Connected TV sets and boxes: an overview

Imano has just published a great infographic on how Brits are using their iPads.  Here’s a quick summary:

As a leisure device:
95% of owners use it in their living room and 89% in bed. Internet browsing and email is the killer application (98% and 94% respectively), but 88% are also using it to consume video, music and radio, and 78% use it for social networking. iPads are primarily for leisure – less than half of respondents use it for work.

A great transaction platform:
78% of owners use their iPad for online shopping. What’s very impressive is that half of owners (48%) say their iPad is the internet connected device they spend the most money on – more than mobile (11%), laptop (16%), fixed computer (19%) and cable/internet TV (4%).  If broadcasters/content owners want a transactional relationship with their viewers in the future then chances are this will not be via red button but via a second screen, particularly a tablet.  However investment in second screen commerce will be limited until iPad/tablet penetration picks up (which will probably come as prices drop). In terms of apps most iPad owners have paid-for 20-49 apps.

A shared device
31% of iPad users say they’re the only user.  50% of users share it with a spouse/partner, and 29% let their children use their iPad. While we talk about mobile as personal device, we need to design apps for iPad that can switch between a state of being personal and communal.

A strong connection with gaming consoles
I thought it was particularly striking that 51% of iPad users also own a Wii, 34% own a PS3 and 30% an XBOX – a far higher proportion of console owners that the broader population. We’ve already seen iPad used as a remote control with Comcast Xfinity amongst others, how long will it be until the iPad becomes the games console controller? Also, 79% of British owners use the iPad itself as a gaming device.

For watching video
The most popular source of video on iPad is YouTube (87%), closely followed by catch-up TV (74%).  The catch up TV stat is pretty impressive when you consider that it’s really only iPlayer that offer a full inventory of catch up material, with Channel 4’s 4oD service offering limited content and Sky Player costing £8 per month (although that’s changing shortly when Sky launch Sky Go)… this is going to be a major growth area.

iPad owners are real advocates
94% of British iPad users love their iPad – 70% say it’s ‘excellent’, and 24% say “it’s the best thing in my life”… oh dear!

Screen shot from Imano: click here for the full infographic

I have a confession to make: I don’t have a different password for every single online account in my name. Sure there’s a few particularly sensitive or transactional accounts which might be an exception but for most there’s a good chance it will be one of a couple of variants.

As a digital evangelist I should probably know better, but as more and more of what we do online is powered by a personal relationship with hundreds and thousands of different companies can we really be expected to remember the same number of unique and uncrackable password combinations?

Well for the 77 million plus Playstation Network users out there (of which I’m one) we’re faced with this this very question.  It’s a real wake up call that if a company the size of Sony isn’t encrypting our data properly then can we place faith in SMEs… is it safe to share my details with the likes of ITV, or the Guardian, or foursquare?

So what does all of this mean for the convergence of TV and the web? All the major broadcasters recognize the need to move past a reliance on BARB data and to develop a direct and data rich relationship with consumers, but the catastrophic failure at Sony is a further dent to consumer confidence in sharing their information.

Without registration it will be harder to offer consumer products that deliver a personalized service, from surfacing content that’s relevant based on explicit user preferences, to using account histories and user behaviours to power recommendation and improve user experience (eg. one-click purchase).  And let’s not forget this data is also important customer insight and of value to advertisers who may support our services.  As consumers lose trust the consequence may be to strengthen the attractiveness of universal login services through third parties like facebook further eroding our direct relationship with consumers and introducing a middleman (and middlemen eventually need paying).

