opinion


The TV is not a mobile phone

Online TV revenues to double in five years

True innovation seems to be so rare in telecoms these days that the industry tends to milk its few success stories for all they’re worth.

Take the iPhone. Apple’s smartphone and App Store have undoubtedly changed the way we use mobile phones and broadband, leading to numerous copycats. A number of operators, consumer-electronics firms and equipment vendors have also revealed plans for app-laden connected-TV sets, services and platforms.

Apple’s rivals have been particularly buoyed by the company’s seemingly underwhelming TV strategy. The latest version of Apple TV features no App Store and no apps. But there are several reasons Steve Jobs should not be overly worried.

The TV is communal, not personal

A large percentage of people tend to watch TV as family or housemates, which makes some apps pointless and others downright annoying (see fig. 1).

Fig. 1: Connected-TV potential of selected applications

F1_Connected_TV_potential_of_selected_applications_.jpeg

Unsurprisingly, live TV makes for the best fit; the family just sits down to watch. Twitter is at the other end of the scale. The personal – and some would say banal – nature of the microblogging service means it is likely to irritate the rest of the family, while its fiddliness will put off the user. Other applications sit somewhere in between (see fig. 2).

Fig. 2: Family appeal and ease of use of connected-TV apps

F2_Family_appeal_and_ease_of_use_of_connected_TV_apps_.jpeg

Parents, purchasing power and premiums

Admittedly, TVs are becoming more personal in some ways. In many Western countries, more people are living by themselves. And a growing number in family homes, especially children, have TVs in their bedrooms, partly because sets have become smaller and cheaper.

But connected TVs are far from small and cheap. A study Informa conducted earlier this year found that manufacturers were including Internet connectivity only in select top-of-the-range sets, which carry a much higher price than smaller sets (see fig. 3).

Fig. 3: US, prices of connected and unconnected TVs, selected manufacturers, May-10

F3_US__prices_of_connected_and_unconnected_TVs__selected_manufacturers__May_10_.jpeg

Despite the reported growth in “pester power,” I doubt many parents will fork out US$1,000+ for a massive flat screen for their kid’s bedroom.

That said, TV-makers tend to refresh their product lines around October. My colleagues and I expect that Internet connectivity will be included in more, less-costly sets, but will be far from a standard feature. In any case, children, parents and singletons are more likely to be drawn to cheaper connected devices with proven appeal, such as games consoles and Blu-ray players.

People switch off when they switch on

But even if more people have their own personal TVs, that does not mean they will interact with them more.

Just watching TV in the evening seems to still have a strong pull. A study published in August by UK regulator Ofcom found that the percentage of respondents consuming only one type of media at a time rose from 25% between 8am and 4pm to 50% by 9pm, largely because people come home from school or work and sit down in front their sets.

The myth of the digital youth

Some would argue that the way people engage with the TV will change.

At virtually every conference I’ve been to over the past two years, at least one industry exec has declared that his teenager regularly watches YouTube while chatting on Skype and networking on Facebook. The implication is that this generation will carry on this solitary, interactive behavior into their adult lives.

I’m not convinced. These kids are behaving like this because they are kids – the technology is just a new outlet for them. Virtually every teenager in modern history has gone through a phase where it’s uncool to hang out with Mum and Dad.

Social networks and on-demand media give them the space and the means to shape their own identities outside of their parents’ gaze and control. Lurking around on Facebook is little different from scowling on street corners with their friends; watching YouTube is like sulking in the back of the car with headphones clamped on.

Once they’ve moved into their own homes, they will return to the living room to watch TV with their housemates or spouses and children.

‘Sexy’ apps aren’t where the action’s at today

That’s not to say that the living room will remain an interactivity-free zone. There is, for example, a great deal of interaction going on in UK homes, but for some reason, no one seems to like to talk about it.

