Hub Entertainment Research’s report last month, which found that 52 percent of pay-TV viewers prefer to watch their favorite shows online rather than via traditional broadcast or cable channels, surfaced amid a flurry of high-profile developments in the fast-evolving, over-the-top and subscription video-on-demand market.

Hub Research chart STB vs online viewing

The Hub study reinforced a Parks Associates report, issued just a few days earlier, that declared SVOD services—many of them offshoots from traditional linear TV networks—now dominate the paid OTT landscape.

Almost simultaneously, several new streaming services materialized. Most prominently, “Philo,” a $16 per month “skinny bundle” of 37 channels largely culled from non-sports cable networks; and a new Disney streaming network, due to debut in 2019, will further bolster the appeal of non-traditional TV viewing.

Disney’s go-it-alone plan, which was announced quickly after the company said it will take its content off Netflix, generated extraordinary interest because of suggestions that Disney will create new shows for its streaming channels, featuring original video based on company franchises such as “Star Wars,” its Marvel properties and Pixar’s “Monsters, Inc.”

Plus, the past month had the usual parade of OTT announcements, such as:

· A fee-based “Sports Illustrated” SVOD channel on Amazon Prime; for $4.99/month, there’s a lineup of sports material, although no live coverage;

· Fee-based “Curiosity Stream” (the SVOD service created by Discovery Channel founder John Hendricks) on Comcast’s OTT platform; the $5.99/month lineup is available on Comcast’s set-top box VOD platform and via its Xfinity Stream app/portal;

· A no-fee, ad-free video streaming service from Hoopla, a company that collaborates with local participating public libraries. Hoopla’s service offers “classic” titles (oldies) from Paramount Pictures, Viacom, Disney and other distributors for delivery to Apple TV and Amazon’s Fire TV at no charge for limited periods of time.

Separately, AT&T filed a trademark application for a “Watch TV” logo, with an intricate design highlighting the letters “A”, “T” & “T”. Although the paperwork at the U.S. Patent and Trademark Office offers no hints about how the logo might be used, analysts speculated that it could eventually be a unified mark for all AT&T video services, including (pending current legal challenges) those offered via AT&T’s u-Verse IPTV systems and DirecTV, including DirecTV Now apps plus the Time Warner content.

For deep thinkers seeking to find a unifying context in these developments, there is the question of how (or if) these platforms and applications will fit into the emerging ATSC 3.0 environment. Some concepts—but probably no deals—may emerge during next month’s CES (see cover story) where the streaming producers and platform providers will be scouting for collaborative and competitive delivery systems.

Philo, which started as an internet TV service for college campuses, has programs from A+E, AMC Networks, Discovery, Scripps and Viacom—along with investments from most of those networks. Nostalgically named after Philo Farnsworth (considered by some to be the father of television), the new streaming service will seek to position itself with cord-cutters who want to access major OTT options, according to Philo CEO Andrew McCollum, an alumnus of Facebook. He expects customers to use an over-the-air antenna to receive local TV and to continue their subscriptions to SVOD services such as Netflix.

“We wanted to build the first social TV experience,” he said, indicating that Philo will eventually add social functionality, which was not available at launch. The vision is to establish a synch-watch feature that lets multiple friends chatter online about shows they are jointly watching, such as programs on Comedy Central or Discovery.

“We share a lot more about much more personal things on social media all the time,” McCollum said.

HOW ADVERTISERS PERCEIVE THE CHALLENGE

Inevitably, these research reports, launch promises and business visions were accompanied by deep thinking about the impact on advertising and the financial structure of broadcast economics, especially as it affects sports telecasts.

In a report last month, Rob Norman, chief digital officer of GroupM Global, examined “the challenge of getting younger viewers into the TV habit” with special attention to the problems for “ad-funded sports programming.” GroupM characterizes itself as the “world’s largest media investment group with more than $108 billion in billings.”

Norman warned that if OTT purveyors “emerge as aggressive bidders” for online sports rights, the legacy “television establishment will lose impacts or be forced to pay more.”

“This is important as it will lead to inevitable advertising price inflation at a time when advertising itself is under considerable pressure to prove return on investment,” said Norman.

At about the same time, the Consumer Technology Association’s research department issued its analysis of the streaming video advertising landscape. Its study “Exploring Preferences for Personalized Content Consumption Experiences” concluded that streaming viewers are more willing than expected to watch commercials on streaming platforms. About 71 percent watch video commercials to discover other streaming content, and 69 percent watch videos for a product or service, explained Steve Koenig, CTA’s senior director of market research, who conducted the survey.

Although about two-thirds of viewers watch streaming ads up to the point where they can skip out “most of the time,” Koenig found that “nearly four-in-10 viewers watch the entire ad without being required to do so.” CTA’s study also determined that viewers expect the length of an ad to conform to the length of the content they’re watching.

“For example, shorter spots for short-form video and longer ads with long-form content,” Koenig said. “To a lesser extent, the number and placement of ads tied to streaming video also influence ad tolerance.”

FORMULATING THE STREAMING FRAMEWORK

The restructuring of the SVOD ecosystem, along with the research findings, are typical of an emerging category, although it is complicated because of the relationships with—and the competition against—existing broadcast and cable operations.

For example, as the Park Associates study pointed out, about half of the general entertainment and premium-level SVOD services in its 2017 Top 10 have some connection to conventional TV brands. Parks pointed out that these top 10 paid OTT video services have “a massive lead over more expensive and relatively newer virtual MVPD services.” Here is Parks’ tally on the most-viewed SVOD services:

1. Netflix

2. Amazon Video

3. Hulu

4. MLB.TV

5. HBO Now

6. Starz

7. YouTube Red

8. Showtime

9. CBS All Access

10. Sling TV.

“While the top three are no surprise, the big story over the past year has been the rapid subscriber growth for OTT video services from HBO, Showtime and Starz,” said Brett Sappington, senior director of research at Parks Associates. “The combination of recognized brands and popular original content is driving demand for their offerings. Services such as Sling TV and Crunchyroll are still enjoying strong growth, but other services have simply grown at a faster rate over the past year.”

Sappington noted that online pay-TV services are also growing quickly, fueled by nationwide advertising campaigns. “YouTube TV’s advertising and sponsorship deal with MLB during the recent World Series is just one example of the marketing dollars behind these service offerings,” Sappington said. “While more online pay-TV services could enter the top 10 within the next year, those services that comprise the top 10 are recognized brands that are aggressively working to expand their subscriber bases. Displacing them will be a difficult task.”

Hub Entertainment Research’s annual “Conquering Content” report examined the role of conventional cable/satellite programming in a different context. Hub identified that set-top box use has “been steadily declining over the past several years.”

It noted that in 2014, 64 percent of viewers watched their favorite show through an STB (either live, on a DVR or through their MVPD’s on demand platform). At that time, just 31 percent said they watched their favorite show online (via an SVOD service such as Netflix, Hulu or Amazon, through a network or MVPD site/app or through other online sources such as iTunes). The past year saw a big jump (from 40 percent to 52 percent) in the online viewership preference.

“These findings suggest that the aggressive investment SVODs are making in original and exclusive content is paying big dividends,” said Peter Fondulas, co-author of the study and principal at Hub. “In this research and other recent studies, we see clear evidence that high-profile online exclusives generate buzz that draws consumers to these platforms, which not only helps attract brand new subscribers, but also builds loyalty among current customers.”

Hub’s Jon Giegengack, co-author of the study, characterized the SVOD companies as transforming themselves “from technology companies that distribute content, into entertainment companies that create it.” He also predicted that in the future, “the share of total TV time may turn out to be a more important way to evaluate platforms than looking at the number of subscribers.”

MEANWHILE, ON THE OBITUARY SIDE

While all these promising and upbeat OTT developments were underway, the video undertaker was also keeping busy. Many OTT services just quietly slip away, but some high-profile ventures get a farewell salute.

For example, “SeeSo,” a comedy SVOD service from NBCUniversal which debuted in January 2016, is running its final feeds this month. No one issued a body count on how many customers the $3.99 per month service ever attracted.

“Fullscreen Media” (backed in part by AT&T in its joint venture with The Chernin Group) will cut off its SVOD spigot in January. Again, there was no official tally of users, but sources suggest it had “hundreds of thousands” of viewers, although it was unclear if that included one-time tune-in audiences.

And Comic-Con HQ, a streaming VOD channel that began early last year as a partnership between San Diego Comic-Con and Lionsgate studio, was cut off last month. Its content—much of it from Lionsgate, has been licensed to other streaming services, including Roku, Amazon Prime and TubiTV.

In other words, the OTT/SVOD landscape continues to be dotted with promises, solid trends and a few corpses.

Gary Arlen is president of Arlen Communications LLC, a research and consulting firm. He can be reached atwww.ArlenCom.com.

With nearly two-thirds of American viewers now using a subscription video on demand (SVOD) service, the market is primed for a different way to watch TV. The impact and opportunities are immense, especially as broadcasters create auxiliary applications for ATSC 3.0 services.

