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Internet Connected TVs:The Next Living Room EvolutionA report into the connected TV challenges faced by brands            ...
Connected TV Whitepaper                                       Introduction to Whitepaper                                  ...
Contents                                       3    The internet-connected TV                                       4    T...
The internet-connected TV                                       “The questions raised                                     ...
The current state of the connected TV market                                                                              ...
Why connected TVs?                                        “In short what connected                                        ...
What is a Connected TV?                                        “There are various                                         ...
What is a Connected TV?                                        What is YouView?                                        You...
Whats on the connected TV schedule?                                                                                       ...
Industry reaction to connected TVs                                              “We will likely see a more                ...
How do you find the content?                                        “As the content propositions                          ...
Revolutionising the business model:  "Brands as media companies"                                                          ...
How does content retain  its crown on connected TVs?                                        “The Olympic Games            ...
Could mobiles become  the TV remote of our lives?                                        “For connected TVs it’s          ...
Filling the connected purse                                                                                               ...
Regulating a connected landscape                                        “Ultimately regulating the                        ...
Social TV - “like” it                                                 Before analysing the impact of social TV it’s worth ...
Conclusion                                                When the TV platform first emerged, producers                   ...
Conclusion                                                For the connected TV to deliver on its promise                  ...
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Connected TV


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Connected TV

  1. 1. Internet Connected TVs:The Next Living Room EvolutionA report into the connected TV challenges faced by brands By Kathryn Meadmore
  2. 2. Connected TV Whitepaper Introduction to Whitepaper This whitepaper has been produced by Adjust Your Set, the leading multichannel video agency, and the IAB (Internet Advertising Bureau), the trade association for online and mobile advertising. Industry research was conducted via an online survey of the IAB’s members. The results from over 200 respondents are included throughout this paper to illustrate industry reaction to internet-connected televisions. This paper aims to understand the issues and challenges associated with the new platform. About Adjust Your Set™ Adjust Your Set is the leading multichannel video agency specialising in content across online channels, connected TVs and social networks. Clients include Marks & Spencer, Thomas Pink, Debenhams, BA, The Royal Opera House and Liz Earle. Founded in 2008, Adjust Your Set delivers an end-to-end communication service using About the IAB video as the platform to provide a constant and consistent The Internet Advertising Bureau (IAB) is the trade the best role for online and the emerging brand engagement. association for online and mobile advertising. With mobile market, helping them engage their over 650 member companies, the IAB promotes customers and build their brands. Adjust Your Set was recently shortlisted as one of the growth of these channels, develops best practice for Through the dissemination of research Media Momentum Top 50 fastest growing Digital Media advertisers, agencies and publishers, and aims to and the organisation of regular events, we aim Companies in Europe and was named Best Specialist put digital high on the agenda of every marketer in to put digital on the agenda of every marketer Digital Agency at the Digi Awards 2011. the UK. in the UK, acting as an authoritative and Online is an exciting and fast-growing objective source for all internet advertising For Further information please visit: http://www. medium and our job at the IAB is to work with issues whilst promoting industry-wide members to ensure marketers can identify best practice.1 Copyright © Adjust Your Set 2011
  3. 3. Contents 3 The internet-connected TV 4 The current state of the connected TV market 5 Why connected TVs? 6 What is a Connected TV? 8 What’s on the connected TV schedule? 9 Industry reaction to connected TVs 10 How do you find the content? 11 Revolutionising the business model: “Brands as media companies” 12 How does content retain its crown on connected TVs? 13 Could mobiles become the TV remote or our lives? 14 Filling the connected purse 15 Regulating a connected landscape 17 Social TV – ‘like’ it 18 Conclusion25 Copyright © Adjust Your Set 2011
  4. 4. The internet-connected TV “The questions raised from the research and discussed within this paper, ? highlight the uncertainty that still remains across the industry.” Connected TVs have gained significant attention over the last year, and it’s only set to continue. The BBC launched an updated version of its iPlayer for web- connected TVs, Sony and Opera teamed up to provide web browsing capabilities on the platform and Audi launched the UK’s first web-connected TV campaign to promote its A7 Sportback range. In addition, recent research claims internet-connected televisions are predicted to make up 90% of the TV market in the UK by 2014.1 With so much weight attached to the internet- connected TV, everyone is asking what this will mean Research from several sources, including sector is in its infancy and needs to gain more for the TV advertising industry. What will the content Ericsson, clearly shows a growing uptake in momentum from recommendation and information on connected TVs look like? Who will manage this new connected TV purchases around the world, on advantages, before consumers start to follow connected landscape? And more importantly, how long anticipating 50bn connected devices globally the trend.” do brands sit back and wait until they make the leap into by 2020.2 The tech-savvy consumer is again The questions raised from the research connected TVs? leading the way and technology itself is forcing and discussed within this paper, highlight the Also, and perhaps more importantly, will anyone the industry to reassess their business models uncertainty that still remains across the industry. connect their TVs to the web? While the increase in sales as audiences migrate away from traditional As this report shows while many brands, agencies of internet-enabled devices is undeniable, in order for channels. 