10 Things You Need To Know About The Future of Television

WHAT NOW?10 Things You Need To Know About The Future Of Television

AS TV AND THE INTERNET HURTLE TOWARDS CONVERGENCE, THERE ARE MORE QUESTIONS THAN ANSWERS, MORE UNCERTAINTY THEN STABILITY AT KIT DIGITAL, WE LIVE TO DEBATE THE FUTURE OF TELEVISION, AND FROM TIME TO TIME WE ASK ONE OF OUR PEOPLE TO SHAKE UP OUR THINKING WITH SOME FRESH PERSPECTIVES IDEAS. WHAT FOLLOWS IS OUR GLOBAL LEAD ANALYSTALAN WOLKS TAKE ON THE FUTURE OF TELEVISION

AS TV AND THE INTERNET HURTLE TOWARDS CONVERGENCE, THERE ARE MORE QUESTIONS THAN ANSWERS, MORE UNCERTAINTY THEN STABILITY AT KIT DIGITAL, WE LIVE TO DEBATE THE FUTURE OF TELEVISION, AND FROM TIME TO TIME WE ASK ONE OF OUR PEOPLE TO SHAKE UP OUR THINKING WITH SOME FRESH PERSPECTIVES IDEAS. WHAT FOLLOWS IS OUR GLOBAL LEAD ANALYSTALAN WOLKS TAKE ON THE FUTURE OF TELEVISION LET THE DEBATE BEGIN!

BUT FIRST,A QUICK DEFINITION:MVPD

BUT FIRST, Once telcos and satellite companies got into the mix, theA QUICK DEFINITION: term “cable company” didn’t really ﬁt anymoreMVPD

BUT FIRST, Once telcos and satellite companies got into the mix, theA QUICK DEFINITION: term “cable company” didn’t really ﬁt anymoreMVPD So now we call the companies that provide pay-TV service MVPDs, which stands for

BUT FIRST, Once telcos and satellite companies got into the mix, theA QUICK DEFINITION: term “cable company” didn’t really ﬁt anymoreMVPD So now we call the companies that provide pay-TV service MVPDs, which stands for Multichannel Video Programming Distributors

AND NOW 10 THINGS YOU NEED TO KNOWABOUT THE FUTURE OF TELEVISION

Q: WHAT’S THE MAIN THING STOPPING VIEWERS FROM CUTTING THE CORD?

A: BANDWIDTH CAPS

A: BANDWIDTH CAPS Even if you’re cutting the cord, YOU STILL NEED AN INTERNET CONNECTION

A: BANDWIDTH CAPS Even if you’re cutting the cord, YOU STILL NEED AN INTERNET CONNECTION Most people buy internet and TV together as part of a bundle that offers unlimited bandwidth and deep discounts

A: BANDWIDTH CAPS Even if you’re cutting the cord, YOU STILL NEED AN INTERNET CONNECTION Most people buy internet and TV together as part of a bundle that offers unlimited bandwidth and deep discounts Cut the cord, and you’re looking at bandwidth caps for internet use, along with higher prices for a reliable high- speed internet connection

A: BANDWIDTH CAPS Even if you’re cutting the cord, YOU STILL NEED AN INTERNET CONNECTION Most people buy internet and TV together as part of a bundle that offers unlimited bandwidth and deep discounts Cut the cord, and you’re looking at bandwidth caps for internet use, along with higher prices for a reliable high- speed internet connection Since video eats up a lot of bandwidth, cutting the cord can prove more expensive than keeping it intact

BUT The US Department of Justice recently announced that it was investigating whether bandwidth caps constituted “restraint of trade” There are strong arguments on either side, so expect this one to reach the Supreme Court

Q: WHEN WILL HBO START SELLING HBOGO AS A STANDALONE SOLUTION?

A: NOT ANYTIME SOON

A: NOT ANYTIME SOON There are several reasons HBO is unlikely to take this step, no matter how much the internet speculates:

A: NOT ANYTIME SOON There are several reasons HBO is unlikely to take this step, no matter how much the internet speculates: HBO IS NOT SET UP TO ACCEPT PAYMENTS. They get their money from the MVPDs who do the collecting for them

A: NOT ANYTIME SOON There are several reasons HBO is unlikely to take this step, no matter how much the internet speculates: HBO IS NOT SET UP TO ACCEPT PAYMENTS. They get their money from the MVPDs who do the collecting for them HBO MAKES A LOT OF MONEY FOR MVPDS. AND VICE VERSA 3 months free is a lure for new customers. HBO’s easily bundled into premium packages. Why give up a good thing?

A: NOT ANYTIME SOON There are several reasons HBO is unlikely to take this step, no matter how much the internet speculates: HBO IS NOT SET UP TO ACCEPT PAYMENTS. They get their money from the MVPDs who do the collecting for them HBO MAKES A LOT OF MONEY FOR MVPDS. AND VICE VERSA 3 months free is a lure for new customers. HBO’s easily bundled into premium packages. Why give up a good thing? HBO GO IS A TROJAN HORSE. If the MVPDs get too tough on fee negotiation, HBO can point out that they’ve got a great alternative that’s all ready to go

Q: WHAT’S HOLDING UP TV EVERYWHERE?

