[opendtv] EE Times: To Understand Smart TV, Follow the Money
- From: "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
- To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
- Date: Mon, 7 Jul 2014 21:02:08 +0000
Here's something for Craig to ponder. A few key excerpts (emphasis added by me):
"The viewers are spending more time on devices where **media brands are not
affecting them**."
"This is the wave of the future, 'follow-me' content with **a** brand coming
along for the ride."
"Morgan believes that the function of television remains the same throughout
all its many changes: 'People want to be entertained, informed, engrossed, and
engaged.' The content such as supplied by ESPN will not go away. It will be
there **regardless of how it's delivered to viewers**. He believes that the
amount and variety of content will increase to serve the demand of smaller
demographics of the larger audience."
As to the way he separates TVs from PCs, in terms of viewing habits and money
spent by global media on these platforms, that would be purely a function of
how the CE companies design their smart TVs. In principle, there could and
should be no difference.
Bert
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http://www.eetimes.com/author.asp?section_id=36&doc_id=1322997&;
To Understand Smart TV, Follow the Money
Jonah McLeod, Director of Corporate Marketing, Kilopass Technology
7/7/2014 12:37 PM EDT
Even before the smartphone first debuted, television began evolving. First the
PC breached the walled garden enclaves of cable TV by allowing users to view
content via the Internet previously only accessible by a cable TV box or
over-the-air TV broadcast. The breach grew larger when smartphones and tablets
provided the same Internet viewing capability.
Today, content being supplied anywhere, anytime, and on any device represents a
disruption in distribution of all forms of media -- video, audio, images, and
text -- brought on by wired and wireless Internet broadband. The best hope of
understanding the trajectory and velocity of this disruption is to follow the
money. Where are investors putting their dollars?
Some insight into the money trails comes from the whitepaper "It's Time to
Change the Channel" published by Difference Capital. The investment company has
recently put funds in content companies Thunderbird Films and Blue Ant Media,
and in IP-based broadband services companies iPowow and QuickPlay.
The Difference Capital investments are busy leveraging the disruptive wave. For
example, Blue Ant Media, a private start-up media company based in Toronto,
creates and distributes content internationally in categories including
lifestyle, travel, music, nature, and documentary. It owns and operates media
brands Cottage Life, AUX, Smithsonian Channel Canada, and Oasis. The company
publishes its content across its television, mobile, Web, and magazine
properties.
Difference Capitals' investment QuickPlay Media, on the other hand, is a
multiscreen managed services provider supplying all the technology and
resources needed to deliver end-to-end services for video on demand, live TV,
and TV everywhere to IP-connected devices.
The company has successfully launched multiscreen video services for
communications and media companies such as Verizon, AT&T, Rogers, and
Bloomberg. Built on their own managed service platform, OpenVideo accumulates
content from over 4,000 providers such as HBO and CBC. The platform then
optimizes the content for more than 400 device types, ensuring that it displays
in the highest quality and meets all digital rights management and security
requirements.
Third wave
In a recent YouTube interview, Tom Morgan, founder and CEO of Redwood Shores
Calif.-based start-up Net2TV, puts some context to this start-up activity. He
declared that we're entering the third wave of television, the first starting
in 1948 with the first television sitcoms being broadcast, signaling the
transition from radio to television. The second, in 1979, was marked by the
first broadcast of ESPN, providing in-depth coverage of a specific type of
content to a large easily identifiable demographic -- males age 18 and above.
He believes the third wave is smart TV that targets smaller demographics with
compelling content that provides advertisers a rifle shot at their potential
buyers, versus carpet-bombing a population. Morgan said smart TV is about a new
economic model and new relationship with the viewer and advertiser. This is
made possible by cloud-based television service for smart TVs and connected
devices such as supplied by Net2TV. Engaging viewers individually and paying
for it will require new forms of programming and advertising and will also
require the delivery of both to viewers.
The hard part he said is reinventing the financials and relationship with the
viewer. That's where Net2TV and the Difference Capital investments come in.
They are creating the disruptive content along with the anywhere, anytime
delivery and measurement infrastructure to solve the problems that cable TV
companies and Internet service providers have yet to get their arms around.
Morgan believes that the function of television remains the same throughout all
its many changes: "People want to be entertained, informed, engrossed, and
engaged." The content such as supplied by ESPN will not go away. It will be
there regardless of how it's delivered to viewers. He believes that the amount
and variety of content will increase to serve the demand of smaller
demographics of the larger audience.
Net2TV's strategy is to deliver compelling content that goes deeper into topics
than programs that target a wider demographic. For example today's cable
cooking show in a new incarnation will be tailored to a particular type of
cooking such as Cajun and produced in greater depth on all the viewing
platforms available to its target audience.
The financials part of this disruption is still in transition as shown in
international marketing consultant, Millard Brown's AdReaction 2014 study.
The study shows that a typical global multiscreen user consumes just under
seven hours of screen media daily. Smartphones are now the largest single
screen medium around the world, accounting for 35% of all viewing hours.
Combined with tablet minutes, mobile devices now take up 47% of all screen time.
By contrast, TV takes up 27%, and PCs take up the remaining 26%. Where is the
lion's share of global media spending occurring? The study shows that in 2013,
66% was spent on TV, 29% on PCs, and a mere 4% on smartphones and tablets. It's
projected to change in 2016 with TV reduced to 60%, PC spending staying the
same, and smartphones and tablets spending increasing to 12%. The viewers are
spending more time on devices where media brands are not affecting them.
Follow-me content
One company that hopes to change the global media spending pattern is Phunware
(funware), based in Austin, Texas.
Phunware positions itself as a multiscreen-as-a-service (MaaS) provider
offering an integrated services platform that enables brands to engage, manage,
and monetize their anytime, anywhere users. Users are provided apps on their
mobile devices for their favorite brands in goods and services, television
program or network, fashion, footwear, and others.
Phunware comprehends the chaotic way users engage mobile devices: one minute
watching a trailer for a movie or catching up on a missed episode of a favorite
show, the next texting, the next exchanging photos or video, the next checking
out a new item for sale, and the list goes on. The mobile device enables user
to act on impulse. If he or she is in a shopping center and next to a Forever
21 shop, Phunware could enable a brand with an app on the user's phone to offer
the user a special deal on an item in the shop, if the user's location services
are on.
The company claims to have launched tens of millions of applications, including
hundreds of branded applications; to have served hundreds of millions of
videos; to have served over 200 billion advertising transactions, ad spots
inserted on the fly; and to have completed over a trillion transactions a year
where someone clicked on an offer.
This is the wave of the future, "follow-me" content with a brand coming along
for the ride. Smart TV will be there, but it too will be branded, unlike today
when it comes free of commercials, with a few exceptions, for $9.95 a month.
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