Media'ZBiz!

According to a report published early this year, over one-fourth of users ages 18-24 are interested in having more social media features integrated into their TV. The study found that there’s a desire to use social networking as a platform to actually enhance the TV-watching experience through interactive chats with other viewers and to have the ability to recommend shows to friends. Another new study by Knowledge Networks reveals that the ways in which people learn about and ultimately decide to watch video on TV or the Internet are remarkably similar – with verbal word of mouth (in-person conversations or phone calls) scoring well above social media as a regularly used source, and TV ads and search engines also playing major roles.

The “lean-back” medium is now more “lean-in” than ever.  The report, shows that television ads are the most important source for discovering new programs and deciding what to watch on TV (see table below), with verbal word of mouth coming in second for discovery and third for decision making (behind interactive program guides).

‘We see a variety of important, often untapped opportunities for leveraging the ways people learn about and decide to watch video,’ said David Tice, Vice President and Group Account Director of Knowledge Networks. ‘On TV, the interactive program guide remains largely underutilized for promotion, given its central role in viewing decisions. And, with online video, one sees the possibility of placing too much emphasis on social media sources, such as tweets from celebrities, as direct drivers of viewing. In fact, it is ‘in-person’ word of mouth and search – even TV ads or coverage – that show more influence in the online space.’

At the same time we all know that viewers are increasingly leaning froward and socially engaging on other devices while they watch TV. This is know as media blur. LiveHive Systems, measures how viewers are socially engaging with TV while they watch. Their ‘Social Engagement Index’ summarizes the interactive behavior of viewers to determine in real-time how effectively a show is socially engaging its audience. ‘The Social TV movement is forcing media companies to rethink how content is produced, distributed, and consumed. However, the tools to understand how viewers are engaging with a show have failed to keep pace.’ said Dave Bullock, President, LiveHive Systems. ‘Nielsen ratings make a rough estimate of how many viewers are watching a show, but Nielsen is not able to measure how engaged these viewers are, or how they are promoting the show on the social web. These are critical metrics that determine a show’s value and its impact for both producers and advertisers.’

TV shows producers are trying to monitor when fans talk about the programs. Getting the attention of someone who is texting, tweeting or talking about a TV show might still be good enough, after all, if you can’t get them to watch the TV show in the old-school manner.

‘We are in the early, early stages of what is now kind of being deemed ’social TV,’ said John Moore, exec VP-director of media services at Interpublic Group’s Mullen agency. He envisions more TV programming having a built-in social component over the next decade. Consumers between the ages of 18 and 24 “don’t want this isolated TV experience,” which he thinks will prompt TV networks to connect their content to Twitter, Facebook, MySpace and various widgets that will be packaged with a new breed of TV sets.

The online video industry is moving closer to Facebook. The latest example is ABC.com for its “V” program, CBS with its initiative around CSI and the recent offering by Hulu. Facebook Connect is Emerging as powerful catalyst for Video Views. Randi Zuckerberg explains to us why (video originally published on Beet.TV).

While the online video industry is moving closer to Facebook, mobile operators are moving closer to Twitter as a way to increase their average revenue per user. Orange, which runs TV services in France, Spain and Poland, just announced to offer tweet-as-you-watch service and integrated mobile features. Until now Twitter users have only been able to send and receive tweets from their online account or by text message. The key to the deal, is that Twitter will become completely integrated with the suite of digital media services available via its mobile portal.

“In countries where we have TV services we plan to enrich shows by allowing people to tweet while they watch their favourite programmes,” said Stephanie Hospital, vice-president of marketing and development at Orange.

In a similar way (but for free), a new application is now available on iPhone (and iPod touch) called tvChatter, enabling viewers to tweet in real time about their favorite TV shows. Watch tvChatter’s vision in video.

