The battle cry that has been resonating throughout the Internet world was that “video was theirs” once net neutrality passed and bandwidth increased. It made for a fairy tale story complete with villains, heroes, and buffoons. During the depths of the recession many of those that owned TV content came to believe in these doomsday predictions, with a few even protecting their downside by investing in Hulu.
The TV set-top box was marginalized by Steve Jobs at the recent AllThingD conference. Although counter to his stated position, Jobs is most likely executing on a long-term go-to-market strategy of securing more TV content; eventually TV content could propel his device business forward for years to come. If the TV industry’s attention remains diverted toward correcting all the imperfections within the ratings “system,” we could be opening the door for more outside disruption from the entire device sector.
In 2004 O’Reilly Media hosted the first Web 2.0 conference. Tim O’Reilly observed that Web 2.0 was defined as software applications that could be built upon the Web rather than the desktop. This period in the evolution of the Web, O’Reilly stated, would allow consumers to self-syndicate data (RSS) across Internet properties. I believe as the TV ecosystem rolls out three-screen technologies we might find ourselves approaching the end of the Web 2.0 Era.
Two weeks ago at the National Cable & Telecommunications Association’s The Cable Show, the iPad was linked to a set-top box. Data was exchanged between the two devices. The technical process of linking a set-top box, a mobile device, and the Internet is now possible. The linkage of these three screens has been more evolutionary, rather than revolutionary, and perhaps that is why the full potential of this opportunity is not yet understood.
TV is purposeful in how it evolves. The remote control and color were introduced in the mid-1950s because these features were the natural next steps. As consumers craved more content, cable distribution took off and satellites began delivering programming nationwide. It’s as if the collective will of the nation moves the television platform forward. Today I believe consumer behavior — such as the universal characteristics that go along with multitasking and time shifting — are currently forcing our industry to adapt the TV platform to satisfy modern needs.
Think of it. Tens of thousands of TV advertisers will be able to build cross-platform measurement statistics off the opt-in TV click and customer records. Media schedules can be built off these real customer insights. I call this the Continuous Loop Theory for Advertising: when the TV click data is sent from the TV platform into e-commerce engines, and once the ROI is crunched, the results are entered back into the TV platform via media schedules. Advertisers’ efficiencies should improve across both the TV and the Internet on an ongoing basis if done correctly.
I think if TV programmers forward these opt-in TV click responses to an Internet Web site — where consumers can follow up on their “clickable” moments — that should be the natural direction for both media. Within a few years we might see scores of companies created that could provide a new revenue stream to both cablers and broadcasters, while at the same time also offering unique TV click solutions directly to programmers and advertisers.
Technology units can get easily bogged down when implementing even the slightest changes to how content and data is transmitted to the traditional bucket. In addition, for every upgrade incumbents make to their plants, the user base of DVRs grows. This growth is destabilizing the metrics of the traditional pipe. Maybe it would be easier if video distribution was just moved wholesale to the Internet? But that would defeat the purpose of why the traditional distribution system must exist.