TV on the verge of transformation

Is the television industry on the threshold of a major transformation?  A number of recent industry research and reports are suggesting that major changes in how people access and view television is coming, and that will severely impact advertising revenues for local TV stations, broadcast networks, and multichannel video distributors (cable, DBS, etc.)

The changes have been going on for a decade or more, as video shifted to digital, as Internet connection speeds increased, and as new viewing platforms (PCs, smartphones, mobile tablets) emerged, and huge new collections of video content have been made available to viewers (YouTube, Netflix, etc.)  These have opened new options for viewing, and have shifted control over viewing from the media outlet to the audience.  Online video (from online rather than traditional TV sources) is booming, audiences are increasingly using options for time-shifting. The last few years have also seen audiences becoming increasingly multi-platform - watching TV on a wider range of devices.  Use of mobile devices for watching video has risen rapidly in the last few years, particularly among younger audiences and ethnic audiences.

A recent Morgan Stanley analysis noted that shifting viewing patterns have contributed to a 50% drop in broadcast network average "live" ratings over the last decade - the measure of audience that watched the initial live broadcast. While some of that decline has resulted from cable networks capturing various niche segments, more recent declines have resulted from the rise of time-shifting options. This has led the TV industry to push for a shift to other ratings measures that include delayed viewing - Live+3 (any viewing within three days of initial broadcast) and Live+7 (any viewing within a week).
Underlying this has been a major shift in what ratings represent - from audience at a certain time, to audience for a specific program/episode.  And created a problem for advertisers, as the delayed viewing options do not necessarily include the advertisements aired during the initial live broadcast.
The figure above shows that the decline hasn't been fully reflected in TV advertising rates and revenues.

The broadcast networks have been able to remain the access points for the very large, mass, audiences, and have used that status that to push advertising rates higher (on a CPM, or per-viewer, basis).  But the advertising industry is starting to push back, as some cable networks are reaching broadcast network viewing levels (for certain programs, at least) and mass advertisers are less willing to buy ads at inflated CPMs for programs with large proportions of delayed viewing.  Analysts suggest that the broadcast networks will be unable to maintain all of the current premium CPM pricing in the long term.

The shift in audience viewing patterns is holding true for cable networks as well.  While the decline in live viewing for cable networks has not been as precipitous as that of networks, they are subject to the same change in audience viewing behaviors.  The impact on cable networks, however, is mitigated by the fact that many get the majority of their revenues from licensing/subscription fees.  Those rates and prices are based on audience demand for access, rather than the number of viewers.  Thus, while cable networks may take a hit on advertising revenues, the overall impact on revenues is lessened.
The relative stability of licensing/subscription revenues is encouraging broadcast networks and stations to explore, and try to exploit, that additional source of potential revenue.  Licensing and subscription revenue levels have been increasing rapidly over the last decade or so, and are rapidly nearing the cross-over point - where the TV industry will earn more revenues from licensing than it will from advertising.
 The last year has seen a number of retransmission consent battles between the broadcast networks and major MSOs - with the networks arguing that their licensing fees should reflect their audience levels.  However, as noted earlier, licensing/subscription prices and revenues are based on audience demand for content, not on advertiser demand for audiences.  And general-interest mass channels have relatively low overall values for their content, more competition, and more close substitutes, than the targeted niche cable networks.  Licensing network access is not likely to generate the audience demand required to replace advertising losses - although the networks might find better success licensing specific programs rather than the network overall.  (Particularly if the broadcast networks continue to distribute their content through free, over-the-air TV stations.  Audiences are not likely to pay for network content when it's available over-the-air for free).

Increased licensing and subscription fees is already driving some viewers out of the traditional pay TV market.  These "cord-cutters" are finding that online video sources and free over-the-air TV can provide the video content they desire at much lower cost that multichannel bundles.  While the phenomenon is fairly new, studies suggest some 8% of the TV consumers have dropped all traditional pay sources (cable, DBS, etc.), another 15-20% have cut back on pay TV, going for smaller bundles of channels, and/or dropping Pay-TV services (like HBO) in favor of streaming video services (like Netflix).
The newest challenge for traditional multichannel systems is Dish's new SlingTV streaming video service, which bundles live streaming of 15 of the high-value cable networks and Video-On-Demand for just $20 month.  (See earlier post on the subject).  The SlingTV basic bundle is likely to prove to be a close substitute for basic multichannel bundles that cost 3-5 times as much, feeding the flurry of cord-cutting.
One analyst argued that the shift in audience TV viewing behaviors reflects a structural transition from ad-supported networks to streaming video services. It's certainly in progress, particularly among younger viewers. How long the transition will take, or how complete it will be, is still unknown.  But the change is structural. The bad news for traditional TV services is that with a structural change, it is unlikely that viewers will return to old habits.


Sources -   Broadcasters fear falling revenues as viewers switch to on-demand TV, ft.com (Financial Times)
BRUTAL: 50% Decline In TV Viewership Shows Why Your Cable Bill Is So High, Business Insider
CHARTS: Why Audience Ratings Have Collapsed For Cable TV Shows, Business Insider
The Evolution of TV: 7 dynamics transforming TV, ThinkWithGoogle white paper.
Evolution of TV: Reaching Audiences Across Screens, ThinkWithGoogle white paper.

Copyright Decision on Aereo

Aereo is a recent technology service that offered online access to local TV broadcasts in selected markets in the U.S.  For a fee, they grabbed programs that a subscriber requested, from "free" over-the-air local broadcasters, digitally converted the broadcast into a IP stream that was sent directly to the subscriber's connected device.

And when TV networks and cable systems  heard about it, they sought to pre-emptively ban it.  Cable because it was a much cheaper alternative to a service they sought to provide.  The networks' objection was pithily stated by one network CEO: "If anyone makes money from local broadcasts, we demand a share of it."  A consortium of networks and MSOs filed suit claiming that Aereo violated copyright law and seeking an immediate injunction against deploying the system; however, the judge in that case ruled against an injunction as Aereo offered a reasonable argument that its service was not a violation of copyright - but did not initially rule on the viability of that argument.  Both parties wanted to expedite matters, so they sought to bring the case to the Supreme Court to get a final ruling on the basic copyright issues.

Copyright law is fairly simple, yet complex.  The law gives the owner of the copyright the legal authority to determine the conditions under which the copyrighted material is made available to others.  It also, however, permits a "fair use" exemption under certain general conditions - allowing others to access and use the content under restricted conditions.  The rise of broadcasting created an issue, however - what counts as a "copy"?  This came to a head with the rise of cable systems, and their retransmission of over-the-air broadcast signals from local (and eventually distant) stations.  As a result, Congress amended copyright law to include "public performance" of audiovisual signals, and specifically applied that term to carriage ("retransmission") of over-the-air television broadcasts. 

Around the same time, the Supreme Court issued a ruling on what behaviors were considered "fair use" of audio and video content.  Specifically, they ruled that - for legally acquired content - individuals could record content for their later use (time-shifting), transfer and translate content for use in different locals or on different devices (place-shifting), and make a back-up (archive) copy, but only for their own use.

Aereo's service was designed to fit those "fair use" guidelines and the "free" nature of over-the-air broadcasting (stations are prohibited from charging viewers for access to public broadcasts).  Each Aereo subscriber was assigned their own antenna for receiving the free broadcasts, and unlike cable, content was not retransmitted unless specifically requested by that subscriber, and was made available only to the device the subscriber sent the request from.  Aereo argued that they were not engaging in a public performance, but a private one that essentially amounted to the time-shifting and place-shifting aspects of fair use.

