Andrew  Burke

TV's Sphere of Influence in 2013

Its the start of 2013 and I have been predicting 'the end of TV as we know it' for the last 10 years, ever since I started working on creating BT Vision in the early 2000's. I believed then that the convergence of broadcast television with broadband-enabled interactivity had to change the way we experience television...

In those early days, we contemplated complete convergence – with the TV doing much of what the PC did – but since then the tablet and large screen mobile phone have taken us to a more selective model where certain things have worked and others have not. The TV is good at displaying video and the new large, flat screens are great at it so no surprise that catch-up and movie rental services work superbly.  But we also thought that social media would migrate on to the big screen, that UGC/PGC would create compelling alternative channels pulling viewers away from the mainstream and advertising would become direct response and integrated into the programming. In retrospect, we should have understood that these latter activities tend to have a more personal, private interaction and do not sit well with the TV as a communal experience.

the death of traditional TV

So time to reflect on where we have got to and where we could be going. Let’s start with a sense of where we are now. According to Cisco research, digital TV in 2011 was being viewed by 694 million people and this will grow to 1.3 billion in 2016. In 2011, tablets were the fastest growing business device/connection category with 19 million and in 2016, there will be a massive 92 million of them.  So over five years we will see a doubling of digital TV users and the population of tablets growing almost five fold.

According to TDG’s latest research, 70% of connected TV owners use the platform to watch long-form over-the-top video content, on average 11.8 hours per week. At least once during that week:

  • 48% of smartphone users watch short video clips;
  • 26% of smartphone users stream TV shows from free sources like Hulu
  • 25% of smartphone users stream TV shows from subscription services like Netflix or Hulu Plus; and
  • 20% of smartphone users stream TV shows from pay-to-view services like iTunes or CinemaNow.

Among 18-49s that use their pads to watch online TV programs (a key TV demographic), 39% report that their pad viewing has led to an increase in regular TV viewing suggesting that those devices have an ability to influence TV viewing. Otherwise, 46% report no change and 15% report a decrease in regular TV viewing. Even among 50+ users, the net impact is close to zero.

For the second straight year Nielsen’s updated count of the number of US TV households for the 2012-13 season declined to 114.2 million, down from 114.7 million for the previous season. The 2011-2012 numbers also indicated a drop from 115.9 million households for the 2010-11 season – a two-year decline of 1.5%.  This is unsurprising given US unemployment rate of 7.8% – but the takeaway is that is fairly stable despite the potential upheaval of OTT.

Social media continues to grow at a pace with 62% of adults worldwide use social media. Social networking is most popular online activity, with 22% of time online spent on channels like Facebook, Twitter and Pinterest. Facebook now has over a billion active users, become friends with one another 140.3 billion times, uploaded 219 billion pictures and awarded 1.13 trillion ‘likes’.  Twitter has over 100 million active users of which around a half log in at least once a day.  42% of Americans surf the web on their PC, tablet or mobile phone whilst watching television.

Looking at TV advertising, Kantar Media reports first Q4 advertising spend slowdown since 2009 and 0.8% growth in 2011, 1.8% in 2012. Political advertising may however be distorting these revenues. Interestingly all forms of ad spend are down – except TV in the US from 2011-12.

Let’s attempt to boil these statistics down to some simple facts:

  • TV continues to go digital and connected
  • A massive number of new video viewing devices now exist
  • However, TV viewing hours have pretty much gone unchanged
  • The use of social media has exploded
  • Advertising spend on TV is pretty much level

If everything is going to stay pretty much unchanged then what is all the fuss about? Well the fuss is not so much whether the TV remains the device of choice for watching video but how that video watching continues to be monetised by both the incumbents and the innovative second-screen pretenders.  The DVR recording of content has already limited the value of broadcast advertising.  The industry has tried to convince themselves that 30x fast-forwarding ads still relay the core messaging but common sense suggests otherwise.  The threat today though is far more wide reaching – the use of the second screen to commercialise broadcast TV without entering into any commercial agreement with the originators of that content.  The halo effect of content associated with a broadcasted channel without their control or permission can be viewed as the positive result of democratization or another example of piracy depending on which side of the fence you sit.

