Connected TV transforming business of television
Research by Futurescape has outlined the extent of how disruptive the race by electronics manufacturers, game console firms, tech companies and pay-TV operators to connect home TV sets to the Internet could be on the industry as a whole.
In its report, Futurescape sees connected TV as providing a way for device manufacturers to effect a business model transformation from products to services. It exemplifies this transition by highlighting how Samsung spent a figure approaching $70 million marketing its Internet TV apps in 2010, including a series of international competitions, Free the TV Challenge. In December 2010 Samsung announced that its Internet TV services had attracted a million downloads.
The report predicts that by 2014, 54% of flat-panel TVs shipped globally, approximately 148.3 million units, will have Internet connectivity and services. It also quotes Samsung as estimating that by the same time, the number of TVs shipped with an Internet connection will have risen from its current 17% to 70%.
One key action that the analyst advices the pay-TV industry to take is to enable subscribers to recommend content to friends. It says that the global pay-TV market needs social recommendation and discovery services which can encourage viewers to subscribe to more expensive packages and to buy more video-on-demand content. Futurescape insists that TV manufacturers’ strategy to provide video-on-demand direct to viewers similarly requires social recommendation.
Futurescape highlights the battle between Facebook-Twitter as not just encroaching but reshaping the 21st Century TV industry and challenging existing business models. It suggests that the winner of such battles will take a dominant strategic position in socially-targeted TV advertising, pay-TV content recommendation, TV show marketing, next-generation EPGs and Interactive viewing.
In all, the analyst believes that the social TV future is one in which all the major television industry players – IPTV, cable and satellite operators, middleware providers, CE manufacturers, broadcasters, studios and advertisers – must negotiate new relationships and resolve unanticipated challenges in order to seize major commercial opportunities.