• by Joe Mandese  @mp_joemandese, October 2, 2009

Widgets, or Web-enabled downloadable applications, may finally be the technology that drives an interactive TV - and advertising - marketplace. That's the conclusion of "Will Widgets Work?," a new white paper released late Thursday by the Global Media & Entertainment Center at Ernst & Young. The paper chronicles the long, protracted history of "missteps" to develop an interactive TV infrastructure that resonates with consumers and marketers alike, and gains the kind of critical mass that conventional TV, or the Internet, have achieved - everything from Time Warner's ill-fated Full Service Network through Microsoft's WebTV, AOL TV, Apple TV, and a variety of proprietary applications and/or platforms - and concludes that it is the open source nature of downloadable applications that may ultimately make it a reality.

One of the main reasons for the enthusiasm the E&Y team has for Web-enabled TV widgets, is that consumer acceptance for downloadable applications has grown rapidly since Apple opened its iPhone to them and created the App Store to facilitate a marketplace around them.

"Widgets have very quickly become a part of consumers' daily lives, and you would be hard pressed to find a computer or mobile device without them," states John Nendick, global sector leader at E&Y's Global Media & Entertainment Center. "When you combine consumers' increasing reliance on widgets with the rapid incorporation of Web-enabled technology in almost all new hardware, the proliferation and adoption of widgets on television becomes self-evident."

The paper reveals research conducted by E&Y showing consumers are especially keen on the potential widgets have for improving their TV viewing experience. More than three-quarters (76%) of consumers said having a widget toolbar on their primary television would be valuable, while nearly two-thirds (61%) said they would like their television to connect to the Internet. Nearly a third (30%) consider the idea of news and information widgets on their television to be "appealing."

The most significant finding as far as Madison Avenue is concerned, may be the potential Web-enabled TV widgets have for creating interactive TV advertising experiences. But the development won't be without its consequences for the conventional TV advertising marketplace.

"As TV viewer attention migrates from programming to TV widgets, broadcast ratings and advertising rates may need to be protected against further erosion," E&Y says. "Although, there is a potential that TV widgets could reduce channel surfing because they permit consumers to view multiple sources of content at one time, one challenge to manage is that conflicting advertising could appear simultaneously (i.e., a TV widget from auto manufacturer A on the screen during a commercial for auto manufacturer B). Another potential issue is that one widget could lure viewers to another competitor's network program. These challenges need to be managed so the true marketing and viewer benefits of TV widgets are not eclipsed."