What's the opportunity in TV apps for marketers? Part one in a two-part series.
The child of one of our staff members was in our LA office the other day and saw some TV app design work for a cable company on a conference room screen. Her initial reaction was to assume it was a blown-up version of her favorite Apple device and she started touching it to make stuff happen.
Not quite yet, kiddo, and you're getting fingerprints on my screen. But, apps on TV are moving into the mainstream and the next 12 months are going to see a big explosion - and a big opportunity for marketers to take advantage of a new platform.
A Little History
Consumers have been promised the "year of the interactive TV" for about two decades now. I recently came across a 2000 research report from a now-defunct investment bank. In the "Why We Think The Situation Is Different This Time" section, the report declared that cable, satellite, and telco infrastructure was ready, the Internet was going to make people crave interactivity, and that the early interactive TV trials had taught providers the lessons that would now ensure success.
Yeah, not so much; and that was 11 years ago. Remember the hackneyed example of our bright new future that everyone liked to use in the '90s? "You can buy the sweater Courteney Cox is wearing on "Friends." "Right from your TV!" It's quite a testament to Ms. Cox that she's stayed relevant since I first heard that scenario in 1996; sadly, we still can't buy her sweater.
Why not? The same reason most products succeed or fail: the intersection between technology and user behavior.
The research report I mentioned above posited that companies with existing "living room" relationships were in the best position to take advantage of interactive TV. This theory totally made sense - unless you've ever tried to launch a new experience on one of the dominant existing TV platforms. I worked with a guy at a very large cable company who once told me despondently, "I've been working here for six years and not one thing I've designed has launched to the public."
That's not surprising. Despite the best efforts of the nation's biggest providers, the TV set-top boxes of the last two decades just couldn't provide a decent consumer experience even for changing channels - never mind for a truly differentiated experience. (I'm sad to say I know this from personal experience, having designed many of these grandparents to modern apps, some small fraction of which actually launched.) They tried to provide timely news, sports scores, weather, and the like, but it often took 30 seconds or longer to load that info onto absolutely terrible hardware and software. Once loaded, there was five to 10 seconds of latency every time you pressed a button. These "proof of concept" ideas generated a ton of industry buzz and even won some awards, but consumers didn't want to use them and it's no wonder.
Faced with consumer apathy toward bad products, the industry did the most obvious thing: pointed the finger at the consumer. One of the things we thought we learned from the failure of early interactive TV apps is that the average American consumer enters a state of almost total inertia when sitting in front of a television. With one hand tucked in your belt and the other in a bag of Pork Rinds Lite, who's got the energy to adjust the volume, let alone go shopping? Clearly, we'd overestimated people's interest in performing via TV the types of tasks that they were perfectly willing to do on the computer. Until…
Enter Second Screen and iOS
It turned out that people actually were willing to do more than just loll on the couch. They just weren't willing to endure the frustrating experiences of the existing providers. Research started to show that consumers were watching TV while using their laptops, a lot. The practice accelerated as the smartphone became nearly ubiquitous; most TV watchers had a second-screen device in-hand to provide easy answers to questions like "who's that actor?" "what's the score of the other game?" and "what's happening on Twitter?" With the iPad and its imitators, the dam burst open. Now users have a device with enough real estate to see full web pages and video without the clunkiness of a laptop in front of them. As apps allow us to use tablets as a sophisticated remote (as many providers now do), these devices are in the living room to stay. And the second screen allows for happy co-viewing (e.g., checking your Facebook feed doesn't need to disrupt anyone else's experience).
The obvious question today is: do we still need apps on the TV? I think the answer is yes. As consumers, we love choice. I want to be able to do everything with a second screen…and do it on my big screen as well. Previously I've discussed the importance of letting users watch their content anywhere, but, for some content, there's just no substitute for the large family-room TV.
So what are the big players doing for apps? Can they use their sheer scale to change consumer behavior in a meaningful way? Will it be enough to attract marketers? Can it slow down the over the top (OTT) services like Apple TV, Google TV, Boxee, Roku, Rovi, Vudu, and TiVo and the dominant game platforms, Xbox and PS3 - all of which are attempting to bring content into the living room through the web connection alone? Let's take a look.