The big media consortium (ABC et al.) argued that the Aereo service was simply a retransmission service, and was engaged in "public performance" because it offered its service to the public at large.  Therefore, Aereo was in violation of U.S. copyright law.

The recent Supreme Court ruling (6-3) was that Aereo's service was "substantially similar" to cable, because it offers a service that allows subscribers to watch TV programs, and that it is a "public performance" because several subscribers may be watching the same program, thus constituting a "public."

It's not terribly surprising, although it is disappointing, that the majority decision is technologically ignorant and focuses on outcomes rather than processes and behaviors.  To the majority, any technology that delivers TV programs to members of the public is essentially no different than a cable system and thus any retransmission right for that content must be granted by the copyright owner (presumably, but not necessarily, for a fee).  In addition, the majority nonsensically assumes that since the copyright act does not explicitly define "public", it is any group of individuals beyond what may be watching on a single device. The majority also finds that it makes no difference who is initiating and controlling the retransmission - an individual subscriber or a cable system; rather, they shift the focus to Aereo because it offers a "service."

There is a weird yet nonsensical example given, where the majority suggests that Aereo's problem is that it doesn't provide a service to the copyright owners, but to the public.  The majority repeatedly focuses on copyright owner's right to set the terms of "performance" or consumption.  This ignores the fact that, under law and the terms of their licenses, local broadcasters must provide their copyrighted content freely and without restriction to the public.  Not only to those watching live at home on a TV set, or through a cable system paying retransmission fees; the viewer, or Aereo subscriber, already has the legal right to view or listen to broadcast content.  The copyright owners have already been paid for that performance by the broadcaster - the majority seems to think that viewers need to pay a second time to engage in time-, place- or device-shifting.

The majority decision argues that this ruling does not prejudge future technologies, saying that it is not their intent.  It's hard, though, to see how this is possible, when the decision sets down three extremely broad definitions - 1) that any system for delivering TV content to consumers is "substantially similar" to cable and thus subject to cable's rules; 2) that any group of individuals is considered to be "the public"; and 3) that the driving purpose is not protection of a copyright owner's rights, but the networks "right" to offer a "public performance" of copyrighted material.  Combine that with the majority decision's total disregard for the specific elements of technology and service offered by Aereo - and thus not providing any hook for a narrow argument - and you set a precedence for overreach.

Further, this case offered the opportunity to re-examine which activities are covered by "fair use."  In light of the wretched quality of the decision, I'm relieved that this Court didn't take up that opportunity.

The dissent shreds the majority decision, arguing that the service provided by Aereo was not even a "performance" as defined by copyright law, much less a "public performance."  Rather than looking at the end stage of the service (providing TV programs to viewers) and making an indefensible leap to equate it with cable, the dissent treats Aereo as an Internet content delivery system.  And supports their argument by actually looking at what the service does, then examining the actual case law relevant to those actions (rather than relying on problematic anecdotes).  The dissent eviscerates the majority's "looks like" argument, noting how it conflicts with other recent decisions (including some authored by the same Justice who wrote the majority decision), and ignores both the question of the type of copyright violation being considered (primary, secondary violation, and whether Aereo is acting as an ISP and thus exempt), as well as the issue of "fair use" and the role of the subscriber (not the system) in selecting content for viewing.

The majority decision has turned a copyright case into a "performance" result, achieved only with mystical inference of Congressional intent, over-broad definitions of "public" & "performance", and a "looks like a duck" equivalence of two video delivery systems that could hardly be more polar opposites in technology and operation.  And by doing so, making the application of copyright to new technologies and content delivery systems even more problematic for the future.

And of course, the TV & cable industry hailed the decision, seeing a potential source of revenues (or a protection of current retransmission rights fees).  However, that's likely to be a short-term and low-value source for broadcasters and networks for two reasons - first, that while they think they're soaking the service operator for these revenues, eventually viewers will figure out that stations and broadcast networks are asking them to pay for "free TV"; second, that it's the content that generates the value for viewers, not their "public performance" of that content.  In fact, to the extent that the broadcast "performance" has any value for the station or network, it comes from the broadcast's ability to reach an audience; as such, any mechanism that will extend or expand their reach should be welcomed, rather than challenged.

Sources -  Supremes Rule Against Aereo, Broadcasting & Cable
ABC et al. v. Aereo, Supreme Court decision No. 13-461

Conflicting Second Screen Reports

  A recent Adobe Systems' Digital Index Report suggests that social and mobile media use is fueling an increase in video consumption.  Enough so that Adobe's launching their own "TV Everywhere" platform.

  Meanwhile, a report from Accenture suggests that using social and mobile media while watching TV was a distraction and hurt TV viewing.  Meanwhile, a study for the Interactive Advertising Bureau suggests that using social media is fairly common - at least if you're watching TV via online streaming. Add to that a study by NPD group finding that almost half of TV viewers with mobile devices have engaged in second-screen activities related to the program they were watching.

  At first glance all these seem contradictory, or at least problematic.  Some of the confusion goes away when you go beyond the headlines to what each of the reports actually looked at.

Adobe's 2012 Digital Index Report is based on a look at Internet analytics of online video starts (excluding User Generated Video), online ads, and Facebook posts, comments, shares, and likes.  Thus it's looking at actual online video use; not media user attitudes, behaviors, or intentions.  What it found was a  rapid growth  in the number of videos accessed, 30 % increase from 2011 to 2012, and 50% from the end of 2010 to the end of 2012.  The increased viewing in the last part of 2012 was driven largely by an expansion in available sports content.  The study also found that viewing on mobile devices tripled in the last year (300% for smartphones, 360% for tablets).  The study also found that the videos watched on smartphones was primarily "content snacking" - short news, weather, and sports clips - and mostly watched outside the home.  In contrast, tablet viewing was for longer periods, and occurred primarily at home.  Video use was heaviest on days with big sporting events. Video social engagement jumped from 42% to 70% over the last year, and by the end of 2012, 77% of viral content were videos.
  In other words, there were a lot more videos available online, people were watching online video more often, and they were including more video (directly or indirectly) in their social media activities.  They were also tailoring their use - linking their viewing behaviors to the relative advantages of particular devices, and to the situational context.  Adobe's conclusions -

• For adver­tis­ers, tar­geted ad con­tent will become more of a real­ity with large TV pro­gram­mers begin­ning to latch onto the mul­ti­ple dig­i­tal video dis­tri­b­u­tion meth­ods. With mobile devices con­tin­u­ing to shape the way con­sumers respond to media con­tent, the data shows that mul­ti­ple forms of dig­i­tal video access are here to stay and mobile con­tin­ues to be a viable medium for TV and sports related video content.
• For broad­cast­ers, new plat­forms are pro­vid­ing incre­men­tal value and tar­get­ing capa­bil­i­ties. Early adopters of dig­i­tal video are afflu­ent, engaged, multi-device con­sumer which should spur adver­tis­ers to pay extra to gain access to this crowd. With strictly online media com­pa­nies pro­duc­ing unique con­tent, it may only be a mat­ter of time before all TV pub­lish­ers are want­ing to make more con­tent read­ily avail­able because it is the most ben­e­fi­cial for them and the consumer.
• For con­sumers, dig­i­tal video leads us to an entirely dif­fer­ent way to con­sume con­tent, where we pay one time for dig­i­tal access to con­tent and are then able to gain access on a vari­ety of dif­fer­ent tech­nol­ogy plat­forms. Chal­lenges still remain before TV Every­where is really every­where, with the major­ity of con­sumers decid­ing to remain with stan­dard TV for broad­cast con­tent. How­ever, the future is bright for tech­nol­ogy already adopted by many large TV and sports broad­cast­ers as a valu­able way to reach a grow­ing mobile con­sumer base with valu­able video content.