72% of IAB and Adjust Your Set survey and broadcasters agree that it’s an exciting platform audiences to want to plug their device in there must be a respondents disagreed with the statement that warrants investigation, many still cite various compelling content proposition. This must not be the sole “internet-connected TVs are a passing fad and challenges facing them and only a small percentage responsibility of the broadcasters; brands too must play will not survive the constantly evolving digital will be implementing a strategy now or in the their part. landscape”, but as one respondent said, “this near-future.37 Copyright © Adjust Your Set 2011 1 Source: Furturesource Consulting March 2011 2 Source: Ericsson March 2011
  5. 5. The current state of the connected TV market Market place 4 With the launch of YouView, a joint venture 60% of new televisions being sold in 2012 are expected to have between the BBC, ITV, C4 and others, as well as Internet connectivity. Google TV, Apple TV, connected set-top boxes and manufactures like Samsung and LG with Smart TVs, the major broadcasters are already setting up to deliver a Independent research predicts YouView will have a market penetration of 3-4 million by completely new channel into the home. This will provide 2014 (high case scenario 8.3million). significant functionality for advertisers and an entirely new way for brands to communicate with consumers. There are still many unknowns about this new market, Virgin’s new TiVo box will be rolled out to 3.7million customers over the next few years. not only what the content will look like and the strategies in place, but how brands and media owners will monetise the new connected-landscape. TV app downloads are also accelerating: in January 2011 Samsung announced that the There have been various statistics recently Samsung Apps platform, the world’s first app store specifically for TVs, had reached released citing the growing uptake of internet enabled 2 million app downloads. Whilst it took 268 days for Samsung to shift the first million devices. Informa expects manufacturers such as television apps, it only took 53 days to shift the next million. In May 2011 Samsung Samsung, LG and Sony to sell a staggering 52 million announced that it had surpassed 5 million downloads. internet-connected TVs over the course of 2011 on a global basis and IHS iSuppli claims that from 2013“The rapid uptake of connected internet-enabled devices will out-sell PCs. The range ofTVs should warrant serious products that are already able to connect to the internetconsideration from brands on includes set-top boxes, connected TVs, video gamethe potential of the platform consoles, Blu-ray players and tablets. Collectively, sales Although the statistics show a growth in conducted in order to provide further proof that theand future revenue streams of these devices will surge from 161 million units in 2010 consumer purchase of connected TVs, a case remains newly-emerged platform has significant benefits toto be generated,” said Chris to 504 million units in 2013.3 By 2014, market research to be proved for those within the industry who convince many to commit valuable time and spendGorell Barnes, CEO of Adjust and consulting firm DisplaySearch, has predicted that prefer to sit back and wait for a more substantial on it? Are we facing a catch-22? Is the industryYour Set. 123 million internet-connected TV units will be shipped uptake in connected TVs until they implement a waiting to see what content is offered first, before worldwide annually. strategy. Does more in-depth research need to be investing in strategies of their own?49 Copyright © Adjust Your Set 2011 3 Source: IHS iSuppli 4 Source:
  6. 6. Why connected TVs? “In short what connected TVs offer the market is £ the ability for brands to connect the massive offline spend with the rapidly emerging online video market.” Online video has grown significantly over the past few years; from home-grown videos of pet cats, to brand-dedicated website players and channels. YouTube was the original Grandfather of online video. Started in 2005 it enabled the first uploading and sharing of video audience. With so much video content now available video delivered to tablets will all grow significantly across the internet and became the first aggregator online, particularly via YouTube, and SEO for video in the coming years, and it’s safe to assume that of content. YouTube established a shared viewing still in its infancy, video strategies have been slow connected TVs will benefit too. TV is the natural experience and now video has moved from bedroom to evolve. However this is about to change. As home for video and thus is a natural fit for video geeks to boardroom level and the power of online technology evolves, providing more devices and advertising. Traditional TV won’t lose its share of ad video has shifted. It’s now an expectant part of the user multiple screens on which to show content on, more spend; instead additional revenue will come from experience and is the fastest way to reach new audiences advertising opportunities have arisen. Traditional the various new channels that ads can appear on. across multiple screens. TV models make up the bulk of video ad spend In short what connected TVs offer the market For brands, online video has become an today, with about $160 billion spent worldwide is the ability for brands to connect the massive integrated component of the marketing mix; strategies on broadcast advertising. But the rapid growth of offline spend with the rapidly emerging online video focus on the easiest and most cost-effective route to connected devices will soon add a new dimension market. TV advertising is about to merge with the engage with the consumer, and in most cases this to what the industry has come to know as TV exciting and innovative medium that is online. This is now video-led. To date the only disadvantage that advertising. Advertising for video on PCs and web will be happening in living rooms throughout the online video has had, is its struggle to find a consistent browsers, video delivered to mobile devices and world in a very short space of time.511 Copyright © Adjust Your Set 2011 5 Source: Data from Booze & Co via July 2011