As the recent IBM Cloud Video report “Everybody Wants to Rule the Streaming World” emphasized, SVOD has “reshaped the way we enjoy television.” It notes that rather than spurring cord-cutting, SVOD options such as Netflix and Amazon Prime have added “to the smorgasbord of video content we already enjoy.”

NEW CONSUMER BEHAVIOR

The study from IBM’s ClearLeap unit is one of several research evaluations during the past few months that affirm that viewers have embraced SVOD and over-the-top (OTT) streaming video programs. Even with perceived problems such as high costs and sometimes-inferior video quality, the ClearLeap study explains that SVOD has “sparked new consumer behaviors,” such as bingeing, which will affect future video distribution strategies.

The implication: infrastructure needs to be built to handle these viewing preferences.

“SVOD services have been adopted by U.S. consumers faster than any other pay media service,” ClearLeap said. Even more important than the 63 percent of consumers who “spend a significant amount of viewing time with them... nearly half of those with SVOD and pay television watch their streaming services as much as, or more than, cable.”

ClearLeap’s report, based on more than 1,000 consumer interviews, acknowledged that Netflix is overwhelmingly responsible for the intense SVOD viewing. But the study pointed to the growth of other existing services, especially Amazon Prime and Hulu, and it augurs opportunities for future newcomers to enter this realm.

Fig. 1 (Photo credit: IBM Cloud Video)

Like other studies, the ClearLeap evaluation put extensive emphasis on the importance of mobile video in the SVOD/OTT agenda. But it also reported that 55 percent of respondents say they primarily use a smart TV, Roku, Apple TV, game console or other connected TV device to watch their favorite streaming service (Fig. 1).

There are also predictable findings about the age distinction: 16 percent of millennials and 18 percent of 30–44 year olds favor smartphone viewing. Seniors, not very much.

Among the most fascinating findings in the ClearLeap report is an evaluation of the problems that turn off viewers and would prompt them to quit using an SVOD service. Again, this is valuable planning information for future programmers and technology providers, as well as a lesson already known by today’s SVOD leaders.

In response to the question of “What would make you cancel an SVOD subscription,” the top answers were: too many ads (27 percent), high price (25 percent), too few shows (20 percent) and technical problems (17 percent).

On that last point, 15 percent cited inadequate video quality and 12 percent reported problems with the audio being out of synchronization with the video image (Fig. 2).

Almost half of SVOD viewers complained about frequent buffering problems.

Fig. 2 (Photo credit: IBM Cloud Video)

As the ClearLeap report explained, “These technical problems can occur anywhere in the network,” notably under-provisioning of bandwidth by Internet service providers. Again, that looks like a competitive lesson for over-the-air transmission of IP content. In a related issue, about 30 percent of millennials surveyed called mobile data caps their most serious concern about wireless access.

“As live streaming grows in importance and prevalence, content providers must have the technology to handle massive spikes in viewer traffic at any given time to prevent site crashes and streaming disruptions,” the ClearLeap report concluded. “Data can help SVOD services better understand viewing habits and plan for peak demand.”

SUPPORTING OPINIONS ABOUT SVOD AND OTT ABOUND

ClearLeap is not alone in its optimism about the appeal of SVOD and related OTT ventures via wired and wireless transmission. Limelight Networks, in its “State of Online Video” report, observed that about 80 percent of millennials subscribe to at least one OTT service, and 39 percent of them watch at least seven hours of online video per week—significantly more than people in other demographics.

Limelight’s study also observed that young viewers are upping their online viewing patterns. Barely 16 percent watch only 1 to 2 hours per week, while the number consuming more hours has steadily increased. It also noted that millennials were “significantly more amenable” to terminating a pay-TV subscription if they could access the content they want online directly from the content owner (23.7 percent compared with 16.6 percent for the rest of the population).

And again, Limelight found that the smartphone is the favorite device that millennials use to watch most online video, followed by computers or laptops. Viewing via a TV connected to a streaming device is the device of last resort.

“Our research continues to show increasing adoption of OTT content, especially among younger consumers,” said Nigel Burmeister, Limelight’s vice president of global marketing. “Traditional providers and delivery models are increasingly at risk of being left behind as consumers become more savvy.”

Separately, Ooyala’s “State of the Media Industry 2016,” published in early summer, concluded that the lessons learned by “the TV industry... in its move to digital” are the basis for continuing appreciation that “differentiated content... is key to building a strong brand in the cluttered digital ecosystem.” Ooyala’s latest report is a follow-up to its “State of the Broadcast Industry 2016” in which Ooyala called 2016 the year in which OTT becomes the “gateway to broadcast’s future.”

The Ooyala report also emphasized the “mobile first” imperative for digital distribution.

Now this is where the research and the forecasting get tricky and intertwined. Much of the research incorporates both SVOD and other online video consumption, including short-form content (think YouTube or Periscope) as well as program-length content. And all of this research is based in part on the assumption that viewers won’t necessarily know the difference or care about the originating source—so long as they can find what they want to see.

For example, a July report from the Zenith, an agency of the global marketing firm Publicis Media, insisted that mobile access has replaced fixed devices as the dominant platform for receiving online video. This study found that consumers spend an average of 19.7 minutes daily viewing online videos on smartphones and tablets compared to 16 minutes on fixed devices, which includes smart TVs and desktop computers.

“This represents a 39-percent leap for mobile over last year’s figures, when 14.2 minutes were spent viewing mobile video,” the report concluded. It said that “fixed” video consumption will be static this year, thanks to a rise in viewing via smart TVs, which offset declines in desktop viewing. Zenith expects that mobile video consumption will grow 33 percent in 2017 and 27 percent in 2018, to reach 33.4 minutes a day.

“Mobile devices will account for 64 percent of all online video consumption in 2018,” said Zenith, suggesting that the growth will trigger a boom in online video ad spending, which it expects to go up by about 20 percent per year.

Several of the upbeat reports scale the growth of the industry. For example, Digital TV Research, in its “Global OTT TV & Video Forecasts” envisions that by 2021, such ventures in 100 countries will generate $64.8 billion, up from $4.47 billion in 2010 and $29.4 billion last year. The company predicts that despite impressive growth in Asia, the United States will remain “the dominant territory for online TV and video revenues—rising by $8.2 billion to $22.8 billion between 2015 and 2021.”

DTR’s forecast put strong emphasis on the growth of advertising VOD (that is, ad-supported services). It predicted that by 2020 AVOD revenues globally will amount to $15.4 billion, compared to $14.6 billion for SVOD by that time. The research firm forecasts 383 million SVOD subscriptions by 2021, up from 21 million in 2010 and 163 million at the end of last year.

GROWING PAINS: SPLINTERED MARKETS, REGULATORY HURDLES

Although the SVOD and OTT markets have evolved largely without regulatory restrictions —if you don’t count that “minor” barrier of network neutrality that can affect their carriage relationships—the freedom from policymakers is not assured. (And of course, the net neutrality legal dispute is still in play.)

Anticipating potential growing pains, the newly formed “TV Neutrality Alliance” wants to make sure that online video distributors (OVD), such as the Telletopia Foundation, which created the group, has access to broadcast TV programming under the same rules as multichannel video program distributors (MVPDs, such as cable and direct-satellite operators).

At the same time, the new alliance wants to assure that OVDs with multichannel content but no broadcast station signals—such as Amazon, Netflix, YouTube and others—will not face existing MVPD regulations about retransmission consent and payments.

“Our proposed modification to the MVPD definition is intended to spur innovation for new broadcast-TV OVDs without creating unnecessary regulatory burdens for on-demand and original content OVDs,” said Michael Librizzi, cofounder and CFO of Telletopia.

Like any emerging interest group, the TNA claims that its goal is to unlock “the true potential of Internet-based broadcast” and believes its approach will create “a more open competitive environment.”

These regulatory options add to the complexity and uncertainly of the emerging SVOD/OTT/online video markets. And that’s not all.

“We are entering a new phase in the evolution of OTT video,” said Colin Dixon of nScreen Media, a California research firm. In a late July research note, he identified four signs that the OTT video economy is “splintering,” which he said “threatens to slow or even derail the explosive growth” of recent years.

Dixon cited “Content Disaggregation,” such as the CW TV network’s broken relationship with Hulu so that it can distribute its hit shows exclusively through its own OTT platform and its library titles through Netflix, plus “proprietary ecosystems.” He argued that “app proliferation” is a “mess” for consumers, since they have to accumulate “more and more apps on their devices” in order to watch shows from different sources. And he believes that “lack of data standards” threatens the “lifeblood of the video business.”

“There are no universally accepted standards in any of these areas for the gathering, format, storage or interchange of the data,” Dixon said. “It is hoarded to gain competitive advantage, put into proprietary formats to gain financial advantage, and selectively mined to gain a marketing advantage.

“In the long-run, this splintering of the industry can only have one result,” Dixon continued. “It creates a nightmare for consumers as they try and figure out when and where the content they want can be found. And we all know what happens when things get complicated for consumers. They sit on their hands.”

Gary Arlen is president of Arlen Communications LLC, a research and consulting firm. He can be reached atinfo@arlencommunications.com.