 The Accenture Video-Over-Internet Consumer Survey 2012 was based on an global online survey of Internet users, which asked them about their online video use on different display devices.  Based on their survey responses, the report suggests that video over Internet, and particularly video over Broadband, is becoming mainstream - a regular component of people's TV viewing.  In the countries the sample was drawn from, 92% of respondents report watching online video, a huge increase from last year's 77%.  In addition, the study found, as in the Adobe study, that viewing habits are forming in the sense that people are tailoring their viewing to specific devices.

Consumers were more than twice as likely to watch full-length content such as movies and TV series on a connected TV, than they are on their PC. That trend is reversed when it comes to short clips and user-generated content

However, all is not rosy; more than half of respondents found in-program advertising and long load times frustrating.  Almost as many (45%) were concerned about the poor video quality (in terms of resolution) of much online video.  Those concerns are highest among younger users; suggesting that those are things the online video industry needs to address for long-term success.  A good sign for the industry is that 43% of the sample are already paying for at least some online video access. and 69% said they would be willing to pay for high-quality video-on-demand content.  At least if the cost isn't too high - only 10% said they might be willing to pay $10 a month or more for an online video subscription.
  One focus of the study was the exploration of multitasking, particularly while watching TV.  A majority of respondents indicated that they engage in some other media use regularly.  When they do so, it's predominantly online: 62% report using a desktop PC or laptop while watching TV, 41% report using a phone or smartphone, and 11% report using tablets to multitask - while 28% will read a newspaper or book, and 9% will play videogames.  One of the more interesting questions the survey asked was what people were looking for when watching online video.  The most frequently cited purpose was for time-shifting (31%), followed by looking for good programs when there aren't any on regular TV (28%), the ability to build your own viewing schedule (23%), and accessing premium content (18%). 

(W)hen it comes to those who access video over Internet on their TV sets ... the flexibility from video on demand, and in particular catch-up access to a catalogue of recent content, and PVR capabilities (were) important attributes. The appeal of these functions as available over the Internet suggests growing consumer sophistication.

Accessing program-specific apps and social media were not widely cited as motivations.  It's the poor showing of apps and social that have some questioning the prevalence and value of "second-screen" behaviors, as those often focus on using the second screen to expand the "first screen" viewing experience.  In fact, only 14% of respondents indicated that the second screen was used for purposes related to the particular TV program.
  There's another interesting contrast in most preferred features for watching online video on TV sets (connected TVs), and using tablets for watching videos.  Preferred features for connected TVs were being able to access video-on-demand content, accessing recently aired TV programs, PVR functionality, and Web surfing.  Preferred features for tablets were accessing channels not available locally, accessing video-on-demand, the ability to download videos, and accessing regular TV channels.  Backing this up was the finding that, for every country surveyed, there is more use of international online video services than local or national online video services.
  In conclusion the report suggests that

Demand for (online video) services looks set to grow strongly as consumers have already embraced new services with enthusiasm.  The consumer is also prepared to pay. But that willingness is likely to be conditional on having access to specific services on each distinct device that will contribute to their overall video experience. Consumers will not, however, compromise on quality.

  The focus on integrating online video into viewing experience, and quality content and production is supported by a recent report from Gfk for the Interactive Advertising Bureau, which suggests that ads delivered by some types of online video yields virtually the same consumer receptivity rates that are delivered by prime-time TV.  The study focused on consumption of Original Professional Online Video (OPOV), online TV prrogramming, as well as user-generated content (UGC).  The OPOV delivered the highest receptivity for accompanying video ads.
  Users overwhelmingly prefer to watch online video at home (OPOV 89%;UGC 88%; and online TV 93%), and use a range of devices to do so.  Viewers of both types were more likely to use social media while watching TV (OPOV - 41%; UGC 51%) than watching TV programming online (35%).    The finding that almost all online TV viewing is done at home suggests that its becoming part of the fundamental viewing experience - a mechanism for extending time-shifting and catching up with missed episodes and series.

Sources - Mobile, Social Drive Highest Video Consumption,  Online Media Daily
Adobe launches 'Primetime' TV Everywhere service, points out we're watching a ton more video,  VentureBeat.
Tablets Up Rates of TV Multitasking,  OnlineMediaDaily 
Second Screens: Not Always Focused On First-Screen Shows,  TVWatch 
Online Video Rivals TV For Viewers,  OnlineMediaDaily

Netflix Optimistic about Internet TV

In a recent letter to shareholders, Netflix CEO Reed Hastings was optimistic about the future for online video.  His "Top 10" list of reasons Internet TV will continue to boom -

Ten Reasons Internet TV Will Grow from Reed Hastings
1. The Internet will get faster, more reliable and more available
2. Smart TV sales will increase and eventually every TV will have Wifi and apps
3. Smart TV adapters (Roku, AppleTV, etc.) will get less expensive and better
4. Tablet and smartphone viewing will increase
5. Tablets and smartphones will be used as touch interfaces for Internet TV
6. Internet TV apps will rapidly improve through competition and frequent updates
7. Streaming 4k video will happen long before linear TV supports 4k video
8. Internet video advertising will be personalized and relevant
9. TV Everywhere will provide a smooth economic transition for existing networks
10. New entrants like Netflix are innovating rapidly.

Source -  10 Reasons Internet TV Will Grow,  AppNewser

The Coming TV Revolution: Can Over-the-Air Free Broadcasting survive?

A number of trends are coming to a head - and may quickly and radically transform the TV (and other video media) landscape

  Broadcast TV has remained the primary force and driver throughout myriad technological advances - coax birthing cable; VCRs facilitating time-shifting and opening new choices for viewing; satellites transforming signal distribution and leading to an explosion of networks; computer gaming providing an alternative use for TV sets; digital networks & the Web opening the market (especially at broadband speeds); mobile and the "TV Everywhere" potential; social media prompting new levels of engagement; among others.  All these have opened the market to competition, and the explosion of choice has led to shrinking audiences and falling revenues - even with TV ad spot prices increasing.
  Still, the big networks remained the top draws in programming, grabbed the lion's share of national ad revenues, and remained, through its public broadcast outlets, more or less universally accessible.

  That's starting to change.  The audience share for the Big 4 broadcast networks has been falling for almost a half century.  This winter saw one of the Big 4 networks' entire schedule outperformed by Spanish-language broadcaster Univision in the key 18-49 demographic.  In the Winter sweeps, a cable show (A&E's Walking Dead) outperformed every broadcast network regular scripted series program.  If you exclude big sporting events and reality programs, most of the Big 4's current prime time schedule was outperformed by cable TV reality programs (Duck Dynasty, Swamp People) and WWE Pro Wrestling.  That's not a position of strength in the market.

