Social TV Increases Engagement – Or, Distraction?; Xbox Bridging Over-The-Top And Cable

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October 3, 2011 – 12:03 am

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Social TV: Distraction Or Ratings Driver?

And if social TV apps can focus viewers back to live TV, is the cost worth it? Like most things, it depends who you ask.

Surely, it seems that a studio or a network can't have a popular show without a related app that provides "behind the scenes" and "live chatting" with other fans. After years of growing DVR penetration, these apps have the potential to provide a rationale for living viewing with other people – just like the good old days!

The main value of social TV apps is that the provide proof of "engagement," which is the hot metric for advertisers looking beyond proof of reaching pairs of eyeballs. Marketers' current demand for return on investment means that they don't just want an audience to merely flash an ad in front of consumers, they want proof that some impact can be made.

Clearly, there's no better proof of engagement than viewers opening an app and telling the world they're watching a show. But as the WSJ's Jessica Vaccellero the price varies, with some apps costing more than $1 million to produce, while others can be crafted for tens of thousands.

So far, the evidence of driving ratings is anecdotal. A recent study about the effects of mobile and TV multitasking from ad agency holding company Interpublic and video ad tech form YuMe, say that 60 percent of TV viewers find themselves distracted by a mobile phone while watching broadcasts.

But Lisa Hsia, Bravo's EVP of digital media, said an app that lets viewers live chat during The Real Housewives of New York sent the show's ratings soaring by 10 percent over the same time last year.

Furthermore, new data from mobile app analytics provider Flurry notes that between the hours of 7am and 11pm, more than 20 million U.S. subscribers access mobile apps every single hour. In other words, says Flurry marketing VP Peter Farago, that's already the equivalent of 17 American Idol finales each day, or more than 6,200 American Idol finales per year. So there does appear to be a basis for matching up mobile and TV viewing activity.

That's all well and good. But it will still take at least other year until there is enough evidence as to whether apps are helping, hurting or is ultimately an irrelevant fad. Advertisers are the real test group at the moment and there verdict will begin to effect the nature of program-centric app and who needs to have one and who doesn't.

Until that happens, the best guess that any show looking to attract the young and the affluent tech-savvy users – i.e., the bulk of all cable and broadcast programming – had better have an app out now or at least few sorry, lest they get left behind in the tech race.

Interactive TV Ads' Long Road

Comcast Spotlight, the cable operator's local digital ad sales arm, says it has executed more than 1,000 interactive ad campaigns with more than 2.7 billion impressions to date. Not bad, but this still just a start. And thanks to Comcast's ownership of NBC Universal, the combined sales effort should help Comcast move ahead with its interactive ads more quickly.

There’s a long road to go before this becomes a serious business. But Comcast’s figures are outlining the path pretty well, after years of fits and starts and continuous talk of this being "early days."

Considering that there are about 70 million cable households, and Comcast, as the largest MSO with 23 million basic video subs, the reach of Spotlight is pretty impressive. Comcast’s interactive ads are available in 15 million households in 50 markets. The one troubling stat Comcast won’t reveal is interaction rates. When the company’s PR man tells B&C’s Todd Spangler they’re “pleased” with where they are, that’s’ code for saying they’re not exactly proud.

The company current has three interactive TV products: request for information, which connects users to basic info, coupons or product samples; remind-record, a helpful tap on the shoulder to set the DVR for a favorite program; and VOD telescoping, which links viewers from an ad to an on-demand program or lets them "bookmark" it for future watching.

Aside from Comcast and Cablevision, which has also been pushing diligently on driving iTV ads, the competition is also getting started on the over-the-top side, which has already presented enough of a threat to cable’s model. But it’s a good thing for the industry and the practice of interactive ads, as competition tends to spur faster strides.

This past week online video ad network TidalTV began teaming with OTT company Roku on cross-screen ads. Read the release. This new video platform expands TidalTV's targeting and optimization offerings, which were previously limited to just the computer and mobile screens.

TidalTV and Roku confidently cite RBI Research stats from May that said over the next five years, media spending on OTT video will reach $20 billion globally as more consumers use broadband to bring video entertainment into their living rooms.

That forecast sounds about right. But whether TidalTV, Roku or Comcast will be able to capture the lion’s share of those dollars remains to be seen, but it’s hard to think of any other companies that are as well-positioned to do so at this moment.

Xbox Bridges OTT/Cable Gap

The future is social. No, it's games. It's mobile. C'mon, it's interactive TV. Okay, we all know it's all of the above. But would anyone think that Microsoft would be the one to claim the center of it all?

There was a time when Microsoft's main competition was the Justice Department's Anti-trust division. Now, Google can claim that mantle (let's agree to revisit that notion in 10 years). But of all the many flops and false starts the past few years, even the most jaundiced Microsoft observer would concede that Microsoft has done pretty much everything right with the Xbox brand.

So there's every reason to expect something meaningful when Microsoft Corp. talks about its plan to offer paid streaming service with Comcast and Verizon Communications through Xbox Live, as Bloomberg reported.

The Redmond software giant has been trying for years to find the right way to expand its gaming console into a more comprehensive entertainment platform.

To do that, an unidentified Bloomberg source says Microsoft also anticipates signing deals with Time Warner's HBO, Sony Pictures Entertainment's Crackle streaming service, NBC Universal's Bravo and Syfy channels and Amazon's Lovefilm.

In contemplating Microsoft's abilities to carry it through in a meaningful way, it helps to think about its advantages – especially when contrasted with Google. In addition to a gaming console and brand that still looms large in the minds of younger demos, especially males, Microsoft's biggest advantage in its work to build itself into an entertainment empire is that it is considered much less rapacious towards media and advertising companies than Google is. In that sense, Comcast, Verizon and the others have less to lose by dealing with Microsoft.

The pressure pay TV providers are under from OTT services such as Google TV and the still-resilient Netflix, which just snatched a major Dreamworks deal from HBO, makes the need for allies who can deliver. Microsoft will have to prove that despite failed attempts to move into music and its uphill mobile battles, it can fill a void and keep subscribers from cutting the cord.

But Wait. There's More!

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October 3, 2011 – 12:03 am

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