With wafer-thin margins and intense competition, making money in connected-TV device sales has never been tougher. One European device maker has come up with a way to differentiate its product and possibly create a new service revenue stream in the process.
European connected-TV device maker Netgem announced Monday a new service product – called netgem.tv – to tackle two of the thorniest problems facing video consumers today: finding something to watch and managing the viewing experience. Starting now, when UK consumers buy a Netgem NetBox 4K for £149 ($190) they also get netgem.tv service.
Netgem Netbox 4K
The NetBox 4K combines free-to-air television channels with many of the most popular UK online video providers. These include Amazon Prime Video, Hayu, Hopster, and Rakuten TV. Netflix is not currently available although Sylvan Thevenot, Managing Director of netgem.tv says it should be added soon. Freeview, the UK’s free-to-air TV service, provides 70 TV channels with 15 HD, and 30 radio stations. Many of the most popular TV channels also provide an app with on-demand and show restart services. These TV apps are also available on the Netbox 4K.
With the addition of USB storage, the Netbox 4K also provides DVR services. According to Mr. Thevenot, adding a 32 GB thumb drive allows a user to pause live TV and record up to 30 hours of standard definition or 15 hours of high-definition video.
Netgem.tv – content discovery
Most consumers are happy that they can pay for only the content services they want online. However, they are not happy wading through all the apps looking for something to watch. Netgem is working with content providers to help consumers get to the good stuff more quickly.
Mr. Thevenot says that netgem.tv provides content recommendations in two ways. When consumers first set up the Netbox, they are asked to rate (thumbs-up/thumbs-down) a series of content categories. netgem.tv uses this data to begin recommending content right away.
The box then monitors what shows a consumer watches and uses that information to refine recommendations. Although usage data is the best way to get more accurate recommendations, netgem.tv may not have access to all the activity taking place on the Netbox. Many SVOD providers prohibit a connected device manufacturer from monitoring activity that takes place within their app. If a consumer spends most of their time within these apps, the recommendations they receive may not be as useful as for other users.
Netgem.tv – support
Most connected-TV device manufacturers offer little or no phone support for their devices. Consumers with a problem streaming to their TV often resort to calling their operator when a problem occurs. Unfortunately, the operator often can’t help. Netgem says it will provide 24×7 customer care to help with any problem that occurs with the Netbox.
Another problem consumers face is that video service providers often stop updating apps for devices more than 2 or 3 years old. Over time, many apps running on smart TVs stop working or don’t support the latest features. Netgem says all the streaming services provided will always work, even after several years.
Netgem.TV – multiscreen support
Some connected TV device manufacturers provide only limited support for mobile devices. For example, Roku doesn’t support streaming to mobile devices through its app. Netgem.TV customers can use it on their mobile devices to watch live TV and on-demand content anywhere inside their home. They can also browse recommendations, schedule recordings, or cast what they see on the mobile screen to the TV.
Netgem.TV to become a revenue service
I asked Mr. Thevernot how Netgem could afford to provide such a high standard of support while other competitors could not. He said that over the next year the company would continue to enhance the features of netgem.tv and start to charge for it after the customer has had the device for a year. Some of the enhancements he envisions include:
- Advanced DVR functionality
- The ability to stream content while outside the home
- TV exclusive content
- Expanded support for Netgem’s other devices, including soundbars.
Why it matters
It is difficult to build a profitable business around the sale of connected TV devices.
Device makers like Roku are building video services to generate ad revenue.
Netgem is differentiating its products with superb service and support which it hopes to charge customers for in the future.