  And then there's the impacts of DVRs and other viewing alternatives. This last ratings year is seeing most scripted programs experiencing significant time-shifting - from 15% to as high as 50% of a shows audience coming from time-shifting - whether through DVR replay, access through Video on Demand offerings, or streamed from network online sites. The shift isn't stopping with broadcasting either; recent studies show that more people are watching Nickelodeon's programming via NetFlix streaming than are watching the network itself.  TV viewing habits seem to be changing.
  Alternative viewing creates problems for an industry dependent on advertising - particularly when a sizable portion of value comes from being able to target times and specific audiences.  One problem is counting those who delay viewing.  That problem's been around since VCRs, although it's really grown significant only recently.  Nielsen's tried to keep pace by developing multiple ratings measures - the original live viewing ratings while introducing new ratings measures that also include delayed viewing within various time-frames.  However, the industry hasn't settled on how to best capture online streamed viewing, so much of that remains unmeasured.  Even with better measures of delayed viewing, much of it occurs through devices that allow users to fast forward through ads or skip them entirely; and VOD and streaming services don't necessarily include the same ads as aired in the original broadcast.  As such, the expanded ratings may capture the additional program viewing, but aren't really helpful in measuring advertising's reach, or adding value to the live ad spots.
  Then there's cord-cutting and the zero-TV homes.  Those terms address different impacts of the rise of online video streaming.  "Cord-cutting" refers to the growing phenomenon of people dropping some or all of their multichannel feeds and relying on a combination of over-the-air broadcasting and online streaming to provide their TV content.  Research suggests around 1 in 10 multichannel subscribers have dropped some or all of their multichannel service (the vast majority dropped pay or more costly advanced tiers while keeping basic service), with another 5-10% considering the move.  While cord-cutting may become a significant problem for those services that are dropped, you would think that it would help broadcasters as the primary source of live TV.  "Zero-TV" homes take things a step further; the term doesn't refer to those without a TV set and who never watch - rather it refers to those who get their TV and video content entirely from non-traditional TV channels.  Primarily from online streaming, online downloads, and recorded home videos (movies and TV programs).  While initially only a small portion of the U.S. TV audience, Nielsen recently announced that it will start including those households in their sampling, and will eventually integrate their viewing into its TV ratings system.  Initial studies suggest as many as 5 million USTV homes fall into the "Zero-TV" category.
  Declining audiences are also evident in drop-offs in advertising revenues.  TV's aggregate share (broadcast and cable) of national ad dollars has fallen below those for online advertising.  Advertising revenues for cable networks surpassed those for broadcast networks a couple of years ago.  At best, TV ad revenues have diminished long term potential.  TV ad revenues, like all advertising media, took a hit in the recent recession, and growth rates have slowed behind other advertising outlets, resulting in a shrinking share of volatile advertising dollars.  TV businesses, like newspapers and cable firms before them, are seeking new revenue streams.
  One potential new revenue source is licensing.  The jump in retransmission fees in the latest round of negotiations, the success of cable and DBS in getting consumers to pay for TV, and the more recent success of online streaming services like Netflix, Hulu, and Amazon Prime, have amply demonstrated the potential value of licensing as a revenue source.  TV and video firms are starting to look in that direction for revenues to replace advertising losses.  In fact, broadcast networks are already scrambling to grab a share of retransmission fees from local broadcasters, creating problems for many local stations.

All of this helps set the stage for the major networks knee-jerk reaction to two innovations fostering the "TV Everywhere" concept: Dish's Hopper with Slingbox, and Aereo.

  Dish's Hopper started as a DVR-type service with two particular twists: it would automatically record every network prime-time program, instead of only those selected by the viewer; and it included technology that allowed viewers to skip all commercials during replay.  To handle the volume of the entire prime-time schedule, much of the program storage would be in Dish's cloud rather than in the subscriber's set-top box.  These factors were enough to get most of the major broadcast firms to challenge Dish in court, trying to prevent its implementation.  Then came another innovation when Dish announced the integration of Slingbox technology, which allows viewers to stream content received at home to Internet-connected devices anywhere.
  With the first announcement of the Hopper service, major networks sought to challenge the legality of the service and technology, largely on copyright and intellectual property grounds, and seeking an injunction that would prevent Dish from implementing and offering the service.  In particular, CBS, and its CEO Les Moonves, not only reacted negatively, but badly.  After the Dish Hopper with Slingbox was voted "Best of Show" at the last CES (Consumer Electronics Show) by C/Net (owned by CBS) editors, Moonves' office ordered them to remove the device from consideration, and to not report any more news or information about the technology or service.  (This was after promising C/Net complete editorial autonomy).  Moonves also threatened to pull CBS off the Dish DBS system if they didn't stop promoting the commercial skip function.  (Revealing also his ignorance of DBS operations and rules: first, Dish doesn't carry the network, they carry local broadcast stations which are CBS affiliates and FCC rules prohibit network interference with local station operations; second, unlike cable, local station carriage rules state that if a satellite service carries any local station, it must carry all local stations in that market.)

  Aereo's technology allows users to access local broadcast signals through the Internet.  It's primarily a place-shifting technology (like Slingbox), rather than a time-shifting technology (DVR, Hopper).  As such, it's impact is to expand the potential audience for local broadcasters, so it's less clear why broadcast networks and station groups would be in opposition to a technology that would only expand their reach and their audiences for advertisers.  Still, a number have joined forces to file a lawsuit aimed at prohibiting the service, again mostly on copyright grounds. (I've speculated it's just because they want to grab a share of Aereo's subscription fees).  A number of the broadcast networks, Fox publicly, have threatened to pull their programming from over-the-air distribution if Aereo and similar "TV Everywhere" technologies are allowed to continue.

  The central question in the two lawsuits is whether the services fall under the guidelines established in the 1984 Betamax case.  In that landmark case, the Court ruled that technologies that technically could be used for copyright violations were legal if they also had substantial non-infringing uses (primarily under "fair use" exemptions).  Among the specific qualifying "fair" uses were time-shifting and/or place-shifting legally acquired content for private use - key features of the challenged services.  Initial rulings in the two cases with respect to seeking preliminary injunctions to ban the services while the case was in progress went against the network/broadcaster groups.  Both judges found that the services had viable "fair use" arguments that would need to be addressed more fully in court, and thus denied the petition for a preliminary injunction.  A Fox spokesman went a bit overboard reacting to one of the rulings:

"the court has ruled that it is OK to steal copyrighted material and retransmit it without compensation."

  This has resulted in an interesting dynamic - Hopper's commercial skipping currently only applies to the the broadcast networks' prime time recordings, and Aereo only redistributes over-the-air broadcast signals.  In other words, those technologies pose issues only for broadcasters. Thus, the renewed interest in "going cable."  It's not a totally new idea for the networks - as early as the 1990s networks looked at cable network licensing fees and thought about grabbing a share of that revenue stream.
  However, it would only work if they abandoned over-the-air broadcasting fully, which would have serious impacts on their own advertising revenues (resulting from the reduced reach and audiences) and the profits from their owned-and-operated local stations (which typically cover losses from network operations). Multichannel coverage has expanded to around 90%, which can qualify as "national" coverage, but there's also the question of whether multichannel operators, and viewers, would be interested in paying for programming that has been proudly touted as free throughout its history (particularly at the price the broadcast networks think they're worth (which is in the range of $10-25 dollars per subscriber per month). 
  Frankly, if they can't draw significant audiences for "free" content, it's not clear why viewers would be willing to pay heavily for it.  Even if the broadcast networks settle for an additional $50 per month per subscriber (for the Big 4 broadcast networks), that would be a huge jump in cost for multichannel subscribers.  It seems likely that a lot more people will drop those channels or services (if possible) with such a price hike.  Multichannel distributors are already moving sports channels into separate tiers (with much smaller reach) in response to concerns over $5-10 monthly subscription increases driven by skyrocketing sports licensing fees.  These jumps are also fueling talk about implementing "a la carte" pricing models (where subscribers pay only for pre-selected channels).  Big price increases would clearly drive demand down (shrinking potential audience), and economic research on "a la carte" also suggests "a la carte" pricing results in huge declines in demand, and thus audiences. And further significant drops in audience would clearly result in sizable drops in advertising value and revenues.