  7. 7. What is a Connected TV? “There are various So who are the main competitors? manufacturers and devices competing in the connected TV market. It was one of the challenges cited by respondents in the survey that has limited the uptake of connected TV strategies so far.” What is Apple TV? What is Google TV? Apple TV is a digital media receiver, or small set- As shown in the statistics earlier in this paper Google TV is a search-based software platform that top box, that allows consumers to use an HDTV set there are various manufacturers and devices competing combines TV content with internet functionality. Just to view photos, play music and watch video content in the connected TV market. It was one of the challenges as Google’s mobile operating system Android can that originates from internet services or local cited by respondents in the survey that has limited the be built into multiple handsets, Google TV can run networks. Apple TV now allows content to be bought “The fact that every uptake of connected TV strategies so far. on multiple connected TV devices including set-top from iTunes, Flickr, Mobileme, YouTube and Netflix, manufacturer works on a For the sake of this paper we define a connected boxes, satellite boxes and digital televisions. As 75% in the US only. Apple has a number of partnerships different platform currently TV as the integration of the internet into modern of respondents in the IAB and Adjust Your Set survey with movie studios and television networks, giving makes it difficult for television sets and set-top boxes, as well as the believe that content on connected TVs will be found it an impressive content library. Rumours started developers.” Anonymous technological convergence between TV and computers; it via search functions, it makes Google’s proposition circulating in August 2011 that the company will survey response also integrates the user journey across multiple channels seem a likely lead competitor in the UK market. It is launch a digital television in 2012. of content. due to launch in the UK and Europe in early 2012.613 Copyright © Adjust Your Set 2011
  8. 8. What is a Connected TV? What is YouView? YouView, formerly known as Project Canvas, is a proposed open, internet-connected television platform for the UK market. The venture is a partnership between four broadcasters (BBC, Channel 4, Channel 5 and ITV) and three communication companies (Arqiva, BT and TalkTalk). The platform, which is planning a full launch in early 2012, will allow consumers access to a range of third-party services (television channels, radio stations, on-demand services and internet content) using a compliant device (such as a set-top box) built to a common standard and through a broadband internet connection. What is a games console? Various games consoles also allow interaction and integration with online TV. Until now many online video services were launched primarily with the game console in mind to meet the demand from users for interactive video and game play. PlayStation 3 (PS3) for example, What is a Smart TV? allows catch up TV services and select channels There are various manufacturers competing in the accessible under a separate TV channel. It also allows ‘Smart TV’ market including Samsung, LG and Sony. What is Boxee? integration with social networking allowing users to Each has the basic functionality of connecting to Boxee is a cross-platform freeware Home Theatre watch and discuss films with other uses, as well as the internet, while pushing their own unique user PC, essentially a software application with a user access to Netflix in the US to stream content. Microsoft’s experience. For example, Sony’s Qriocity Video on interface and social networking features designed Xbox console and subsequent launch of Xbox Kinect Demand service allows viewers to rent classic films for the TV. Marketed as the first ever “social media shows a new level of interaction with your TV, even down or enjoy the latest Hollywood blockbusters which centre”, Boxee enables its users to view, rate and to how you purchase products. A recent prototype shown are immediately streamed to the device, whereas recommend content to their friends through many in partnership with MasterCard allows you to wave your Samsung has launched the Samsung Smart TV from social network services and interactive media. hands at an icon and select purchases, all from the which consumers can download apps as well as However you cannot currently watch and record live comfort of your sofa. view content. TV via over-the-air TV, cable or satellite signals.715 Copyright © Adjust Your Set 2011
  9. 9. Whats on the connected TV schedule? Frequency Of Activities On Connected TVs To Watch Catch Up Tv As Entertainment Platform Participating With Social Networks Surfing The Web Participating Via Mobile Phones 80% 71% 61% Playing Interactive Games Entertainment Interactive Games Purchasing From Retail Brands In order to provide the type of engaging allow consumers to pause live TV while ordering a content audiences will want to watch and interact takeaway or a new outfit via their TV or one day even When the IAB and Adjust Your Set asked industry with, a clearly defined strategy must be employed test drive a new car from the comfort of the sofa via members what kind of content they believe consumers by each party involved in the connected TV market. a remote control and connected TV. will engage with, 80% said they feel that entertaining While broadcasters and production companies short-form content will be the most prevalent. This is already employ a 360 degree commissioning “Until now branded content followed by interactive content (71%) where consumers approach that allows audiences to engage in has been produced at the can change the outcome of the video and app inspired programming content across a range of other While purchasing from a retailer optimum engagement time for games (61%). YouTube has been an influential force for devices and platforms, brands too must develop a appears low, as more connected consumers, about 2-3 minutes online advertising since its launch and with the rise of connected strategy. For too long, brands have got by TV services become available it’s long. However, on connected streamed video content on internet enabled devices; its using different, loosely combined creative concepts sensible to expect this activity to TVs brands need to up their influence is still noticeable. 