GARY ARLEN

Reports that Comcast might acquire Visible World, a programmatic TV ad platform provider, put a spotlight recently on the overhaul taking place in the video advertising world. Shortly after that announcement, the beam intensified when Nielsen bought eXelate, a data firm focused on digital advertising.

These deals—and a slew of similar alliances—are reshaping the TV advertising landscape, integrating commercial delivery, targeting and measurement, including ad effectiveness. The timing is impeccable too, paving the way for the advanced marketing options that ATSC 3.0 will enable.

Coinciding with these structural deals are developments that underscore viewers’ and advertisers’ changing expectations in the on-demand media era. For example, HUB Research LLC’s February “Study on Time-Shifted vs. Live TV Viewing” repeatedly showed that viewers want to use technology to control commercials that they see. Although HUB’s study focused on video-on-demand and digital video recording use, extensive parts of its report looked at “ad avoidance as a driver of time shifting.”

DVR VS. VOD AD AVOIDANCE

According to HUB Research LLC’s February “Study on Time-Shifted vs. Live TV Viewing,” viewers who do use fast-forward during VOD use it a lot, with half fast-forwarding through every commercial. “It’s not a revelation, but it confirms what everyone expected,” said Jon Giegengack, a co-founder/principal of HUB. “It shows that while DVR and VOD are really good for the traditional TV industry, the longer we go down this road the more pressure there is on the traditional model of making money through advertising.”

HUB’s study found significant differences between DVR and VOD ad avoidance procedures, some of which are artifacts of the platforms. Nearly 90 percent of DVR users fast-forward through most or all commercials in their recordings—56 percent of them do it “all the time at every commercial break.” On VOD, where some channels restrict the ability to skip commercials, about 49 percent of viewers who can skip commercials do it all the time and 32 percent jump over most commercials, according to HUB’s research.

“VOD has a different set of values,” said Peter Fondulas, HUB’s co-founder/principal. “More than 40 percent of VOD customers consider it a major restriction” if they cannot skip commercials, he said. He characterized it as a problem exacerbated because the same commercials are often repeated in every break during the VOD presentation—both via online sources such as Hulu and through cable set-top box catch-up features.

Such restrictions not only take away viewers’ ability to skip commercials, but also “rub it in their faces that such control has been eliminated,” Fondulas said.

Beyond the VOD and DVR experiences, viewers are increasingly sensitive to the ads— often short videos—they can see on websites and streaming media platforms, according to HUB’s co-founders. They said that viewers are more willing to tolerate, if not outright like, commercials when they believe that they have some part in the process, according to Fondulas.

“Even small things like a countdown clock”—which shows how much longer the commercial will run—or the ability to “skip an ad after the first 15 seconds gives viewers the impression that they have some control,” he said.

These insights are what make the Comcast, Nielsen and other ad technology deals so significant. Steve Hasker, global president of Nielsen, in describing the purchase of eXelate—which currently focuses on the online video market—made his intentions clear.

“While we are starting in digital video, we think it will—if and when the market is ready—go to a broader television ecosystem,” Hasker told the Wall Street Journal. He emphasized that the “synergy” between Nielsen and eXelate “will allow us to better serve the programmatic buying and selling space, in and around particularly video, but all forms of media.”

That’s not a commitment, but it’s a strong indication that Nielsen, like other advertising and measurement firms, foresees the expansion of programmatic ad-buying in the TV business. That means more real-time buying—through automated systems—and more specific targeting.

BEYOND THE ZIP CODE

HUB’s study found that DVR users are no different—almost 90 percent fast-forward through most or all of the ads in their DVR recordings. Comcast’s interest in 15-year old Visible World is even more complicated. Neither firm will discuss details; Comcast, which is notoriously zip-lipped about deals, has strengthened its protective curtain as it goes through the final steps of its Time Warner Cable merger process.

Although Visible World’s primary market so far has been online and cable advertising, its opportunities for use at NBCUniversal properties—starting with its cable networks such as CNBC, SyFy, Bravo, E!, USA Network, NBC Sports and Oxygen—is immense. Visible World works with advertisers to customize ads for specific viewers, going far beyond ZIP code information to use data from cable set-top boxes. Its programmatic ad buying software, AudienceXpress, brings cable ad buyers the ability to target specific viewers, much as online services can do.

One challenge of a Comcast/Visible World alliance—be it a merger or some sort of joint venture—is whether other broadcasters and media companies would be comfortable using a system owned by a rival. Analysts expressed concern that competitors would fret that Comcast or its NBCU networks would have access to proprietary data.

Others dismissed such concerns, noting that in 2014 Comcast bought FreeWheel Inc., which provides services for managing advertising across digital services and apps. Among FreeWheel’s customers are Walt Disney Co. and Viacom. Visible World already works with Cox Media—the ad division of Cox Communications—and Magna Global, a large ad-buying agency, to sell programmatic TV ads through a Webbased interface.

Visible World has a relationship with Suddenlink Communications (another large cable operator), which uses its “Schedule Optimizer” platform for programmatic scheduling of its cross-channel inventory and evaluation of how well certain programs reach specific audiences. Visible World also works with Sintec Media’s “OnAir” automated broadcast management solution to offer broadcasters a way to optimize program promotion schedules.

CONSUMERS LIKE TARGETED ADS
New advertising tools—and these examples barely scratch the surface—provide aggressive ways to meet the expectations that were identified in the research of HUB and other analysts. Developers hope that today’s business deals and continuing experiments will manifest themselves into features that can be delivered via the ATSC 3.0 platform now in development.

Most significantly, the integration of new research and measurement tools with realtime ad buying will lead to more efficient broadcast commercial targeting. The planning also takes into account the need to stay on the “safe side” of consumer privacy concerns.

At the Mobile World Congress last month, where the focus was on wireless systems, many of the lessons about digital advertising could be extended to the new vision of broadcasting commercial operations. Speakers described solutions such as “deterministic” and “probabilistic” modeling to handle multiscreen campaign management.

Proponents of programmatic advertising insist that the advanced systems will catch on quickly after the current testing period. Jeff Green, founder and CEO of The Trade Desk, a real-time ad bidding platform, contends that, “consumers are clamoring for on-demand, addressable content.”

“More relevant ads are worth more to advertisers,” Green said in AdWeek recently. “Consumers welcome them, too.”

Gary Arlen analyzes cross-platform media technology and content at Arlen Communications LLC. He can be reached via TV Technology.

Gary Arlen

BETHESDA, MD. —Woody Allen. Philip K. Dick. Ridley Scott. The New Yorker. Starting with that “A” list of creators and content, Amazon is pushing aggressively into original video programming and theatrical movies. The high-profile juggernaut is bringing added credibility to the streaming video marketplace, joining Netflix’s growing inventory of original content plus stepped-up productions from digital and conventional production sources.

On the technology size, YouTube’s shift to HTML5 as its default video player technology is expected to presage the next ramping up of the Google subsidiary’s video agenda. Last month, YouTube also announced support for 360-degree videos, clearing the way for more original content, including sports and outdoor adventure videos.

YouTube’s adoption of HTML5 as the default player technology (rather than Adobe Flash) will let viewers see video faster, with less buffering. In addition to quicker video load times, the new technology offers higher-quality video resolution in less bandwidth, which makes possible 4K video at 60 frames per second.

These streaming technology advances, especially when delivered to the growing array of big flat-panel screens, enhance the accessibility for the high-profile content coming their way.

Netflix has lured Tina Fey to bring her news series to its streaming platform.
Amazon’s creative juggernaut and the You- Tube technology upgrades (plus similar developments at other OTT providers) coincide with a new sheaf of market studies confirming that audiences—especially coveted millennials (ages 13–35)—avidly consume OTT/online video. A half-dozen recent reports underscore the shift toward on-demand viewing and alternative program content.

Amazon’s double-edged approach, unveiled last month, demonstrates several important trends. Top-notch talent is increasingly migrating to online distribution, reflecting the greater creative flexibility on OTT than broadcast or even cable networks allow them. The program selection process and distribution timeframes are being reinvented. In addition, new digital platforms are enabling “old media” (such as The New Yorker magazine) to re-imagine and expand their digital offshoots.

Moreover, the new digital ecosystems, with virtually unlimited real estate, are encouraging writers and producers to mine historical content for literary gems they can bring to the screen. In Amazon’s case, this includes an updated series based on the 1962 cult classic “The Man in the High Castle.”

Fig. 1: Forecast of streaming media player devices in households with Internet access
Amazon stepped up its streaming video assault last month by releasing 15 potential series pilots, seeking crowd-sourcing approval before decisions are made to expand some of those pilots into a full first season of shows. Viewers were asked to sample and rate potential new shows to determine which will be developed as full series.

Amazon hopes to repeat the success of its first such effort, which launched “Transparent,” the series for which won Amazon its first Golden Globe award in January. (Ironically, “Transparent” was not highly ranked in the viewer polling last year, but Amazon went ahead with the series anyway.)