  The move would also significantly impact local broadcasting, removing a large amount of a station's most popular programming, which would also have to be replaced.  Studies suggest that losing a network affiliation can cost a broadcast station as much as 75% of its value, and could result in half to two-thirds of local TV broadcasters running significant losses and most likely ceasing operations.  Including those owned and operated by the networks parent companies.  Are those companies willing to write off some of their most profitable assets in the hope that they can pull big bucks as a cable network? 
  Then consider the PR nightmare of viewers facing price jumps of $50 or higher a month, just to access what they've always been told is "free TV".  And then consider how Congress and the FCC would react to something that would significantly damage (and possibly kill off) free over-the-air broadcasting). 
  The reaction really seems overblown, particularly when considering that the actual economic impact of these new technologies and services is likely to be minimal.  Sure, commercial-skipping may reduces the value of ad spots, but those aren't being counted now anyway.  In addition, keeping programming accessible longer, and available over more devices in more places actually increases the potential for viewing. The net impact of these technologies on the financial bottom line is likely to be minimal.

Source -  Tech upstarts threaten TV broadcast model,  IT Business Net

Edits - had to clean up some language and missing phrases. Added a la carte issue

Is TV Everywhere Legal? For now, maybe...

The last year has seen several new start-up services that seek to provide users access to programs they legally receive at home when they aren't in front of the TV.  And that's part of the goal of TV Everywhere - being able to access and view programming regardless of time, location, or type of screen.

  Aereo is a new start-up that offers subscribers access to their local TV stations through the internet, particularly via mobile devices.  It works by providing subscribers with a small antenna/tuner connected to their home Internet connection portal; allowing subscribers to take their free broadcast TV signals beyond the home.  As soon as the Areo started its service, they were sued by a consortium of networks and broadcasters for copyright infringement.  Part of the suit asked the courts to ban the service while their suit was in litigation - i.e., they wanted to kill the service while the challenge dragged out in court for years.
  An appeals court has now affirmed the trial court ruling against an injunction, allowing Aereo to continue operating through the litigation process.  Normally, such an injunction banning some behavior or service is awarded only if the party asking for the injunction is considered likely to win the case on its own merits.  As such, it's not a clear indication that Areo's service is legal, although judges indicated that Areo had a viable legal precedent for their system falling under "fair use" guidelines (as place-shifting of an otherwise legal signal).  That was enough to suggest that the challenge wasn't a cut-and-dried winner.

While I'm not a lawyer, the economist in me does wonder why broadcasters would object to a service that would make their signals more widely available and more valuable to viewers.  Perhaps it's not TV Everywhere access they object to, but not being offered a cut of Aereo's subscription revenues.

Source -  Appeals court denies broadcaster request to shut Aereo,  Consumer Electronics Net

CBS takes shows mobile

CBS has released an app for Apple mobile devices (using iOS) that will provide direct access to current network programming.  (The network indicates that Android and Windows 8 versions are in the works).
  The free (but ad-supported) app allows users to watch full shows streamed in HD, and includes live social feeds for fans to chat with one another.  The network indicated that most daytime and late-night programming will be available within 24 hours of initial broadcast, but prime-time programs will normally be available only after 8 days.  It also seems that for now, at least, not all programs will be available through the app.

Source -  CBS holds Big Bang Theory, The Mentalist from iPad app, FierceCable

Evolving Video Landscape

More indications of a changing video landscape...

Europe is seeing the rise of "Hybrid" TV - integrating traditional TV with online video. 
  In Sweden, telecom and IPTV operator Helm is planning to launch a multiscreen service using the TiVo interface. Com Hem says it wants to improve the TV experience for its viewers, by expanding viewer options and experiences via time-shifting and place-shifting, bringing TV and apps to multiple devices in the home as well as outside it. Tomas Franzen, CEO of Com Hem, plans to use the TiVo interface to bring "features like TV Everywhere, remote recording, universal search, smart recommendations and access to a wide range of third party interactive applications."
  In contrast, Panorama TV is a smart TV app that offers access to live HDTV streaming from 250 European travel destinations, along with weather reports and tourist information.  More than a million viewers have accessed the service via smart-TVs since October.  Germany's Feratel indicates that it plans to introduce a booking service to the app in the near future.

  In-room revenues from VOD and IPTV offerings increased around 150 percent since 2011, according to iBAHN, who provides content services to the hospitality industry.  iBahn's service provides smart-TV functionality, including letting guests access their individual streaming subscription content, without the need to update HDTVs to smart TVs.

Ooyala's 2012 Global Video Year in Review report is out, and shows that use of online and mobile videos continues to grow rapidly.  The share of streaming video viewing doubled in 2012, with a huge spike of tablet viewing on Christmas Day.  That's still only 8% of all video viewing, however.  The kind of online videos being watched varied by device.  Long-form quality IP videos (TV shows and movies) accounted for 63% of all video viewing on tablets, and about 80% of IP video viewing through connected devices and smart TVs.  In contrast, almost half of IP video viewing on smartphones were under 6 minutes in length.  Ooyala's metrics are based on the online habits of 200 million users in 130 countries.

A large-sample study from Hitwise Mobile shows that Google's various sites accounted for 5 of the 10 most used portals for mobile broadband (3G, 4G, WiFi) users, and almost a quarter of all visits.  Google's YouTube video portal was the second most visited site (4.55% of all hits), and sported the second highest usage in terms of time spent on the site.

A new report from Rovi is indicating that video streaming on mobile devices is on the rise.  The report indicates that in the U.S., as well as many countries in Western Europe, more than two-thirds of mobile device owners report watching streaming video on those devices at least 2-3 times a week.  Tablet owners reported the longest viewing sessions - about two-thirds of UK and US tablet owners average more than 30 minutes a session. About a third of tablet owners in the UK use their devices primarily to watch TV shows, while a third of tablet video streaming in Germany and the US were movies.  Roughly 80% of tablet viewing was in the home.  Video streaming sessions tend to be shorter with smartphones - with more viewing of user-generated content and live events, and are more likely to occur outside of the home..  But perhaps the most important result for the future of mobile video was that 93% of US tablet users rated their devices as a good way to view movies and TV shows.

A market report by IHS Screen Digest suggests that a quarter of TV sets shipped in 2012 included Internet capabilities, and by 2015, more than half of all TVs shipped will be smart-TVs

“Consumers are now increasingly buying big-screen TVs that include the Internet capabilities, even if they’re specifically looking for [those capabilities] or not,” Veronica Thayer, TV systems analyst at IHS.

The report also notes that partnerships between set manufacturers and IP video apps (see above) are on the rise in Europe and will make their way into US markets - as they offer a way for program producers and distributors to reduce costs while providing greater presence among viewers home entertainment options.

Sources -  'Hybrid TV' Taking off in Europe,  FierceIPTV
Global Video Index - 2012 Year in Review, research report from Ooyala
Google Dominates Mobile Sphere,  Online Media Daily
Video Streaming Growing in U.S., Europe,  MarketingDaily 
Smart TV Growth Is Set To Explode, Marketing Daily

Verizon FiOS - (Some) TV Everywhere (at home)

Verizon first started experimenting with streaming live TV channels to tablets a couple of years ago, and had announced plans to make most of the channels on their FiOS system available to customers.  Then copyright and licensing got in the way.  Verizon argued that the multichannel licenses they held and subscribers paid for entitled them to watch the channels regardless of whether it was delivered to a TV set through a set-top box or to a tablet through WiFi.  The cable networks argued that since the licenses were made before WiFi streaming was viable, it did not include that delivery method, and they wanted extra cash to extend license coverage to streaming options.