69% of respondents either across digital and traditional channels. They will not increase among consumers. Video game, focusing less on video agree or strongly agree that “snackable” branded content be able to use this same strategy on connected TVs; commerce platforms by Marks & length and more on creating will become more widespread. everything will appear together and unless there Spencer and ASOS prove consumers high-quality content to suit Interestingly when asked to rate on a scale is a completely ‘glued up’ relationship between all enjoy them and this behaviour will the platform that’s both bold of 1-5 how frequently they thought people will use parties involved on the platform, the result will be a no doubt translate to connected and engaging.” Chris Gorell their internet-connected TVs for particular activities, poor customer experience. TVs.” Jack Wallington, Head of Barnes, CEO of Adjust Your Set. ‘watch catch-up TV’ came out as the most frequent and For brands, the connected TV should allow Industry Programmes, IAB. ‘purchase from a retail brand’ least. a rejuvenation of the traditional ad break. It will817 Copyright © Adjust Your Set 2011
  10. 10. Industry reaction to connected TVs “We will likely see a more fully integrated strategy developing within agencies.” 60% 85% 12% have had interested in ad currently have discussions opportunities a strategy “This sector is in its infancy and needs to gain more momentum from While this paper has outlined the various recommendation and connected devices currently available on the market, or information on advantages due to launch, and the growth in sales of such devices, before consumers start to the research carried out by the IAB and Adjust Your Set follow the trend,” Anonymous found that just 12% of industry respondents currently Once internet-connected TVs do take off, survey is forcing media agencies to reassess their survey response have an internet-connected TV strategy in place. The respondents feel that the strategy will be in business models as audiences migrate away from majority of respondents (85%) are interested in the the hands of the media company (31%). It’s an traditional channels. This again raises the question advertising opportunities afforded by internet-connected interesting development when agencies are from an organisational perspective and the old TVs, but there was still 10% who are not sure when they increasingly adapting across the paid, earned and relationships of buying and selling. Media agencies will implement a strategy and 22% who say they have owned media spectrum. Agencies have always are increasingly being bypassed by ad agencies and “It’s clear the industry no plans to implement one at all. In addition over a third defined themselves with terms like “traditional” even brands themselves to book ad slots. During considers the platform an of respondents feel that only a budget of up to £50,000 or “digital”, but with internet-connected TVs the 2010’s X Factor the successful Yeo Valley ad was incredibly significant leap for should be allocated to connected TVs; will this be enough relationship between agency, brand and broadcaster created and booked by BBH and Yeo Valley with online advertising, but it’s also to create the compelling content proposition needed to will change. We will likely see a more fully Fremantle Media and ITV directly. Will brands be become apparent that like persuade the consumer to plug in? integrated strategy developing within agencies and circumnavigating the media industry in favor of so many other technological Many in the industry believe the internet- even brands themselves acting like agencies to deal becoming a media company in their own right? But developments we’re waiting connected TV trend needs to take off further to warrant directly with the broadcaster. as Richard Morris, the deputy managing director for for the consumer to leap a strategy and challenges facing the industry include Technology has always played a significant Carat recently said within a feature for Marketing first.” Jack Wallington, Head of cost, fragmentation of the manufacturing industry and role in the media and marketing industry and 90% of Magazine about the ‘endangered media agency’; Industry Programmes, IAB. that there are still other channels, including mobile, respondents in the IAB and Adjust Your Set survey “now more than ever, brands are going to need help to explore. either agree or strongly agree that new technology managing the complexity inherent in media.”6919 Copyright © Adjust Your Set 2011 6 Source:
  11. 11. How do you find the content? “As the content propositions develop so too will the ways consumers access content” 75% 63% Persuading a consumer to plug in and utilise Search Functions Recommendation content on their connected TV is no easy task. Consumers are faced with multiple channels and an array of content at their fingertips. So how does the industry persuade the consumer, and more importantly, how will consumers find the content they want? Industry analysis has shown that consumers are content propositions develop so too will the ways online TV channel on a mobile app. It’s a potentially already purchasing internet-connected TVs and this is consumers access content. They may initially visit small leap from here to an app on connected TVs. only set to continue. So while brands and broadcasters the related app for additional information regarding In addition, users will be able to find content via develop their content propositions, consumers will likely traditional TV ads, but eventually a seamless search functionality on connected TVs, which 75% continue to view linear TV and likely access additional transition to click-through from ad to branded of the IAB and Adjust Your Set survey respondents information and content via a service similar to the red content app will develop. agreed would be a key method of discoverability. button. As the IAB and Adjust Your Set research shows, Earlier in the year Audi launched pre-roll Following search, 63% of respondents said content consumers will also continue to consume catch-up ads for the A7 Sportback, which directed audiences would be found via recommendation, potentially content on internet-connected TVs (this was listed as the to the channel via internet-enabled TVs from social media. Following search functions, 63% most frequent activity by respondents when asked to rate where they could watch further content. Brands of respondents said content would be found via how consumers will use internet-connected TVs). As the such as Debenhams already offer video from its recommendation, potentially from social media.1021 Copyright © Adjust Your Set 2011
