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TV, Entertainment Options, Convenience Expand Horizons

Written by: Andy Marken

Article Overview: Television viewing seems ubiquitous for young/old; men/women. Does it hold opportunities for people to reach consumers in newer, fresher ways?

TV, Entertainment Options, Convenience Expand Horizons

We had one of the first color TVs in our Midwest community.

It was awesome…everyone was our friend!

We pity our son.

He and all his friends have a notebook…smartphone…iPod…3-4 4GB Store ‘n Gos…250GB USB HD… broadband iNet connection…Wii…PS3…DSLR camera…

HDTV set in his room? Gawd forbid!

For the Olympics he was like lots of folks.

He wouldn’t be told what to watch and when.

He found his and lots more on the Internet. He was getting stuff the TV guys didn’t think was “mainstream”…from hundreds of always-on video streams.

Lots of them in high def.

To the Web 2.0-centric people, content is content.


Figure 1 - Shifting Habits – There is no way you can say there is a mass exodus from entertainment from the TV set to the computer but if you look at the percentage of people clicking on their content rather than turning the dial…there is a difference. Source – Pew Research

We didn’t always catch the events on TV we wanted so…we missed them.

Sure we could ask the kid to program the DVR but we’re not stooping to that level.

No way !!

Always There
If Web 2.0 folks miss the programmed time they just go online.

Our options are limitless.


Figure 2 - Bigger Pipes – As broadband service becomes more widely available in countries, states, provinces, cities, towns and areas; people find it increasingly convenient to surf the Web to find the content they specifically want. The Web just opens up a lot more options for people. Source -- eMarketer

All the good ol stuff is there – Hogan’s Heroes, Have Gun, Wonder Woman, Dr. Who, Jerico, Wonder Woman…

The wife just found that her HGTV shows are on the Web.

We may cancel our cable service.

Cool !!!

For the content providers there is good news/bad news about TV over the Internet.

It’s quickly becoming a mind-meld of entertainment.


Merging Service – For a growing number of male and female consumers the line between watching highdef content on their TV and on their PC is blurring. The primary importance is viewing the videos when they find it most convenient. Source -- NYTimes

All of the Tellywood players are putting their content out there.

They just can’t figure out how to make a buck…

They feel a lot like The Office’s Michael Scott, “Last week I would've given a kidney to anyone in this office. I would've reached right into my stomach and pulled it out for them. But now, no.”

The old ad formula doesn’t work on the Internet.

On TV you have gross rating points for shows. On the Web you’ve got opt-in individual viewers.

It takes a lot of individuals to make up the $4.5 billion they were raking in from ads.

TV is still hot:
- 102.5 mln LCD TVs will be sold in 2008
- 105 mln satellite, cable and IPTV subscriptions worldwide
- 13.7% of Americans have HDTVs
- 144 bln digital TVs will be sold by 2011
- 720k HDTVs sold in France in 2 months preceding Rugby World Cup
- 84% of UK homes have digital television
- 85% of HDTV owners are happy with picture quality
- China to exported 38.6 mln televisions in 2007, sold 38.3 mln for their domestic market
- Flat panel TV spending exceeded $100 bln in 2007

Olympic Power
Sure the Olympics stimulated the purchase of a lot of big screen sets.

But the Internet delivered more…choice!

The net pulled in millions of viewers for events they were interested in.

They watched the contests when they wanted to watch them.

Neat!!

It validated some of the projections for Internet shows and IPTV:
- video services will generate $26.3 bln by 2011
- China will lead the world in IPTV by 2011
- In the US, top states with IPTV interest: Hawaii, New Jersey, North Dakota

Delivering the Olympics over the Internet only reinforced its growing importance for obtaining information and entertainment.

Today there was a whole world of video on the Web – past and present, personal and professional content.


Figure 3 - Download is Up – Tellywood, companies and individuals are posting news, information and entertainment video content as quickly as they can. So far the demand seems insatiable. At the same time people are becoming more discerning in what they watch. Just anything on the Web won’t survive in tomorrow’s market. Source – Pew International

Give people a choice and it’s impossible to make them go back to “the good old days!”

The walled broadcast/cable garden is disappearing.

Network executives are repeating The Office’s Jim Halpert’s comments…“Wow. But then who would watch my TV?”

The Conference Board found that nearly 20% of U.S. Internet households watch TV online. By 2011 it is estimated that there will be 200 million broadband users and 183 million (91%) will watch online videos.

Male/female, young/old the numbers are increasing.


Figure 4 - Broad Interests – Men and women, young and old are enjoying the newly discovered freedom of being able to watch their video content when they want rather than rushing to the set because of the program guide or struggling to program the DVR. While Gen Xers grew up on the Web, anytime news, information and entertainment is something that appeals to everyone. Source -- Ipsos

How hot is the potential market?