Among the most enthusiastically supported series in Amazon’s arsenal is “The Man in the High Castle.” The video series is based on the award-winning alternative history masterpiece by Philip K. Dick about life in the United States if Japan and Germany had won World War II and then started bickering about their North American territory.

Its pedigree includes venerated producer- director Ridley Scott (who directed “Blade Runner,” the 1982 movie also based on a Dick novel) and Frank Spotnitz as executive producers of the Amazon series. Spotnitz, who also wrote the screenplay, was a writer and producer for the popular Fox series “The X-Files.” David W. Zucker, who is producing “The Man in the High Castle,” has credits as a writer and producer for TV series including “The Good Wife” and “Numb3rs.”

Also treading along Amazon’s star-studded streaming video path are filmmakers such as Woody Allen, who will create “straight-to-series” productions. While cynics have noted Allen’s historic denigration of television (despite his start as a TV writer for Sid Caesar and Garry Moore), his late-life return to video recognizes that his quirky, iconoclastic ideas fit well with the specialized appeal of streaming channels.

Separately, Amazon Studios, the production subsidiary of the e-commerce behemoth, plans to produce and acquire up to a dozen movies per year, which will be released to theaters and then on Amazon Prime Instant Video four to six weeks laterz. The theatrical plan itself is significant, but the short window for home-viewing dangles an attractive option to theater owners who hate simultaneous “day-and-date” release, but might tolerate a month or two of exclusivity. The sequence would leverage theatrical promotional costs by bringing the content home quickly, rather than the typical three to six months later.

Collectively, the arrival of such celebrated “behind-the-camera” talent is an important indicator of old Hollywood’s embrace of new digital platforms. Amazon’s Original Movies will be in the low-budget range: $5 million to $25 million each. As “Variety” pointed out, Ted Hope, another successful veteran producer who has been brought in to head the movies venture, is “a vocal advocate for changing the way independent films are produced and distributed.”

Amazon is hardly alone in its theatrical aspirations. Netflix is also pushing a similar agenda, including a four-picture deal with Jay and Mark Duplas, brothers with creative and on-screen credits for movies and TV shows such as “Zero Dark Thirty” and “The League.” Netflix also has lured Tina Fey to bring her new series “Unbreakable Kimmy Schmidt” to its streaming platform. Fey made the move after problems with putting the series on NBC, her long-time outlet.

AUDIENCES ARE READY
The aggressive original production plans of Amazon, Netflix, YouTube and other streaming video stalwarts come amidst a slew of upbeat reports about audiences thirsty for viewing alternatives.

comScore found that not only are millennials avid viewers of streaming content (87 percent look at it), but that 45 percent of young viewers “exclusively” watch shows via Internet sources. About 45 percent of viewers under the age of 25 watch via the Internet, including 13 percent who only watch shows online. comScore, which has announced viewership ratings studies to compete with Nielsen, also says that four out of 10 U.S. households now subscribe to a digital video service, with 32 percent using Netflix and 19 percent using Amazon Prime Immediate Video.

Research by NATPE||Content First (a TV programming association) and the Consumer Electronics Association showed that just 55 percent of millennials use TVs as their primary viewing platform, while streaming devices—laptops, tablets and smartphones—are poised to dominate their viewing preferences.

The NATPE/CEA study, conducted by E-Poll Market Research, “confirms that the paradigm for TV content discovery has changed dramatically with increased availability and use of TV content streaming options,” NATPE President and CEO Rod Perth said. Among the study’s key findings is that millennials are comfortable using many different sources of TV program content, and consequently are significantly more likely to consume full-length TV programs from a streaming source than live “real-time” TV programming.

This age cohort has especially embraced portability, with a quarter to half of millennials watching TV programs on smartphones, tablets or laptops. Older viewers (Generation X, ages 35–50) “love video-on-demand and DVRs,” according to E-Poll’s research.

Deloitte, in its 2015 “Technology, Media and Telecommunications Predictions,” cited the growing expenditures for streaming media services. Deloitte’s report, also issued in January, expects that millennials will “spend about $3,000 per year on technology hardware and connectivity,” including game consoles and portable devices on which they can receive and watch streamed video.

ABI Research, in its study of over-the-top and multiscreen services, predicted that the online video market— fueled by Netflix, Amazon, Hulu and similar providers— will grow to $56 billion by 2019, with a six-year compound annual growth rate of 23.1 percent.

And NPD’s “Connected Home” forecast, issued in late January, envisions that 40 percent of U.S. Internet homes will have a streaming media player by 2017, up from about 16 percent now. John Buffone, NPD’s executive director- Connected Intelligence, sees the growing OTT content mix (including Amazon, Netflix, Hulu and YouTube initiatives, plus the recently unveiled streaming video services such as CBS All Access and HBO Go’s standalone feed) as fully integrated with the hardware deployment.

“Over the coming years we will continue to see a growing audience of TV viewers for streaming video services, authenticated network apps, and offerings such as CBS All Access that no longer require a pay-TV subscription from a cable or satellite provider,” Buffone said.

In other words, OTT content, hardware and viewer appetites are falling into place. Just as broadcast TV struggles to find its bandwidth.

Gary Arlen analyzes cross-platform media technology and content at Arlen Communications LLC (www.ArlenCom.com).

Gary Arlen Seek and ye shall find… if you’re lucky.

As viewers increasingly shift between broadcast/cable channels and online shows— even during the same screen session—there’s increased value for comprehensive guides that can steer them to what they want to see, wherever it is.

Yet the mantra of “anytime, anyplace, any device” is still just that: a handy slogan, but a frustration for platform-transcending viewers.

The desire to be able to find (not just “search” for) programs becomes even greater in the on-demand realm, whether viewed via cable or online sources. Now add in the multiplatform access provided via smart TVs and new services such as Sony’s PlayStation Vue—which can deliver content from any source almost seamlessly— and the necessity for universal video search becomes essential for many viewers.

It’s an opportunity that cries out for advanced program discovery and navigation. And also for better integrated digital program guides that encompass the full array of available shows, far beyond the classic listings grids and their up/down/left/right onscreen corollaries.

“The discovery process plays a big role in the success of TV content, both online and linear,” says Jon Giegengack, co-founder of Hub Entertainment Research, a Bostonarea media analysis firm. In Hub’s annual “Conquering Content” study, released last month, the firm found that 61 percent of viewers say “they need a universal listing to find shows across all TV sources.”

“The idea of a universal source for searching across platforms has consistently been viewers’ Number One interest” for several years, Giegengack told TV Technology.

Equally striking, the Hub study found that 51 percent of viewers say they have watched a show on linear TV after they first found and watched it online. That kind of crossover viewing underscores the value of integrated program search and navigation. In Hub’s research, 48 percent of respondents said they are more likely to choose sources that make discovery of new shows easy.

Source: “Conquering Content” Hub Entertainment Research, December, 2014VALUE OF INTEGRATED VIDEO DISCOVERY
Further emphasizing the need for cross-platform program search is another new study being issued in two parts this month by NATPE and the Consumer Electronics Association. At the International CES in early January, NATPE President/CEO Rod Perth noted that viewers in 70 percent of broadband homes have streamed fulllength TV programs in the past six months.

That leads to important “implications for how to reach audiences with information about new programs,” Perth said. The full study is being unveiled at the NATPE convention this week in Miami.

Among the preliminary findings revealed at CES were such obvious results as the proclivity of the millennial demographic group (ages 13 to 34) to use “many different sources of TV program content and consequently [they] are significantly more likely to consume full-length TV programs from a streaming source.” The study also confirms that millennials—the most avid consumers of online content—are also the least likely to watch a conventional TV set.

“Only 55 percent of millennials select a television set as the preferred screen for viewing television content,” according to an advance copy of the NAPTE/CEA report.

Such findings, affirming the Hub and other research, are further reminders of the value of cross-platform video content searches. Dozens of program discovery services have sprung up in recent years, but none has attained the iconic role that TV Guide—or even the old newspaper TV pages—provided. Services such as Jinni, which last month signed a deal with Vudu (adding to its alliances with Time Warner Cable, Canal+ and other linear systems), provide extensive cross-platform program information. Google offers a variety of video content search services, which may come in handy as Google Fiber rolls out. TiVo, thanks to its acquisition of guide service Digitalsmiths, has been expanding its cross-platform capabilities. The pioneering blinkx. com, established a decade ago, now focuses almost entirely on Internet video content, monetizing access through advertising.

Yet the infrastructure for a true, full-umbrella video discovery system is haphazard, usually deliberately. Cable operators and online programmers such as Netflix, Amazon and Hulu really don’t want customers to find out everything they could see because, inevitably, a lot of programs would be “outside” their monetized corral.

Moreover, discovering content is not enough. An ideal search/find system should be integrated with a navigation service. Several companies are focusing on the importance of “catch-up” features, which enable a viewer to go back to the start of a show (via VOD technology) even if they “discover” the real-time telecast minutes, hours or even several days after it ran.