  12. 12. Revolutionising the business model: "Brands as media companies" “Where broadcasters have led and won audiences, so must brands follow with a supporting strategy and assets to engage consumers.” own business model. Now brands need to move Meerkat, Tony Tiger, the Nescafe couple and more from linear advertising to a multichannel approach. recently BT’s Adam and Jane. Where broadcasters have led and won audiences, so By listening to what the customers want must brands follow with a supporting strategy and and need, the content can also become more assets to engage consumers. personalised. 88% of respondents in the survey However, while respondents agree (54%) either agree or strongly agree that brands need with the statement that brands will become media to create a more personalised experience in companies in order to navigate the internet- order to meet the growing demand of audiences. connected TV landscape, half (50%) followed this by Household demographics are varied but brands saying that both business models will still exist. 22% and agencies have long used customer data disagreed entirely and feel that brands will never be gathered via loyalty cards, online subscriptions able to fully produce and manage the same quality and tracking click-throughs to personalise and “With a range of connected of content as media companies. connect with their customers. Connected devices TVs coming to market In navigating the connected TV landscape, should be no different and we could one day view with different platforms, As with most industries, as it is in everyday life, brands must create their own voice and lead bespoke and personalised content in our homes; it’s important that media imitation is the sincerest form of flattery. So much so conversations, not aggregate other people’s for example a young couple with no children could companies and brands work that brands are re-defining their business models and views. They should listen, respond and respect the enjoy the latest travel ad, while the family next together to standardise and taking inspiration from the media industry, in particular customer, and in this regard create innovative and door could view child-care related ads, even if they therefore simplify marketing the ways they produce and distribute content. Brands unique content that suits the consumer’s needs. are both watching the same programme. Survey offerings across all of them, have had to re-address how they engage across an No longer will there be just a push message during respondents agree with this view with 89% either which is where the IAB Video increasingly complex media landscape. When the the TV ad breaks to buy a product; consumers agreeing or strongly agreeing that in the future Council could help.” Jack broadcast industry introduced 360 degree commissioning are seeking the information they require and the internet-connected TVs will personalise ads for Wallington, Head of Industry and launched Facebook pages, Twitter character profiles message has become one of pull as well. The really different household demographics even if that Programmes, IAB. and online competitions alongside programmes such smart brand will create a world that will capture the household is enjoying the same programme as as Skins, The X Factor and Hollyoaks, it re-defined its imagination of consumers, for example Compare the others in the area.1123 Copyright © Adjust Your Set 2011
  13. 13. How does content retain its crown on connected TVs? “The Olympic Games could be what the Queen’s Coronation was for colour TV.” While the IAB and Adjust Your Set research reveals that the industry thinks the content on internet-connected TVs will be video-led (51% feel that over 60% of the content will be video led) and that 77% believe that consumers will want to interact with TV content, the content proposition ultimately lies in what the audience wants. was for colour TV. Consumer research does show a Research released earlier this year by market positive reaction to internet-connected TVs with two- “Internet-connected TVs will change researcher Knowledge Networks found that although two thirds believing the quality of connected TVs is about consumers’ viewing habits for good.” out of five households have a connected TV in their living the same, or better, than their regular TV reception Anonymous survey response room, very few consumers are making the most of its and one quarter of those cite watching TV shows features. 47% prefer to watch a programme on its regular through connected devices as their number one TV time slot and 62% “are not connected or not capable” platform choice.7 So why, if the audience wants to and “most plan to stay that way.” engage with the content on connected TVs, does the “It is clear that the real While 91% of the industry questioned by the IAB industry not seem prepared for this phenomenon? together gaming and TV be a major aspect of the goal for both brands and and Adjust Your Set agree that consumers will plug If the industry is to take small baby steps new digital landscape? 61% of survey respondents broadcasters is finding a way in their internet-connected TV, they’re relying on the across the connected TV landscape, then gaming think that app inspired games, similar to those to persuade the viewer to ‘turn consumers themselves to want to find relevant and could be the first of these. Connected TVs could available on a smartphone, will be relevant on’ the installed but inactive engaging content, rather than develop strategies to see the “gamification” of advertising. TVs in the to consumers and therefore could encourage device. This should be the persuade them (only 12% currently have a strategy in home don’t just support television content; they engagement on connected TVs. Some of the most key growth area for the next place). Events such as the Olympic Games next year also support the hugely successful gaming industry. successful red button applications were around 6 to 12 months.” Chris Gorell could provide an ideal opportunity to develop the type of Gaming consoles are one such device to connect sporting programmes and interactive voting on Barnes, CEO of Adjust Your Set content that will persuade the consumer to plug in. The to the internet and game-shows are one of the reality shows. It follows that we are on far more than Olympic Games could be what the Queen’s Coronation most popular programme formats. Could bringing just the cusp of gamification of the TV ad.1225 Copyright © Adjust Your Set 2011 7 Source: Knowledge Networks
