Bullpen: EPGs at a Crossroads

The electronic program guide (EPG) has long been the nemesis of video services. It has become an increasingly complex user interface, but also the foundation for program information, recommendations and interactive applications on set-top boxes, and now on consumer electronics (CE) devices.

Many of the features provided by the EPG fall under the general category of "guidance." While content and applications for video services have multiplied like rabbits, the EPG has been slow to develop. What’s holding up the progress? And what lies ahead?
Challenges Although EPGs are the face of video services as we know them, significant challenges exist within their ongoing development and support. A few of them follow.

Total control: The largest video service providers (Comcast, Time Warner Cable and Verizon) insist on building the EPG themselves rather than customizing a commercial product. The idea behind in-house development is total control over development priorities, release schedule, look-and-feel, and exclusive use/ownership.

In-house development efforts additionally struggle with the following issues:

• Competition for resources. Motivated to "do it better, cheaper, faster," in-house efforts struggle with attracting the best and brightest managers and developers.

• (Lack of) competition for EPG. Because in-house efforts don’t compete against commercial EPG products, it’s only a matter of time before complacency sets in.

Continuous improvement: Consumers have also become complacent when it comes to EPG improvements and become alarmed when changes do occur. Not having been trained to look at change as a positive, they react negatively and flood the call centers with questions.

Resource constraints: EPGs operate within one of the most unconventional environments there is from a programming perspective. Instead of forward software engineering (simply adding new features), the platform must constantly deal with give and take – giving up certain features for other new features because of the limited memory and processor speed available.

Backward compatibility: Unless video service providers want to support multiple program guides, they must develop new software releases down to the lowest capable device – a lowest common denominator approach to software development. New software releases also need to maintain complicated customer configurations stored within devices such as parental controls, favorite channels, preferences and even DVR recording schedules.

Lack of manufacturer support: Up until recently, Cisco (Scientific Atlanta) sold the Scientific Atlanta Resident Application (SARA) with its set-tops. However, it has dropped support for this guide platform, leaving operators who have been relying on a steady stream of updates to look elsewhere. Motorola, the largest set-top vendor, offers no EPG with its product.

Lack of cross-selling: Subscribers generally have a hard time finding what is on. In the days of three networks, each network did a good job of keeping its audience informed about what they were doing (cross promotion spot). Today, there are just too many channels and too little viewer attention for that to work.

Cross selling is also complicated by commercial zappers, such as TiVo, which permit users to skip advertisements promoting future programming. Even with today’s best-in-class guidance technology, subscribers remain unaware of much available programming.

These sorts of challenges work against the EPG being anything but a rapid application development (RAD) environment. As a result, major software releases take years instead of months, and smaller point releases take months instead of weeks. Opportunities In spite of these challenges, the opportunities in the guidance market are heating up. The days of slow, reliable changes to the EPG may be numbered.

As mentioned, Cisco has dropped support for SARA. Competitors such as Verizon and Netflix (via Samsung, TiVo and X-box) have raised the bar on EPG functionality and look-and-feel. And as everyone knows, the available video choices from multiple sources have increased dramatically.

Commercial EPGs will become an increasingly viable option. Challenged with a significantly higher functionality bar and greater demand for better looking and higher performing EPGs, in-house EPGs to compete on the open market will be prohibitively expensive.

Within the coming year, I anticipate that one of the three major video service providers building its own EPG will abandon the effort; and within three years, no video service provider will be actively building its own EPG. They will all be using customized, commercial off-the-shelf (COTS) EPGs.

Core EPG features will become table stakes. Let’s face it: All EPGs do the same core tasks. So why try to differentiate one service from another in an area where they must largely work the same anyway?

Ultimately, the applications associated with these EPGs will differentiate service providers. They will all use different skins, and different orientations of the same data, but beyond that, video service providers will need to invest in apps that tie together their services and value-added partnerships.

Perhaps the way video service providers need to look at the EPG is the way Internet companies look at the content management systems (CMSs) running their company Web sites. Even if they use the same CMS, that doesn’t mean they cannot differentiate themselves from a fierce competitor. It is all about distinct themes, skins, content, etc. Spending less on core EPG development would allow video service providers to spend more on truly differentiated features.

Guide data will eventually differentiate EPGs. Until now, if you licensed data from Tribune Media Services (TMS) or Macrovision (TVGuide) and had unlimited resources and time, you could build an EPG as good as anything available.

But that paradigm is shifting. Guide data is growing to include studio library metadata, Corbis inventory metadata, Netflix recommendations, YouTube library metadata, a video service provider’s video on demand (VOD) library metadata, a subscriber’s personal digital library, and more. The challenge to incorporate all this into an EPG is becoming gargantuan – perhaps even to the point where TMS or Macrovision is unable to expose such data relationships.

The only way video providers will gain access to these high-value data relationships is through buying an EPG from a data provider who exposes these data relationships. Through these relationships, video service providers can then build applications to better cross-promote their unique content. Newcomers? Without continuous and significant improvement in the EPG, especially within guidance technology, the video product becomes less valuable over time. It becomes more and more difficult for the subscriber to extract the value that is in there.

The ensuing chain reaction cuts potential audience numbers for programmers.

There is a significant dynamic at work, however. As programming choices continue to proliferate and EPG development plods along, the resulting delta provides operating room and multiple business cases for newcomers to participate in not only the guidance of all this content, but also potentially in the delivery as well.

Bruce Bahlmann is an independent research analyst. Reach him at [email protected].