As audi­ences con­tinue to frag­ment, as more of us mul­ti­task with lap­tops on our laps while watch­ing TV, and as the Inter­net finally comes to our liv­ing rooms with a new gen­er­a­tion of solutions like listed lately by Gary Hayes (Social TV Reloaded – 20 Best Solutions), it’s only a mat­ter of time before tele­vi­sion becomes ‘fully’ social! Social TV offerings, are on many operators’ roadmaps.
(Published simultaneously on GLITNER’s Blog)

The content industry is worried about distribution becoming free. This is a global phenomenon. The more broadband we have the better devices, the more the push towards sharing without payment is clearly there.

BBC News in their yesterday’s Q&A, Internet Piracy Plans highlights the principal issues:

The creative industries estimate that six million people in the UK regularly file-share copyright content without permission, costing the industries revenue that they cannot recoup.

In 2007, an estimated one billion music tracks and 98 million movies were shared illegally. A report by analyst firm Forrester recently reported that 10% of all internet users in the UK share files illegally. The figure for Europe is 14%.

Will banning persistent file-sharers work?

The creative industries believe illegal file-sharing is almost endemic while the government has set a target of reducing the problem by at least 70% in the next two or three years.

The difficulty is that the problem is a moving target. More persistent illegal file-sharers are already beginning to use software which masks their IP address while online, and the files being exchanged are encrypted, so it is harder for ISPs to use DPI technology.

Stephen Garrett from Kudos, the firm behind Spooks and Ashes to Ashes, warns that illegal file sharing threatens the existence of hit and quality TV shows.

Gerd Leonhard, from MediaFuturist, said in a recent interview:

… On the other hand, the content industry has, to a very large degree, refused to license the content in so many new ways that are being asked for, starting with imeem and YouTube, and MySpace originally. The refusal to license has essentially created a vacuum to where everyone rightly then also says if we can’t actually do it legally, we have two choices which is to quit or to do it without permission. Then you have companies like imeem and MySpace and YouTube initially doing it without permission.

…The discussion about solving this problem with technology is nothing but a fig leaf because it will never work. In a democracy, it’s not actually technically feasible. If you imagine this, then I get disconnected from the web for downloading and I go to my neighbor and use his Wi-Fi.

….It’s basically not a technology problem. It’s a structural and licensing problem. It’s basically a business problem. Whenever you try to solve a business problem with technology, like we have with DVD region coding, and those kinds of things, you end up really going against the consumer and sacrificing things that otherwise the consumer will hate you for.

The key question really is this; does any of this make any money for anyone? Does kicking people off the web because they have downloaded without permission make any money for anyone?

In a perfectly timed article for Contagious Magazine, Faris Yakob (Chief Technology Strategist at McCann Erickson) debunks the “Content is King” aphorism in favor of “Content is the Republic.”

At the heart of Yakob’s thesis are two ideas:

1) As more consumers produce content, traditional content monetization models (paid, advertising) are challenged. Because digital content is platform agnostic (no distinction between video, news, articles – it’s all content online) it creates room for different monetization models based on context and consumer desire.

2) Align servicing next to content: iTunes has been successful because it made buying music simple and cheap enough. Youtube is experimenting with a new monetization model by allowing users to offer high-quality downloads of videos for low prices.

So is Content 2.0 Content as a Service…

The leading social media company, Demand Media seems to think such wise and offers it.

The company is currently the 15th most visited property in the US according to comScore. Demand Media has created more than one million pieces of content (artciles and videoas), making it one of the largest producers of content on the web today. The content is distributed to an audience of more than 80 million via Demand Media’s network which include LIVESTRONG.COM, eHow.com, Trails.com, Golflink.com and others.