The BBC’s “red button” service enables cable, satellite and digital-terrestrial TV viewers to access a variety of live streams, replays and information about news, sports and music events. The UK public-service broadcaster claims that a whopping 12 million people press the red button every week, up from 11 million last year. Major events such as Glastonbury and Wimbledon each consistently attract several million red-button pressers.

But the “red button” is a bit of a pariah in the media industry, apparently because advertisers claim that equivalent services on ad-funded platforms are more expensive and less effective than online and direct marketing.

That might well be the case, but connected-TV players can at least learn from the UK broadcaster’s decade of experience. The “halo effect” of a Twitter or Facebook app might make a connected-TV service glow with Web 2.0 hype, but the red button shines a spotlight on where success truly lies: in services tightly tied to big-event communal viewing.

TV 2.0 will happen, but not on the TV screen

That said, a small, but significant, proportion of people are already browsing the Web, updating their Facebook status or posting on Twitter while they watch TV. But they’re doing so using laptops, smartphones and iPads. If people are going to interact with their TVs, it’s likely to be via the versatile and easy-to-use interfaces of smartphones and tablets, in particular.

Some industry players have made a start. A number of pay-TV operators, big-name consumer-electronics firms and startups offer apps that enable users to turn their devices into remote controls for their settop boxes and PVRs.

Verizon is looking to take things a step further. The US operator is reportedly working on a variety of “companion” services for its IPTV offering. One could, for example, enable a subscriber watching an American football game to access team stats, replays, player bios and perhaps behind-the-scenes content via his smartphone or tablet.

Bridging or breaching the attention gap?

The big question is whether people really want to interact with their TVs in this way. On one hand, today’s viewers do not like to be distracted. Over 80% of video – whether scheduled, recorded, on DVD or on demand – is watched on its own, according to the Ofcom study. On the other, smartphones and tablets have only recently begun making their presence known in the living room.

One industry partnership might shed some light on how things might develop. Last month, ABC Television launched an iPad app that will give users access to extra content during ad breaks and pivotal moments during the showing of ABC’s new primetime drama My Generation.

Significantly, the My Generation Sync app is powered by technology from the Nielsen Co., whose main business is measuring the behavior of TV and online audiences. Nielsen is reportedly planning a broader industry rollout for the platform early next year.

Whatever the outcome, players from across the TV spectrum – platform operators, TV makers and content providers – would do well to focus on smartphone- or tablet-based apps that complement traditional viewing. People simply won’t take to those that get in the way.

Failing to see the orchard for the Apple trees

The irony is that for all their Apple-inspired strategies, few connected-TV wannabes seem to be paying attention to what the company is actually doing in the TV market.

Some, I believe, hope that Jobs has for a second time dropped the ball with Apple TV, leaving them the chance to beat Apple at its own app-store game. Informa estimates that the company sold only 600,000 of the first version of Apple TV; the second version doesn’t do much more than offer more sources of VOD. But the more circumspect might now be wondering whether Jobs has concluded that the iPhone model simply won’t translate to the TV.

The truth, I suspect, lies somewhere in the middle. In any case, Jobs is laughing. Smartphones and tablets seem destined to play a key role in the living room, regardless of whether connected TVs succeed.

Tags:

2 comments

  1. GregM 12/10/2010 @ 6:10 pm

    I believe TV 2.0 will happen on the TV screen and accessing apps via STBs like Apple TV and Google TV is a big step in that direction.

    For example, the future of programming may be video content apps. Imagine accessing the Apple TV (or whatever STB you have) app store and downloading a Simpsons or Gray’s Anatomy app. Maybe there is a subscription or a per episode fee, I don’t know. The user could access previous episodes through the app as well as info about the show and social or user generated content.

    This model would work for all programming and apps could be organized in a number of ways for easy access.

    Besides video apps, you have music apps like Pandora, iTunes, and Rhapsody.

    There are also interactive magazines, podcasts, blogs, shopping, weather, social, photo and video apps, banking, cooking… you name it.

