Parks Associates Blog

Wednesday, March 26, 2008

Top Ten Technology Trends for TV

A friend was recently telling me about listening to his morning radio show on the drive to work, and the DJs were discussing their memories of the early days of TVs (you know...the TV dark ages of the 1970s and 1980s). My friend cited people calling in talking about the needlenose pliers turning broken channel changers, the "vertical hold" button, some guy's dad who whittled a notch into a broomstick so he could change the channel from the couch, etc.

I remember not having a remote control for a TV until my first TV purchase as an adult in the early-1990s. My brothers and I were thrilled with having cable for the first time in the 1980s. We had one of those switching devices that had the numbers you had to punch down, and the unit came with perhaps 20 feet of cord. So, it acted like a remote control ... one could lie in repose on the sofa, with 20 feet of cord stretched back to the TV and barely move a muscle to change that channel. Good times.

Fast-forward to 2008, and the context for television has changed considerably. After shows like CES and the recently-completed Future of Television event that I attended on Monday and Tuesday, I'm struck with all of the potential that TV and video services have. Of course, I'm also struck with the potential failures that will take place if the technology know-how that is so adeptly exhibited by Silicon Valley doesn't match the business plans of the content owners in Los Angeles and New York. And, it will all come to a very ugly end if your average user in Cincinnati (which I understand has supplanted Peoria as the metropolitan litmus test for "average" U.S. consumer sentiment) is intimidated by the application, doesn't understand it, or can't get it to work.

I had the opportunity yesterday to moderate a panel at The Future of Television Conference titled New Television Technologies You Need to Know. In that discussion, we were able to define some of the key technology trends that are going to characterize what Parks Associates has come to call "The TV 2.0 Experience." If you forgive the complete lack of originality in the title, the overall theme that we're working under with our "TV 2.0"-related research is that big changes are coming to the TV screen, and we anticipate some significant opportunities for technology companies to supply solutions to media companies and deliver a much more rich and immersive video experience.

So what are the key elements of the TV 2.0 experience? We believe that next-generation television services will be built on a number of key features and experiences delivered not only to the TV screen, but also other viewing platforms (such as the mobile phone, the PC screen, the in-car LCD display, and other portable and mobile devices). The features and applications that define TV 2.0 are characterized by key industry megatrends, such as:
  • The expansion of network capacity by incumbent operators, allowing them to increase quantity and quality of programming (providing more channels and increasing high-definition offerings);
  • The move from multicast programming to unicast offerings (linear vs. on-demand);
  • An erosion of strict linear program lineups to more personalized scheduling, enabled today by the DVR and tomorrow by the on-demand and “Catch Up” services that are now beginning to account for a significant amount of video consumption;
  • The ability to blend communications and entertainment experiences, beginning with simple features such as Caller ID on the TV and moving to more advanced features such as consumer “telepresence” and video conferencing;
  • Home networking that allows the set-top to act as more than just a TV signal decoder; it can now link to PCs and other devices to pull content as well as stream it;
  • The move to combine traditional Web activities such as social networking and creating and sharing user-generated content and bring it in a higher-quality format to the TV screen;
  • The ability to more efficiently deliver advertising and marketing to consumers based on more specific targeting, likely starting with general geographic targeting, then targeting based on their viewing habits, and moving to demographic-based targeting;
  • An acknowledgement that the Internet is becoming a powerful and efficient tool for delivering higher-quality programming and content and figuring out how to blend that with the TV experience; and
  • A move to bring TV content to other devices without the set-top box necessarily being involved.

In yesterday's New Television Technologies You Need to Know panel, my panelists (including Awshin Navin from BitTorrent, Anton Monk from MoCA, Perry Solomon from FAST Search, and Brad Auerbach from HP) were able to help me define some of the key technology areas that they see as most impacting the new generation of television services. The list that we developed during yesterday's discussion includes these areas:

  1. Distribution (making it more efficient and cost-effective)
  2. Seamless content experiences (three-screen)
  3. Personalization (time/place-shifting, VoD, customization, ec.)
  4. Social networking aspects (recommendations, chat, etc.)
  5. Search (helping viewers locate and discover content)
  6. Connected platforms (home networking)
  7. Marketing/advertising (targeting, immersive, behavioral/demographic targeting, analytics/measurement)
  8. Communications (features like Caller ID, video calling, chat, etc.)
  9. Measurement (who’s watching what when and how, dynamically altering content lineups to reflect the democratization of the viewing experience)
  10. User interfaces (electronic program guides, remotes)

We're going to be digging deeper into these issues with at least two studies this year, one targeting consumers and the other a focus on the industry. We'll look forward to sharing the results!

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