OFFERING BETTER TOOLS
“Conquering Content,” Hub’s latest study on how consumers find and choose new TV shows, also found that while TV consumers appreciate the greater content choice offered by online viewing options, they also have a strong need for tools to make all of that content easier to use. For example:
• 81 percent say that, thanks to new TV options, more of their viewing time is spent on TV shows they “really like” than was the case in the past.
• Only 13 percent “graze,” that is, sample new shows that look even a little interesting, versus 29 percent who say they only try a new show if they’re sure they’ll like it.

“Consumers are now realizing both the benefits and the challenges that come with massive amounts of content available instantly,” Giegengack says. “The almost unlimited catalogs mean that viewers need, and increasingly expect, tools to make discovering shows they’ll love a manageable task.”

Ben Weinberger, co-founder and CEO of Digitalsmiths, says that his company’s tool, distributed via its parent TiVo, allows cable operators to promote all formats of content “to the right audience.”

“They can find anything they want on a single platform,” he said. “The operators can apply business rules based on the goals they want.”

Meanwhile, cable operators— weighing the financial impact of broadband content versus their own linear and on-demand video offerings—are still evaluating the trade-offs of offering a full cross-platform program search/discovery component. For example, Comcast is rolling out its cloud-based X1 platform, which “makes it easier for our customers to access all the programming available to them as part of their subscription through integration of live, On Demand and saved programming and also through intuitive search and discovery,” said Matt Strauss, senior vice president and general manager of Video Services at Comcast Cable.

“We are exploring the ways in which we might expand our collection of apps on X1 over time and continue to work with third parties on the integration of new content and experiences into the platform in a way that’s seamless, intuitive and complimentary to the comprehensive X1 experience,” Strauss said.

But as for creating a revenue stream for OTT content, Strauss simply said, “It’s too early to discuss how we’d monetize Webbased programming on X1.”

So for now, the business reality may trump the marketplace situation in which viewers (at least according to the recent spate of studies) are clamoring for truly integrated video discovery and navigation.

Let’s see where that leads.

Gary Arlen is president of Arlen Communications LLC, a research and consulting firm. He can be reached at www.Arlen-Com.com.

Aereo CEO Chet KanojiaWASHINGTON—Befitting its near mid-decade position, 2014 kept the broadcast industry smack-in-the-middle of an array of business and technology issues, most of them with no evident ending point. Even the Aereo case—seemingly concluded when the Supreme Court deemed the service illegal in June and the company filed for bankruptcy in November—threatens a phoenix-like revival thanks to the FCC’s emerging “over-the-top” rulemaking procedure.

From spectrum auctions to ultra-high definition displays to the ongoing saga of ATSC 3.0, the past year and the new one ahead are loaded with never-ending processes. Despite plenty of “benchmark” moments, from the Sochi Winter Olympics to a Los Angeles channel-sharing experiment, 2014 offered a tapestry of events and technology developments, most of which are likely to remain works in progress for years to come. The past year offered glimpses of technologies—from news drones to IP networks—that are in early and intermediate stages despite years of evolution that have brought them this far.

THE ‘COMPLEX MATRIX’ THAT IS UHD
Ultra high definition television is a good example, adding an economic component to the complex matrix of technology and policy factors. UHDTV is expected to be a highlight at this week’s International Consumer Electronics Show, with more companies introducing larger displays and lower prices for the 4K version. LG, Sharp, Samsung and others will offer glimpses of 8K technology, still not likely to reach consumers until decade’s end.

As evidence that UHDTV is indeed finding a market: Sales of UHD displays accounted for about 10 percent of overall TV sales revenue in 2014. Analysts expect that proportion to grow.

The big question is how broadcasting figures into the 4K landscape. It’s also a reminder of the interconnection of so many ongoing developments, since UHD factors into the Advanced Television Systems Committee evaluation of its 3.0 standard.

With Netflix and other streaming video services plus satellite TV providers adding 4K programming, the appeal of UHDTV is becoming evident. At the 2014 NAB Show, Ateme, Ericsson, Elemental Technologies and others touted their H.265.HEVC encoding solutions, which could accelerate the inventory of 4K content, a critical factor in the adoption curve. Canon, JVC, Panasonic and Sony, among others, are shipping 4K production monitors, further reinforcing the reality that 4K is coming. Theaters are promoting 4K movies that they exhibit in much the same way they hyped 3D movies several years earlier.

Broadcasters are pondering how to cash in on 4K, given spectrum constraints. Many questions were raised about this capability during 2014, but answers are still sparse.

Curved UHDTV sets created a big buzz at the 2014 International CES.SPECTRUM AUCTIONS ON THE HORIZON
By the time the FCC issued its proposed rules for the broadcast spectrum incentive auction, it was already clear that any such auctions won’t occur until at least 2016, receding again from earlier expectations. When the FCC adopted its Auction Report and Order in May 2014, there were still dreams of a “rocket-docket,” but now the deadlines augur a long deliberation. The FCC’s official notification about the auction procedure—including methodologies for establishing pricing processes and spectrum repacking procedures—came out in early December (see “FCC Aims to Clear 84 MHz of Spectrum,”). The slow process during 2014—with the next rounds of comments and replies due at the end of January and February respectively—underscore that policy makers will remain in the middle of a muddle about auction policies well into 2015.

And that doesn’t account for the pushback from NAB and others. The commission’s politically split decision in the December rulemaking (three Democrats supporting the auction process plan, two Republicans opposing it) is a harbinger of larger policy feuds ahead… and delays.

AND THEN THERE WAS AEREO
Media mongers were transfixed by the legal maneuverings and sheer bravura of the Aereo saga, which wended through courts, board rooms and the FCC throughout 2014. When the Supreme Court deemed Aereo’s service illegal on June 25, resolving inconsistent decisions by lower courts about the legality of Aereo’s retransmission of broadcast signals, most observers expected the company to disappear. Even the major financial backer, Barry Diller and his InterActiveCorp which had committed $25 million to the venture, conceded defeat.

At the 2014 NAB Show, Elemental Technologies was among a number of companies demonstrating their H.265 HEVC encoding solutions. The Supreme Court’s 6-3 decision ruled that Aereo’s streaming technology did “not distinguish [it] from cable systems” and hence Aereo was not entitled to transmit copyrighted broadcast programs via its personalized antenna and Internet delivery system. The networks and studios gloried in the victory.

But CEO Chet Kanojia hardened his heart. Although the company “paused” its services (believed to reach fewer than 100,000 customers in the three initial New York, Boston and Atlanta markets), on June 28, Kanojia insisted that he would find a way to revive Aereo. By autumn, Aereo had laid off most of its staff, and in November, the company filed for Chapter 11 bankruptcy reorganization.

Yet, at about the same time, the FCC began floating its proposed rulemaking for “Online Video Programming Distribution” (also known as over-the-top) Internet-based video. Some observers considered the plan as a way to enable companies like Aereo to deliver channels under rules similar to those governing cable and satellite companies (also known as “multichannel video program distributors,” or MVPD). This is a regulatory process that is at the beginning—not the middle—and is likely to take years to resolve, with the potential of reshaping the video delivery business.

NET NEUTRALITY: JUST THE BEGINNING
Ditto for net neutrality. Although the term has been around for more than a decade (coined in 2003 by Columbia University Professor Tim Wu), the battle over an “open Internet” escalated in 2014 as the FCC dithered with a plan to create “fast lanes” via paid prioritization. That could allow big content aggregators such as Netflix or YouTube to dominate the broadband video ecosystem. The outpouring of outrage (especially a viral campaign that triggered nearly four million “public” comments to the FCC), brought net neutrality into the spotlight. President Obama added more pressure in November when he urged the FCC to classify Internet content under Title II rules, a move that terrifies cable and telco companies.

An FCC decision in mid-December not to seek more public input suggests that the commission may be ready for its next move by March. FCC Chairman Tom Wheeler wants to proceed quickly, although it is still unclear how he’ll resolve the battle over whether Internet services should fall under Title II (strict common carrier regulation) or Section 706 (less severe advanced telecom guidance).

Whatever the FCC decides, the net neutrality fight will inevitably wind up back in court.

And that would keep TV and telecom “in the middle” again for another year.

Here’s an unlikely combination for the convergence era: a 21-episode video series called “We The Economy” about economic education; packaged for the short-attention- span generation; presented in multiple styles—comedies, musicals, animation, documentaries—and released simultaneously on broadcast, cable, online and mobile platforms, with a theatrical premiere thrown in. Add high-profile performers and directors, including Emmy-and Oscar-nominees/winners, plus funding from billionaire Paul Allen. And establish a business model that makes the shows free-on-demand to viewers while allowing limited advertising.

Gary Arlen

Given those parameters, the producers of “We The Economy” are ecstatic that the shows attracted 5.2 million views during the first three weeks of on-demand availability, and that every segment has generated at least 110,000 streaming sessions. That tally represents reports from only 23 of the 56 platforms carrying the series, so the backers are expecting even higher viewing levels of their mongrel series.

The initial “stick time,” or length of viewing, has averaged seven minutes initially, which indicates that viewers are generally watching at least one full episode, according to Cinelan, the New York branding/ marketing video production company that devised the series.