There’s also a very practical issue for the kind of convergence we want to deliver.  Because of the PS3 hack I not only have to change my twitter login on twitter.com, but on all the accounts that sync with it: my mobile, tweetdeck, peep, tweetme, facebook, and the list goes on.  What does this mean if we want people to be able to buy through Amazon on their remote? And what about the next generation of EPGs that will be powered by the social curve and our online behavior elsewhere on the web?  We’re talking about not only a lot of places for data to leak but many more places to update when things go wrong.  Again this plays into the hands of the big players like Facebook, who would surely love every movement we make on the web passing through their walled garden, but then the debate moves from one of data protection to privacy…

Right now many consumers are sharing their information in a pretty unguarded way, in good faith, only to discover that the privacy they thought they had isn’t so, from facebook thinking it’s ok to pass their mobile numbers to third parties, or masses of sensitive information being passed to app producers via the unregulated Android marketplace (including many apps with the sole purpose of harvesting data). To remind consumers that all of this activity is permitted by the ‘terms and conditions’ on these services is no defense, these companies really are cutting off their nose to spite their face.  Add these privacy violations to the PS3 data leak as the latest in a long list of recent security compromises (play.com, Internet Explorer…), and a press who love to stoke up fear amongst the public, and we have a serious problem…where consumers will simply refuse to share, or worse the government will intervene in a big way.  Both scenarios are terrible news for competition and innovation, but most depressingly it’s terrible news for the free web and SMEs.  From Sony and facebook to startups present and future: we need to get our house in order, take consumers concerns seriously, or risk losing the most valuable thing we have: a relationship with the customer.

Yesterday I spent the afternoon at the AOP event ‘VOD and the rise of web connected TV‘ where Anthony Rose was speaking about whether publishers should be getting their content onto connected television platforms.

With 2 million connected television sets in British homes, and projections of up to 7 million by the end of the year (if the C.E. manufacturers meet their targets), content owners are switching on to this growing market.  The problem from a publishers perspective: – lots of platforms, a small audience (right now), big technical challenges and a lack of standards between platforms, messy and confusing commercial frameworks with platform owners, and the build of your product won’t come cheap.  But then there is one BIG pro to being a first mover: PLACEMENT.

With so many platforms vying for dominance they’re fighting each other to secure content.  The TV app offering is thin right now, and publishers with respected brands have an opportunity to get good visibility within the app store.  Think of how hard it is to get an iPhone app in the charts these days, or think about iTunes and the longtail of music that people never find – infact Anthony pointed out 60% of music on iTunes gets ZERO downloads each year.  There is an opportunity for the brave – to get on there quick, tweak their product to create the best service while the audience is small and forgiving, and then monitise the hell out their product when the market gets big, which isn’t that far away, while their competitors scramble to put something together.

All music to our ears as we set up to help brands and publishers navigate this market – understand the platforms and differing standards, develop the right business model for their content on connected TV, and most importantly create products that are suited to the television audience – simple, entertaining, ‘lean-back’ experiences that people want to engage with consistently.

One of the areas Anthony was most passionate about was the potential of connected television for news publishers and the opportunity to deliver a personalised service that draws relevant content, including the reams of stories that never make it into the paper.  He was also keen the emphasise that connected TV doesn’t only have to offer video based services – it can also be a great medium for pictures, games, even text services when done right.

And try as hard as I might to ask Anthony Rose about the rumoured 6 month delays with YouView…  he was keeping schtum.  Infact there was general despondency in the room about YouView and how, if it’s pushed back to 2012, the platform may struggle to gain the kind of market share once predicted.  In such a fast moving market consumers who upgrade their television sets will probably get a connected set and then be locked into that manufacturer’s platform (from Samung to Sony) for years to come.  I fear if YouView doesn’t get out there soon, it may not need to get out there at all.  From a publisher and brand perspective platforms like Virgin Tivo, Samsung and game consoles are becoming serious contenders for publisher investment.  I expect more fragmentation in the next 12 months, not less.

There aren’t many parts of the web where Yahoo is ahead of Google, but it seems television is one area it’s determined to get right.

