Zeebox and first mover advantage

3 weeks ago I bought myself a sexy new Samsung smart TV, then just over a week ago came the perfect accompaniment in the form of Zeebox for the iPad.  Sure it may not be the most incredibly groundbreaking idea to create a TV listings app that delivers and allows you to share contextual information about what you’re watching – but then it’s simple things which often catch on.  Most of us have done the conference circuit and heard talk after talk about all the amazing possiblities of the second screen syncing to TV (from interactive ads to transmedia TV formats, shopping to new forms of content discovery), but now someone’s actually done something about it, and you’ve gotta at least respect that.

So here’s what I like:

1. Simple, intuitive and clean UI: It’s a really sleek design on iPad.  I love the forwards/backwards EPG (albeit limited to now, next and the previous show).  Clearly Anthony Rose has taken one of the better ideas from youview and run with it, although it would obviously be very exciting if/when it integrates with catch-up services.  I also like the simple ways of organising content by channel, popularity, friends and genres… if I had more than one friend on Zeebox I’m sure the ‘friends’ view would be quite compelling, which takes me on to…

2. Social features: It’s nice I can see what my friends are watching (although maybe my friends don’t appreciate me knowing they’re watching ‘Boob Envy’ on PickTV).  I like the prospect of inviting friends to view with me (again, when I have more friends on the app).  It’s a great bit of foresight to automatically add the show hashtag when I go to tweet.  And the fact my login to the app is via Facebook Connect makes life easy too.

3. Zeetags: Sure some of these aren’t quite right – but they’re pretty spot on!  While everyone else seems to be talking up investing shed loads of money into audio stream technologies Anthony Rose has taken the simpler and cheaper approach of generating tags from subtitles.  Ok – so it’s not that exciting that zeetags only lead to wikipedia and news – but there is HUGE commercial and creative potential here for both broadcasters, content owners and third parties – zeetags could be like a google adwords (or promoted tweets) for TV.

4. Controls your TV: I love the fact it can switch between channels on my TV – that makes it worth it alone.  Of course it’s pretty limited right now and doesn’t really address the issue that I tend to flick between Freeview HD and Sky – but again there’s a lot of potential as Zeebox is cutting out the remote and the traditional EPG – again a clever move with big implications (how long until a service like YouTube or Netflix buys a placement in the Zeebox EPG?).

5. Fast: It goes without saying but to keep my attention the app needs to download images/metadata quickly and be traction free – and it is pretty good in this regard.

There’s a few other bits in Zeebox that I’ve not tried or don’t really pay attention to (shopping, audience popularity, twitter feed (but that’s because I have my tweets open in tweetdeck on my third screen)), but then I’m sure others do use them.

The big thing for me is this has the potential to be disruptive.  So no one’s heard of ‘Zeebox’ as a brand yet, but how far behind are the broadcasters with their own version of this kind of thing?  If youview try to do something then are we to wait another year?  In that time zeebox (which will be on iPhone and android too I’d guess) may be a destination in its own right.  I was running a brainstorm called ‘Death of the Remote Control’ at Mindshare last Thursday and I was taken aback when I showed them Zeebox and they got very excited at how they could promote brands through zeetags… there are serious dollars which might leak to this kind of third party app.

So what are broadcasters to do?  They can get on board and make Zeebox an even more compelling proposition by giving it access to advertising timelines, additional content, interactive features, on-demand, and maybe in return share that potential revenue and get some valuable data?  Or they can try to kill it – create technical standards that make integration complex, deny it access to on-demand content, or try to create something better (and stay better).

It’s an exciting (and shrewd) move on the part of Anthony Rose.  To deliver something like this in under 9 months is pretty impressive, and the broadcasters are going to struggle to move at that pace themselves. I look forward to seeing what Zeebox, broadcasters and advertisers do next.

Zeebox Video Tutorial

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.

A couple of months ago at the AOP event ‘The Rise of Connected Television’ (Jan 2011) future technology visionary Anthony Rose said “publishers now need to embrace connected TV”.  But with so many platforms, no proven business model, and considerable technical hurdles which come with not-insignificant development costs, who is going to move first in the UK?

