Developments in TV ( Part 2) - Consumption of content, will facebook dominate TV delivery?
Not long ago we were getting excited about the red button on interactive TV. You could vote or play along with a game show but on the whole, red button style interaction was pretty limited. Now we are now entering a second, much bigger, wave of TV viewer interactivity both active and what facebook call 'frictionless' that will change the way we interact and consume TV content going forward.
We are finally getting the long promised true convergence of TV and Internet screens. In Part 1, we discussed the new areas and methods of content creation and how that will be distributed differently in the future. Part two is concerned with our selection and consumption of TV content will change and who will be the winners?
First and foremost on consumption, linear has had its hay day and catch-up is the new broadcast. This change is not to be underestimated, as the evolutionary phases of in-home entertainment-technology can be defined as the 'fire' around which people told stories, then radio emerged in the 20's and for decades became the family entertainment centre point until Black and white liner analogue TV assigned Radio to the kitchen, then colour TV emerged, then analogue video recorders, then PVR’s, to national Digital broadcasting, to high definition, to 3D and now to non-linear catch-up TV or TV on demand whatever you chose to call it. It is a real historical milestone, which ironically may also herald the end of the TV as that focal point of family entertainment as consumption becomes more personalised and individual.
Yes there is the argument that linear viewing will remain for the foreseeable future and represented 90% of US broadcast viewing in 2010. I can also see no other way of viewing ‘Live’ occasions and sporting events so it may always in fact always be an anchor of sorts. But that’s me who has until lately got up at 6.00am to watch football live rather than record and watch two hours later. But the times they are a changing and the default mode of viewing is inexorably shifting to On Demand. Try telling any of my kids, all under 10 who has grown up with DVD’s and PVR’s that they can’t have their favourite program exactly when they want it.
In our last piece we proposed the point that content creation will move up the gears and volumes would greatly increase. There was some argument here on the source and quality of the content but none argued that content proliferation was not going to happen. As a result you must see an increase in the number TV channels just like the fragmentation we saw in the magazine industry over the last 20 years. Once the web becomes the norm channel for broadcasting, you will see the rapid rise of the single-issue-channel covering everything from local politics to knitting and this will have a serious impact on the few established regional channels.
For example, I am currently back in the UK and am looking at ITV for the first time in years. Why? -Just because it has the Rugby World Cup. Do I care its ITV? Not really! I am watching the Rugby 'content' not ITV (the brand carrier) and I am doing it almost entirely on catch up I will add. The BBC alone I would argue still has a brand, and I expect quality (falling though it is), original material there. All the others are a brand blur, as I know they simply show me a mixture of other peoples content. As on demand viewing increased and people miss those ‘TV channel-branding ads’ it will become an even bigger brand problem. The knock-on effect must result in a future dedicated Rugby World Cup channel. This content for example would immediately get my viewing at the expense of the ITV brand. So it seems inevitable as program producers/makers, in an effort to increase margins, will leverage more social media (i.e. facebook) and internet channels creating more over the top TV (OTT TV). There will be a temptation to bypass the traditional distributors altogether and set up your own vertical channel such as a Sport occasion, Xfactor or popular seris such as Glee. The 2012 Olympics has already done this with restricted broadcasts just around the London olympic sites.
So much content, so little time!
So with this over supply of content choice, the consumer will need a way to discover it. A hyper competitive TV environment for viewing figures should herald the emergence of an engaging immersive personalised experience that gives consumers access to the content they want, or at least the content they think they want. This will give them the key reason to return to that TV brand destination. Machine recommended viewing and the deeper engagement associated with it is therefore an inevitable universal development. This is where people are recommended programs based on their previous consumption patters. Tivo have been doing this for a while now, as have Amazon online, but the technology is now universally available for websites so future OOT TV through a combination of algorithms and editorial nudges, content suggestions could be individually crafted to suit your interests and needs. The more you watch and share, the more chances the system has to learn, and the better its predictions get. We’ve already had a glimpse of the power of recommendations to sway viewing with Netflix claiming that 60% of Netflix rentals are a result of algorithmically generated recommendations.
