You've probably heard it a hundred times. Television viewership is down. Mass media is no longer effective. Consumers are in control, and primetime TV is in peril. Time will tell if all that is true, but it's fair to say the last few years haven't exactly been glorious for our beloved television (HDTV and Blu-ray aside). Although mass media as we have known it may be a thing of the past, IPTV (television over the Internet) could bring viewers back to the living room and provide all-new opportunities for broadcasters, advertisers and, most importantly, for the audience members themselves.
Although many players have had a hand in the fragmentation of TV's mass reach, the Internet has been the driving force behind the migration away from prime time. As the Web reached mainstream status, it brought with it capabilities previously unavailable to most consumers: unbridled access to information, on-demand content, interactive experiences and, last but not least, user control. Clearly, consumers love these new capabilities; Internet usage continues to increase, often at the expense of traditional media.
However, while previous television platforms have been unable to truly scale or adapt to consumers' new expectations and interests, the IPTV platform brings with it the potential to have the best of both worlds: the connectivity, access, interactivity and control of the Internet, and the superior video quality, casual viewing experience and integration of the TV into the living room.
Unlike other broadcast systems, such as over-the-air, cable or satellite, which are essentially one-way communications, IPTV brings the kind of two-way networking consumers see on their Internet-enabled PCs. With that connectivity come exceptional opportunities for innovation and consumer engagement.
A glimpse into the future of IPTV reveals the potential for some compelling enhancements to the viewer's television experience. Imagine thousands of on-demand content options one click away - including niche content that would never make it to mainstream TV. Imagine never seeing an irrelevant advertisement again. Or video chatting with your friends while watching the latest episode of "Lost" and interacting with clues hidden in the show's scenes.
With the ability to dynamically place video ads based on user profile information and preferences, IPTV systems could radically increase relevancy and engagement. This opens up a world of creative possibilities for the next generation of TV ads. Interactive show experiences, long-form content and uninterrupted shows with advertisements alongside are just a few ideas.
Another potential benefit for advertisers will be the ability to measure ad performance - something that's standard on the Internet. Marketers will be able to track number of viewings, engagement times for interactive content and household demographics (based on data from the provider). The ability to report on performance and ROI could help IPTV gain popularity among advertisers.
As for the potential popularity among consumers, signs are good. A recent survey by Zogby International indicated 53 percent of Americans would consider replacing their cable or satellite TV subscriptions with broadband television. And IPTV's growth could be rapid. According to a Strategy Analytics report, the number of households using IPTV worldwide will top 80 million by 2011.
IPTV isn't without its challenges. Because the content is delivered over a network, bandwidth will continue to be of major concern and a necessary area of improvement. That issue is only compounded by the growing availability and awareness of high-definition content. Consumers won't have much interest in taking a step back in quality unless there's significant upside.
Even with the challenges, the IPTV platform has a bright future thanks to innovative companies like AT&T, Verizon and even Joost, which may end up having the best content experience once they are able connect to the TV. Even Microsoft is getting into the game. The company announced this year its plans to extend its Xbox 360 platform capabilities to include IPTV.
So once again the race to the set-top heats up. Let's hope this time the result is worthy of the hype.