Demand Media seems to have found a new stable and profitable business model, that fits into consumers’ video on demand needs. Here is an extract from a great article published by WIRED MAGAZINE explaining the Demand Media business model:

Volume is also crucial to Demand’s top distribution partner, Google. The search engine has struggled to make money from the 19 billion videos on YouTube, only about 10 percent of which carry ads. Advertisers don’t want to pay to appear next to videos that hijack copyrighted material or that contain swear words, but YouTube doesn’t have the personnel to comb through every user-generated clip. Last year, though, YouTube executives noticed that Demand was uploading hundreds of videos every day — pre-scrubbed by Demand’s own editors, explicitly designed to appeal to advertisers, and cheap enough to benefit from Google’s revenue-sharing business model. YouTube executives approached Demand, asked the company to join its revenue-sharing program, and encouraged it to produce as many videos as possible.

In the wake of her high profile promotion of AMC’s “Mad Men” show on Twitter, Carri Bugbee has built a Twitter-based ad agency (Big Deal PR) for entertainment clients.

Last February, the first annual Shorty Awards honored Mrs. Bugbee’s “MadMen’ character tweets as the year’s best Twitter advertising campaign. Find out more about the details of how she did it in this video interview by AdvertisingAge.

A new wave of HD TVs — some already in stores — let the viewer connect the Internet directly to the TV set. Beyond serving as normal TVs, these sets are built to stream a host of Internet sites, including YouTube and Picasa, as well as video-on-demand services.

LG 47LH50 LCD HDTV

What analysts are saying?

Analyst Carl Howe of the Yankee Group says the transition to the connected living room is “very early now,” but he sees tremendous growth. There will be 3 million connected Blu-ray players from LG and Samsung in U.S. homes by the end of the year, he says, growing to 8 million next year.

Web-connected TVs are a bigger market. There will be 6 million in place by the end of the year, growing to 11.7 million in 2010, and 50 million by 2013, Yankee projects.

The sets aren’t built for full-fledged Web browsing. “I think the direction we are heading is the transformation of the TV into ‘Internet lite,’ ” says Kurt Scherf, vice president and principal analyst for Parks Associates.

Big changes aren’t likely to happen immediately, but Mike McGuire, research VP and media analyst for Gartner, says this is bound to cause “serious disruption” in the way people consume TV.

“It won’t (happen) in the short term, but as companies see the opportunities and the experience becomes seamless, all of a sudden you might see more than a few consumers thinking to themselves, ‘Why am I paying so much for cable? Why am I paying so much for video on demand?’ ”

What media experts & CEOs are saying?

Sonic Solutions’ CEO Dave Habiger sees his company’s big future as providing software for electronic delivery of movies to digital devices and selling and renting the movies online via its Roxio CinemaNow service. As his company prepared for a transition from DVD to Blu-ray, it ended up concluding that the business as we know it of renting and selling DVDs — think Netflix, Blockbuster, the corner video store — is poised for an exit. Habiger believes the time has finally come for movies to be delivered via the Internet to a slew of devices including TVs.

“These Web enabled TV sets are going to significantly increase the rate of video streaming,” David Poltrack, chief research officer and president of CBS Vision,  says. “I think you’ll see people experimenting with this by the end of the year. And, barring a bad experience, you’ll see content in this form by 2010. Five years from now, I think it will be a significant contributor of revenue to both content providers and distributors.”

LG introduced two models in May, rival Samsung has two, and many more are expected by the end of the year, along with TVs that can receive preloaded Internet channels, such as CinemaNow — or Blockbuster’s online channel, which is run by CinemaNow.

One thing is certain: these TVs are coming and fast.

Web-enabled TVs on the market:

LG 47LH50 LCD HDTV (47-inch)

LG 50PS80 plasma TV (50-inch)

Panasonic TC-P54Z1 (54-inch)

Panasonic TC-P54V10 (54-inch)

Panasonic TC-P50V10 (50-inch)

Panasonic TC-P54G10 (54-inch)

Panasonic TC-P50G10 (50″)

Panasonic TC-P46G10 (46″)

Panasonic TC-P42G10 (42″)

Coming soon:

Vizio SV422XVT (47″ – Oct.)

Vizio SV422XVT (42″ – Nov.)

Vizio VF552XVT (55″ – Dec.)

Sources for this post are from Variety and USAToday.