Taken to the ultimate you have what Mr. Zukkerburg calls 'frictionless sharing'. This is machine learning using your consumption data but also recommendations powered by your social graph. It is say’s the proponents the perfect TV channel: always exciting, always relevant to you - sometimes serendipitous - always worth your time. (As a side note, with multiple TVs, computer and even mobile screens on which to consume this content will we not all drift into our own little personalised TV world?) That aside, You will however need to find the winning formula, and by formula I LITERALLY mean mathematical formula or complex algorithm as this sounds perfect for the TV content consumer, but and this is the big BUT, outside of facebook and Google, who owns (shares) more of your customers consumption data and has the processing ability to compete with these Titans?
Facebook has its massive hat in the ring for a while now. Last week it had many announcements but the introduction of a Hulu ‘social canvas app’ which will allow you to watch TV shows and the extension of a Netflix trial that will deliver movies, all on brand facebook. Facebook’s movie and TV partners also include IMDb, Flixster, DirecTV and Miso and all of these experiences are powered by Facebook’s new Open Graph. Is this a bad thing? Facebook is making it easier for companies to access consumer’s personal data via the open graph, but who controls this flow... Come into my parlour said the spider to the fly...
I think that the likes of Hulu and Netflix might as well add their collective hats into the facebook ring as their obsession seems to be growth at any costs and access to 750mill+ consumers is growth in spades. But this strengthens facebook as a content brand destination and more are going to follow. The dilemma is best illustrated if you take another type of content provider the UK's Guardian as an example, admittedly a newspaper group in trouble but with a long-term strategy of I would expect delivering VOD through Guardian TV. Last week they proudly announced that they had hit 300K users of its facebook app in a couple of days; by comparison its Guardian facebook page has only 123,000 after a year when I looked yesterday. This seems like a great result but to be critical is the Guardian not just creating a better facebook brand experience at its expense, by putting its own content on facebook.
The Guardian’s theory is that Facebook users like the experience of being on Facebook so rather than direct readers away; they want them to explore the Guardian within the platform. Does it matter that there is no business sense in this, as all advertising around the content is owned by facebook. It seems to be a pray and hope traffic driver. Longer-term think of how Europe buys natural gas off Russia, who hold the power in that relationship?
But the truth his that newspaper publishers and just behind them TV broadcasters have never been weaker when you look at a future environment where content discovery takes centre stage. I would go further in saying that the entire open web of free and independent websites has never looked so bleak. Compare the future offering of these small data poor players to that of the big data giants of Google, facebook and even twitter and LinkedIn. These guys know what you want content wise before you even know yourself. As a result you can either do what the Guardian has done which is a temporary blood transfusion that makes facebook stronger, or you can back the collective opposition and allow access to both your content and other content that you don’t have a vested interest in and thus develop an alternative to facebook content destination worth revisiting. Is the idea any madder that handing the family jewels over to facebook and thanking them for the pleasure?
The only possible black cloud on the horizon for facebook and the open graph, or bright cloud depending on your perspective is the spectre of Privacy. But I don't think any of us, up to and including Mark Zuckerberg himself, completely understand the implications of the new features just yet. We won't until hundreds of millions of people are using them. Consumer privacy backlashes and Google/facebook bashing are in vogue for politicians so regulation like the opt-in cookie option in the EU may impede some OTT technologies been rolled out i.e. inter device communications, personal recommendations etc. The other unknown is a growing awareness of the value of consumption data. It may also see a rise in a market for your consumption data as consumers see facebook valued at $100Bil, and all based on the value of their data. They may want a slice of that pie.
The up side for consumers of all this hyper competition for TV content suppliers and distributers will be A La Carte TV content culture – True pay per view. Consumers will demand more flexibility in how they purchase TV and will be offered more flexibility to build their own TV subscription packages by adding only content they want and not necessarily the content the cable company or IPTV Company wants to sell. This will have serious impacts on the margins of both distributors and content generators but should drive further innovation, as incumbents have to finally change their supply chains and business models.
As for the now, people are still slow to change their current TV consumption habits en masse, but as content selection tools, smart use of their consumption data, cloud computing and lower cost smart TV hardware hits the mass market consumption patters will never be the same. Lets just hope that the variety and choice of content destination remains.
In part 3 of this series we will look at the technology that will facilitate this change including connected TV's, Enhanced Electronic Program Guide (EEPG) with intuitive UI, multiple new types of screens and seamless, idiot proof, cross device interaction. Watch this space...
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Company: Digital Ministry
Involved in the digital media and Marketing industry for many years, through working at the Economist Group (uk), Universal McCanns, Zivo, emitch, OneDigital, IBM (client side), Agency.com & TBWA. Now in Bath, UK working as a consultant
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