Before I go on a tangent - I have to say. I love what tBone is doing. Because the solution of contextual metadata creation is the big bottleneck in the multiplatform world. Synching and triggering are key elements in creating social TV and engagement that has context. I have had a couple of meetings with the crew there and I really think they are onto something. Keep moving lads – and may the wind be on your stern.
Of course I may be wrong on many accounts, but the piece below an attempt at a bird’s eye view on the play of many parties in this emerging paradigm of media convergence and the inevitable, massive disruption about to take place in the living room. One of the last bastions of linear, one-to-many models in a many-to-many world. Print has been torn. Music hammered into another reality. TV is next.
Off the back of numerous convergent media related conferences and events in Silicon Valley and London in the last few weeks, I have been bombarded with information from lots of people, much smarter than me in most cases - with lots of brilliant insight and ideas, doing plenty of brilliant things.
This is a rather stream-of-thought exercise in late-night, jet-lagged insomnia.
The War Has Already Begun
I think there's going to be a great big battle over the second screen. Carriers like Vodaphone and Orange in Europe are creating social TV apps, broadcasters are playing in the space - but tankers take time to turn... third party developers are having a go at it - see Miso, Philo, Tunerfish, Getglue, Intonow (Yahoo), CE manufacturers won't open an API for the remote - being careful - and Samsung is running Social TV in Korea with Cyworld deal... TV margins have been dropping like hot potatoes. Freemantle and Endemol are writing new formats that marry the second screen experience... Skype will come into the picture soon (tVoip) - you can bet - Video conferencing on the big screen and social video companion devices coming to a living room near you - sooner or later. Game Consoles are having a go - look at Nintendo's release this week - Wii U. xBox and PS3 both have app stores... Google TV, Apple TV (watch out for them actually selling REAL TV's soon), Roku, Boxee, Set Top Box guys and Cable, Logitech is looking at socially enabled remotes - IPTV players in France…
And Big Cable in the USA? They are also joining the fray and hitting the second screen aggressively while the nation continues to cut the 100+ dollar a month cord for 500 channels of, what I consider, largely… drivel. Not mention the marriage of Comcast and NBCU being a control play of massive proportions. European cable behemoths like UPC are moving into social TV with their Horizon gateway, which includes single screen social media. ... Sky in UK and Germany are harvesting good data and creating some compelling returns for consumers around social TV. Then there’s the satellite guys. With Directv and Dish Networks consistently being in the top 15 of most hated brands in America, I don’t give them much of a chance.
Who doesn't want a piece of that 200 billion dollar global TV ad spend that is perceived by many as ripe for being disrupted as the old value chain gets hammered like it did in print and music?
Metadata is now the new oil in TV land. And most commercial broadcasters have a serious issue with the lack of metadata they are producing and how much metadata is being extracted by third parties, which will allow interactivity beyond their control.
The broadcasters, if they break down their internal silos and work together, have the best chance to win the two screen race. But they need to set aside the politics, face the technology challenges and do some serious centralizing of the decision process with a cross-departmental core team who all individually wear a lot of hats and have a penchant for getting things done - because dealing with multiplatform crosses many departments. Huge broadcast organizations are a bit like dog pounds – with everyone spraying in their corner, asserting their territory, and too often baring their teeth at each other.
But still - why do I think broadcasters have the best chance if the can spin their Titanic around?
Because they have access to the scripts (buy that dress Jennifer Aniston is wearing - merchandising is the saviour of the music industry along with concerts – record labels are dead) and they currently buy the content. Importantly, they have the strong brand relationships. They currently own live content as well.
Unless Google, Apple and Microsoft start outbidding them for live and prime-time level produced drama, comedy and other high end content - which is not hard for them to do. Google is already moving with baby steps. Microsoft just shelled out 8.5 billion for Skype. How much content would that buy? Being generous at one million per episode of a solid drama, that’s about 8,500 hours.
But that's REALLY disruptive.
If broadcasters don't grab that second screen fast, others will. It’s a matter of who can get to market fastest and get traction that will likely determine the future.
A birdy told me that AT&T allegedly paid 300 million for the rights to collect the voting money for American Idol in the USA and that it grossed over a billion dollars in voting money. That's one show and one interaction. Consumers are willing to pay for micropayment engagement. That much is clear. Two hundred thousand people are playing The Million Pound Drop on the second screen in real time in the UK which shows clearly that consumers love being engaged. So to me - that means there are other ways to pay for content by giving value to consumers rather than shoving 30-second spots in their face.
We Love Commercials – Honestly!
I love that argument from big broadcasters and colossal content producers; who's going to pay for quality TV if we can't? Reality TV can be compelling but it’s mostly crap and it’s dirt cheap to deliver – usually at the cost of decent drama – and if that's what is going to be continuously spoon-fed, like Pablum, more and more to the public then the argument is moot.
Five hundred channels of which 80 per cent you don’t watch is not a good deal nor a sensible solution. And frankly, a lot of people prefer a la carte and subscription to what they want, when they want it rather than what Neilson and Barb think a few hundred families should determine what we want to watch at times that inaccurately satiate our needs.
Actually, it's creating the case for niche TV. And on Demand. And Subscription. And Indy producers from all genres being able to create content for their slivers of audiences. SciFi, Reality, Drama, Film, Horror, etc.
Who's going to pay for that? According to Google there are hundreds of people on Youtube making over 100,000 dollars a year. Go figure. One-to-many is not the future anymore. Many-to-many is here. You can shoot HD video on a Nokia phone. Professional Video editing software is being mastered by kids in their basements. CGI is not beyond reach anymore.
The Storm is a’ Coming
Shotsberger (2000) reported that though it Radio took 38 years to reach 50 million listeners. TV took 13 years to reach 50 million viewers.
