Jul 24, 2013

The Prophesy of the Wounded Wildebeest And Other Tales of Summer

Because it’s summer and because it’s fun to speculate (and because last week saw both an Apple TV and Google TV story, both based on unnamed sources and secret meetings) let’s take a look at what the world might look like if the Prophesy of the Wounded Wildebeest comes true and one of the MVPDs gives in to Apple.

The Prophesy of the Wounded Wildebeest says that the weakest of the MVPDs, the one most likely to be culled from the herd and taken out by the jackals of Bankruptcy and Insolvency is the one that’s most likely to strike a deal with Apple in a sort of Hail Mary play that assumes the Apple TV will be successful enough to keep them in business and then some. And since that is more or less what happened with the introduction of the iPhone, the prophesy is not altogether unfounded.

So let’s assume for the purposes of this exercise that the device in question is a streaming set top box, something on the order of the current Apple TV device, that delivers Apple’s magical new TV interface to the user’s existing television set. (Apple has no reason to actually build a TV set: the monitors are dumb terminals and there’s nothing wrong with them in terms of size, shape or screen quality.) Let’s further assume that this set top box is available only to subscribers who have the Wounded Wildebeest’s cable and internet service (e.g. most of them) and that the Apple TV enables some combination of live broadcast (of several hundred of the most popular stations), VOD and DVR functionalities. And that no matter what you think of Jonny Ives’ design for iOS 7, the new TV interface is universally acknowledged to be something pretty special. Special enough for fanboys to camp out overnight and pay a couple of hundred dollars for the privilege of owning one of these new devices.

So what happens next?

The first few months will no doubt feature lots of reviews of how absolutely life-altering the service was (along with the inevitable backlash in the tech press.) But the service will be new enough that it will still seem like science fiction-- most people won’t actually know anyone who has the system and the whole experience will seem pretty foreign. There will be the usual debates about whether TV is responsible for the dumbing down of American culture and how a device that makes it easier to watch TV is the worst thing ever invented and a sure sign of the impending apocalypse.

At the same time, pretty much everyone else in the industry, from the other MVPDs to competing internet companies to TV set manufacturers to random VC-infused start-ups will be scrambling to introduce their own version of the magical Apple box... much to the chagrin of the various networks, who all have things like channel placement written into their retrans agreements. And while they might have reluctantly agreed to let Apple come up with a new interface, that agreement did not, in their minds, extend to the rest of the industry. So expect lots of lawsuits around the "me too" players.

And the Apple TV may or may not succeed. Because by the time it comes out, the early adopters, the people who put up with the glitches and crashes and Fail Whales, may have gotten so used to watching TV in a completely nonlinear fashion that anything linear-- no matter how cool it is-- is going to be greeted with a giant collective yawn.

Or not-- the inherent “Apple-ness” of the product may still be enough to get a critical mass of fan boys on board and with them, a similarly critical mass of second-stage adopters.

Whatever happens, I will make two predictions that don’t feel a lot like going out on a limb: (a) there will be lots of lawyers and legal wrangling involved and (b) the final product, no matter whose product it is-- Apple, Google, Intel or someone else-- will not be nearly as revolutionary as insiders hoped it would be.

At first.

In business, victories are won slowly, in increments. And then, suddenly, all at once.

Jul 22, 2013

The Best Available Screen

It seems like just about every conference I go to features someone putting out the “teens prefer to watch TV on their iPads” myth and I just wanted to set the record straight.

Teens (like adults) prefer to watch TV on the best and largest screen available. Which, if you are an American teenager in 2013, is often your iPad: Mom and Dad are watching the big screen TV and even if they aren’t, they’re in a position to comment on your viewing habits, which makes the relatively private iPad a better option.

Now one reason behind this dynamic may be the fact that many parents seem to have banished TV from the bedroom, a result, no doubt, of the many articles outlining how harmful that was. That leaves the living room or family TV as the only option, and if it's already occupied, then the tablet or laptop makes a good back-up.

But regardless of why, high production value TV just looks better on a big HD screen. (And even better still on the new 4K and 8K screens.) So if it seems that kids are avoiding the big screen in favor of their devices, it’s only because someone else got there first.

Jul 8, 2013

The 4S's of Second Screen

While much of the talk around second screen focuses on the content that users will create, that’s just the tip of the iceberg: most users don’t want to create content of any sort and are more than happy to let someone else do that for them. Someone else, in this instance being the people who create the actual shows, and/or the networks and the advertisers who pay to be on those networks.

In talking to all of the aforementioned stakeholders, we’ve come to the conclusion that second screen content can be broken out into four main buckets. Their weight in the second screen experience will vary from show to show, depending on factors like audience makeup and content type. The mix may even vary depending on when the viewer experiences it: before, during or after the program.

These four content buckets, which we’ve been calling the “4 S’s” are Social, Stories, Stats and Shopping.

Social is social media, which will play an increasingly shrinking role in the equation. While Twitter currently has a large install base compared to any dedicated second screen experience, it is nowhere near as ubiquitous as many advocates would have us believe: the majority of Americans are not on Twitter and are unlikely to ever join. Even among Twitter users, influence varies wildly depending on content: for every Oscar ceremony, there are 10 documentaries on History Channel no one is tweeting about. The waning popularity of live television makes any “of the moment” form of social media less relevant. Which is perhaps why a recent study showed that “only 1.5% of respondents report being drawn to TV viewing occasions because of social media.” Social will continue to be important for sports and other event programming that people like to watch live, but we see it’s current prominence rapidly diminishing.

Stories will become the most prominent second screen content for scripted programming. Stories, which will be created by the same people who create the show itself (with occasional help from avid fans) can be anything from “scenes from next week” to behind the scenes footage to interviews with the stars or producers to additional background on the characters. This content will generally be intended to be viewed either before or after the show-- not during it. It’s ideal for hardcore fans and for viewers who are bingeing on a show and want to catch up on the entire experience. The advantage for networks and advertisers is that this is the sort of content fans will return to long after the program airs live, thus prolonging exposure to the series itself and providing additional opportunities for both advertising and promotion of other network shows.

Stats are statistics, polls, voting and all other things number based. These will be particularly important for sports and reality game shows where viewer interaction is already part of the experience. Being able to touch the screen to manipulate stats and poll results and the like should prove to be a very engaging experience and this is one area where users will be able to take full advantage of their devices. As a result, stats should prove more popular during programming that is watched live than during scripted programming.

Shopping is T-commerce, which will generally happen after the viewer is done watching the show. Certain types of how-to shows (cooking and home improvement) may prove to be the exceptions, but given that many of those shows are, for all intents and purposes, 30 minute infomercials as it is, providing a vehicle for in-show t-commerce makes perfect sense. For scripted programming, however, it’s something that is likely to occur once the program is over and the viewer has time to focus on shopping, rather than cramming it in during a quick commercial break. If done correctly (watch our explanation of the “Ad Locker” concept) this will be part of a very lucrative second screen ad ecosystem.

Show runners will need to figure out what combination of the “4S’s” best suits the needs of their audience, and then tweak that content-- on a daily basis, if necessary. The goal of the content will be to drive tune-in, increase loyalty among hard core fans, promote future episodes and to serve as a platform for advertising and for the promotion of new network programming. (As live TV viewing decreases, networks will need to seek out alternate ways to promote their new shows. Second screen experiences for their existing shows should prove to be an effective medium.)