It is in fact a nesting box made of earthenware. It basically has the shape of a jug, with a narrow, straight neck and a bulbous body. The bird could enter the nesting box through the long, narrow neck. The jug typically had a hole at its back, that was made before the jug was fired (called a 'robbery hole'). This access hole allowed people to reach in and take the nestlings to, for instance, make starling pâté.