    The possibilities for accessing and sharing information are endless when you start thinking about an app store for the TV.

    Then there is gaming. Many of the games would not work with simple remotes, but I can see a new generation of games developed where the smartphone or bluetooth device (i.e. iTouch, Zune) acts as the controller. A good example of this type of game is the Scrabble game for the iPad where the players can view and play their tiles from their iPhone.

    How about Skyping from your TV? A camera mounted near your TV and a Skype app could let your whole family have video chats on your TV with Grandma and Grandpa.

    How about home security apps, home automation apps, apps that integrate with vehicle telematics systems.

    This is TV 2.0 and all of this could be possible now via boxes like Apple TV and Google TV. They just need to open the SDKs and app stores to developers.

    If you don’t thik this is TV 2.0, you have to admit that it is a big (and essential) step in that direction.

  2. Richard Kastelein 12/10/2010 @ 10:47 pm

    Bear in mind, I know who your audience is, and they are threatened as much as the content industry is with the CE manufacturers move to grab market share or a piece of the Telecom Pie.

    While I agree that two screen solutions make the most sense whether it be a tablet or a highly advanced remote – I do however question the future of TV advertising and it’s affect on the single screen solution – as VOD, Catchup TV, and entertainment in the cloud will affect what we know is the 30 second spot – where most of the money is spent in TV advertising.

    Brands will have to find other ways to reach their audience on the big screen as consumers, conditioned by uninterupted commercial free fare from the Web – and connected TV offers an interactive path to get on the landscape – of which there is plenty of these days – in front of eyeballs.

    Half a minute of propaganda every seven minutes in the US just won’t cut it any more.

    In ten years my daughters will likely laugh at the way they used to come home and watch programs at a certain time as they pull what they want to watch, when they want to watch it, out of the cloud.

    Live events on TV and news, like the music industry – and it’s decline of record labels and rise of concert promotors, will be the only real sustainable model – and the only real way for brands to reach their audience using traditional commercial models.

    Unless, they start divvying up the landscape on the TV and allow for less intrusive and more interactive advertising based on Contextual Advertising, or Behavioral Targeting based on the viewer’s preferences and habits, and even Location Based Advertising (LBA), based on the viewer’s lat and long via IP. Or it could be Experience Marketing (full fledged TV experiences), brands written into the scripts with more than just product placement and even content being produced by brands, such as Red Bull is now creating, and selling at events like MIPCOM.

    The point is, connected TV and the application architecture they are building in will allow for more interactive TV. And it’s my feeling that it will have an impact.

    As for the thousand dollar TV, I paid six hundred for mine and there were even cheaper Samsung models that are connected.

    And your waggish note on judging ‘kids’or Millenial behaviour and writing it off as a fad – well that’s kind of like my parents behaved when I got a computer. They are on Facebook now.

    “Once they’ve moved into their own homes, they will return to the living room to watch TV with their housemates or spouses and children.”

    I don’t really know where to start with this statement… it reads like dogma. Personally, our family unit rarely watches TV together due to the particular niches that we each favour – and there’s little that we can all enjoy together – aside from from a few genres. Like the music industry, the TV and Film industries have fragmented into shards in terms of range and selection of viewing material.

    Then there’s Google TV. But that’s a whole other ballgame. When Google starts shopping for content producers who are going to suffer over the next few years for a number of reasons, and starts producing content of their own – then there will be a paradigm shift.

    The idea of a Norman Rockwellesque scene of a cosy family unit circling the TV is not a picture of the future. Or as Marshall McLuhan said… The Medium is the Message. And even the Massage if you like. And the medium we are shifting to is being fueled by the Internet and called the Web.

    I could pull out numbers as you have with Ofcom – that shift the case more in my direction – but really, who really knows? It’s lick the finger and stick it up in the air time for all of us on both sides of the fence.

    Cheers
    Richard

Leave a comment

Your email address will not be published. Required fields are marked *

Polls

What is your name?

Loading ... Loading ...