Time Warner Cable. Unless it has a big announcement in the works, TWC seems to be pretty far behind the rest of the pack. It has no third-party apps, nor a place to put them in its current system. It advertises a couple of "enhanced TV" features - like viewing your photos and the Start Over feature that lets viewers go back to the beginning of a show in progress - but appears to have no app framework.
Comcast. The big daddy of the distributors, Comcast is in more than 22 million homes in the U.S. (Fascinating fact: the numbers are so big and the company's had so much growth by acquisition, an exec there told me Comcast itself doesn't know exactly how many subscribers it has.) The Kabletown crew has been pilloried for being slow-moving, but CEO Brian Roberts has stepped up the pace in the last couple of years. Comcast's "Xcalibur" service, currently in a test market in Augusta, Georgia, is a hybrid of typical cable architecture and IP (web) data in a brand new box. The result has a lot of potential. You can see the system in action here, and the app section that begins at 2:30. (Full disclosure: I was part of the team at my company that designed much of the Xcalibur system.)
The most important thing here is that it has a discrete app area. If you're used to the Apple or Android app stores, the first thing you'll notice is a very limited selection, but Comcast has spoken boldly about planned growth.
DirecTV. Like Comcast, DirecTV has created an area of its system called "TV Apps." Unlike Comcast, it already has more than 50 apps to choose from. Some of them are pretty pedestrian, but there are also apps for Twitter, Facebook, Flickr, Gawker, Gizmodo, Gmail, weather, Fantasy Football, and more. DirecTV has taken the smart step of providing a web-based portal so you can do all of your adding of apps on the web and only consume them on the TV (like most TV-based management, adding apps on TV is slow and annoying).
Consumer electronics manufacturers. Over the last two years, we've learned that 3D TV isn't actually so interesting. But connected TV? There may be something there. Research company DisplaySearch projects that in 2014 there will be 123 million connected TVs sold worldwide. Part of this is the CE manufacturers looking for any way to add new features that entice consumers to buy, but some interesting standardization seems to be coming with Yahoo TV Widgets ("widget" is Yahoo's word for "app"). These widgets have been around for a couple years and now number around 150. The list is here.
Currently, Yahoo is working with Samsung, Sony, Vizio, and Toshiba to create a single platform. Unlike the OTT providers, Yahoo's working with existing providers to display on top of its existing content. Unlike the legacy providers, it can create these apps with HTML in a couple of days, rather than the act of congress it takes to launch something on the legacy systems. The downside? At this point, there's not a massive number of TVs that can run the widgets, but that's changing fast.
So what's the opportunity for marketers? At this point, the app stores aren't crowded, so there's a chance to make a mark. Advertisers who figure out a way to leverage successful campaigns through TV apps will get amplified buzz and press coverage and win first-mover advantage.
What makes TV special is the big-screen content, so the successful marketers will be those who leverage full-screen video rather than heavily text-based content. Content that ties in with shows or existing sponsorships to provide bonus materials or additional information will really help. Make no mistake: you're going to have to incentivize customers to get them to discover your app on these nascent platforms.
Smart campaigns that offer prizes, recognition, or affinity points for using a TV app will be a great way to get consumers to try interacting with your product via their TV. Whether they stay or not is up to you. Obviously, you have to make sure the application is good. But if you can create a quality product that provides real value to consumers, the distribution and growth opportunity is incredible. As marketers, we're no longer able to concentrate our marketing in one area; TV apps are a market that, in the coming year, will be hard to ignore.
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Andrew Solmssen serves as managing director of Possible's Los Angeles office, leading the firm's West Coast client teams and determining best practices for engagement management.
He previously served as managing director at digital firm Schematic, where he played a key role in developing some of the earliest advertising models for delivering broadcast content via the Internet. Andrew was also responsible for providing strategic guidance to clients such as Comcast, ABC Television, and NBC Universal in the areas of digital strategy, content distribution, mobile entertainment, and Internet TV. Before Schematic, Andrew served as executive producer at Web design and consulting firm Kaufman Patricof Enterprises.
A frequent speaker at industry events such as Digital Hollywood and CES, Andrew is also regularly quoted by business and trade media on the topics of digital advertising and technology innovation. Prior to his involvement in digital media, Andrew lived in Namibia as part of the Harvard Institute for International Development.
Follow Andrew on Twitter @asolmssen.
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