While quite a few US news organisations have jumped on the connected television bandwagon, UK publishers are still pondering which platform is worthy of investment, if any, and whether the answer is in flash apps, TV optomised websites or lean back video services.

Prioritising resource allocation towards competing devices- from Android or Blackberry tablets (for example) versus connected television is is not an easy sell internally.

While there are reasons to sit and wait, I also think the reasons to invest NOW are equally compelling.  So for publishing companies out there who create and own content here are 6 key points to help you sell this investment internally.  Or if you’d rather have someone else sell it to your senior team give us a call and we’d be happy to present.  So here we go…

Reason 1. TV App Placement
The new connected television platforms are short on content right now. Samsung, the leading CE solution, has only 380 applications in the app store. Virgin TiVo has only a handful but by the end of the year it plans to have ‘hundreds’ of television apps competing for space.

Reason 2. Promotional Activity
The competing platforms are/will be marketing their connected solutions aggressively, and popular third party apps can benefit from this activity. YouView have a promotional budget of £50million. Samsung are spending $70million globally promoting their connected television app store.

Reason 3. Growth projections
There are already 2 million connected television sets in the UK. This is due to rise to 5.6 million by the end of this year, 11.6million next year, and 100% penetration by 2014.  Globally 40 million connected TVs have already been sold.  60% of new televisions being sold next year are expected to have internet connectivity. Major retailers Best Buy and Walmart say they will only sell connected TVs by the end of 2012.  Independent research predicts YouView will have a market penetration of 3-4million by 2014 (high case scenario 8.3million). Virgin’s new TiVo box will be rolled out to 3.7million customers over the next few years.  TV app downloads are also accelerating: it took 268 days for Samsung to shift the first million television apps, but 53 days to shift the next million.

Reason 4. Rival Activity
There are only a few flash based news apps on connected televisions so far, including the AP News Ticker, weather and stock price tickers. More investment has been made into HTML5 television optomized websites (launched in GoogleTV’s app environment ‘Spotlight’), for example New York Times, USA Today, Al Jazeera TV, CNN, C:net, Huffington Post.  In terms of the UK VirginMedia TiVo has its own Celebrity news app.  No major ‘household name’ news publisher is established in this space, yet.

Reason 5. Television: An attractive platform
At the moment connected television users are more tech saavy and higher earners (owing to the price of connected TV sets). As set top box solutions and platforms like YouView launch (a hybrid connected TV/VOD and Freeview platform) the audience will broaden. Either way the average Brit is spending 4 hours a day using their television set. The adoption of video on demand is increasing: 8% to 22% active reach in the last 2 years.  Connected TV offers a lean back television experience to the consumer but the level of insight and accountability that advertisers expect from online.

Reason 6. Capturing a new audience
Lastly as highlighted in last weeks NMA session on media consumption by kids (see my recent blog post) – there’s a whole audience to whom formats like print are completely irrelevant (and dare I say it, even PC based web-browsing is not that important to certain sections of the audience).  Publishers shouldn’t only be thinking about retaining their existing customers in a shrinking market, but about how they can attract new customers through these more relevant platforms.  This is not just about getting a TV optomized website, it’s about producing the kinds of content that works on connected TV (and other devices)… think moving pictures, photography, graphics, it’s a whole new set of rules that requires a completely different mindset… and we’re always on call to help!

Limited by space I haven’t chucked everything in but there are many more compelling statistics and projections to back up these 6 points but this should hopefully get that conversation started in your digital teams.

A final note: this week I’m off to South by Southwest Interactive in Austin, Texas to represent The Connected Set – so things may be temporarily quiet on the blog front but no doubt frantic on the twitter front @theconnectedset.  If you’re going to be out there and fancy a beer there drop me a line.  Jason (MD, The Connected Set).

Radio 4’s Media Show led with the news that YouView’s launch has been delayed again, this time until ‘sometime in 2012’.  You can catch up with the full interview via iPlayer here, but here’s a quick summary:

Before Richard took to the mic YouView’s problems were summed up by media consultant Matthew Horton:

• YouView has been too focused on managing up and getting the platform through BBC Trust approval.  Managing down and getting the thing built has not moved quickly.
• Shareholder disagreements have also been a major problem – particularly issues around cost recovery for running the platform (already £6million per shareholder) and the user interface of EPG versus a more web like navigation experience.
• The latest delay will only see other connected platforms gain market share (in fact in today’s New Media Age Nigel Walley at Decipher said “YouView has missed the window to be the dominant force in the market”)
• With the delay it will be launching in to a more developed market, and it’s crucial it gets it right first time.
• They still don’t have a working box.

