The Biggest Challenges Facing Smart Home Product and Service Distribution in Europe: Insights from NAGRA

by Parks Associates | Nov. 9, 2018

Prior to Parks Associates’ 13th-annual CONNECTIONS Europe: Strategies for the Smart Home and Consumer Iot conference, Simon Trudelle, Sr. Director Product Marketing, NAGRA shared insights with the analyst team to address the challenges and revenue opportunities with growing the smart home industry in Europe.

Simon will be participating on the Enhanced Experiences: Tech Support in the Smart Home panel on Tuesday, November 13 at 16:30. Panelists joining him on this session include:

Alton Martin, Co-Founder/Chief Evangelist, Trusource Labs
Daniel Moneta, CMO & EVP Corporate Development, MMB
Giles Sutton, Sr. Vice President, Industry Engagement, CEDIA

What are the largest recurring revenue opportunities for the smart home industry in Europe?
As our research findings show, the proportion of service providers worldwide offering adjacent Smart Home services such Home Security, Home Automation and Home Entertainment Services (beyond traditional TV services) has kept increasing (roughly +3%) at the global level.

What are the biggest challenges rolling out new smart home products and services in Europe?
While the take up of broadband and FTTH is happening at a sustained pace all across Europe, leading to high penetration rates in several advanced markets, scale (for service providers) remains a challenge, as there are few very large cross-border broadband operators in the region capable of developing and successfully launching innovative new “market plays”. In addition, the nature of European homes (more multi-dwellings apartments than individual homes in high-income, high-connectivity large cities) seem to restrict demand for the baseline services that have proven successful in North America. Healthcare regulations or specific insurance schemes in some markets also tend to slowdown the take-up of new products and services in this sector.

At NAGRA, we believe that there are Smart Home verticals, like Home Security, where service providers have a play, assuming they can establish the right partnerships with other regional ecosystem players (from physical security providers to insurance companies). Health care is another segment, despite the constraints mentioned above, where operators can win business by ensuring high data security and meeting strict privacy standards.

For the more consumer-centric entertainment services, the opportunity is more around ensuring that consumers can securely enjoy the benefits of connected devices and services anywhere in their homes. High performance wifi connectivity and proactive detection of home network issues are top-of-the-mind topics for the large service providers we work with.

What channels to market are driving growth in the smart home industry?
Industry feedback tells us that the appetite for connected devices to improve everyday life is definitely growing, and it is leading to a growing retail consumer market. At the same time, we see some service providers successfully adding Smart Home services to their multi-play bundles, especially for Home Automation and Home Security services. While the growth rate of such services is often lower than what we see for SVOD entertainment services, the long-term relationships such services imply mean that they also help increase loyalty and reduce churn for broadband providers.

Going forward, it’s clear that we will keep seeing a mix of provider services and retail device manufacturers competing to address consumer needs.

What are you most forward looking to about the show this year?
There are two topics of major interest for us at NAGRA:
-- improvements in user experience for a more fragmented home entertainment world
-- home network security as a driver for added-value and reduced customer support costs for service providers.

For the panel, we will mention our HomeScout offering that ties nicely with the core topic of the discussion (tech support and related issues).
Improvements in User Experience: The take up of entertainment services, now merging with traditional linear TV services - from SVOD to music to sports streaming, not to mention cloud storage and other home network services – means that consumers are starting to pile up subscriptions with billing relationships spread across multiple providers, not to mention a fragmented user experience for media, creating complexity and anxiety for consumers. This situation clearly calls for a super-aggregator role, for which incumbent cable, telco and pay-TV providers are well positioned to assume.

At NAGRA, a solution like OpenTV Signature Edition for Android TV Operator Tier is designed to bring all content and billing in one place.
Home Network security: adding more connected devices to the home network, with some of them offering computing power that could be misused by intruders and hackers (bitcoin mining, DoS attacks, etc), is starting to raise new concerns for consumers, both in terms of data security, physical security and privacy in general.

At NAGRA, leveraging our unique portfolio of smart home, cyber-security and IoT technologies, we are field-testing a product called HomeScout, whose purpose is to help secure the home network. HomeScout, through an agent integrated into the network access gateway, captures IP traffic and connects to a secure cloud platform to monitor the profile and behavior of connected devices in the home, as well as traffic over the home network.
Such a solution allows service providers to gain better insight into the home network, deliver security services as well as enable smart parental control. The end goal is to ensure that their subscribers get the best Smart Home and network access experience, leading to fewer service calls and lower churn.

Next: AI Isn’t Just Hollywood’s Dream Anymore
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