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iPO Analysis - TV Viewers Devising Their Own Convergence
Monday, November 3rd, 2008 at 2:45 PM - by
Several new trends in TV and Internet viewing have been noticed lately by professional observers and ratings services. Traditional TV viewers are asking themselves how they can better mix and match their services, and some viewers have been found to be time sharing between TV and the Internet. Internet access boxes that lock viewers into a niche on the Internet for the sake of the simplicity of the user experience may miss out on opportunities.
The convergence of TV and the Internet may be coming from an unexpected direction. Previously, those who thought about the so-called convergence issue thought of it in terms of electronics and technology. That is, eventually, the personal computer on a TCP/IP Internet connection via an ISP and a HDTV on a coaxial cable from a cable company would somehow merge in some undefined way.
Several factors have conspired to delay that convergence. In the recent past, various industries have solidified their market positions with technology and partnerships that have made it difficult to forsake one service in favor of another.
However, along the way, technical imagination, competition, and a hunger for new outlets for growth have also produced novel ways to deliver content. One can watch certain TV shows on an Apple TV or via Netflix streamed to certain Blu-ray players. Joost and Hulu.com offer TV on PCs and Macs. Cable and satellite TV have been feverishly putting video on demand services in place.
The result has been that with so many different avenues to chose from, smart young customers tied together via social networking services have figured out how to satisfy their viewing interests by cleverly picking and choosing amongst often competing services and weeding out the losers.
This is also creating a huge headache for advertisers because they're finding it increasingly more difficult to find and approach the viewers they want to get to, optimize their advertising budget, and construct meaningful metrics for the success of their advertising.
According to a recent report by Nielson, 30 percent of online activity occurs simultaneously during TV watching. What are they doing? According to Neilsen:
- Shopping online for products they see on TV
- Web searches
- Texting, chatting
In my own experience, I seldom watch a rented Netflix movie without having a Mac on my lap to check on the cast via the International Movie Database, imdb.com. A computer is also handy when a topic or issue comes up on TV that one wants to find out more about via a Google search. "Did Joe Biden really say that?" Audi launched an intriguing commercial, "Progress is Beautiful," during the Beijing Olympics and it's often seen during football games. Miro, for example, plus YouTube allows one to download and savor that amazing ad. It's almost as if the world of one-way TV feels limited, while the complementary Internet provides multitasked background and perspective on everything we see simultaneously.
The Fragile TV Economy
TV Watch noted that there hasn't been a serious decline in cable TV subscriptions, despite the economic slowdown. That's likely because when times are tough, people need their escape vehicle. What they're not doing, however, is not adding premium services like HBO, Showtime, for example, because they've become accustomed to watching premium content in other ways, Apple TV, boxed TV series on DVD/Blu-ray, or some other more flexible choice.
Just at the time when an explosion of different avenues for viewing video seemed to be spiraling out of control, the slowdown of the U.S. economy, in particular, is crystalizing a new set of exploratory patterns by viewers who've learned how manipulate their iPod, Apple TV, Macintosh, DVR, and packaged media to satisfy their interests.
As a result, a lot of focused and restricted services, like the Apple TV, that rely on simplicity and inflexibility to meet peoples narrow needs could fall out of the equation, while services and hardware that give people the ability to creatively construct their own solutions, like the PC and the Mac, with supporting hardware, will likely be the winners.
Impact on Apple
Companies that detect and plan to exploit this trend will devise convenient, flexible solutions rather than focusing on protecting specific, outdated revenue streams. Apple has been criticized recently for not making some key, desirable modern video technologies available in their products because of their own vision, agenda and culture. That may have worked when times were good, but nowadays, customers are about the cut-throat business of identifying the losers, optimizing their viewing packages, constructing their own personal video technologies, time shifting and cutting costs.
That's creating a new game in town, one that every supplier of video products, including Apple, will want to monitor with keen attention.
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