Commentary

Top 10 Consequences Of 350 Million Connected TVs In 2015

by Dave Morgan , Featured Contributor, June 16, 2011

As attendees to the Smart TV Summit in San Jose last week learned, it is estimated that by the end of 2015 there will be 350 million computer-driven, Internet-connected televisions in the world.

Even if these estimates are off by 20%, it will still be an enormous number and will likely have extraordinary impact on the media and marketing industry. Today, for fun, I have created my list of the Top 10 consequences of there being 350 million connected TVs in the world in 2015. Here they are:

1. More TV viewing. Nielsen just told us that live viewing of TV in the U.S . grew once again in Q1 2011 over Q1 2010. Imagine what the numbers are for all TV device usage if you include Netflix, gaming, and over-the-top web video viewing? Connectivity and computational power means more content choices and a more robust experience. That means more TV.

2. Video becomes app-packaged. Just as we have seen content and services become "app-packaged" for delivery on smart phones and connected tablets, so too will we see video become app-packaged on smart, connected TVs. Much of our TV channel paradigm will give way to TV apps.

3. Consumer electronics companies race to become the Apples and Googles of TV. Consumer electronics companies like Sony, Samsung, LG, Vizio, Roku, Microsoft, TiVo and many others will try to emulate what Apple has done in smartphones and tablets and what Google has done on the Web.

4. A la carte programming will pressure the business models of cable and satellite companies. If you're in the business of bundling dozens or hundreds of networks for packaged subscription sale, the inevitable emergence of a la carte programming -- HBO Go, ESPN 360, MLB.com, Hulu, YouTube, etc -- will create enormous pressure on companies that depend on consumers buying the entire package. The cable companies are already developing stand-alone offerings.

5. Not enough quality video content. As carriers, devices and networks scale up to serve more video content and services to connected TV users, producers of quality, branded content will find it a seller's market. They will find more buyers than they can serve, and lots of control over margins and pricing.

6. Companion Web services to video viewing. Unlike phones and tablets, TVs have enough screen space to support multiple simultaneous services at once. Anticipate a future where we're watching a prime-time show, viewing tweets from our friends and getting GiltCity offers all at once.

7. Less desktop screen use, which will mean more use of other screens. I am with Steve Jobs on this one. The personal computer as we know it is going to be demoted. People will spend less of their time with computers. TV screens, along with smartphones and tablets, will be promoted. People will spend much more time with them.

8. More device coordination. With the largest screens in the household now connected, we can expect much more coordination of services among the devices. Smartphones and tablets will become remote controls. TVs might become video phones (yes, I know Ma Bell started promising us this one 40 years ago, to no avail).

9. TV swallows set-top boxes. The set-top box -- the bastion of cable company control -- may move into the TV, and programming subscriptions may become just another app, like Netflix is today. At the same time, we may see new set-top boxes -- maybe in our phones or tables? -that will fight for control of the consumer video interface.

10. Disruption to all in the TV and video entertainment industry. The one certain consequence of a world with 350 million connected TVs is that every single company in all industries touching TV and video entertainment will be disrupted. Either they find a way to thrive in this world, or they will not survive.

What do you think? What will a world of 350 million connected TVs look like?

television, tv

16 comments about "Top 10 Consequences Of 350 Million Connected TVs In 2015".

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Doug Garnett from Protonik, LLC, June 16, 2011 at 6:22 p.m.
Let me add one...
"Consumers remain frustrated that there's never anything on that they want to watch."
Consumers told us this would be the case with the jump from 60 channels to 250 channels. They were right. And its still true with 500 channels. DVR's have done the most for changing this. But they just reduce the number of times people say this.
Given the rules of consumer behavior, my guess is that it will even be worse with 350MM connected TV's. Because they'll have some type of pressure that there "should be something if only they could find it" to add to the frustration that it doesn't really exist.
Reply

Dave Morgan from Simulmedia, June 16, 2011 at 6:32 p.m.

Doug, do you think it's that there's nothing on they want to watch? or that in a world of hundreds and thousands of choices, they don't know what is one that they might want to watch?

Paula Lynn from Who Else Unlimited, June 16, 2011 at 6:38 p.m.