The last week has seen several announcements (and rumours) from Yahoo.  First, rather than adopting the ‘internet on your TV’ approach taken by GoogleTV, they’re actively wooing television broadcasters, forging content partnerships to create VOD services.  The biggest deal so far is with Disney who will offer on-demand content from ESPN, ABC and Disney networks.  Whether they’ll be offering access to full episodes or just clips and trailers is unclear- assuming their service is of a similar depth to the ESPN’s XBoxLive service then Yahoo will be miles ahead of its direct competitors.  Of course Disney only represents about one fifth of the US broadcast market, but it’s a sign of Yahoo’s strategy that the success of connected TV depends on offering good television viewing experiences, and working with the big media owners.  No doubt Google is now trying to create its own partnerships having made a very costly and high profile mistake of trying to enter the market without engaging broadcasters, but they’ve ruffled a lot of feathers and I wouldn’t expect big announcements from GoogleTV anytime soon.  Expect to see more media companies ‘trialling’ services will smaller players first as they try to work out how to make IPTV pay.

Yahoo has always differentiated itself from Google by rejecting a separate app environment, and rejecting the full web browsing experience on television, opting to create a service based around widgets that overlay over broadcast content.  They’ve recognised that most people use their television to watch television, and that pulling up some graphical information or basic interactivity over their broadcast is not as offensive or disruptive as having to ‘quit’ the TV part of the TV and switch to the ‘app/web’ section.  In the UK ‘red button’ interactive services over broadcast are very much accepted and viewed as an enhancement to broadcast, not an alternative.  Yahoo have a unique offering – although unfortunately Yahoo Connected TV in all its glory is only really available outside of Europe as the overlay function has been disabled in Europe by their C.E. partner Samsung.

Another announcement from CES last week was Yahoo’s “Broadcast Interactivity” service, specifically targeting broadcasters and advertisers to create widgets tied into linear broadcasting.  They’re piloting the service with CBS, ABC, Showtime, HSN, and advertisers Ford and Mattel.  Some of products they have in development include a live reality show voting app, access to cast info and exclusive clips and stills around shows, playalong quizes, a ‘shop and buy via remote’ app, and interactive advertising.  What’s quite clever about this service is rather than relying on reams of broadcaster supplied metadata it uses audio recognition to activate elements of the widgets – practically speaking that means rather than Ford having to know exactly every time its advert is going to be broadcast on air accross the entire breadth of channels and times, Yahoo uses audio sensing technology that runs in the background and recognises the ad from its audio track to launch the app- this means (theoretically) that it can not only work on live broadcast, but also timeshifted viewing, playback and on demand.

While Yahoo Connected TV will probably never be a big player in Europe thanks to the lack of overlay and the impending broadcaster-backed platform launches of YouView (UK) and Hbb (Europe), I think Yahoo stands as a real alternative to GoogleTV elsewhere.  I’d expect to see further announcements and growth in the US, plus considerable market penetration in Asia where Yahoo has always trumped Google in its search business.  Watch this space.

(in a quick update to my last post about Samsung’s messy approach to internet TV it seems they may finally be engaging with content owners – I hear they’re trying to secure News Corp content for the Samsung connected TV platform).

UPDATE 6 JAN: Samsung have announced an interactive drawing game ‘We Draw’ as winners, with on-demand workouts IPTV service ‘Gymbox’ second and space exploration app ‘Armchair Astronaut’ in third – more details on LostRemote:
http://www.lostremote.com/2011/01/05/we-draw-wins-samsungs-top-tv-app-award/

ORIGINAL POST 4 JAN: Samsung have just announced the finalists of their $500,000 TV App development challenge, and unfortunately the lineup embodies all that’s wrong with Samsung’s approach to internet connected TV.

It should be said a few of the apps in themselves are actually neat ideas and nicely executed- like  ‘Armchair Astronaut’ which allows users to explore the solar system on their television set with a really cool layer of real time information about the planets, and ‘TheGymBox’ which is a simple idea of workout videos via IPTV- but even these good ideas will probably fail to capture many eyeballs, and that’s down to Samsung…

Samsung’s approach to connected television is flawed for a number of reasons…

1.  A bad U.I.: separating ‘apps’ and ‘television’
When navigating their devices there are separate zones for television (the EPG) and the app environment.  As an early market where the audience have no history of using apps on their television set I suspect most people will only play with apps for 15 minutes when they unpack the TV for the first time and then never revisit, and why should they revisit a bunch of shallow novelty apps?  Yahoo Connected TV is a better template where users navigate an array of apps (or widgets) via a broadcast overlay interface, but again it still only offers shallow services.   A better template which is already a success are ‘red button’ services in the UK tied in to linear broadcast- these prompt people to access interactive services that are relevant to the broadcast content they are consuming, which brings me on to…

