Traditional Media meets digital: Smart TV

We have been discussing about the evolution of media, and with out visit to Intereconomia, we got the chance to even get the point of view from experts in the sector and their bets on what’s next? But could we say that the digital/online TV shift is being forced? For example, with attempts like Google TV and its rocky start, can we conclude that everything is happening faster and more drastically than it should? Are TV Networks prepared for this?

Digital convergence has a big responsibility of this shift, with the triple-play bundles it has aggressively integrated Internet and TV. Nowadays we even add the mobile phone as another main player of this convergence with the quadruple-play bundles offers.

As a consequence of the segmentation of the consumers, and the need for more targeted content and higher ROIs, a high numbers of options and competitors enter the online and digital TV market. Higher interactivity in the similar industries forces TV to make this shift also, putting the industry under dynamic changes and pressures. TV networks are aware of this, they know that the shift has to be done, but still they are holding to the big revenues they can get out of more traditional ways – while they can.

Theories and business studies claim that the change will be driven by two factors, openness of access channels and the level of consumer involvement, both aspects increasing considerably with the new trends. Nevertheless, I still think that we are going to keep having traditional TV at least for some time, giving the Networks time to come up with and implement new business models to support their business. An IBM case study named “The End of TV as we Know it” gives six ways for these enterprises to move fast and shift quickly to the new formats, before it is too late and they get replaced by other alternatives. These areas evolve around segmentation, innovation, trials, mobilization, openness, and restructuration. These aspects are currently being touched by the big players, offerings like IPTV has increased its adoption rates and we can see new proposals for mobile TV out in the market which are expanding massively (see below)

Why is this happening? The industry is realizing how it is getting cheaper and cheaper to  stream and store digital content, so they try to develop new business models so they can be able to exploit this digital advantages, we have discussed examples of these possible revenue models throughout the specialization, in my opinion the dominant ones that can have an impact on new ways of TV are:

• Advertising, skip resistant for free content for those that resist more the charges on online content and less intrusive kind of ads for the users that are paying a fee in a subscription model.
• Charging for Extra Content, i.e. sport games of league or extra cameras for reality shows
• Subscription model, users pay a monthly fee for either all the content of specific channel
• Per episode or per movie.

These alternatives can be offered in any of the three screens mentioned before, and can be mixed in different ways.

Now lets go back to the article, Google TV. Another example on how digital convergence brings new competitors from what before were different areas now to play the same battle. Are consumers ready for such a smart way of TV?.

Even though I love the idea, I am not the regular TV user. In my opinion, this alternative hasn’t died yet due to consumer curiosity, in the picture below we see Google trends result on the people's awareness of Google and Apple TV (blue and red respectively), they peaked last year in their launch, but they have only reached a niche of customers since it launched last years. 

Google was very confident of reaching somewhere by attacking a segment of the market that now evolves around 4 billion users and cherishes an advertisement model reaching $70b in revenues, but the growth has gone slow. A slow growth makes the process even harder, since TV makers won’t have a real incentive to support the early move, and critics say that the only way this alternative will rise is if the Android effect happens again, by Google expanding to more and more TV makers which will make Google TV with Android OS their preferred option. However, we still need more time to develop this market and wait for its further development, let’s just hope it won’t be too late for Google.


See Article:
Why Google TV isn't dead yet?
Also see:
Can Google TV pull it together?
The end of Television as we know it  
Mobile video traffic: Alleviating the capacity crunch