Consumers will change service providers to gain access to easier content navigation, according to research commissioned by Hillcrest Labs, makers of the HoME navigation system with its Loop remote control device.

The Maryland company, whose innovative two-button remote control won a video accessory award as best in show at the Consumer Electronics Show in Las Vegas, hired Frank Magid Associates to interview consumers before and after using its HoME navigation system, which includes software and the Loop controller.

After using the system to more easily browse a variety of content, test subjects were 20% more likely to change from a cable or satellite video service to a telco video service that uses HoME, according to Andy Addis, executive vice president of Hillcrest. Those same consumers said they were much more likely to spend on pay-per-view content and would increase their pay-per-view spending by a factor of three, he added.

“Menu-drive remotes don’t scale – they’ve reached the end of their useful life,” Addis said. “The winners in the video content battle will be the ones that make it easy for users to navigate all this content and unify all this digital content under common navigation platform. Our research shows that only one-third of the time do people know what they want to watch. Two thirds of the time, they have a vague idea or no idea. So the ability to easily browse the content that is available to them is important. The research showed $8 in incremental revenue per month directly associated with the Hillcrest system. We make our partners money.”

The HoME system unifies content, including broadcast programming, video-on-demand, shopping, recorded content from DVDs and Digital Video Recorders, plus personal photos and videos, onto a single navigation platform and uses the two-button free-space pointing device shaped like a loop to easily navigate through on-screen options.

A direct result of that integration is that consumers can easily get to content and will use more and spend more, reducing churn as well as increasing revenue, Addis said.

Hillcrest was founded by Dan Simpkins, founder of softswitch maker Salix and a veteran of the service provider selling cycle. The company continues to move closer to deals with major service providers, he said, but knows this is a long process.

“Service providers don’t make buying decisions easily and don’t deploy mass-market technology instantaneously,” Simpkins said. “Last year was the first year we spent talking to people. We have active and very deep discussions with some of the largest service providers on the planet. But these range from early introductions well into the technical due-diligence on the products, on the software and on the process.”

Hillcrest is not limited to the service provider community, however, but is talking with consumer electronics makers and others.

“As the battle for digital home continues to rage, there are a number of industries realizing they have the potential to control the home experience – consumer electronics players, gaming companies, home networking companies, and content creators themselves,” he said. “Our business model is based on our ability to deploy this software in a number of different products.”

One reason to look primarily at the telcos, however, is that they are entering the video game after cable and satellite companies and need to offer something more compelling.

"If today’s IPTV providers are just going to roll out the same linear programming that cable and satellite have—the game is over,” Simpkins said. “They have to create more value for the consumers to convince them it’s worth switching.

"Consumers want a more interesting and compelling experience for their extra dollars. What is most crucial is to help them embrace the world of exploding content by taking the best of push technologies and integrating pull – combining search and browse in a really elegant way, which is what we do.”