  It appears that an agreement's been reached, at least for 75 cable networks.  Last week, Verizon debuted an updated FiOS app for the iPad that offers live streaming of 75 networks (or at least as many as subscribers are paying for).  The app also includes the ability to browse and search program listings, update set-top box (STB) settings, program DVRs, and act as a remote for the STB. 
  However, all that only works when the subscribers have paid for a video bundle that includes the channel, subscribes to FiOS Internet service, and uses a Verizon-supplied WiFi router.  In addition, the live program streaming to iPads only works over WiFi in the subscriber's home.  Finally, at least for now, it does not include local stations feed or major broadcast networks.

Not quite "TV Everywhere", but it's a welcome start.

Source  -  FiOS Tucks Into Table TV, Multichannel News

A Smart TV Viewers Bill of Rights?

Jim Monroe, in a post at TVBoard, looks at the rise of connected devices, Smart TVs, and tablets and wonders if things are getting too complex.  Sure, technology enhanced choices and DVRs allowed viewers to skip commercials, which could impact broadcasters' bottom line. Still, as he quips,

We never worried whether people knew how to work their TV sets.

Monroe identifies what he feels are the three key distinctions between old-style TV viewing and the world of connected TVs and devices like tablets - connected devices have more options for controlling the viewing experience (touchscreens, (virtual) keyboards and allow searching, and the hassle of scrolling through lists and sometimes logging in; tablets are hand-held, small, and "reading small text and trying to decipher tiny graphics... is annoying"; and mobile connected devices are mobile, not "bolted to the wall...  and perfectly suited for watching programs."  (I'm still trying to figure that one out myself).
  Connected devices, by definition, expand user options by providing access to a growing archive of programs and entertainment options, and in the case of mobile connected devices, options as two where and how one accesses and consumes media content.  And in one sense, increased options can be seen as a drawback - more choice can lead to more complexity in finding and watching specific content.  And is often the case in the early stages of innovation, there's some uncertainty as to what options and content people will want, and user interfaces can be a bit clunky.  So perhaps Monroe has a point when he argues that

Unfortunately, when you combine unnecessary features, complicated navigation and some ill-conceived attempts to charge subscription fees you leave viewers convinced that connected TV is at best difficult and at worst a new way to gouge them.

Monroe's concern for the future viability of (connected) television, and his nostalgia for old-fashioned lean-back TV viewing resulted in a proposal for a "SmartTV Viewer's Bill of Rights." 

1. The Right to Relax (keep controls simple)
2. The Right to Channel Surf  (see #1, and have channel up and down buttons)
3. The Right to Sip a Beer  (keep hands free)
4. The Right to Quality (not low-rez home videos)
5. The Right to Free-TV
6. The Right to Sanity  (keep commercial breaks short)
7. The Right to Simplicity (see #1, applied to installing sets and apps)
8. The Right to Familiarity (there's too many channels)
9. The Right to Serendipity (help in discovering new programs)

There's certainly a lot of nostalgia, and more than a little Luddism, in this list and in the arguments Monroe gives in support. For him, "Our parents watched three channels and paid nothing... There’s way too much stuff out there for me to sort through it myself..."

  The problem, for me, is that Monroe is focused on what he sees as the negative consequences or an expanded television marketplace.  And while explicitly focused on viewers, there's an underlying concern that as options increase and the market becomes more competitive, there's less money available to produce "quality programs" that will reach "enthusiastic audiences."  What Monroe doesn't address is the obverse - the value in increased options.  He might not see the value of a portable TV (tablet), or the ability to access music, movies, and TV programs on demand, or the ability to watch sports from home when you're traveling or working somewhere else.  But others do, or they wouldn't be cutting into traditional TV's audiences and market share.
  As for connected TVs and devices being too complex - usability will improve with time and testing.  And the younger audiences are already used to multitasking and dealing with current levels of complexity.  In the future, complexity will likely move from being a burden to being a value (as complexity give users greater ability to customize their TV viewing experience.

Still, it's an interesting and thought-provoking post.  Give it a read.

Source -  The Smart TV Viewer's Bill of Rights,  TV Board

Infographic: The Borderless Lifestyle

Verizon has released results from a study of "borderless customers" - those owning laptops or desktop PCs, mobile devices, and say that they "usually" have a device with Internet service at hand.  Verizon projects that 40% of US adults now fit that description, and the study looks at their attitudes, preferences, and behaviors.  (The report notes the sample was non-random and not necessarily representative of the general U.S. population).  Selected results were presented in the form of an infographic..

  Verizon's news release provides this rational:
Verizon believes the Borderless Lifestyle is a result of the convergence of wired and wireless broadband networks, and the unique user flexibility and personal empowerment that converged services enable. The Borderless Lifestyle is about eliminating the old technology boundaries that used to separate networks and service platforms, home and work, allowing customers to connect and accomplish what they want or need to do, whenever they wish, wherever they are, using the device that they prefer.
The study suggests that over half their sample felt that Internet service was their home's most important utility - more people than the 39% identified as having a "Borderless Lifestyle."
  Still, as a whole, while the Borderless were equipped for anywhere-anytime media consumption and engagement, their digital activities remained tied to their physical homes, at least for now.  They still prefer to watch TV at home on traditional TV sets, and many online program access points remain clustered in their homes.  Where they differ from other folks is their eagerness for the potential of the "Borderless Lifestyle" to be realized.

• 90% look forward to having all home electronics interconnected, with access to the Internet, compared to 64% of the Non-Borderless.
• 82% would like all media content, and all of their digital files, available anytime-anywhere (46% of NB)
• 61% look forward to using smartphones or tablets to control their TV sets (23% of NB)

Source -  More Than Half of U.S. Consumers Regard Internet Service as Most Important Utility in the Home, According to New Verizon Survey,  Verizon news release

A Gaggle of Social TV / Second Screen Reports

The last couple of weeks have seen a number of reports coming out on multiplatform and multidevice diffusion and use.  It's busy time here, so I'm going to combine and highlight -

A study from consumer research group GfK MRI found that 63% of tablet owners report watching TV while they use their tablets in the previous week. And they did so a lot - 41% of total TV viewing time was spent with tablet in hand. The focus on tablet use behaviors is interesting, because most of the studies to date focus on what people are doing while watching TV.
  So what were they doing online while watching TV time?  34% were posting on social media; 25% visited websites or used apps tied to the show they were watching (a show's site or app, the network's site, or a fan site); 21% were looking up information about the show; 16% watched video clips about the program; 11% were voting in a show's content or event; and 9% were actively participating in a live chatroom.  As for the TV advertising, the study found that 28% looked up more information about a product advertised on the program on their tablets - and more importantly, 12% reported that they later purchased that product.
  As for which screen was primary. 36% reported being true multitaskers, with equal focus on TV screen and tablet.  Another 36% indicated that their primary focus was on the tablet, and only 28% said their primary focus was on the TV's bog screen.
  Source -  Multiscren TV-Tablet Viewing Soars,  MediaDailyNews

Research from Forrester suggest that people are watching video in new ways. with multitasking (watching TV while also doing something else) is quickly becoming the new norm.  Forrester found that 74% of US viewers regularly multitask, a significant jump from last year's 58%.  Their report uses this result and the boom in digital video devices and services to argue that traditional audience rating measures are becoming outmoded and incomplete.  Digital captures so much more information about its users, while Nielsen and other ratings services are struggling to develop ways to count the viewing that occurs through the myriad potential second screens.

Forrester says GRPs no longer provide complete coverage for marketers because they only measure age and gender in a world of digital detail, are a backward-looking metric, and face digital video platforms that can already target audiences beyond the basic.