For those who can keep the up the monthly fees ($1500, $2000+ per year), I would bet you are on the path of rightousness.

Doug Garnett from Protonik, LLC, June 16, 2011 at 7:06 p.m.

@Dave -

Hard to tell. We are funny - the human animal. Let me try this:

The world of infinite channels isn't what consumers want.What the mass of consumers WANT is to have a handful of channels where we can reliably find something we want to watch.

That makes it VERY unsatisfactory to claim to solve the "find something to watch" problem with huge volumes of channels. (There are people who are exceptions, but it's only a small percent that are really comfortable with huge numbers of channels.)

There's a great study out about today's special interest channels from the Ehrenberg-Bass institute. What they find is that, on average, people spend only limited portions of their viewing away from the major networks.

In other words, even with easy access to hundreds of channels, viewer behavior is to spend 90% of their time on 6 to 8 networks and go to specialty networks for brief periods of 1-2 hours at a time.

Truth is that any theory that humans like "unlimited" numbers isn't psychologically accurate. I'm reading that book about Packing for Mars right now. It's interesting how psychologically difficult the enormity of space is - both attractive and repulsive.

Would love to hear your thoughts.

Michael Michael kokernak from buyOTTads.com, June 16, 2011 at 7:35 p.m.

My pet peeve...

people that comment about there is nothing to watch.

I spent 18 months setting up three over the air antennas, three DVRs, Comcast, every single OTT box, every single service like Hulu, Netflix, Blockbuster...I bought a Samsung Connected TV.... I tied it all into my iPad, iPhone, Laptop, and multiple video devices through out the house. I even on a weekly basis track all the programming and pricing changes.

To those that say "there is nothing to watch and consumers don't want it"..... they don't know what they are talking about.

It is coming. It is awesome. The future is already here if you take the time to set up the equipment and use it.....commenters that don't use all the services and make uneducated assumptions just hold back progress. BTW-- today there is something on TV all the time if you just know how to look for it.

Michael Michael kokernak from buyOTTads.com, June 16, 2011 at 7:39 p.m.

and...if you know how to bundle you can already slash your monthly subscription fees with actually gaining tons of fresh content in new areas

..did you know Blockbuster pay per view movies are $1.00 cheaper than Comcast?

So even arguments about prices going up forever are also uninformed opinions pushed out into the ether.

Joe Bencharsky from iNet Entertainment, June 16, 2011 at 7:43 p.m.

A few items you missed: It will also move content generators towards richer and more interactive media. A feature of the internet of which they have not yet begun to scratch the surface.

And a new monetization model that allows affordable content across many channels and platforms. Ramping up pricing based on add-on apps and features is not a viable sustainable approach.

Michael Michael kokernak from buyOTTads.com, June 16, 2011 at 7:44 p.m.

navigation is improving and the clicks between getting to other video services is becoming seamless. This generation in a few years will have no trouble understanding how to toggle between providers. Any study released saying consumers don't want it is skewed to whatever the underwriter wanted the report to say.

Industry pundits need to start using the technology and become heavy users ...it will change everyone's perspective and comments.

Dave Morgan from Simulmedia, June 16, 2011 at 11:23 p.m.

From @zimbalist ... the end of Net Neutrality ... sorry I missed this one, because I agree with Michael. It is likely to happen and it is likely to be harmful.

Julia Kennard, June 17, 2011 at 7:15 a.m.

some further comments..

Will we start to see a swing-back from 'lean forward' viewing on PCs to the 'lean back' experience of the large TV set? Watching online video is now engrained with much of the population, but there is now a desire to get this online content back onto the TV set. It also brings back that social element of sitting round the TV screen.

OTT is going to change the Pay-TV industry with cord-shaving of expensive TV packages. However, it also represents great opportunities for Pay-TV operators to reach new audiences who don't have satellite/cable with OTT services. Good example here might be college students or single family households.

Doug Garnett from Protonik, LLC, June 17, 2011 at 3:37 p.m.

There's a funny concept that has woven it's way into this thread. And, I point it out because i hear it pretty regularly.