The Internet took four Years, iPod took three years…Facebook added 100 million users in less than 9 months and iPhone applications hit 1 billion in 9 months. How long before 100 million Tablets and Smart Phones appear in front of 100 million Smart TVs? Not as long as you think…. 2013 most likely.
We are fine. Honestly.
Sure the viewing numbers are going up with linear TV – there’s a massive demographical chunk of Baby Boomers retiring exiting the workforce and sitting in their living rooms with plenty of free time. There’s a seemingly smug air at Pay TV conferences I have found. It’s fine. Numbers are going up. We are okay. They can’t beat us. We are professionals.
Sure that’s what journalists and photographers thought. Millions of bloggers (There are over 200,000,000 Blogs) and dumbed down digital cameras have made everyone a hack or shutterbug. Photojournalists are taking wedding gigs – and print journalists are running for corporate PR and Marcomm territory to put food on the table.
The Demographic Bomb
In 2010, Generation Y passed the number of Baby Boomers and 96 per cent of them have joined a social network. Most of them have smart phones and are creatures of the web, and ample studies show their TV viewing is spirally vortexing’ downwards. Long form entertainment, chopped by distracting irrelevant advertising is just not cool anymore. Not when their multitasking minds are growing up in a news nugget world where reading a book over 100 pages appears as a tome. Or busy revamping the English language – morphing it into an unrecognizable, chopped down pidgin… in a Twitter world that has created an acronymic, smilied-out, syntactical nightmare.
Monopoly is Just a Game
My biggest worry about the evolutionary marriage of the Internet and TV? Net Neutrality. On one hand governments in the West are honing in on an innovation-driven economy – which will need the massive transfer of knowledge that an open and free internet for all provides. On the other hand, I mean those hands that feed them – the sycophantic lobbyists who play political poker for corporate interests, have sway in the other direction. Retaining the status quo, fending off disruption, keeping margins where they are, and beating back third party innovation are viable tactics.
How long do you think it's going to take before the ISP's really start screaming as Netflix (and other emerging VOD platform running on IP) suck up larger percentage of bandwidth (they already take 30 percent at primetime in the US).
In my opinion, the key to driving the new economy is making it accessible to everyone, not creating a digital class system. Canada is going through a phase right now, with a number of ISP’s such as Bell Canada, Eastlink, and Rogers throttling of certain protocols around Hi-Speed Internet. On January 25, 2011, the CRTC (Canadian Radio, Television, Telecommunications Commission) ruled that usage based billing could now be introduced. Some think it’s a protective move again Netflix’s entry into the Canadian market with a streaming only solution. And don’t think Comcast does not have similar aspirations in the US. Consolidation… err… monopolization… err… the marriage of broadcasters and ISP’s a reoccurring theme in North America.
Audio Synching – Wow Factor or Viable Solution?
For event triggering using audio sync via fingerprinting or watermarking - there are goods and bads - ambient noise can cause problems - Finterprinting has lag time - as the app needs to capture five to ten seconds then push it to a database to recognize. Watermarking? You have to be a broadcaster or content producer to execute a watermark. Unless it's an ad - then it can be agency or brand driven.
Speaking of advertising.
I found it quite interesting that Red Bull is not only creating a gamut of branded content... they were also selling it at MIPTV in Cannes this year. How’s that for role reversal? How long will it be before brands become content creators in their own right?
I have this theory that, in the future my three daughters under ten will think it was rather odd when they had to come home to watch a certain programme at a certain time and it had all these interruptions.
I call it Legacy TV.
Brands and agencies are going to have a hell of a problem in the next five years figuring out the complexity in reaching consumers when TV becomes two-directional and the return path is chock full of vehemence and data that clearly shows – people hate commercials (In the United States, there are 3 minutes of TV ads every 7-8 minutes). A TV exec once told me at a conference that consumers understand that programmes have to be paid for by someone, and therefore understand that commercial are a necessity.
Yeah. Right. Viewers are going to ‘understand’… gripping their chair arms when commercials come on (often way louder than the programme you are watching) because they ‘understand’ that low-grade propaganda (for the better part) is an essential part of the value chain and therefore, need to pay rapt attention.
According to Socialnomics by Erik Qualman, 78 per cent of consumers trust peer recommendations. Only 14 percent trust advertisements. Only 18 per cent of traditional TV campaigns generate a positive ROI. The NYTs notes that hit TV shows have most-skipped ads on Tivo. I am sure the brands who pay for slots on those big shows just love that one. Socialnomics should be required reading by all TV execs.
Click here for full pic
Most commercials are at best, a good reason to get up and make a pot of tea or take a pee. Or, in an ever-increasing world of media stackers they simply shift their attention to a companion device. At worst they are miss-targeted attempts at blanket branding or simply mind numbing stupidity.
You can tell I don’t like commercials much. I am not alone.
I also understand that brands need to fund quality formats via broadcasters for some time into the foreseeable future. But their minions, the agencies, are going to have to get a lot more creative in how they engage consumers in the future – and the ‘old’ easy way of simply throwing 30 seconds at a public that wants to watch, what they want to watch, when they want to watch it, on any connected device, anywhere they want to watch it, preferably without being interrupted – is a dying proposition.
Branded Content is a solution. Preferably subtle product placement will be another way. Game mechanics with calls to action on a second screen will be a winner. More targeted engagement is undeniably more likely to get attention. Accessorizing works... feel free to give me added value to things I own. Freemium is pretty cool. Micropayments I can live with. Affordable subscriptions for content I really get a kick out of are nice. Let me have the chance to win something. Give me more compelling reasons to like the brands. Let me socialize what I like to my networks. Challenge me. Engage me. Give me some buzz.