    Source -  Study: In Growing Digital Media World, GRPs Still Important,  MediaDailyNews 

Ericsson ConsumerLab's latest annual TV and Video study concluded that Social TV is rapidly becoming a mainstream, mass-market phenomenon.  The study looks at TV and video trends world-wide, based on thousands of interviews and data from online activities collected from consumers in 14 countries.  The found that 62% of their sample combine social media activities with TV viewing on a weekly basis; up from 44% last year.  Women were slightly more likely to do this than men (66% vs. 58%), and a quarter (25%) of respondents reported engaging in more narrowly defined Social TV activities - using social media to share their thoughts about the program they were watching at the time.
  Other relevant report highlights - two-thirds report using laptops or mobile devices for TV viewing; 60% reported using on-demand services to get programs they wanted to watch each week; and over half the sample want the ability to choose their own video content. The desire to control both the selection of content and the viewing experience (time, location, device, and quality) is reflected in the video characteristics consumers were most willing to pay for - improved technical quality (HD or higher), the ability to control the viewing experience (time-shifting, on-demand), access to recent movies. Interest in paying more for personalized content jumped from about 22% to nearly 30% in the last year.  Despite their interest, consumers reported that a variety of technical and regulatory barriers had limited their TV watching outside the home.
  An Ericsson spokesman concluded,

”As the number of screens and services increase, people are eagerly looking for an easy-to-use, aggregated service that can bring everything together. It should allow consumers to mix on-demand and linear TV including live content, facilitate content discovery, leverage the value of social TV and provide seamless access across devices.”

  Sources -  Social TV becoming a mass-market phenomenon, says Ericsson,  InformationWeek
TV and Video: An analysis of evolving consumer habits, 2012,  Ericsson ConsumerLab report.


Networked Insights has developed an interesting Network Executive's Social TV Survival Guide that identifies the major lifecycle segments of television, and discusses how social media and social TV can help the producers and programmers.

At the very least, they suggest, take advantage of the fact that using social media and social TV tie-ins provides real-time access to a wide array of audience responses, preferences, and behaviors - rather than traditional data collection methods that are highly focused, and can take weeks or months for meaningful results to trickle in.

Industry observer Simon Dumenco of Advertising Age describes social TV this way: “Millions of people are now partaking of the ‘dual-screen’ experience -- watching TV while using a smartphone (or tablet) to share their thoughts about what they’re viewing and to ’check in’ to shows. The result: a massive and rapidly expanding real-time focus group (and promotional force).

   Source -  How social media affects the TV lifecycle,  Lost Remote 



Social TV interactions  have exploded in the last year, according to a white paper by media research firm Trendrr.  They found that that last June set new records for social TV activity, with more than 81 million social interactions generated from 5500 telecasts that they tracked.  That was a 681% increase from June 2011, and a 15% increase from the previous month.  Interestingly, recent growth was fed by social activity tied to cable programs (up 45% from May), while social interactions tied to broadcast network programs fell 18%.  In June, more than two-thirds of social TV activity was related to cable programs.  I'll note that June's not a big month for new broadcast programs or episodes, which are much more likely to generate social interaction than repeats. Broadcasting's share of social TV activity should rebound this fall with the start of the new seasons.
    Source - Social TV interactions skyrocketed 171% this year, Lost Remote

A study from the Online Publishers Association shows tablet adoption and use continues to grow.  The study found 31% of respondents had tablets, and three-quarters of tablet owners reported using them daily.  Tablet use averaged almost 14 hours a week, predominantly in the evening.  Some 85% of their sample of mobile device owners (tablets and smartphones) reported using their devices to multitask while watching TV - averaging 1.6 hours a day (about a third of all TV viewing).  Looking deeper, the study identified a group of "heavy" TV/ Second Screen users, who averaged 3.1 hours of multitasking daily.  Roughly a third of mobile device users were included in this group.  Other interesting TV results - a quarter of tablet owners had bought a movie to watch on their table, and 18% had purchased full-length TV programs.
    Sources  -  Tablet Adoption Explodes, study reveals key usage patterns,  Lost Remote
     A Portrait of Today's Tablet User Wave II, an Online Publishers Association report.

Sports Fans Moving Online

TV used to be the overwhelmingly dominant medium for sports coverage, as well as sports news and commentary.  While TV remains a valued and important source, a recent survey conducted by Burst Media indicates that those naming TV as their primary source for sports information has dropped below 50%.  Perhaps more critically, more than a quarter of respondents identified content Web sites as their primary source for sports information.  Looking towards the future suggests that the gap between TV and the Web will continue to shrink - when respondents were asked to indicate what they thought was the best source for news, TV's share shrunk to 41.3%, while content sites rose to a 35.4% share.
  The growing importance of the Internet as a source for sports information is reflected in other survey results.

• 35.1% of sports fans report going online at least once a day for sports-related reasons (the share jumps to 66.8% for tthose who self-identify as dedicated fans
• 34.7% of younger sports fans (18-34) report they frequently use social media to comment on or share sports content (that stat drops to 15% for the 35-54 demographic and 5% for those over 55)
• 31.6% of sports fans use tablets for sports, and 45.7% report using smartphones to access online sports content
• 35.7% report using mobile devices to access online sports content while they watch sporting events on TV
• while casual fans reflect the general population in terms of demographics, those identifying themselves as devoted sports fans skew heavily male (79.0%), more educated (50.6% having at least a college degree), and higher income (43.7% are in high income households).

  The results suggest that sports fans are finding value in online and mobile sources for sports content and information.  Combine that with the younger fans' adoption of social media as a platform for connecting with other fans, and you can see the foundation for increased use of online and mobile media as valuable sources for sports information.

  I think that TV's larger screen will keep it the predominant and preferred source for watching sporting events live.  On the other hand, the Internet offers access to a wide range of sports content and information beyond that, in a format that's easily searchable, available any time and almost everywhere, can be interactive and social, and is readily customizable to the user's specific preferences as a sports fan.  The Internet's already overtaken TV, cable, and newspapers as the preferred source for news (for many of the same reasons).  It probably won't be long before we see the same shift in preference for sports information (if perhaps not as quickly for watching live sporting events).
  Now the methodologist in me will note that the survey sample targeted U.S. online users, not the general population, so some inflation of the online numbers should be expected in the survey's findings.  On the other hand, with more than 80% of US adults online, the differences between online adults and the general population are becoming minimal.

Source -  Sports Fans Turn More to Web, Social Media,  OnlineMediaDaily
 

Better Authentication Boosts TV Everywhere

NBC partnered with Adobe this summer to authenticate its Olympic coverage video streaming efforts.  A recent announcement from Adobe indicated that its Adobe Pass system authenticated more than 88 million video streams during the Olympics, capping a ten-fold increase in authenticated streams..

That represents “the highest number recorded for a single event in TV Everywhere history,” according to Campbell Foster, marketing director for Adobe Media & Ad Solutions.

Adobe Pass allows users to authenticate themselves and their multiple devices with a single login, and without having to acquire additional hardware or software, or entry of credit card information.  By simplifying the authentication process - without sacrificing security and minimizing content owners' concerns about lost revenues.  The system is now in use by more than 150 pay TV providers and 25 networks.
They hope is that streamlining and simplifying a secure authentication process will promote use of online and mobile options for video content delivery, fostering content use across platforms and fostering the rise of "TV Everywhere."