2. A lack of convergence with broadcast
Samsung seem to think they don’t need to engage with broadcasters to make their platform a success.   Truth is we’re watching television broadcast content on average 4 hours a day and that’s a big potential launchpad for deeper interactive applications.  A couple of the Samsung finalists make attempts to tie in with broadcast, like ‘Numote’, a Foursquare-esque ‘check in’ app for television shows, and ‘Guroo TV’ which is an EPG based on social trending, however the scope and depth of these apps could be supercharged with the participation of broadcasters – where ‘checking in’ via Numote can actually reward you with much more than points or badges, or where broadcaster-provided metadata fuels another layer of recommendation within ‘Guroo TV’.  Truth is the app developers will struggle to strike a deal with broadcasters to tie in with their shows, but a market leader like Samsung could do this, particularly in Europe where 1 in 4 TV devices sold is a Samsung.

But despite the hype are Samsung actually that interested in apps?  I suspect not, particularly in Europe where it doesn’t allow any broadcast overlay interactive services.  I think for Samsung apps are just a novelty to differentiate their devides from their rivals.  Chances are it will eventually scrap its own proprietary television apps environment for whichever third party internet connected TV platform dominates further down the line, be that GoogleTV (in the US) or YouView (in the UK).

3.  Is it a computer screen?  Is it a mobile phone?  Who knows?
As well as physically separating ‘apps’ and ‘television’, and lacking convergence with broadcast, Samsung totally misunderstands television viewing behaviour.  For many people television is a social experience – so along comes another ‘Twitter on your TV’ app in the shape of ‘TV Twicker’ where your tweets pop up as you watch your favourite shows.  Have Samsung not heard of smartphones as a well established and pretty effective device for this?  And who really wants tweets on their television set – whether you’re viewing in group or on your own?  I don’t mean to be unfair to the developer because I’m sure there is a small audience out there who might use it, but for Samsung to select this as a finalist shows a lack of understanding of television user behaviour, and a lack of imagination and ambition.  Unfortunately it goes from bad to worse with a ‘social jukebox’ second screen app ‘WeTeli’ where people can add videos to a playlist queue in social situations (ok, that’s not too bad I admit), add comments and rate (yeah, I don’t think that’s likely), and wait for it… they can throw virtual tomatoes at the screen if they don’t like the video (ok, now that’s actually not even fun the first time you do it)… if this is Samsung’s idea of ‘social’ then I won’t be attending any of their parties anytime soon.

4. A bad deal for developers
I don’t mean to be down on the developers, they’re just trying to tick the boxes of Samsung’s restrictive competition, but if Samsung weren’t offering loads of cash and prizes would anyone bother?  I suspect not.  Samsung not only lack transparency on their commercial terms with developers around revenue shares but it also takes them a lifetime to approve apps – 3-4 months if you’re very lucky, often significantly longer.  Samsung say this is for quality control, as I said before I think this is because Samsung aren’t really taking TV apps as seriously as they suggest.

So, what next for Samsung’s high-profile apps challenge?  Well the winners of the US competition are announced at C.E.S. in Vegas this week, the European Challenges are taking submissions until mid Jan and then expect an announcement of the winners shortly after, and all these apps will appear on the Samsung Apps platform this half of 2011.

I think the majority of the developers of these apps have a done a good job within the restraints of the Samsung’s platform, but I’d say as soon as they get that cheque from Samsung they should spend it on getting their ideas on a better platform, and even more, where appropriate, find a way of convincing broadcasters to use their technology.  Broadcasters are not only hungry for good ideas (certainly in the UK), but they actually have the means to deliver an audience.  It’s that convergence of linear broadcast and web enabled applications that are the real killer opportunity in the next few years.