MULTIPLATFORM DISTRIBUTION
“Out-of-the-gate performance has been somewhat higher than we expected,” Karol Martesko-Fenster, Cinelan’s managing partner/cofounder, told TV Technology. He cited “big numbers” via LinkedIn and Yahoo! Connections, plus the creative ways in which distributors such as Netflix, CBS News, CNBC, Pivot TV, Hulu, Amazon Instant Video, YouTube and Vimeo are offering the presentations to their audiences. For example, Netflix calls all 21 episodes “Season One.”

Among the other distributors are Comcast’s Xfinity TV, Time Warner Cable, Cox, Verizon, BrightHouse, Mediacom, Suddenlink, Sony’s Crackle, Apple’s iTunes, AOL’s On Network and GooglePlay, plus specialty film/video firms such as Snag Films and multichannel networks such as Condé Nast’s The Scene.

Martesko-Fenster, a long-time video impresario behind the venture, worked with economists and top Hollywood production talent to create the series, which consists of standalone segments that are each five to eight minutes long. Nearly a dozen “advisors” (economists, historians, academics, journalists) are credited with supporting the productions. Watching all 21 productions takes a little more than two hours.

One significant factor of “We the Economy” is its benchmark status catering to the short-attention span of its target: young viewers. In addition, its education and public service status gives it a halo effect, which Cinelan is now exploiting to take the series to schools, libraries and other academic venues, as well as global markets and airline onboard programming as ancillary outlets for the video.

The mini-movies are intended to explain or present aspects of economics in an infotaining style. Episode titles include “GDP Smackdown,” “Fed Head,” “The Street” and “Taxation Nation,” with other segments explaining the role of government, globalization, financial inequality along with more basic topics, such as “What is Money?”

‘We The Economy’ poster Each episode was created by a different production team, albeit with occasional overlapping actors and talent. Among the prominent film- and videomakers taking part are Morgan Spurlock (who spearheaded the project via Cinelan, in which he has a stake), Catherine Hardwicke (director of “Twilight”), Adam McKay (“Anchorman”), James Schamus (“Crouching Tiger, Hidden Dragon”), Oscar-winning documentary-maker Barbara Kopple, and Adrian Grenier (actor and producer, best known for his role in HBO’s “Entourage” series).

The lineup also includes Chris Henchy (“The Campaign” and “Land of the Lost”), Jessica Yu (who has directed movies and TV episodes including “Scandal,” “Grey’s Anatomy” and “West Wing”) and Bob Balaban (a familiar character actor—“Grand Budapest Hotel,” “Girls,” “Alpha House,” “Seinfeld”—who also has a lengthy director/ producer resume).

“We immediately agreed to take the normal distribution model and smash it to pieces,” Spurlock told a Hollywood trade publication. “No windows, no fees, just get it to the public.” He said his major goal was to put “these films simultaneously in front of every American wherever they watch content.”

TAILOR-MADE FOR FOD
On the “We The Economy” website, Spurlock further explained the format, especially how differently it deals with a topic that would normally be very dry and straightforward. The episodes are bundled into five “chapters.”

Karol Martesko-Fenster

Martesko-Fenster points out that the series is not a pro-bono project; all the talent and advisors were paid via the Vulcan funding, although he declines to reveal the budget for the project. Distributors are not allowed to sell and insert commercials within any of the episodes, but some sites—such as Snag Films—are placing ads between segments.

Joe Cantwell, a Cinelan advisor and longtime cable TV programming executive, characterized the program format as “tailor-made” for the Free On Demand category.

“We worked closely with iN Demand to place, package and promote the series according to each cable company’s needs and opportunities,” Cantwell said, noting that iN Demand has “deep experience with independent film and FOD content.”

Social media has also played a big role in the series debut, Martesko-Fenster said. Many of the actors and directors used their own Twitter, Facebook, Pinterest and other accounts to tip off their fan bases about the show. Episodes with such talent-generated social media promotion had higher usage levels during the first few weeks, according to Martesko-Fenster.

Although Martesko-Fenster declines to disclose plans for future short-form ventures, the apparent success of “We The Economy” enhances the prospects for more multiplatform, short-length series with such high production values and high-minded intent.

It also might pave the way for more international options. Martesko-Fenster said that at the theatrical premiere—a free one-night-only showing at New York’s Lincoln Center and at other cities where policy- and decision-makers were invited to see the series’ highlights—Cinelan scored a few more deals. A German media operator at the New York screening followed up with an offer to carry the shows in Germany. Similar deals are underway for China and other countries, says Martesko-Fenster.

“We The Economy” could become a model for future content creation and presentation.

Gary Arlen is president of Arlen Communications LLC, a research and consulting firm. He can be reached atwww.ArlenCom.com.

Gary Arlen The announcement last month from Home Box Office that it plans to launch an à la carte streaming video service “sometime” in 2015—followed a day later by CBS’s launch of its “CBS All Access” OTT service—illustrate the speed with which media companies are addressing the integration of online video delivery with traditional linear programming.

While the details—especially financial arrangements to appease cable and satellite operators—are still being hammered out for the HBO migration, plenty of other projects are either underway or in the early planning stages. Collectively they indicate the urgent search to find a new route to monetizing the collaboration of “old” and “new” media.

At the 23rd annual Goldman Sachs’ Communicopia Conference in September, the CEOs/chairmen of companies that own Home Box Office and Showtime both openly confessed that they are considering making over-the-top services available that would allow viewers to bypass a cable or satellite TV operator. In particular, Time Warner CEO Jeff Bewkes’ remarks at Communicopia were a stunning reversal of his comments there last year, when he strongly shied away from any such OTT possibility.

Exactly one month later, HBO CEO/Chairman Richard Plepler, citing America’s 10 million broadband-only homes, characterized the online video audience as “a large and growing opportunity that should no longer be left untapped.”

“It is time to remove all barriers to those who want HBO,” Plepler told an investors meeting. “So, in 2015, we will launch a standalone, over-the-top HBO service in the United States. We will work with our current partners. And, we will explore models with new partners.”

Observing that 80 million U.S. homes that do not buy HBO now, Plepler vowed, “We will use all means at our disposal to go after them.”

HBO is already offering its HBO GO content in Scandinavia (and soon elsewhere in Europe) as an OTT broadband channel available without a cable subscription. In fact, coinciding with IBC in Amsterdam in September, HBO revealed it will use cloud virtualization technology from ActiveVideo to allow viewers to see HBO GO via legacy set-top boxes.

Also at the Goldman Sachs event, CBS Inc. CEO Les Moonves indicated that Showtime Networks, the premium channels that CBS owns, are ripe for OTT delivery.

“I don’t know when the timing is right,” Moonves said, but he called the opportunity “very exciting” and a way to deliver “a Showtime channel in the future... all over the world.”

The terse acknowledgements by Bewkes and Moonves—followed by the announcements from HBO and CBS—underscore the march toward Internet-delivered, on-demand video. Like all other top media executives, they must be evaluating alternative distribution options all the time.

CBS will charge $5.99 a month for its “CBS All Access” OTT service. The HBO announcement, in particular, raises the stakes—will it spur other cable programmers to speed up their OTT plans?

Separately, a week earlier in New York, at the re/Code Media conference, ESPN President John Skipper, (who is also co-chairman of Disney Media Networks) hinted at his willingness to sell sports programming to OTT delivery. Skipper (like Bewkes, Moonves and others) was coy about details, for fear of aggravating current cable affiliates. But he acknowledged that ESPN content will be available via the Internet TV service that DISH plans to launch this year. He also indicated he is mulling other OTT distribution.

Although Skipper avoided specifics, analysts believe the mostly likely major upcoming alliance is with Verizon, which just confirmed plans to start its broadband video service by mid-2015. Verizon will use the Intel OnCue technology it acquired last year.

BUZZFEED, VH1 SHOW CROSSOVER OPTIONS
Meanwhile, other cable programmers are jumping into the online video world through a variety of platforms. For example, BuzzFeed’s agreement to cross-promote the VH1 series “Couples Therapy with Dr. Jenn” underscores the growing symbiosis—some may say “co-dependency”—between linear TV networks and Web video. The relatively small alliance emerged as BuzzFeed is stepping up its own media juggernaut. The company recently unveiled plans for “BuzzFeed Motion Pictures,” which will create videos for its website and for TV and theatrical release.

Under the VH1 deal, BuzzFeed will create video segments for its website, pointing users to the “Couples Therapy” TV series. In exchange, VH1 will run promos for BuzzFeed’s social media content, which focuses (for now) on gossip, quizzes and entertainment news.

BuzzFeed has similar “social tune-in” arrangements with Bravo (an NBCUniversal network) and the Independent Film Channel (owned by AMC Networks). The value of these relationships takes on increased meaning in the context of BuzzFeed’s recently unveiled media production agenda.

CEO Jonah Peretti says the company will set up three units: BuzzFeed Video for shortform content; BuzzFeed Live Development for mid-length serialized projects; and “Future of Fiction” to develop long-form film, television and “transmedia” efforts.

