Connected TV: Signals to Watch for Your Enterprise
Connected TVs are a hot topic at this week's Consumer Electronics Show, but what do they mean inside the enterprise?
In a 1936 advertisement, RCA introduced television broadcasting to New York City, extolling the virtues of its untapped potential. Just as it was then, every new advance in how we communicate inevitably brings visions of a "technological utopia."
TV grew faster than any technology in U.S. history, from 2% in 1947 to 95% in 1969, yet remained a one-way medium. Eventually, PCs and the Internet became the new utopian platform, supporting new methods of commerce, new sources of news, and so on. This new, two-way media would provide an interactive experience with which TV could not possibly compete and that would surely be its replacement.
But even with a slight decline due to computers, TV sales have remained strong among all generations. Nielsen's 2015 Generational Lifestyle Survey reported that television remains the top source of news for adults over age 21. The definition of "news" for a 21 year old may be a comedy program, but the preferred medium is still the big screen.
Media analyst firm eContent has reported a milestone reached in early May 2015, one that "signals a change in how consumers prefer to access their favorite content." Among Comcast customers, the number of Internet subscribers surpassed cable TV subscribers for the first time, eContent reported. "Granted, the majority of that bandwidth is not being used to post to Facebook or shop on Amazon. It's predominantly the pipeline for streaming video," the report noted. Most viewers who made this switch are not yet aware that they did not simply switch to a more convenient "on-demand" platform. They are now engaged in two-way communication with their TV programming.
The Birth of the Second Screen
IP is a two-way communication stream. At a minimum, a streaming video service knows that "someone" at IP address 18.104.22.168 requested a program, switched to a different program, and then went back to the original one for several hours. It can tell if the viewer skipped an ad after the mandatory five seconds or stayed engaged for the whole thing -- information more valuable to advertisers than forcing a 30-second ad on an uninterested viewer.
Connected TVs have changed viewing habits. In its most recent Digital Democracy Survey, Deloitte Consulting learned that 83% of viewers with a streaming subscription engaged in "binge viewing" of programming. Content producers for streaming services have responded by releasing entire seasons of programs at once, rather than week by week, but the new viewing habits they most want to leverage are not happening on the TV screen.
What content producers really need to know is what's happening on the other devices that about 60% of viewers watch simultaneously. If that device is a smartphone or tablet and a method is developed to match up the viewer of both devices, advertisers and content providers will have an unprecedented level of information about viewer preferences. Nielsen, the company that has been analyzing audience activity since 1930's radio, now reports extensively on second-screen viewing.
"The second, third and sometimes fourth screen is becoming a fundamental extension of the viewing experience," said Megan Clarken, executive vice president of Nielsen Global Watch Product Leadership, in a Nielsen Insights report. "While multiple screens give viewers more options, they also give content providers and advertisers more opportunities and ways to reach and engage with viewers. Well-designed experiences can not only make the viewing experience more enjoyable, but they maximize the time users spend interacting with brands, too."
Roku, the most popular stand-alone streaming device on the market, includes a "channel" for watching YouTube videos. The experience is cumbersome when just using the Roku controller, but YouTube encourages a viewer to use his or her device-pairing option to connect a smartphone, tablet, or PC. With a paired device, the viewer has more control, including the ability to "cast" a video playlist to the TV. Once paired, YouTube can identify the second screen in use at the same time as the TV -- and the content provider no longer needs to wait for one out of many viewers to post a comment to a fan site to measure the level of engagement. If the device is personal, the content provider knows exactly who is watching the TV.
Matching users to their content is an important industry goal, as we'll see during CES, which is opening today in Las Vegas. CES will once again feature the C Space Storytellers conference track, dedicated not to hardware and gadgets, but exclusively to digital content. CES's Chief Digital Officer Global Forum, or CDX, focuses on how digital platforms and technologies are transforming consumer engagement, marketing communications, and the enterprise. The list of participants, which includes representatives from a mix of major consumer brands, content providers and marketers, makes it clear that this is far from a niche topic.
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