Connected TV’s Internet Reality; UK IAB Study Says Marketers Need Data For Interactive TV

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October 17, 2011 – 12:03 am

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Weak Connections

It's pretty clear that more connected TVs are becoming a fixture in consumers' homes. But it's also pretty clear that most connected TV owners aren't paying much attention to the widgets that come factory-selected with their new sets. LoveFilm's Chris Bird told attendees at MediaTel Group's Connected TV Experience conference in London that consumers primarily care how big and how good-looking the screen is when considering a purchase, not the wi-fi, reported Newsline's Liz Jacques.

HMDG's Greg Grimmer offered stats at the same conference, saying that a mere 12 percent of consumers purchased a wifi-enabled set just because they happened to looking for the top model TV on the market. To be sure, there is an opportunity for app developers, entertainment companies and digital content providers in general to reach this audience. Ofcom says that 4.6 percent of homes now have a connected TV. And, of the 10 million sets sold in the UK in last year, one million came with Internet accessibility.

Of the early TV widget providers, Yahoo certainly gets points for getting its apps on most new connected sets. So it has a natural reason to put the idea of consumers and connected TVs in the best light. In a presentation at the 2011 TV Next Conference, Russ Schafer, Yahoo's Senior Director, Global Marketing, noted that 337 million connected devices will be sold by 2015, with wifi-enabled TVs comprising 161 million sales by that date, up from around 50 million today.

In a separate post related to the MediaTel conference, Jacques supplies a helpful set of capsule profiles of a dozen prominent "connected TV" providers, including Virgin Media, XBox, Samsung Smart TV, Google TV and others. Read it here and check back in a year to see how those services have changed.

Platforms Vs. Networks

While it will take some time for consumers to get used to connected TV apps, time-shifted viewing is already becoming mainstream. And that is opening up a battle between the traditional advertiser/network relationship, as new methods for counting viewers is making the future of TV ad targeting come into sharper focus.

A very long article in the UK's MarketingWeek by Michael Barnett surveys the evolution of interactive TV advertising and finds the effort centering on tying the tablet, PC and the TV viewing together at once as a more efficient way for advertisers to reach their desired consumers. And that will put more power in the hands of platform providers, as those viewers use their devices to increasingly devise their own programming schedules.

According to the IAB UK, 85 percent of marketers are interested in advertising on internet-connected TVs. But without reliable data about who's watching what and when, advertisers will not get beyond the interest phase.

The UK TV measurement firm BARB has been trying get a a pilot project off the ground for the past year that would incorporate data from time-shifted TV shows that are not viewed live or in the seven days after transmission. In addition, the new initiative would tally viewing on laptops and personal computers in 100 homes on its research panel.

If all goes as planned, the laptop PC, and tablet trial will be launched across 1,000 additional homes next year. But some advertisers don't like the idea of a panel, which is still viewed as an imprescise, old school audience data method. As eHarmony's Ottokar Rosenberger, UK country manager, says: "…it needs to move to a real-time, real-action model whereby we buy against audiences that we know are actually there, and where we can target by household."

The promise of targeted TV remains exciting to marketers. But until the reality catches up to the dream of accurate audience measurement – beyond the old-fashioned panel method – the targeted TV ad space will remain stalled.

Browser Wars Come To TV

Even though apps appear to be all the rage on smartphones, the mobile web is still where most of the activity takes place. The reason is that users like the individual flexibility that web-based discovery offers, as opposed to the closed world of the app. When TV offers a true web-based experience, the connected set will start to fully live up to its potential.

Opera, a web browser that is popular internationally, particularly in eastern Europe, is currently working with Sony, Sharp, Philips and Toshiba, to make its browser available on those companies' respective devices, reports PC Advisor's Carrie-Ann Skinner. So far, the plan is for Opera to do more than just expand apps so viewers can surf the web from their TV, but also as a platform for other apps to be accessed through.

The Opera browser is hardly known inside the U.S. But if it can get insert itself on connected TV sets globally, it could significantly change the game with is dominated by Internet Explorer, Firefox, Safari and the up-and-coming Google Chrome. Web browsers haven't improved much beyond speed the past decade, but being able to cove the TV set and the PC would change the nature of connected devices beyond the PC significantly.

Hulu Off The Block

The possibility of the sale of premium streaming portalHulu was always over-hyped these past few weeks, and that truth was settled this past week when the company decided to cancel the sale negotiations. For now, existing backers/content partners Disney and News Corp., along investor Providence Equity and CEO Jason Kilar have instead said that they will all recommit to the service, rather than passing it on to some other party. (Comcast bought Hulu's original backer NBCU stake earlier this year, but it can't actively operate it.)

"Since Hulu holds a unique and compelling strategic value to each of its owners, we have terminated the sale process and look forward to working together to continue mapping out its path to even greater success," the company said in a post on its official blog. Our focus now rests solely on ensuring that our efforts as owners contribute in a meaningful way to the exciting future that lies ahead for Hulu.

Why did the sale talks fail? Partly, it was about money – Hulu makes a lot of money, but it is expensive to operate. But it was also about control and the future of the over-the-top landscape. The content companies have an interest in keeping Hulu going in the face of competition from Netflix and other over-the-top services like Google TV. Hulu attracted offers from Google., Inc., Yahoo Inc. and Dish Network Corp., people familiar with the matter said last month. Dish, which has started a Blockbuster-branded online streaming service, bid $1.9 billion, Bloomberg BusinessWeek's Andy Fixmer reported.

So what's next for Hulu? Expect those IPO talks to start up again – soon.

The CW Netflix Deal

After weeks of indecision about branding (Quickster will one day be a trivia question) Netflix finally got some good news: it signed a major deal with with the CW network. Read the release. The deal, signed between the CW's co-parents CBS Corporation and Warner Bros. Television Group, could be worth as much as $1 billion, reports B&C's Ben Grossman. Sure, the CW is not exactly the highest rated network. But it attracts younger demographics and in a sense, that's the real value of this deal.

This is a pretty comprehensive arrangement and in some ways, it's unprecedented. It gives Netflix the right to show all CW scripted shows (that is, new reality shows are not covered by the agreement). New shows? Available for streaming? Perhaps it's only a matter of time until Netflix gets some major current season shows.

Until that happens, Netflix will be betting that The CW comes up with a massive hit show. That would truly turn things around for the fledgling streaming service. But for now, The CW is the real winner, since its target audience is most likely the ones to be most reliant on streaming. The problem is, what will that mean to its advertisers? Can Netflix turn viewers back to live viewing?

The answer to the first question will depend on creating affinity for brand sponsors of the shows elsewhere. Either way, the pay off for both The CW and Netflix is still some time away. But if the network's parents are satisfied, that could add up to a lot of good will for Netflix – something it is in sore need of these days.

But Wait. There's More!


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October 17, 2011 – 12:03 am

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