Hot enough so that everyone wants a piece of the action – Amazon, Sony, Netflix, Apple, Hulu, Microsoft. Even the cable companies, networks, studios as well as thousands of kids with their content management/delivery schemes are jumping in.

More Stuff
What they don’t have is “inventory!”

Tellywood is digging in the very back of the closet for content to offer up for consumption.

The old powerhouse series are back – StarTrek, MacGyver, The A-Team, I Dream of Jeanie, Dean Martin Show, anything, everything.

It’s all good but still it isn’t enough.

Bypassing the walled garden guards, independent producers are finding they can get music video and movie audience exposure without begging at Tellywood’s hallowed doors.

Creative hopefuls who weren’t tapped at the Tribeca, Toronto, Sundance, Vancouver, Minneapolis, Paris, London and the other film festivals around the globe aren’t going home in defeat.

There are VOD, content management/distribution, IPTV (62 M subscribers WW by 2012 – eMarketer) and other video service providers eager to increase their inventory offerings and share the proceeds – paid viewing or advertising supported.

According to an IBM study, people are going online for their entertainment because of:
- better content selection – 46%
- updated, fresher content – 25%
- trustworthiness – 24%
- faster downloading, streaming – 23%
- friends go there – 21%
- hipper, current environment – 12%

Online entertainment is so inviting, interesting and entertaining; people are finally undertaking the challenge of connecting their PC to their big screen TV (we paid to have it done).

Some Pixelization
We watched some of our shows on our laptop system and then on our big screen TV.

Some things just look better on the big screen.


Repurposed Content – The biggest challenge for Tellywood is to rework the content to ensure the best possible viewing experience. Some content suffers from excessive pixelization (as you see on the left) making it more desirable to be entertained on the TV set. It’s not a big issue but it can be scar sometimes. Source -- NW

Right now there’s more smoke than flames surrounding IPTV.

But the global trend is unmistakable.


Figure 5 - Global IPTV – Asia Pacific and Western Europe were the early adopters of IPTV and their numbers will continue to grow rapidly. One of the reasons was that their Internet service started as broadband at the outset. While subscriptions are low at present but the growth opportunities are strong. Source -- iSuppli

There are currently about 112 million TV households and 80 million Internet households. Both will increase through 2011. The percentage of people who stream content will rise significantly as the line between TV and Internet viewing blurs.


Figure 6 - Online Viewing – The noise around the growing volume and quality of video content on the Web continues to attract users. There is also a direct correlation between broadband service and changing viewing habits (somewhat obvious) but it is the ability to surf entertainment options at your leisure that people are coming to expect. In addition, the Web based content is also helping the relocation of media server computers into the living/family room. Source -- eMarketer

Television still has a decent lead but online video viewing will siphon off viewers from their conventional entertainment habits.

People will view their entertainment content in the same way Scott did people on the show, “You may look around, and see two groups here. White collar, blue collar. But I don't see it that way. You know why not? Because I am collar-blind.”

With the entertainment line blurring, a growing number of consumers are seriously considering cutting loose their cable/satellite TV service for the Internet and IPTV.

What’s not to prefer?
- content on your schedule instead of theirs
- advertising that seems to be better integrated and less intrusive with Internet video
- real broadband service to the home

Or you can listen to cable/satellite and follow The Office’s Michael Scott advice, “Reverse psychology is an awesome tool, I don't know if you guys know about it, but basically you can make someone think the opposite of what you believe, and that tricks them into doing something stupid.”

Feel the move
Tellywood and the cable/satellite folks are determined that regardless of where the content is viewed; they will be a part of it.

They just can’t figure out what to do with all of the network schedulers that will be idled by anytime viewers.

On the other hand with online movie viewing and Tellywood could take more control of their content from the cable/satellite guys.


Figure 7 - Movies at Home – Movies on demand will become increasingly popular for people but it will require many years to replace – if ever – the special outing of going to the theater or the habit of owning and loading your own disc. We agree a $2 billion market sounds like a good number but it is dwarfed by two decent megahits global proceeds. Source – Screen Digest

They just aren’t certain how to turn digital pennies into huge dollars.

Effective monetization is a tricky job.

The big winner will be the individual(s) who can figure this out not just one show…one digital stream…one network…but the whole online content industry!

If you’re the one then you and Scott can look at the losers and say with a demeaning smirk… “Dwight, you ignorant slut!”


Charts/graphs available by contacting andy@markencom.com

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Article Tags: cable service, color tvs, content providers, dslr camera, dvr, female consumers, figure 1, good news bad news, gos, hdtv, high def, hogan, mass exodus, midwest community, pipes, tv over the internet, usb hd, video streams, wii, wonder woman



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