Assault number one is coming from the programme enhancement applications such as Zeebox, Flingo, IntoNow and TV Tak.  These technologies either synchronise with the broadcast stream through technology or rely on the consumer to select the desired programme.  They then proceed to add value to the broadcast by delivering additional information, bespoke programming, related twitter feeds, enhanced sponsorship messaging, coupon distribution and product placement. Granted these companies are currently working with, as opposed to against, the broadcasters to deliver their solutions but the long-awaited transition from TV viewers to TV customers is being achieved outside the control of the traditional free-to-air broadcasters.

Amazon has already embraced this new channel by approaching producers of comedy and TV shows to create programming for online streaming and tablets in return for a $55,000 upfront payment and a portion of revenue from toys and T-shirts.

Zeebox is launching its viewing companion application in the United States in partnership with Comcast Cable, NBCUniversal and HBO. It enables users to find programmes through enhanced listings with personalised social recommendations and promises to enhance viewing with further contextually relevant information about programmes. In the UK, Zeebox has partnered with interactive TV platform ShowCaster to launch an unendorsed second-screen TV show that will provide commentary and interactivity options for viewers watching X Factor on their main television.

Assault number two is coming from social TV ‘check-in’ services like Miso, Viggle and GetGlue that allow viewers to use their mobile device to tell friends which TV shows they are watching. Miso has built a SideShow application to help networks and viewers create and share their own multimedia projects for following along with TV shows.  GetGlue and Viggle both offer discounts and perks for people who check in with specific shows. Social media monitoring company Networked Insights found that media agencies are improving efficiency in their TV buys by 5% to 12% when they consider the social media ripple effect surrounding a TV show.  If a proportion of this ripple effect can be attributed to the Social TV second screen applications then they begin to influence a significant part of the marketers TV advertising budget.

However, it is early days for all these applications and actually usage volumes are low compared to the hype they are commanding but they are delivering off-broadcast value to a generation that feel little loyalty to the big networks.  This generation trusts their social networks much more than they do the big brands and so the influence from the second screen applications could be proportionately higher than their current usage suggests.

So the big ‘TV’ change for me is where the influence is moving from and to.  Back in the 1950s, entire programmes were funded by a single sponsor and messaging benefited from the halo effect of the content.  Tomorrow, that halo effect could be generated by brand advocates using social media alongside the viewing experience.  Those advocates will literally become priceless to brands looking to influence the social media generation and the detection and fostering of them will be a key part of the new Social TV (sTV) applications. In future, the problem of getting TV ad messaging to resonate may not be one of targeting or focus as second screen can render them essentially invisible. Therefore moving that messaging to within the distracting mechanism has to be a compelling solution. Until this happens, TV ads will continue to under-perform for the Y & Z generations and their value will deteriorate regardless of how creatively brilliant they are. Broadcasters may attempt to acquire the second-screen disrupters but the core appeal of the successful social media sites tend reflect values of independence, personality and subversiveness – something it soon loses when owned by big corporates as we have seen with MySpace and Friends Reunited.

Televisions are going to remain the screen of choice for viewing video content; OTT content will increasingly act as an alternative TV channel delivering more of that video content; second screens will be used to watch video on the move and away from the main TV; but it is the influential effect of second screen applications that could change TV economics forever.  This influence on what programmes to watch, what advertising messages to believe and what products to buy will be the television monetisation battleground of the future.  Therefore, we stop worrying about who is watching what and when but who is influencing who and through what channels. Then the links in the television economic value-chain of the future will be become a lot clearer.

Throughout the history of television, the intelligentsia have spent many hours debating the influence TV has exerted on society but, in my mind, the future debate will be quantifying the influence second-screen social media will have on the shape of television.


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Andrew  Burke Chrisp Thinking Andrew Burke
Company: Chrisp Thinking
I am currently Chairman of Crisp Thinking, Non-Executive Director of StaffShare Ltd and a partner at Snowy Road Ventures. Previously, I was CEO of Amino Technologies plc after being a non-exec director at Amino and Rawflow Read Andrew 's full bio

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