  14. 14. Could mobiles become the TV remote of our lives? “For connected TVs it’s likely the mobile device will merge with the traditional TV remote.” Try asking your friends or work colleagues how many of them use their mobile phone as soon as they wake up in the morning? It’s often the first thing they Samsung Smart TV can already use their iPhone, switch between applications. And if only one phone do before they even turn on the light. An August 2011 iPad or Android handset to control their TV, using controls the TV, if you’re not in the house, how will “Communications Market Report” from Ofcom shows a downloadable app or the touch remote that the other household members change that 60% of teens and 37% of adults in the UK are “highly comes with most of its high-range sets. Other TV the channel! addicted” to their smartphone device, with a staggering manufacturers, like Mitsubishi and Samsung, are And it’s not just mobile apps and devices 81% leaving their handsets turned on all the time. working on smartphone remotes and phone apps that will allow greater interaction with connected It’s little wonder then that the mobile device as part of both Apple and Google’s TV offering TVs. Broadcasters will likely develop companion will play a significant role with the internet-connected and LG offers a remote control that works more apps for their channels and programmes that will “Mobile will dominate the TV. Earlier in the year marketing agency Digital Clarity like a computer mouse. Over 30% of respondents aggregate all the information for the consumer. interaction between consumer found that 80% of under-25s use a second screen to from the IAB and Adjust Your Set survey feel that The recent launch of Zeebox by Anthony Rose and and TV (TV will dominate communicate with friends while watching TV and 72% consumers will access internet-connected TVs via Ernesto Schmitt reflects just this. The free zeebox the viewing, mobile the used Twitter, Facebook or a mobile app to comment the TV remote into an app store controlled by the TV app automatically syncs an iPad, phone or computer conversation).” Anonymous on shows. manufacturers. There are still issues to work out of with a TV, shares the viewing and shows the survey response For connected TVs it’s likely the mobile device course; if your phone goes into sleep mode, or you audience what their friends are watching in will merge with the traditional TV remote. Owners of a receive a call during a TV programme, you’ll need to real-time.1327 Copyright © Adjust Your Set 2011
  15. 15. Filling the connected purse £ Accessing content on the range of competitive TV for the first time. Another measurement body, devices and platforms currently available raises the Broadband Measurement Working Group made the inevitable question of monetisation and revenue up of a range of broadcasters, has not yet launched streams. Each piece of the connected puzzle, from the its standard metric for video on demand across TV manufacturer to the broadcaster, media company web-connected devices. As the industry continues and brand, will each be looking at the ROI of providing to launch content across mobile, connected TVs and content and technology for the connected TV. While the other platforms, these forms of measurement will manufacturers can clearly see sales rising, Samsung have to keep pace. Throughout 2011 Brightcove, the sold two million Smart TVs in just 90 days with Europe video content platform, has been releasing tools and North America accounting for more than 700,000 and support resources to help organisations take units, brands and broadcasters will need to measure the advantage of LG’s Smart TV. The platform provides Another piece to this puzzle is the effectiveness of their connected TV strategy. media companies and brands with control over user standardisation of ad formats on connected TVs. There are a number of ways to create revenue, experiences, programming and business operations, While the measurement of online advertising is depending on what sector the brand operates in; such as advertising and analytics. Brightcove said debated by UKOM and regulation is clarified by automotive, retail or FMCG for example. Retailers earlier in the year that distributing content onto bodies including Ofcom, the industry needs to will want to develop an e-commerce strategy for their the connected TV market requires a focus on how address the various opportunities available to connected TV proposition, FMCG to push vouchers content can be measured and therefore monetised. them. From pre-rolls to branded content hubs, and automotive to book test drives. While the IAB and The tools are currently only available for one the opportunities on connected TVs are greater Adjust Your Set research revealed that respondents felt connected device – the LG Smart TV, with potentially than what is currently available spread across a ‘purchase from a retailer’ was the least likely activity for more to follow. Alternatively another video platform number of devices. Currently pre-roll ads serve customers on connected TVs, the platform is not solely to Ooyala has launched ‘Ooyala Everywhere’, a the online market, while traditional advertising encourage shopping, there are a number of possibilities video solution aimed at providing large content still plays its role on linear TV. However, each of for brands. Even for retailers there is strong reason to distributors a framework to develop online video these opportunities will be available to brands on believe customers will purchase via the platform. At experiences with more flexibility around how the