Jan 11, 2013

10 Questions About The TV Industry 2013

All the upheaval in the TV industry (and we're just at the beginning) leaves us with lots of questions that can only be answered over time.

Here are ten of the big ones we'll be watching in 2013:

1. Will Anyone Cave? Meaning, will any of the networks give in and start selling content to a third party disruptor like Apple, Google or Intel, opening the door for the complete dismemberment of the current economic structure? Right now that seems unlikely: the TV industry is not like the music industry or even the cell phone industry - none of the major players are losing money. But stranger things have happened and it's worth keeping an eye on, particularly because until someone actually does cave, innovation is pretty much a pipe dream.

2. How Many Hours Until The Other MVPDs Start Pressuring The Networks Over TV Everywhere? As I mentioned in yesterday's post, the Sling Hopper pretty much blows the whole TV Everywhere scenario wide open in that it not only lets Dish viewers watch their shows outside the house (which was the big battle the MVPDs were hoping to win this year or next) but it even lets them watch their shows outside the country (so much for geoblocking.)  Dish is the nation's third largest MVPD, something many in the industry will soon be reminded of: in a classic case of NASCAR Blindness, Dish's decidedly downscale demographics have led many to dismiss their impact. Reality: Dish has 14 million viewers, FIOS has just under 5.)  That number may prove even more shocking now that Dish has a distinct competitive advantage to reach more upscale viewers and that should lead to a tougher stance from their competitors. Or not.

3. When Will The Networks (Finally) Sue Dish Over Sling Hopper? Soon, because if the other MVPDs start pressuring them about Sling, they're not likely to sit quietly and give up all that uncounted ad revenue. Granted, Slingbox has been around for many years, but my assumption is that it was such a niche product, it wasn't worth hassling about. Since Fox and CBS are already suing Dish over Hopper, they're probably thinking, what's another lawsuit?

4. When Will TV Manufacturers Give Up On Apps?   You'd be hard-pressed to find anyone other than the manufacturers themselves who thinks that Smart TVs with dozens of apps are a good idea. Least of all consumers who don't seem to be connecting them to the internet or using any of the apps-that-aren't-the-one-that-instantly-connects-to-Netflix. I saw a glimmer of hope at CES - a piece of demoware from Panasonic that had an iPad app that controlled search, discovery, social interaction and channel changing and interacted seamlessly with the big screen. It was very nicely designed and it was actually quite intuitive (I got to play with it some.) The switch is inevitable, it's just a matter of when.

5. How Long Before A Non-OTT Network Adopts The Netflix All-At-Once Approach To Program Release?  A lot of that is going to depend on the success of the post-modern storytelling technique adopted by Arrested Development's writers: the revived season tells each episode from the POV of a different character. If it's a hit, you'll be seeing dozens of clones and semi-clones who rely on the release-all-episodes-at-once format. If it dies, it'll be a while before the mainstream networks take that approach.

6. How Do Actual Consumers React To Google Fiber TV? My buddy Rich Greenfield was mighty impressed by Google's offering, which includes Netflix and other OTT networks fully integrated into the interface, a tablet-based remote control with voice and gesture commands along with unlimited 1 gigabyte internet. How well is this going to go over with your average technophobic consumer? I'm thinking pretty well, since Google seems to be putting a lot into the marketing of this product and taking cues from Apple and from Microsoft's successful relaunch of Xbox. But it's still an uphill battle for them and the other key thing to watch here is consumer adoption of the newfangled products, the tablet-based remote in particular.

7. Will The Other MVPDs Follow Google's Lead And Integrate OTT Services Into Their Services? From a consumer standpoint, it makes sense for the MVPDs to treat Netflix, Hulu, Amazon and Vudu just like HBO and Showtime: it's one less hassle for the folks at home to deal with, one less Input device switch they have to grab the remote for. This is another one of those instances where the technology is there but the impetus is not: since none of their competitors had this feature, MVPDs  weren't at risk of losing business because of it. Now that Google Fiber's introduced it, if it proves to be a popular feature,  it won't be long before we see the other MVPDs following suit.

8. Which Of The Second Screen Apps Will Be Left Standing This Time Next Year? The consolidation and the fallout started last year and will only continue in 2013. Who remains is anyone's guess - but easy bets for roll-up are apps like Miso that don't enable discovery and are limited to one key function. Who will be doing the buying is a more intriguing question: the MVPDs, STB manufacturers, TV manufacturers, networks and other 2nd Screen apps are all likely suspects.

9. Will 2013 Be The Year MVPDs Get Into The Second Screen Business? I've been preaching this for a couple of years now: MPVDs are the logical owners of second screen apps, and those apps will mainly serve as remote controls and EPGs, with some social and recommendation engine functionality thrown in. MVPDs control the data and the holy grail of second screen app-dom: the ability to change the channel, so they're the logical choice. They can get there by buying up a lot of the current crop of apps, none of which need to actually be free-standing apps as much as functionality on a larger app (e.g. make NextGuide the search and recommendation engine for the Cablevision app.) It's a logical next step, one that Dish already seems to have put in place with their Sling Hopper apps, and that may just cause the rest of the crowd to more strongly consider following suit.

10. How Will SmartGlass Evolve: Everyone is very impressed with the automatic content recognition capabilities of SmartGlass - the way it immediately populates the second screen with relevant content once it senses what show/movie/song is on. The trick is going to be figuring out how to make sure that extra content doesn't feel intrusive or distracting, something that will be a distinct problem if advertisers get involved. Second screen is a great thing, but if it becomes an annoyance, consumers have a secret weapon: they can just put it down. The other thing to watch here is how much more content becomes available on the XBox: will FIOS and Comcast expand their offerings to include channels that are popular with viewers? Will other MVPDs join in? How the entire XBox/SmartGlass ecosystem evolves is one of the more important trends to watch this year.

These are just 10 of the issues the industry will confront this year. There are many others, from the use of voice commands, gestures, natural language recognition, the future of TiVo, the impact of the cloud, bringing social in during production... more than enough to make 2013 a very interesting year.

And we'll be following every minute of it here at the Toad Stool.

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