It's not our job to "blame" the mass of consumers for how they view TV and what they do. My observations about multiple channel are based, in large part, on observation ---- what do people tend to do?

This is critical because its what GoogleTV failed to do. It's what most tech industry TV advocates avoid doing.

Tech all-too-often fails as a result because they "build what can be built" instead of finding out how technology can be more useful to a mass of people.

James Smith from J. R. Smith Group, June 17, 2011 at 5:33 p.m.

Device convergence should move ahead as Mr. Morgan suggests but, my immediate concern is with "quality" content. Quality content is often confused with high production values. There seems to be plenty of eye-candy product available but will there be enough mind-candy product?

Mentally engaging/informational (non-news, non-talking heads) content is tough to find. Mind content is appealing to the higher education/moderate-affluent income demos. What services will rise to meet the needs of these electronic media consumers and the advertisers that hope to cost-effectively reach them?

Richard Kastelein from Agora Media Innovation Ltd. UK - V.O.F. Expathos Netherlands, June 19, 2011 at 10:22 a.m.

The key to delivering channels and content that one likes in the future will be a combination of curated and non-curated metadata creation by content producers, networks and 3rd party players (audio fingerprinting etc). You social graph will also be important - what your social circles watch and pass on will play a part in what you watch.

So yes, there are tens of thousands of apps in the Apple iOS store. It took nine months for a billion to be downloaded.

A mixture of multiplatform and connected TV will be the future - not one or the other exclusively for the greater part IMHO.

More thoughts here...

http://www.appmarket.tv/opinion/1229-so-shall-tv-be-disrupted-or-democratised.html

Snip

"I love that argument from big broadcasters and colossal content producers; who's going to pay for quality TV if we can't? Reality TV can be compelling but it’s mostly crap and it’s dirt cheap to deliver – usually at the cost of decent drama – and if that's what is going to be continuously spoon-fed, like Pablum, more and more to the public then the argument is moot.

Five hundred channels of which 80 per cent you don’t watch is not a good deal nor a sensible solution. And frankly, a lot of people prefer a la carte and subscription to what they want, when they want it rather than what Neilson and Barb think a few hundred families should determine what we want to watch at times that inaccurately satiate our needs.

Actually, it's creating the case for niche TV. And on Demand. And Subscription. And Indy producers from all genres being able to create content for their slivers of audiences. SciFi, Reality, Drama, Film, Horror, etc. "

Rick Monihan from None, June 20, 2011 at 4:39 p.m.

Adam Singolda wrote a recent piece about "Content is No Longer King" on the value of discoverablity. That is the ability to find worthwhile video is what value is derived from.

After reading all the comments, I have to say that while I questioned portions of his premise, putting into the context here makes it almost assured. That is, cable with over 500 channels today is boring. Why? There's still nothing of comparative value on at any given time. There are stretches of time when something good is on, but generally it's alot of bleck.
Yet, still, people watch.

Which means either they don't want to spend time seeking what they desire, and are willing to settle, or there is alot of really great stuff on TV all the time. I can't believe the latter is true.

Or, it could also mean that many people ARE finding what they want. In a connected environment, this will increasingly be the case. Freed from the constraints of linear viewing, people will find what they are looking for and watch alot of it.

Amit Khemchandani from Adatrix @BIZense Technologies, July 4, 2011 at 4:23 a.m.

Hello Dave, Just came across this article. Interesting...

The implications of this are many and varied. However TV is not a personal device like smartphone or tablet and it has a distinct personality. Its more like a friendly passive device ( till now ) for the whole family ( unless you're watching alone ) and each member has a distinct taste for content/channels.
So how much of personalization can be achieved and acceptable on the TV is still not clear.

One thing that can emerge from this scenario is that the TV content would also become available for consumption on our smartphones, tablets and PCs
under the same package subscriptions. This would allow content consumption by different members of the family simultaneously or at different times across different touch points with unique personalization and targeting.

Maybe some implications for future of converged and personalized digital advertising ?

Amit Khemchandani from Adatrix @BIZense Technologies, July 4, 2011 at 4:27 a.m.

Hello Dave, Just came across this article. Interesting...

Maybe some implications for future of converged and personalized digital advertising ?