internet-connected TVs and thus a clear definition MIPCOM 2011 Google TVs Director of Content Donagh video is consumed. However, until one definitive and regulation needs to be decided in a competitive O’Malley said that once connected TVs achieve mass guide is launched, there is no way to successfully market. In addition, how will broadcasters measure adoption, they should allow consumers the ability to measure the effectiveness and thus revenue of and monetise a customer journey from a 30 second purchase any item of their choosing at the click of the all content on connected TVs. Will the value chain ad to branded content. Will the broadcaster receive button.8 Ultimately it’s about conversion. end up so large that no ads get served at all? Or a share of the profits if a consumer interacts with In May of 2011 the UK Online Measurement will only the biggest advertisers be able to afford branded content found via an ad? Will brands be Company (UKOM) and Nielson unveiled the first industry- it? We could inevitably end up limiting consumer allowed to serve TV ads, pre-rolls and produce a backed online video metric. The news meant brands and choice on connected TVs if a new buying, selling and branded content app? And who will be in control of broadcasters could directly compare web viewing with measuring model is not found. the media buying and selling across each platform?1429 Copyright © Adjust Your Set 2011 8 Source: New Media Age article:
  16. 16. Regulating a connected landscape “Ultimately regulating the connected TV landscape will mean a decision over control and ownership” With any new consumer service regulation issues always arise. For example, with online video on TV, does that count as TV rights clearance or online? In May 2011, Jeremy Hunt, the Secretary of State for Culture, Media “Connected TVs represent the merger and Sport, officially began a “wide-ranging review” of of two huge advertising mediums which the 2003 Communications Act, the rules that govern are regulated in different ways. Online the regulation of broadcasting and communications video is still incredibly new and we’re still To ensure internet-connected within the UK. His goals are to build a communications Convention, voted unanimously against the need trying to figure out how this fits alongside TVs take off and reach their framework “that will drive growth and innovation, remove for a new Communications Act. It’s clear there is a broadcast from a regulatory perspective. full potential, the industry unnecessary burdens and continue to protect consumers disjointed opinion on this matter across the industry. However, advertising on connected TV, needs to work together as a and the public.” It is still unclear how internet-connected Ultimately regulating the connected TV like all advertising, will be covered by whole. Both broadcasters and TVs will fit into Jeremy Hunt’s local TV service strategy. landscape will mean a decision over control and the Advertising Standards Authority’s brands should agree formats Interestingly IAB industry members questioned in ownership. The IAB and Adjust Your Set research Committee of Advertising Practice who and decisions together.” the survey are like-minded, with 66% of respondents reveals that once connected TVs take off, survey will offer guidance in due course.” Chris Gorell Barnes, CEO of agreeing that Ofcom will need to issue new regulations respondents feel that the strategy will be in the Jack Wallington, Head of Industry Adjust Your Set for internet-connected TV. However, delegates who hands of the media company (31%). Programmes, IAB. attended the 2011 Royal Television Society Cambridge1531 Copyright © Adjust Your Set 2011
  17. 17. Social TV - “like” it Before analysing the impact of social TV it’s worth noting that social TV is nothing new. TV has always driven social interaction; whether it was the ‘water cooler’ moment the next morning in the office or comments posted on Facebook during a Saturday night programme. Love them or hate them, we all have something to say about content, and those who produce it. Steve McCattery, VP of home business EMEA at Motorola Mobility said recently in the Daily Telegraph that “social television is essentially the act of discussing what is being watched on the main TV using internet services.” 60% of respondents in the IAB and Adjust Your Set survey agree, or strongly agree, that internet-connected TVs will further encourage the use of social networking sites. Internet connectivity fundamentally changes the Connected TVs will further revolutionise this with branded content that has bearing. Jim Kite, nature of television by giving viewers access to video- trend by integrating social networks directly into the strategic development director, said “the deeper on-demand, web video and new online services, such as TV platform via apps, or have browsers that bring the interaction with social media, the greater the social networking. Social media in particular has already social media to the screen. Zeebox for example likelihood of moving the consumer from enquiry shaken the world of online video with various tools now provides an app that automatically syncs an iPad, to brand preference.” Within their research 86% of integrating the two. Facebook video players for retailers phone or computer with a TV, shares the viewing those who watch videos in social media would then in particular, now allow consumers to browse product experience and shows the audience what their visit the brand website. The more involvement from videos while engaging with their friends. friends are watching in real-time. consumers in content, the more likely someone is to This trend for ‘social TV’ is spurring This form of integration will allow viewers to move down the purchase funnel. “At Adjust Your Set we’ve entertainment companies and brands to create an even interact with TV shows without the second screen; Peer recommendation has also had a long- measured up to 50% higher greater interaction between the two media. recommending shows or movies to friends and established impact on sales and brand engagement engagement in videos Social video combines the interactive experience family and posting reviews in real-time. and companies like Amazon have had success recommended by peers via into one channel. Scrolling through peer reviews Ultimately social video can greatly impact with recommendation in the past; “others who social media than those found and friends’ tweets whilst still viewing video content; the point of sale as well. As research from have bought this book, also liked…” The power via search engines.” Chris changing the outcome of the film with your own ideas, Starcom MediaVest Group claimed, it is not just of customer data can ensure recommendations Gorell Barnes, CEO of Adjust or purchasing a featured product from the video with the being aware of brands on social media that leads are made based on consumers viewing habits Your Set click of a button. It is the ultimate fusion between content people to continue that relationship or buy goods, and connected TVs with integrated social media and experience. it is the level of interaction or “doing something” comments, could take this to the next level.1633 Copyright © Adjust Your Set 2011
