• by Michael Kokernak , July 14, 2010

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.

Google's PageRank is based on a reverse-linking metric that determines the value of a Web site and its subsequent placement in search results. Simply put, the more Web sites that link to a popular site, the greater the value PageRank delivers to consumer search and to advertisers. Today, however, Internet clutter (defined as social "conversations") might soon begin to erase PageRank's effectiveness.  It should be no surprise then that Google has entered the device business.

Web 2.0 is all about linking Web sites through passwords and then sharing user data between Internet properties and devices. Bundle enough of these sites together, (across expensive devices like the iPhone, iPad, Android, etc.) and the Internet doesn't seem so free and open anymore. To say the least, this walled-garden marketplace has weakened overall Internet measurement technologies and made great content that much more valuable.

Facebook has a massive appetite and  is constantly being fed bootlegged videos from local and national television outlets. Consumers happily send the video downstream. What could be classified (in some cases) as copyright infringement, is relabeled as social conversation, and then distributed freely without restraint. Not a great place for advertisers. 

Web URL shortening services (like TinyURL.com and Bit.ly) accommodate Twitter's character limit by changing URLs into abbreviated links. It becomes tougher then to establish a link between the URL's origination and it's consumption. To make matters worse, Google and Bing are populating their search results with tweets, which further increase overall Internet clutter while simultaneously weakening advertiser recall.

The television industry was quick to adopt social media. It seemed almost overnight every local newscast, TV show, and TV commercial had a collection of Facebook, YouTube, and Twitter addresses.  I'm convinced that unwittingly, over the past decade, tens of billions of dollars in valuation potential has slowly been siphoned from TV to the Internet.  The market cap of some of these Internet pipelines has skyrocketed as a direct result of the constant free TV exposure.

In order to secure strong revenue growth, the TV industry needs to develop a simple metric and pleasing consumer experience like PageRank -- a metric that marketers can understand and one that is scalable. To begin with, marketers, when reviewing new types of measurement techniques, will most likely still require control over commercial placement and an easy-to -pply return on investment formula.   From a technical standpoint TV can deliver this cross-platform experience for both TV and the Internet from a single TV remote control click.  

Marketers could conceivably determine the exact time the TV program was watched -- partly via the set top box return path -- based on when the TV click (captured from their TV commercial) hits their Web site. Today's hotly debated issue regarding the effectiveness of fast-forwarded TV commercials will fade, as a TV click will deliver absolute proof of engagement. 

One TV click, like Google's reverse-linking metric, can act like a nail gun that staples the price of the TV commercial avail right to the exact consumers (and their demographic profile) who followed up on the Internet. This one click could not only optimize a marketer's TV commercial schedule, but also introduce cohesive planning for adjacent Web buys on the Internet. 

Obviously there is a tremendous amount of work ahead for the television industry.  TV Everywhere, mobile DTV, and Canoe Ventures are great first steps. In addition, (according to Cable Television Labs), around the end of 2010 there should be up to 25 million set-top boxes that are EBIF-enabled.  These set-top boxes should be television's first device paywall, and they should be used to push back on the device makers.   

Jobs, when describing the iPad in an email to a tech writer, said the device would provide "freedom from programs that steal your private data." With his comments, Jobs gave us some insight  into the probable long-term strategies of all the device makers. They are communicating to us that they want to move content into their devices, within their environments, and eventually under their compensation rules. A future of free and open Internet is shaping up to being more of an ideal, rather than what will become our reality. 

Make no mistake. Our future will be forever interwoven with Apple, Google, and other device makers. However, the activation of those 25 million EBIF set-top boxes, around a simple TV click-through metric, could help to ensure that we remain an independent television platform (with pricing elasticity and consumer choice).