Source - Adobe Trumpets TV Everywhere Streaming Success, Online Media Daily

The Growing Importance of Search for TV

As media markets continue to expand, become more competitive, and with the flood of content availability and options, helping people find the information and content they want becomes more and more important - and valuable - to potential consumers.
  John R. Osborn offers some thoughts on the importance of search for TV firms in the Online Video Insider blog.  I'll offer my own insight that search will remain important, and become increasingly valued, for all media forms and formats.

  Osborn starts by reminiscing about TV's Golden Age of the 1950s, when there were limited channels and programming schedules were fairly static - so that most everyone knew where and when to find the programs they were interested in viewing.  Today, he notes, more than half of US TV homes have DVRs, about 90% use multichannel video providers (cable, DBS, etc.) to access TV content from some or all of the 500+ networks available in the U.S.  And then you also need to consider a number of other content sources that Osborn doesn't list - the huge backlist of movies and TV programs available through home video (DVDs, BluRay); the rise of multiple streaming services offering access to TV content and movies (Netflix, Hulu+, etc.) - including many current programs; and the explosion of online video.  A quick stat from YouTube can give you an idea of the wealth of online video content available - on average, users upload to YouTube more video content each hour than the major U.S. networks have produced in their 60+ years of operation.
  Today, it's not enough to produce good TV programming to successfully attract an audience - potential viewers have to first learn that the content is available, and then to find it.  And to  become successful, the content has to be engaging enough to get them to not only view the program, but to come back for new content as it becomes available.  Search can be incredibly useful in meeting these goals.
  Osborn's post outlines the importance and value that good search options can provide viewers, advertisers, content producers, cable/telco/satellite distributors (PayTV) many of which currently offer a variety of search options - and are applicable for local stations and outlets as well.  There are some good exemplars and templates out there - Tivo's search and recommendation system, Microsoft's new X-Box Live technology, Amazon's recommendation platform, and Netflix's recommendation system.
  The full post is worth a read.

Source -  The Importance Of Search In Next-Gen T/V Business Model,  Online Video Insider

Europe - Getting Connected

Research firm Parks Associates estimated that there were 155 million households with broadband connections at the end of 2011.  Their research suggests that there is a growing demand for services delivered by IP/broadband, from audio and video streaming to gaming to connected home management services.

Source - Parks Associates Consumer Analytics e-mail

Time for TV Everywhere Critical Mass?

Jeff Heynen, directing analyst for broadband access and video at Infonetics Research thinks 2012 will be a watershed year for 'TV Everywhere', predicting that cable giants Comcast and Time-Warner will push implementation and diffusion of the service.  The question will then be what impact will 'TV Everywhere' services have on subscriber churn and revenue.

  The prediction is based on two Infonetics Research reports on sales and orders for MVPD equipment and set-top boxes.  Taken together, the two reports suggest that the global video infrastructure market will grow by 8% this year, with sales of more than $875 million.  Much of the growth is expected to be in Asia, with China outspending both the North American and European markets in investment in Video on Demand and video streaming hardware.  The reports also suggested that IPTV growth pushes streaming equipment demand - predicting that IPTV subscriber base doubling in the next four years.

  Infonetics projects set-top box growth to be somewhat slower, generating about $14.7 billion in 2012.  They also see a shift from basic cable and satellite STBs to hybrid models that include IP video capabilities.

"TV Everywhere and other multi-screen video initiatives are fundamentally changing the TV business model, which apps streaming live TV to iPads and telcos and cable companies offering home automation security and video conferencing to subscribers in an effort to make the TV the hub of the digital home," Heynen said. "Demand for digital, HD and premium video content and services will continue to drive revenue growth in the VoD and encoder market."

Source -  Infonetics: 2012 a 'watershed year' for TV Everywhere services,  FierceOnlineVideo

The Future of TV - 10 Things to Know

KIT Digital recently provided some thoughts on the future of TV, and some of the more immediate questions, from its Global Lead Analyst, Alan Wolk - in the form of a slideshow.  The slides are available here if you want a copy, and I'll see if I can get an embed to work.

10 Things You Need To Know About The Future of Television from Alan Wolk

Among some of the key points -

• Transition to TV Everywhere is being slowed by "Lawyers" (really about interpreting intellectual property rights in that new context)
• Bandwidth caps by broadband providers (setting a limit on data transfers) is slowing diffusion of TV Everywhere and "cord-cutting" (people leaving MVPD for access to TV content via the Internet)
• Rise of Smart TV currently slowed by lack of single standard, and difficulty in upgrading programming in TVs - suggests that small set-top boxes like AppleTV and Roku may be the future, as they are easily upgradable.
• Content producers (esp. movies) most worried about drop in DVD sales (why buy when you can get most through Netflix and its kin), and the shrinking window between primary theatrical release and availability through pay VOD.
• There's potentially big value in second screen apps - as a way to implement "click-to-buy" online purchases for goods shown in ads or within program content; and as a source of consumer data on viewing and impacts.
• Who has the best user interface (combining simplicity with value) goes a long way in determining winners and losers.

Source -  10 things you need to know about the future of TV,  LostRemote

Goin' Live on Mobile

Results from the Dyle Mobile TV Data Report suggest that more than two-thirds of consumers would watch more TV if live programming was available on their mobile devices.  Using a sample of US consumers in the critical 18-54 age demographic, the study asked about their use of various media devices, as well as their viewing behaviour.
  The study found high penetration levels for many of the media/mobile devices considered - in fact, only 2% indicated that they had none of them. 86% reported owning a cell phone (56% owned a smartphone), 79% owned a laptop, and 71% owned a desktop computer.  One third of the sample reported owning an iPad or other tablet.

  The sample also reported that consumers in the sample used a wide variety of devices and sources when watching TV.  When asked about their viewing habits in the previous month, 85% reported watching live programming on their TV, 59% watched TV content streamed online, 56% watched recorded content on their TV, 32% watched streamed content via a gaming console, 26% watched streamed content on a mobile device, and 22% watched streamed content on an iPad/tablet.  When asked about their interest in watching live mobile TV if it were available, more than half the sample indicated they'd be interested in watching it on their smartphone or tablet.  Interestingly, the two-screen home option was not the mostly likely place that respondents said they would be likely to watch live mobile TV.  While 63% indicated that they'd use live mobile TV at home as an additional TV, 85% had an interest in watching live mobile TV while waiting, 76% would watch in transit, and 74% would use live mobile as a way to entertain kids in a car.  They also reported high likelihood of using live mobile in more intrusive locations (53% at a sporting event, 52% at the gym, and 44% at work).
  As for the types of programming they'd be likely to watch live mobile TV, local news & weather topped the list (81%), followed closely by movies (79%) and national news (75%), while about two-thirds also expressed interest in sitcoms (69%), sports (66%), children's cartoons (65%), and dramas (64%).

The research and report are in support of a joint venture of mobile TV providers from 12 major broadcast TV groups.  I would also note that the sample was not very large, and limited to US consumers in the 18-54 age bracket, so results are not generalizable to the general population, but reflect a core demographic of interest to advertisers and broadcasters.

Sources:  Dyle: Mobile Users Prefer Live TV,  TV Technology
Full Dyle Mobile TV Data Report

Milepost: Netflix passes Billion-hour streaming

Netflix announced that its subscribers watched more than 1 billion hours of streamed video in June.  The growing use of Netflix by its 26.5 million streaming subscribers may be a reflection of recent efforts to expand its Internet library.  It also may presage a shift in overall viewing habits from advertising-supported entertainment to subscription-based access, according to an AP press report.

Source - Netflix subscribers' monthly viewing of Internet video surpasses 1 billion hours for 1st time,  Broadcast Newsroom.