  18. 18. Conclusion When the TV platform first emerged, producers filmed radio programmes that were already being broadcast in studios. The likes of David Attenborough re-defined the medium by creating formats that went further than studio programming had ever gone. Now we’re seeing the development of social media impact how we interact with our favourite programmes and technology that enables us to consume on any device, from any location. What is the defining connected TV format? Will the interactivity and connectivity of the latest platform take both brand and broadcaster to new levels of production, creativity and engagement? It was reported from the 2011 Royal Television Society Cambridge Convention that “broadcasters are available on it. As the world becomes better distracted from linear TV as the almost endless not yet ready to embrace internet-connected television connected across multiple devices and screens, array of media is offered to them on connected platforms, due in part to the lack of control they would the industry too needs to connect its strategies and TVs and recommended from friends. Video already have over the advertising appearing next to their content propositions. provides a more direct and personalised customer content.”9 What broadcasters need to understand is The connected TV has created a new relationship, particularly when integrated with that this phenomenon is happening regardless and integrated, collaborative and interactive ecosystem. social media, but it also has numerous challenges the IAB and Adjust Your Set research has shown that Viewers can now post a blog, order a dress, play a ahead for it. “No one knows what will 85% of respondents are interested in the advertising game and update their Facebook status all from More compelling than the content itself is happen and it is very early opportunities afforded by connected TVs. Advertising their TV sets, and by pausing the TV, they can do the interactive package that it can be wrapped in; days to guess who will win. models will need to be re-addressed as connected this without interrupting the programme. The result comments posted via Twitter or Facebook, peer However, it is certain that TVs create a more personalised user experience. 75% is that brands will need to work harder to target recommendations, requests for information and the traditional TV model will of respondents from the survey revealed they agree their customer and keep audiences engaged. It’s smart-commerce – the purchase of products via change.” Anonymous survey that internet-connected TVs will change the type of become easier to click away from the TV ad and your Smart TV. Products could soon be sold via an response advertising used by brands. The platform will allow a we may not want to watch the same advert as our ‘interactive purchase cycle’ that involves friends, pull message, rather than push, with the type of content neighbours. Viewers will also become increasingly brands and even TV programme endorsements.1735 Copyright © Adjust Your Set 2011 8 Source:
  19. 19. Conclusion For the connected TV to deliver on its promise it needs to reach its full potential and become an indispensible tool for the customer to access, interact and engage with content. That content however has to create and deepen the viewer experience and The End relationship. As already mentioned in this paper, it’s clear the industry is waiting for someone to make the first move. Broadcasters and media owners can easily slot into the connected schedule with programmes such as The X Factor easily transportable to a connected device. Broadcasters have shown the way forward by creating the market, now it’s up to the industry as a whole to navigate connected TVs together. Each plays a part; the broadcasters and media owners, brands and agencies. “I think internet TVs are just It could ultimately reveal a whole new digital landscape, an early step on the path to with new regulations and revenue opportunities for all. fully integrated broadcast For brands in particular, it’s a whole new strategy. and internet media. People Most brands already have a dedicated branded video babies to walk, BT could offer tips on the internet- the constantly evolving digital landscape”. We can’t will undoubtedly access channel but rarely direct their customers toward it from connected home, or Nike could show interviews with deny that the platform is here, that customers personalised content on the a banner ad, TV commercial or email newsletter from their celebrity stars, while you purchase the latest are purchasing connected TVs and that content is big screen but I think the one device to another. But brands should soon realise products from these retailers; the list for potential needed to sustain them. Innovation is at the heart format that will take is yet that in addition to serving customers an ad between connected TV content is endless. of the media and marketing industry. As the latest to be decided and probably their favourite TV show, they now have the opportunity to Regardless of the debate surrounding gadgets arrive on the market, consumers want to not even developed yet.” compete for the customer’s attention and create content strategies and content propositions, 72% of the digest content on them. Whether the content and Anonymous survey response consumers want to watch. New mothers could watch survey respondents disagree that “the internet- strategies will emerge to support connected TVs is a Pampers programme on the best ways to encourage connected TV is a passing fad and will not survive the key question.1837 Copyright © Adjust Your Set 2011 Design & Illustration by Bigmess