A: LAWYERS

A: LAWYERS The big road bump right now is around RIGHTS ISSUES and whether the broadcast channels or the MVPDs are responsible for AUTHENTICATING VIEWERS

A: LAWYERS The big road bump right now is around RIGHTS ISSUES and whether the broadcast channels or the MVPDs are responsible for AUTHENTICATING VIEWERS In addition to the legal wrangling, WIFI STILL ISN’T EVERYWHERE and that holds up real demand.

A: LAWYERS The big road bump right now is around RIGHTS ISSUES and whether the broadcast channels or the MVPDs are responsible for AUTHENTICATING VIEWERS In addition to the legal wrangling, WIFI STILL ISN’T EVERYWHERE and that holds up real demand. The ability to sit on your couch and watch the Mets game on your iPad isn’t quite the game changer that watching the Mets game on your iPad in the back seat of a taxi would be

Q:WHAT’S THE BEST OPTION FOR A SMART TV?

A: WAITING

A: WAITING SMART TVS ARE LIKELY TO GO THE WAY OF THE DVD PLAYER

A: WAITING SMART TVS ARE LIKELY TO GO THE WAY OF THE DVD PLAYER The manufacturers can’t agree on a single standard, technology keeps advancing, and consumers are not used to buying TVs with the same frequency as other electronics.

A: WAITING SMART TVS ARE LIKELY TO GO THE WAY OF THE DVD PLAYER The manufacturers can’t agree on a single standard, technology keeps advancing, and consumers are not used to buying TVs with the same frequency as other electronics. While creating Smart TV apps makes sense right now, look for them to be replaced by SMARTER (AND SMALLER) SET TOP BOXES that allow MVPDs to push out the latest updates as well as APPS ON 2ND SCREEN DEVICES that do the work of a set top box

Q: WHAT’S KEEPING THE BIG HOLLYWOOD STUDIOS UP AT NIGHT?

A: WHAT ISN’T?

A: WHAT ISN’T? Two big ones:

A: WHAT ISN’T? Two big ones: THE RAPID DROP IN DVD SALES. UltraViolet has recovered somewhat from its less-than-stellar debut, but given how comfortable consumers are with streaming video, there’s no indication that UltraViolet can save the DVD

A: WHAT ISN’T? Two big ones: THE RAPID DROP IN DVD SALES. UltraViolet has recovered somewhat from its less-than-stellar debut, but given how comfortable consumers are with streaming video, there’s no indication that UltraViolet can save the DVD THE PUSH TO SHRINK THE WINDOW BETWEEN THEATRICAL AND PAY VOD RELEASE. MVPDs see big proﬁts from early VOD releases, but cinema chains are freaked out by the prospect. Studios know the VOD market is growing and will slowly but surely start to shorten their windows

Q: WHEN WILL CONSUMERS BE ABLE TO CLICK AND BUY SOMETHING THEY SEE ON TV?

A: THEY WON’T

A: THEY WON’T Though the “Jennifer Aniston’s Sweater” paradigm has long been a fantasy of advertisers, THERE ARE VERY FEW PRODUCTS THAT CAN BE ORDERED WITH JUST ONE CLICK.

A: THEY WON’T Though the “Jennifer Aniston’s Sweater” paradigm has long been a fantasy of advertisers, THERE ARE VERY FEW PRODUCTS THAT CAN BE ORDERED WITH JUST ONE CLICK. Factor in decisions like size/color/model/quantity/shipping mode and you’ve annoyed the viewer by taking them away from the show they want to watch.

A: THEY WON’T Though the “Jennifer Aniston’s Sweater” paradigm has long been a fantasy of advertisers, THERE ARE VERY FEW PRODUCTS THAT CAN BE ORDERED WITH JUST ONE CLICK. Factor in decisions like size/color/model/quantity/shipping mode and you’ve annoyed the viewer by taking them away from the show they want to watch. THE SOLUTION: Consumers will be able to purchase items after the show from their 2nd screen device

A: THEY WON’T Though the “Jennifer Aniston’s Sweater” paradigm has long been a fantasy of advertisers, THERE ARE VERY FEW PRODUCTS THAT CAN BE ORDERED WITH JUST ONE CLICK. Factor in decisions like size/color/model/quantity/shipping mode and you’ve annoyed the viewer by taking them away from the show they want to watch. THE SOLUTION: Consumers will be able to purchase items after the show from their 2nd screen device BIG WINNER: Product placement, as 2nd screen devices provide more opportunities to turn placements into sales

Q: WHAT MAKES 2ND SCREEN APPS THE BEST THING EVER FOR MVPDS?

