The next generation of TVs will include technology that will allow for the installation of apps and the ability to pull content digitally, from anywhere.
People are not buying TVs much anymore.
People are still watching TV, of course. There doesn't seem to be any slowing down in the amount of time that people are willing to devote to watching shows. But consumers seem to be wholly satisfied with their current sets, and sales have been slow for the last few years.
But, really, why shouldn't they be happy with their current televisions? Many people have flat screens, and often those flat screens are big. High definition has been on the rise, as well as surround sound systems. If their TV can't connect to the Internet, there are myriad other options to get online content on their TV: game consoles, DVRs, and accessories like Google's Chromecast or AppleTV.
The problem, of course, is that consumer satisfaction puts manufacturers in a tough position. A happy customer is a wonderful thing, except that happy customers don't go out and buy new things. There was a valiant attempt over the last few years to get people to upgrade to 3D TVs, but no one seemed to care.
But they can't stop trying, of course. This year, at the Consumer Electronics Show in Las Vegas, there is a new push going on; this time to get everyone to upgrade to smart TVs. This time, it may just work out, and that gives advertisers a really great new opportunity.
The Center of the Living Room
No matter what new technology comes along, it seems that the television remains the center of the living room. The TV is usually the biggest screen in the house, so it not only gives the best viewing experience, but also easily allows for sharing (as in two people sitting on the couches watching the same thing; not sharing like on Facebook).
People clearly didn't want 3D in their living room. So what do they want? Variety and choice and options. The real revolution in TV has been about content and shows that have benefitted from technology, either by existing on a platform that is digitally delivered (like House of Cards on NetFlix) or fostered great communities of fans who spread the gospel of great shows (like The Walking Dead on AMC).
The next generation of TVs will, yes, have some technology that will increase the quality of the images (things like 4K displays, sometimes called Ultra HD). But more importantly, they will put technology within the TV that will allow for the installation of apps and the ability to pull content digitally, from anywhere.
This is going to spark a series of shifts in the TV markets. Here are a few of them, along with the reason these are important for advertisers.
Channels will Fully Become Brands
For a long time, it was difficult to clearly tell the difference between different TV stations. Could anyone say, clearly, what a CBS show was, versus an ABC show? Of course, you knew the difference between shows, but not really between the networks.
The growth of cable networks really blew that whole thing up. It became very clear what an HBO show was and how it was different from an FX show. Channels have now really become brands in their own right, standing for something and building a following. I will watch pretty much anything that runs on AMC.
There's only one way that this can go, for advertising: channels will start to work more directly with brands to create new content. This is the same story as native advertising, where online content brands (like Buzzfeed, for example) are reaching out directly to brands to build content that is also advertising, but fits directly into the overall experience.
Brands Become Channels
It has always been easier to get online than to get on the air. The limitation of frequency is not the same as the limitations of bandwidth and anyone can get online. That means that brands can start to seriously think about creating their own destinations on television, in the same way they think about having their own destinations on the Web.
This may happen in one of two ways. The first is that some brands will be brave enough to, literally, launch their own TV channel. Many have already taken a medium step toward this with launching their own YouTube channel. Being on TV will be different, though, because brands will expect viewers to tune in for longer stretches of time, and will take advantage of the big screen and shared nature of the TV experience. Today, brands have lots of short videos on YouTube. Tomorrow, they may also have a few longer forms of content -- something that could reasonably be called shows.
The other way will be that brands will hop on new channels. The men's lifestyle magazine Esquire recently launched a cable channel. We should expect that other publisher brands will follow suit and that they will bring along with them the advertisers that they already have relationships with, either simply as commercials spots in the shows or as content development partners.
Apps. Again with the Apps.
Smart TVs will have their own app stores, filled with tons of small apps that perform specific functions. Brands like The Weather Channel will, assumedly, get an app on those stores quickly, because we can assume that people will begin to launch apps rather than tune to channels.
That becomes another way for brands to get on that Smart TV screen. The apps they build should start to think about how they can take advantage of that big screen environment, either providing news or utility or fun.
My guess is that Smart TVs will, in fact, catch on. They are not doomed to the same fate as 3D TV, simply because they are not a novelty, but rather a deepening of the same kind of behavior that people already enjoy with television. And advertisers will get a chance to take advantage of this because TV isn't going away, and neither is advertising.
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Gary Stein is SVP, strategy and planning in iCrossing's San Francisco office. He has been working in marketing for more than a decade. Gary lives in San Francisco with his family. Follow him on Twitter: @garyst3in. The opinions expressed in Gary's columns are his alone.
Hong Kong, May 5-6, 2015
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