The growing relationships with cable networks give BuzzFeed a foot in the door when it is ready to transmit those “transmedia” products. Its expansion is fueled by a recent $50 million investment from Andreessen Horowitz, the $4 billion Silicon Valley venture capital firm.

Whatever happens to the BuzzFeed agenda—or whenever it happens—will be one more adventure in the evolving relationship between “big media” and Internet television.

At the Goldman Sachs event, Verizon Chairman/CEO Lowell McAdam said that ABC, CBS, Fox and NBC will be part of the Verizon à la carte lineup, but he stopped short of identifying any other big programming deals.

“Over-the-top video is right around the corner,” McAdam said, echoing phrases used by the programming CEOs. “We’ve got the assets in place, and I don’t feel we need an awful lot more.” He did acknowledge some initial limitations about delivering a full OTT program lineup via wireless systems.

“No one wants to have 300 channels on your wireless device,” McAdam said. “And I think everyone understands. It will go to à la carte.”

One more “horn of plenty” pronouncement emerged from the Communicopia discussions, this one involving Sony’s plan to deliver OTT content via its widely used PlayStation game consoles and its less-universal smart TV sets. Viacom CEO Philippe Dauman revealed that all 22 Viacom networks would be available through the Sony package, which is expected to debut within a few months (it was announced at the International CES last January).

Viacom’s popular networks, including Comedy Central, MTV, VH1, SpikeTV and Nickelodeon, match the demographics of PlayStation users.

Collectively, this spree of OTT deals and promises offer dramatic evidence of the fuzzy lines between conventional TV and Internet-centric delivery. Among the big hurdles is wireless bandwidth for viewers who expect full access to OTT content via mobile devices.

Nonetheless, the teasing hints—some of them obviously trial balloons—from media executives are harbingers of deals to come.

Gary Arlen is president of Arlen Communications LLC, a research and consulting firm. He can be reached atwww.ArlenCom.com.

WASHINGTON—FCC Chairman Tom Wheeler is seeking to put broadband/online video onto a level playing field with cable and satellite carriers, including their relationships and requirements to retransmit broadcast channels. In his blog this week “Tech Transitions, Video, and the Future,” Wheeler spelled out his vision for a là carte program or channel delivery as well as giving “Internet video services ... access to” broadcast content.The blog is a prelude to a Notice of Proposed Rulemaking that will be another notch on Wheeler’s Open Internet agenda.

Although Aereo is never mentioned in Wheeler’s blog, the demise of that wireless Internet service provider is clearly part of the chairman’s impetus. Wheeler’s focus on “Competition, Competition, Competition” coincides with his eagerness “to update video competition rules so our rules won’t act as a barrier to this kind of innovation.”

Fundamentally, Wheeler wants Internet-delivered video to operate with the same ground-rules as cable and satellite TV, especially when it comes to access to broadcast programming.In the acronym-speak of Washington, that means OVPDs (Online Video Program Distributors - i.e. broadband carriers and Internet Service Providers such as Verizon, Comcast, AT&T, Cox)would be treated the same as MVPDs (Multichannel Video Program Distributors aka Comcast, DirecTV, Time Warner Cable, Cox, Dish).

True to his Democratic roots, Wheeler is looking for a “level playing field” in which Internet TV operators could carry conventional linear broadcast channels if they wish. OVPDs would have the same ability to negotiate with broadcasters that DBS got in 1992.His plan does not assure carriage since financial deals would still have to be cut.

He characterized such deals as a 21st century definition for video delivery that is technology-neutral, assuring that IP and wireless broadband video delivery are always in the discussion going forward.

Wheeler’s blog and NPRM vision could also set the stage to crack down on cable operators if they start to abandon their current tiered, linear channel structure and migrate their networks to the broadband platform, enabling more a là carte channels or shows.One way to look at Wheeler’s blog is as a warning message to cable companies: If they try to become OVPDs, the FCC will not tolerate it.

Not surprisingly, the National Cable & Telecommunications Association, which Wheeler headed three decades ago, was among the first to snap back with warnings about “profound” implications for government to extend regulation to Internet video services.NCTA challenged whether “any would-be virtual MVPDs will meet their ‘social compact’ obligations.”

CTIA: The Wireless Association, which Wheeler headed from 1992-2004, did not issue a statement.Most other reactions so far have taken a “wait for the NPRM” stance.For example, in response to Wheeler’s proposal for online video distribution, NAB issued a pro-forma acknowledgement:

“NAB welcomes video distribution platforms that legally deliver local TV content to consumers when and where they want it. We look forward to engaging with the FCC to ensure that this new competition enhances rather than undermines localism.”

Some analysts focused on Wheeler’s intent to break the cable industry’s long-standing resistance a là carte programming, which OVPDs could do.Wheeler’s tone seems to be that the FCC will not look kindly if MSOs try to stymie competition by moving content to broadband. This will get into some sticky policy issues, especially with program distribution contracts that restrict how shows that are scheduled for linear delivery can be used in video-on-demand situations. The problem gets even more complicated with vertical integration, notably Comcast and its NBCU networks.

Coming on the heels of recent video streaming announcements from CBS, Home Box Office and other networks, Wheeler’s stance appears to encourage such over-the-top delivery strategies. Since PBS, Disney/ABC, Hulu, CNN and other networks are already offering their content via various online platforms, Wheeler’s blog is a further endorsement of the multi-platform future.

By invoking his Open Internet agenda several times within the blog, Wheeler offered a reminder that related issues—notably, ‘net neutrality—will be part of the upcoming discussion in the NPRM.The OVPD issue will also be woven into the Incentive Spectrum Auction debate, since the wireless carriers who win those airwaves will most likely use some of the bandwidth to transmit online video.

Wheeler will have barely two years to push his Open Internet agenda through the commission, including the inevitable follow-up court suits and legal battle.

The blog, worth reading for its historical perspective and its insights into the chairman’s goals, is the opening statement in the next battle about the future of TV as well as the outlook for the Internet.

Gary Arlen is president of Arlen Communications LLC, a Bethesda, Md. research and consulting firm.

Gary Arlen

C-SPAN’s decision to put its three networks’ core daily telecasts behind an “authentication” pay wall called attention to an increasingly complex challenge: How to familiarize viewers with their multiple options to watch the same programming.

Beyond the restriction of real-time simulcast online streams to paying viewers, C-SPAN is barely modifying its current procedures. Yet, the announcement in late July of changes that will slowly roll into effect this autumn underscored the misperceptions that audiences—even the policy- savvy wonks who tune into C-SPAN’s legislative proceedings—have about the multiplatform migration and program sourcing.

BUSINESS MODEL REVISION
Fundamentally, the only significant change is that C-SPAN will only provide the online simulcasts of the C-SPAN channel (which covers all House of Representatives sessions); C-SPAN2 (which carries Senate sessions); and C-SPAN3 (which programs a potpourri of shows including lectures, academic presentations, book discussions plus reruns of government events) to viewers who subscribe to cable or satellite services.

“If you want to watch the live feeds of our TV channels, you’ll first need to sign in with your cable or satellite company credentials,” said C-SPAN Co-CEO Susan Swain in an online video explanation of the changes. She added that C-SPAN’s business model revision “reflects the dynamic changes you can see going on in video distribution today.”

The viewer authentication policy coincided with C-SPAN’s expansion of its mobile apps, including its C-SPAN radio service.

C-SPAN Vice President of Affiliate Relations Peter Kiley characterizes the new policy as “a hybrid delivery system,” since all of the programs—even those that CSPAN produces itself—will be available via the company’s online video archive, usually about an hour after the original telecast. Original shows such as “The Communicators” and “Washington Journal” will be available on a delayed basis; the streaming quality may be somewhat lower than that which authenticated viewers can see, Kiley said.

C-SPAN Co-CEO Susan Swain explaining the new pay-wall system via video on the network’s website. As pay walls go, the Cable-Satellite Public Affairs Network’s barrier is minimal. To see live online feeds of the three networks, viewers will have to register to confirm that they are paying customers of an affiliated cable or satellite TV, using the cable industry’s TV Everywhere authentication system. Links on the C-SPAN home page direct users to the TV Everywhere process.

C-SPAN managed its announcement of the pay wall aggressively. A fortnight after disclosing the pay wall plan, Kiley told TV Technology that merely a handful of viewers had questioned or complained about the process and that far more viewers had signed up via the authentication service. Although Kiley declined to specify the number of complaints or registrations, he did acknowledge that the summer timing was deliberate, with Congress preparing for a long recess. He said C-SPAN valued the slow political season for the transition. Kiley also suggested that the actual switchover to required authentication may kick in after the short autumn session, but before the election recess.

FREE TO VIEWERS
The streaming video announcement pushed to the surface a variety of issues about how C-SPAN’s content is used. A valuable component of C-SPAN’s 35-year history is its Video Library: nearly 206,000 hours of programs (which continues to grow), including Congressional sessions, hearings and events. About 180,000 videos from that collection have been viewed so far this year, with daily access accounting for more than 10,000 “titles” (video segments, such as individual floor speeches). That library will still be available for free to all viewers, whether or not they are cable customers.