Then Richard Halton’s turn to respond:

• Trust approval for YouView was a year later than planned which had a knock on effect on to the delivery schedule.  They now have a plan to launch early to mid 2012 and it includes plenty of contingency.
• They’re very happy with the user interface which is working but the backend coding is proving more complex.  As YouView is a ‘complete solution’ including payment this is adding to the complexity.
• They’re reducing the scope of some elements of the project.  Only last week all the shareholders agreed on a new reduced specification and timeline, which is why they held off announcing the delay.
• Asked on first mover advantage Richard said being first is not always best, citing GoogleTV’s failure, and saying how iPlayer got it right even though it launched after 4oD.
• He also argued the audience (predominantly Freeview customers) are not early adopters.  (certainly most people outside the industry haven’t heard of connected TV, let alone YouView).
• Asked about the fact catch up services are already available across multiple devices including PS3, Wii, Virgin, etc, and if it makes YouView irrelevant he said it will be the first platform to bring all the major VOD services and EPG together as a seamless package and that he thinks it is just as strong a consumer proposition despite the delays.
• Will it launch by the time of the 2012 Olympics?  “Absolutely”.

I know a lot of people are already writing off YouView but it’s my belief that it still has the potential to be the leading platform, or at worst second to Sky in terms of market penetration.  The main reason for my optomism is that the broadcasters are the shareholders.  Content is king in this case, and while they may deploy their catch up services on other platforms the opportunities to create new converged content services on their own proprietary platform *should* make YouView more compelling than rivals.  Let’s not forget it is still live and time shifted viewing that accounts for over 95% of TV content viewing.  With so much investment the broadcasters have to make it work – expect them to throw a lot more cash at it for launch, as well as huge chunk of airtime .

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.

Last week Virgin unveiled details of its new set top box which it has built in partnership with TiVo.  After years of having EPG, catch up and V.O.D. services built on legacy systems from the NTL Telewest era, Virgin are future proofing themselves in this new powerful box which comes complete with a 1 TB hard drive (that’s 10 times the average Sky+ box), 3 tuners, a 10Mbps modem and the latest (localised for the UK) TiVo middleware.

At £199 + £40 installation, + an XL TV sub package, it’s not cheap, but no doubt prices will fall pretty quickly as Virgin tries to capitalise on what is a major competitive advantage over Sky’s service, as well as etsablishing market share before YouView launches towards the middle of 2011.  2011 will also see Virgin build upon the platform, launching an iPad app which syncs with the box (similar to the comcast Xfinity remote app), multiple user profiles for personalisation, a QWERTY keyboard, and the much hyped app store (the rev share deal with developers is still tbc, but Cindy Rose (director of digital entertainment at Virgin) claims that within 12 months they’ll have “hundreds” of apps on the platform).

So the opportunity for 3rd parties in the apps space may be unclear in the absence of any commercial framework and no open SDK as yet, however Cindy Rose is talking up the possibilities for new IPTV services that may have previously been commercially inviable via linear broadcast – specifically local and non-English-language services which is something YouView have also been promoting.  The commercial deal is the big stumbling block here, whereas YouView won’t be taking a cut of payments (or at least will take a nominal fee) the Virgin deal is undoubtedly going to be less generous – say 30% based on mobile apps fees.  Virgin’s big advantage is the dedicated 10Mbps broadband connection going straight into the box making broadcast quality streaming the norm, freeing the platform from the limitations of copper networks that will delivery the majority of YouView IPTV.  Perhaps the loss of revenue to Virgin is a price worth paying for a broadcast quality service that consumers are far more likely to pay for?

For the full interview with Cindy Rose, Director of Digital Entertainment @ Virgin Media click this link: http://paidcontent.co.uk/article/419-interview-virgin-medias-cindy-rose-on-the-connected-tv-explosion/