A: DATA

A: DATA Viewers will all have INDIVIDUAL 2ND SCREEN ACCOUNTS, which will provide MVPDs with detailed data about who is watching, what they’re watching, where and when

A: DATA Viewers will all have INDIVIDUAL 2ND SCREEN ACCOUNTS, which will provide MVPDs with detailed data about who is watching, what they’re watching, where and when This data can be used to negotiate better deals with the networks whose content they broadcast

A: DATA Viewers will all have INDIVIDUAL 2ND SCREEN ACCOUNTS, which will provide MVPDs with detailed data about who is watching, what they’re watching, where and when This data can be used to negotiate better deals with the networks whose content they broadcast MVPDs can use the data to approach advertisers directly and negotiate a Groupon-like deal for their subscribers

A: DATA Viewers will all have INDIVIDUAL 2ND SCREEN ACCOUNTS, which will provide MVPDs with detailed data about who is watching, what they’re watching, where and when This data can be used to negotiate better deals with the networks whose content they broadcast MVPDs can use the data to approach advertisers directly and negotiate a Groupon-like deal for their subscribers Better data also means a better user experience as discovery engines can be ﬁne-tuned and commercials better targeted

Q: WHAT’S THE ACHILLES HEEL OF MOST SOCIAL TV APPS?

A: INCOMPLETE DATA

A: INCOMPLETE DATA Social TV apps only collect data on viewers who are using their app or whose tweets they’ve collected

A: INCOMPLETE DATA Social TV apps only collect data on viewers who are using their app or whose tweets they’ve collected Thus, the data they collect is incomplete and often inaccurate: without hashtag filtering, tweets about a rough day at “the office” get credited to the eponymous sitcom

A: INCOMPLETE DATA Social TV apps only collect data on viewers who are using their app or whose tweets they’ve collected Thus, the data they collect is incomplete and often inaccurate: without hashtag filtering, tweets about a rough day at “the office” get credited to the eponymous sitcom That may not matter, because THE END GAME OF MOST SOCIAL TV APPS IS ACQUISITION. Their functionality will be bought by and rolled into much larger, “Swiss Army knife” type apps that offer more refined data

A: INCOMPLETE DATA Social TV apps only collect data on viewers who are using their app or whose tweets they’ve collected Thus, the data they collect is incomplete and often inaccurate: without hashtag filtering, tweets about a rough day at “the office” get credited to the eponymous sitcom That may not matter, because THE END GAME OF MOST SOCIAL TV APPS IS ACQUISITION. Their functionality will be bought by and rolled into much larger, “Swiss Army knife” type apps that offer more refined data Along with the ability to change the channel

Q: WHO IS GOING TO DETHRONE NETFLIX?

A: SOMEONE WHO GETS THE VALUE OF A GREAT USER INTERFACE

A: SOMEONE WHO GETS THE VALUE OF A GREAT USER INTERFACE MOST USERS ARE INHERENTLY TECHNOPHOBES. So the simpler you can make anything for them, the better

A: SOMEONE WHO GETS THE VALUE OF A GREAT USER INTERFACE MOST USERS ARE INHERENTLY TECHNOPHOBES. So the simpler you can make anything for them, the better Netflix may not have the best selection of movies, or the best prices, but it’s got the best user interface. That gives it a huge advantage over its rivals, none of whom seem overly concerned with what their sites look like

A: SOMEONE WHO GETS THE VALUE OF A GREAT USER INTERFACE MOST USERS ARE INHERENTLY TECHNOPHOBES. So the simpler you can make anything for them, the better Netflix may not have the best selection of movies, or the best prices, but it’s got the best user interface. That gives it a huge advantage over its rivals, none of whom seem overly concerned with what their sites look like Any future rival will need to create a better user experience. That means intuitive search, no extra passwords and a taxonomy that doesn’t read like a secret code

Q: WILL MVPDS BEGIN PROVIDING DIRECT ACCESS TO OTT CHANNELS?

A: ONLY IF THEY WANT TO REMAIN COMPETITIVE

A: ONLY IF THEY WANT TO REMAIN COMPETITIVE While Roku, AppleTV and other OTT devices are simple enough to use, TiVo was almost put out of business by cable company DVR/STB combos, despite their inferior interface

A: ONLY IF THEY WANT TO REMAIN COMPETITIVE While Roku, AppleTV and other OTT devices are simple enough to use, TiVo was almost put out of business by cable company DVR/STB combos, despite their inferior interface SIMPLICITY is one of the most appealing features of any type of technology.

A: ONLY IF THEY WANT TO REMAIN COMPETITIVE While Roku, AppleTV and other OTT devices are simple enough to use, TiVo was almost put out of business by cable company DVR/STB combos, despite their inferior interface SIMPLICITY is one of the most appealing features of any type of technology. OTT-enabled set top boxes put the onus of updating and maintaining on the MVPDs. Add in the demand for OTT channels, and the decision is a no-brainer

Thank YouFOR MORE INFORMATION, EMAIL ALAN[DOT]WOLK[AT]KIT-DIGITAL.COM

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10 Things You Need To Know About The Future of Television

by Alan Wolk on Jul 19, 2012

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