By Ronald Jacoby
While mobile has dominated the headlines over the past few years (thanks to rise of the smartphone and the success of apps), another movement is under way in the living room — Internet-connected TV. Just as DVRs and on-demand programming have become the standard, soon we won’t be able to remember our TVs before they were web-enabled.
Right now, more than 30 million U.S. households are using digital TVs, Blu-ray players and gaming consoles for viewing some form of online content in the living room, and that number is on the rise. According to Parks Associates, less than a quarter of HDTVs were connected to the Internet in 2010, but by 2015, that number will spike to 76%. The reason for this massive jump? With increasing consumer demand for connectivity in the living room and faster broadband speeds, device makers will make it convenient for HDTVs to connect directly to the Internet without an extra device in-between.
So how will Internet-connected TV change how we use the television? And why would someone need a connected TV? Just look at your phone to see how the Internet transformed this familiar device. From music to videos to games to search, social media and instant messaging — it’s all happening again, this time optimized for a screen 10 feet away from the couch.
Today, early adopters are accessing full-length TV shows and movies, news and information, social networks, music, casual games and more from their connected setups. But how can the industry cross the chasm from early adopters to broad adoption?
My company’s research and platform usage data reveal a few key trends that we think will spur the mainstream into flipping the switch on connected TVs.
First, It’s Got to be Social.
Consumers love TV shows and talking about them with friends.
- Content around TV shows and social media will spur the growth of this new landscape, especially among women.
- 60% of those surveyed said they would be interested in looking at online content on their TV related to the program they were watching.
- Among those who showed interest, 28% want to include their friends via social media when watching TV.
Second, Tablets and Phones Will Have an Impact on the Connected TV
- 25% of people who purchase a tablet say they use their connected TV more since the purchase.
- Internet-connected TVs need to be multi-screen to take advantage of the interactive features like touchscreens, gestures and media playback.
Last, and more surprisingly, advertising will be a key driver of usage for connected TV.
- Two in five consumers said they are interested in content relevant to the commercials they see. In fact, more than half of survey respondents reported that they are likely to interact with an ad.
Here’s a look into what the future looks like for Internet-connected TV.
Attention Developers: There’s a TV App for That?
Broad consumer adoption will happen when developers can create apps that sync web content with live TV. This will enable the consumer to interact with TV shows and advertisements. Here are a few ways we see this playing out. Consumers will be able to:
- Participate in TV show trivia
- Vote for a favorite actor
- Purchase an item seen on TV
- Play along with a favorite game show
- View related videos and photos
In terms of discoverability, TV apps currently use a pull model, meaning you have to actively browse through the app gallery and select one to use it. In the future, TV apps will be integrated right into the broadcast experience, through what the industry calls “broadcast interactivity.” Personalized, relevant content will soon be pushed to you. In short, it will appear seamlessly on your screen, a lot like the promotional text you already see today along the bottom of certain TV shows.
Social networks like Facebook and Twitter are not detracting from our TV consumption. Rather, they are creating a hybrid experience around TV content. The socialization of television is extremely important and very exciting.
As an example, let’s take a look at the news of Osama bin Laden’s death. President Barack Obama’s speech about the military operation in Pakistan drew more TV viewers than any other speech of his presidency — 56.6 million according to Nielsen. At the same time, the news set records on Twitter, with more than 5,000 Tweets sent per second at times before and during the speech. What this shows is that millions of people were not just watching TV at that moment — they wanted to participate in the news.
With connected TV, broadcast and social experiences will blend. Imagine watching the speech, reading the tweets, and pulling up the White House pictures on Flickr about what it was like to be in the room when the raid happened. Most people are already doing this — with a tablet, smartphone or laptop in hand. Now, you could do it on the big beautiful screen in your living room.
As the television becomes a two-way device, TV networks are already exploring the potential by developing TV apps that, for example, enable viewers to vote on their favorite characters or contestants. This social enrichment of programming will let networks gain valuable insight into audience engagement and reaction to their programming.
Connected TV Advertising
In 2010, television advertising expendetures were the largest for all media, coming in at $69 billion. What this signifies to many is that television is still a tremendous medium to drive product, services and brand awareness.
Connected TV is a Holy Grail scenario for an industry that has been trying to bridge the emotion and effectiveness of television advertising with the metrics, interactivity and audience targeting of Internet advertising. For example, rather than distributing a standard car commercial, the company could run the same ad with the option for connected consumers to pull up additional information on the car, read consumer reviews and find a local dealer — all with the click of the remote control.
Additionally, with connected TV, ad content can be locally relevant and based on consumers’ interests and behaviors. This means ads will be more personalized and tailored to you.
For example, your favorite sandwich shop can distribute a message to you about a “Sunday Special,” just in time for the big game. This creates a whole new layer of experience around TV viewing that is hugely compelling and powerful, both for consumers and advertisers.
As with the web and mobile industries, there is significant opportunity for businesses to capitalize on the ability to make purchases directly from the television — “t-commerce,” if you will. According to the Parks Associates report, by 2015 there will be more than $8 billion worth of transactions conducted via web-enabled consumer electronics.
There are so many interesting scenarios for t-commerce. There’s the obvious — browsing and shopping for products on Amazon and eBay. But what if you could buy the exact shoes your favorite character was wearing on tonight’s episode of Gossip Girl with a click of the remote? Or what if you could pull up the menu of a local restaurant to order dinner for delivery? These scenarios are all possible through t-commerce, and the best part is, you can do all of it while you’re watching live TV.
The Future is Bright
The best part about the connected TV movement is that it is happening now. Right now there are millions of web-enabled TVs on the market with libraries of on-demand movies and TV shows available directly from your television — without the need for a console or set-top box. There are TV apps to play games, socialize, shop and get the latest in sports and news.
But what’s most exciting is yet to come — the experience of seamlessly interacting with programming and ads, and communicating in real time with friends and family right from your TV. As the web has transformed the print and music industries, it is surely on track to revolutionize television.
Ron Jacoby is the chief architect and vice president of Yahoo! Connected TV, a leading platform for Internet-connected TV, available across top TV brands worldwide including VIZIO, Samsung, Sony, Toshiba and LG.