[opendtv] Commentary: Broadcasters Must Wise Up About Smart TV
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
- Date: Wed, 1 Feb 2012 12:00:03 -0500
http://www.tvnewscheck.com/article/2012/02/01/57177/broadcasters-must-wise-up-about-smart-tv?utm_source=Listrak&utm_medium=Email&utm_term=Broadcasters+Must+Wise+Up+About+Smart+TV&utm_campaign=Broadcasters+Must+Wise+Up+About+Smart+TV
COMMENTARY
Broadcasters Must Wise Up About Smart TV
At last month's CES, three technologies showed significant progress:
connected TV, smart TV and TV Everywhere. It's likely the three will
converge. If so, they'll arrive in one massive wave that could
completely disrupt the way people watch TV - and threaten the way
broadcasters do business. Broadcasters must figure out how to catch
the wave.
By Arthur Greenwald
TVNewsCheck, February 1, 2012 8:15 AM EST
LG's cracker-thin 55-inch OLED screen was gorgeous. So was Samsung's
super-sharp 4K Ultra High Def set. But the consensus at the 2012
International Consumer Electronics Show was "no breakthrough video
products." You could almost hear broadcasters breathe a sigh of
relief.
Not so fast. While no single Next Big Thing was poised to threaten
traditional television, three technologies showed significant
progress: connected TV, smart TV and TV Everywhere. What's more, it's
likely the three will converge. If so, they'll arrive in one massive
wave that could completely disrupt the way people watch TV - and
threaten the way broadcasters do business.
Story continues after the ad
Connected TVs are sets that you connect via broadband to the
Internet, specifically to sites that aggregate or sell streaming
video. The sets feature launch screens populated by colorful branded
icons and apps that jump directly to third-party "channels" for
gaming, shopping, movie rentals and specialized videos.
LG, Samsung, Sony and Vizio showed sets with the the GoogleTV
interface, which drives viewers to an assortment of content partners,
including Google's own YouTube subsidiary, now aggressively promoting
"channels" programmed by Vin Di Bona, CSI-creator Anthony Zuiker, Amy
Pohler, Ashton Kutcher and many others made wealthy by broadcasting.
Just this week, Bruce Seidel, the executive behind such Food Network
hits as Iron Chef America announced his departure to head a new
YouTube food channel for Electus.
Right now, the colorful launch screens are laid out like a stamp
album. Confusing at first, but better than the typical schedule grid,
especially once consumers can arrange the icons. Check out GoogleTV's
demos here. Then imagine looking for your own station or network.
It's a preview of a future where you're on equal footing with
channels devoted to fashion, chocolate or America's Funniest Videos.
How can such narrow topics achieve promotional parity with your
station? They'll buy featured positions by cutting deals with set
manufacturers and interface service providers.
Smart TV is any search tool that lets viewers choose content by title
or topic. Typically today, this requires clicking
one-letter-at-a-time onscreen or on a tiny keyboard. "The user
interface on these things is still horrible," says tech guru Tim
Bajarin. "The fact that you still have to type stuff in is absurd. We
should be way beyond that already."
Indeed, some high-end 2012 models allow you to speak selections out
loud, or make onscreen choices using hand gestures - but the response
time lags and the results are sketchy. Perhaps these features were
rushed into production in response to persistent rumors that later
this year, Apple will bring out its own game-changing TV, powered by
Siri, the voice driven "assistant" built into every iPhone 4S.
Today's smart TVs are precocious toddlers, little more than key word
matches within a single program guide. But they'll soon skip a grade
and display much more sophisticated selections. "Your television will
be able to combine multiple databases into one electronic guide,"
says Bajarin. "Rovi is already doing this."
According to Google's new company-wide privacy policy, GoogleTV will
almost certainly use customer preferences to promote
partner-generated video. So will Netflix, Amazon and every other
streaming video supplier. Ultimately, broadcasters may have to pay
dearly for a place among the top search results.
This doesn't just threaten station ratings and revenue. It endangers
the source of primetime content itself. "Studios need healthy
networks for our shows to succeed," Warner Bros. TV President Bruce
Rosenblum told a CES audience. "They attract viewers with promos."
The broadcast network program development cycle is hardly a science,
but no other model is nearly as efficient for nurturing, replicating,
and cross-promoting hit shows. Even with short seasons, Mad Men is a
loss leader for AMC. Netflix is gambling more than $100 million on
House of Cards - 26 original episodes starring Kevin Spacey. That's
not sustainable, especially considering that over 60% of Netflix's
OTT business comes from streaming off-network shows.
TV Everywhere is a term popularized by Comcast and Time Warner to
describe their plans to use broadband mobile apps to let
"authenticated" customers access the same video content they enjoy at
home. At CES, Echostar and Dish promoted similar services tied to
Slingbox and/or multi-room DVRs. Broadcast veteran Jack Perry hopes
his Syncbak devices will do the same for stations and networks. All
of these companies claim they are "close" to completing deals for the
necessary digital rights, but that remains to be seen.
There should be money to pay for the rights. TV Everywhere will
generate $5.6 billion in additional ad dollars, based on skyrocketing
projections for out-of-home viewing. That's according to Needham &
Co.'s Laura Martin, and that's her low estimate. (Read a synopsis of
her reasoning here.) The beneficiaries would be broadcast networks
that own a substantial share of their primetime fare.
For consumers and content owners, TV Everywhere sounds like a
terrific arrangement, that is, until it catches on. If it's popular
enough, it fulfills the worst FCC forecasts about broadband scarcity.
Here's where broadcasters' over-the-air mobile DTV could ride to the
rescue. Too bad that technology is still at the starting gate.
Tucked away in a far-flung corner of the CES exhibit floor were the
promising product demonstrations of both the Mobile Content Venture
(Dyle) and the Mobile500, broadcasting's two mobile DTV ventures. The
devices provided rock-solid reception. The Mobile500 software even
delivers basic DVR functions. Unfortunately "promising" is damning
with faint praise, especially at this late date. Last week at NATPE,
I opened a panel on "Making Money in Mobile" by polling the audience
about mobile DTV. Not a single attendee had ever heard of it. Yikes.
To matter in the marketplace, mobile DTV must offer a package of
programming at least as compelling as any of the TV Everywhere
lineups. If they do, then broadcasters may have the advantage since
theirs will be the only one that is free, just as conventional
broadcasting has always been.
Free access to local news, and top primetime and syndicated shows
could prove very appealing - especially with DVR functionality that
let viewers control program start times. It might also prove
appealing to carriers if it simultaneously unclogs their broadband
networks. On the other hand, for 85%-90% of American home already
paying for cable or satellite, the concept of "free" may prove less
compelling, since they may well receive TV Everywhere at no extra
charge.
Either way, broadcasters need a much bolder presence and strategy in
the digital domain. Stations need to buy and try the latest digital
devices to stay current with consumer trends. They need to stake a
claim to premier positions in smart TV search and graphic displays.
They need to promote more aggressively the existence and benefits of
mobile DTV. And as soon as possible, they must merge the MCV and
Mobile 500 and use their combined clout to negotiate win-win
contracts with the carriers to make mobile DTV receivers in phones as
common as cameras.
All of which amounts to the final takeaway from the 2012 CES: gradual
change is not an option. The connected TV-smart TV-TV Everywhere wave
is coming, and broadcasters must catch it. If they do, the inherent
strengths of network and local programs will keep them ahead for
decades to come.
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