Airtel wants to lead the shift to hybrid TV with Xstream

Telecom major Bharti Airtel recently launched a first-of-its-kind converged digital entertainment platform, Airtel Xstream, which will provide a unified user interface across all screens—television, personal computer, and smartphone. The company wants its customers to have their over-the-top (OTT or streaming) apps, satellite TV channels, movies, songs, etc. on a single platform.

The company says that the Airtel Xstream Stick, priced at ₹3,999, is for the new generation that likes to be connected seamlessly. Sunil Taldar, CEO and director, DTH (direct-to-home) business, Bharti Airtel, spoke to Fortune India about how Xstream could be a futuristic platform for connected homes and what are the key industry trends. Edited excerpts:

How has the media and entertainment industry changed in recent years?

There are two broad trends that we see: one is the way people are consuming media. Media consumption is increasingly seeing trends where people want to watch linear as well as non-linear TV (or OTT content). This is the trend we see predominantly in urban areas because there’s better connectivity and affordability; not that it’s not there in the smaller towns but [this trend is] predominantly seen in the large cities.

The other trend we see is that as TV penetration increases, there is an opportunity for the lower end of the market. There is a penetration task for the DTH industry and that’s where we see a large penetration opportunity.

Is rural and smaller towns a big opportunity for you now as more people are ditching traditional TV in urban areas?

In urban areas where people consume more and more OTT content, there is an opportunity for the DTH industry to actually deliver this content on OTT as well as linear seamlessly, both in-home and out of the home. And that’s the reason why we launched Xstream last month, which is India’s first converged content platform where we deliver content to the consumer across screens, whether it is mobile or your large TV screens. For Xstream, we’re targeting the urban market.

Then what about the rural segment?

If you look at DTH, it’s the most effective way to deliver content through satellite. As TV ownership increases, there is an opportunity for us to get more customers for the DTH business. Another innovation is our zapper boxes, which is our high-definition boxes based on the feedback we received from the rural market. They said we have our own videos which people make during weddings, etc. But they don’t have a device through which they can access those pictures. So, what we have done is that we have launched a media player with a USB drive where you can access all the content on your large screen. We are currently making sure that both these innovations—for non-connected boxes and Xstream... we take [these] to as many consumers as possible.

What was the idea behind Xstream?

We have done a lot of consumer research for OTT; there is a lot of feedback that we received from consumers. First is that people wanted to consume all OTT content on their large screen, where there is 4K content with good sound effect. On your mobile devices, you don’t experience that quality. If you’re using multiple/different streaming devices to access OTT content and a set-top box for accessing linear content, that’s a clunky experience. As the OTT content providers or OTT services proliferate, the friction that the consumer faces, with respect to maintaining multiple relationships with different OTT players, is a lot. When we went to the consumers they said “can you give me this content on the large screen, make it seamless” and “if you can also aggregate that content for us?”. And “this content that I am watching, can I watch it at home and seamlessly on the go as well?” This is when we said we need to develop a device for consumers where they can get this seamless experience across screens and we can give them an aggregation of content that is what we have done through Xstream.

What is the future of traditional TV?

As OTT becomes more popular and broadband penetration in the country improves, we will see more and more people adopt hybrid television and we will lead the change through this box. The set-top box actually occupies prime real estate in most Indian homes. It is right in the centre of living rooms and therefore the role that it plays today of delivering content in our view is limited. The way we have designed Xstream, it’s a futuristic set-top box. The role that it plays today is of delivering content. Tomorrow, as we launch more services, this set-top box will act as a gateway to a smart home. And we will be able to deliver smart home solutions and connected homes. Right now we’re the only DTH operator who has launched a hybrid box in the market. I am sure others will follow suit because this is what consumer expectation is.

Are people moving away from the big screen in the house?

Even in the West, there are a lot of discussions which say people will move and watch only OTTs. And OTT has been in the West and data connectivity has not been a challenge in the West. What has really happened is—and there is a lot of data around this—that the overall time spent in front of the screen has gone up. And people are watching both OTT and linear content. They will not stop watching live TV whether it is sports, whether it is news or live programming. This pretty much will remain relevant which is what the consumer comes back and says that I want to definitely watch satellite TV but I wanna watch OTT. But I wanna watch it through the same device on my large screen seamlessly and when I step out of my house, I should be able to access it on my portable device. That is exactly what we have solved for the consumer. When it comes to OTT, it is in the best interests of every OTT content provider that the real habit-forming happens when you start watching OTT content on a large screen in your home. And [for] every OTT content provider, it’s in their best interest that there is a device available today which is capable of delivering linear as well as non-linear [content] on the large screen.