll be happy with the answers we’ve already received: The strong indications that the service is building value for our customers, our content partners and ourselves, and that online video and pay-TV channels can co-exist as parts of our service bundle.