Adding some confusion to the pay wall issue stems from the belief of some viewers that C-SPAN itself is a government video service, rather than its reality: C-SPAN is a private nonprofit organization funded initially by the cable industry, in part, for the “halo effect” it provided during the industry’s contentious growth phase in the 1980s (which had different contentious issues than today’s confrontational environment.)

Beyond the video feed it receives from the two chambers of Congress, C-SPAN produces video for its other programming, including congressional committee and subcommittee sessions, plus sessions from regulatory agencies. For example, C-SPAN carries meetings of the Federal Communications Commission, either live or on a delayed basis, depending on timing.

The House and Senate floor feeds are produced by the respective video units of each congressional chamber. Kiley pointed out that C-SPAN is pursuing its “longstanding request to Congress” that it be allowed to install and operate its own video cameras in each chamber. Congress has repeatedly refused such proposals, he said.

In anticipation of the changes, C-SPAN redesigned its website (www.C-SPAN.org) earlier this year to make access more “platform- agnostic” and “mobile-friendly,” Kiley said. Live streams of all federal government events covered by C-SPAN will continue to be available online via a direct link from the home page, with no sign-in required. The revamped home page highlights “Congress, White House and Courts.”

Separately—and most timely going into a campaign season—C-SPAN’s video archive offers a treasure trove of indexed video clips, especially statements that rival candidates savor in their attack ads about what incumbents have said or promised. The increased online access—authentication notwithstanding—opens opportunities for campaigns to harvest more and newer material to pump into their own video, which is increasingly aimed at online distribution.

C-SPAN has a notoriously liberal policy for makings its videos available, especially for scholarly research. But it does not permit unlicensed commercial use of any of its video programming except for public domain House and Senate floor video. It licenses the original video that it produces for use in documentaries, films or TV programs as well as in trade or business productions.

Restricting its live network feeds to paying customers reflects efforts throughout the TV industry to readjust financial fundamentals for the multiplatform era. Although a handful of policy wonks may wonder about the differences between “real-time online access” and “live streams” (as enunciated in C-SPAN’s fact sheet about its changes), those are merely linguistic nuances in the bigger issue of content monetization— even (or especially) at a nonprofit organization.

Gary Arlen is president of Arlen Communications LLC, a research and consulting firm. He can be reached atwww.ArlenCom.com.

Gary Arlen

BETHESDA, MD.— How often does an 18,000-attendee trade convention deal with “chaperone and parent” issues or offer free badges for “ages 8 and younger?” VidCon, which focused on all things YouTube, faced those logistics at its fifth annual conference and trade show at the Anaheim Convention Center in late June—reflecting the young demographics of the YouTube world.

More significantly, the scope of VidCon, up from 1,400 attendees in 2010, and the presence of major Hollywood studios— many of them already working with You- Tube—vividly recognized that network TV channels (or “multichannel networks,” “MCNs” as the industry dubs them) are no longer limited to the world of broadcasting and cable.

These online channels offer vast, well-watched networks and not just for the young.

VidCon took place amid a slew of developments that will further establish You- Tube’s networks as a viewing destination for digital audiences. At the conference and in the weeks afterwards, organizations in the YouTube universe unveiled plans that will solidify and inevitably expand the Google subsidiary’s role in the competitive viewing landscape, such as:
• The imminent debut of fee-based YouTube channels;
• Technical support programs from companies such as Dolby, RED and Samsung;
• Support for frame rates of 48- and 60-frames per second, which will boost the appearance of motion-intense scenes (especially valuable for video games);
• “Fan funding,” which enables supportive viewers to “tip” their favorite channels with sums from $1 to $500;
• “The YouTube 15,” a popular music hit list produced by SiriusXM. The weekly show, which debuted in early July, features the top music and video playlists, based on YouTube data;
• A plan by FullScreen, a YouTube network, to let “star” creators charge fans to see programs during an exclusive “viewing window” before non-paying viewers can access those videos;
• A service by Tubular, a digital marketing platform, that alerts YouTube creators via Twitter about how much viewing their content is receiving, and
• A subtitling translation service that will assist global viewers. With 60 percent of YouTube video views coming from outside a channel’s home country, YouTube wants to facilitate international access to content; field tests showed an 8 percent increase in views for the subtitled videos.

YouTube’s Space LA supports the production of videos by up-and-coming producers. AND THERE’S MORE
Moreover, several new research reports confirm the strength of YouTube viewership. For example, Adroit Digital, a media buying agency specializing in programmatic buying, contends that more people watch YouTube videos (68 percent of respondents to its April survey) than watch live broadcast TV shows (50 percent). Adroit’s free report, “Online Video: Look Who’s Watching Now,” acknowledges that with digital video recorder viewing (30 percent of respondents), the overall TV audience is far larger; but it makes the point that broadband video viewing has become a significant alternative/addition to conventional TV.

Admittedly, the short viewing times for YouTube and similar broadband videos, as noted in the Adroit study, differ substantially from the broadcast and cable viewing experience. Nonetheless, with its dedicated channels and high-profile, targeted content, YouTube increasingly is becoming a part of the “TV network” array.

Under those conditions, not surprisingly, legacy TV companies are buying into the broadband MCN juggernaut. For example, “Tastemade,” a network of online food channels that run on YouTube, recently received a $25 million investment from, among others, Liberty Media and Scripps Networks Interactive (the same parent company that owns Food Network, Cooking Channel and Food.com). The two-year-old online network company positions itself in contrast with legacy TV channels:

“A generation ago the cable industry launched category-defining brands in food and lifestyle,” Tastemade explains on its website. “We believe the same opportunity exists for today’s global, social and mobile digital platforms.”

At the VidCon convention, which attracted far more grownups than the chaperoned teens and younger creators, Dream- Works Animation CEO Jeffrey Katzenberg described an “ocean of opportunity” and called “this world of short-form video... an amazing place to create laughter.” He and other VidCon speakers focused on the expanding number of channels that YouTube carries, thus fulfilling the company’s plan to re-invent the TV structure, but with a broader array of branded channels.

Katzenberg acknowledged that “monetizing [this platform] is still a struggle.” But he expects to see within five years, that first-rate content will “migrate up to the top of the pyramid,” with 5 percent of video creators generating “95 percent of the value.”

To back up his enthusiastic predictions, the DreamWorks mogul has committed substantial resources to YouTube’s online video lineup. In particular, Katzenberg cited his studio’s $33 million purchase last year of Awesomeness TV a U.S.-based sketch comedy reality series. More significantly, DreamWorks Animation has turned over to Awesomeness some of its valuable properties, such as “Shrek” and “Po the Panda” along with characters from its recent Classic Media library for Awesomeness to create short, animated productions.

HELPING THE VIDEO CREATORS
In addition to the activity in Anaheim, the week included updates at YouTube Space LA, a two-year-old production venue near Venice. The Dolby Institute, in collaboration with RED Digital Cinema, offered a two-day workshop on tactics and techniques to improve video images and audio. YouTube’s “Space LA,” like similar facilities in New York, London and Tokyo, supports the production of videos by up-and-coming producers.

Dolby Institute Director Glenn Kiser was quoted characterizing the training program as one that encouraged participants to “think much more critically about sound as they head out to shoot their next round of projects.”

Meanwhile, back at VidCon, the sponsor and participant list offered evidence about the attention that legacy media companies and advertisers are devoting to broadband video. NBC Universal, Disney (via its recently acquired $500 million online video Maker Studio), Endemol Beyond USA, a unit of the global production and TV program licensing company, and HLN (the Time- Warner network formerly known as CNN’s Headline News, now repositioning itself as a social media network), were on hand, as were sponsors such as Kia Motors, Samsung, Best Buy and Taco Bell.

YouTube CEO Susan Wojcicki, who assumed the top role five months ago and was making her first appearance before the core creative community, promised VidCon attendees that, “The whole platform is being redone in a way that’s never been done before.”

She described the revamps and new features as ways to engage a bigger and global audience, build a successful business and manage creative work.

In other words, YouTube is beginning to look a lot like television.

Gary Arlen is president of Arlen Communications LLC, a research and consulting firm. He can be reached atwww.ArlenCom.com.

Gary Arlen

Rounds Live seeks to enable viewers to gab along with TV shows, complete with participants’ own webcam videos dotted around the screen.

Rounds Live, a new social media service, is the latest venture that seeks to enable viewers to gab along with TV shows or, as the company describes it “turn any website into a live video chat party”—complete with participants’ own webcam videos dotted around the screen. Rounds Live’s software creates “video bubbles” on any Web page, in essence a transparent layer that sits independently on top of the content, regardless of whether the content is static, live or on-demand.

The system can be used with streaming video content, but not with linear broadcast or cable programs. Since considerable sports and reality content is now available online in real time (such as event programming/concerts on YouTube and sports league-run websites), the company behind Rounds sees considerable opportunity among its initial target audience of young viewers who watch such shows on portable and handheld devices. Eventually, such programs could be seen on smart TV sets.

Tel Aviv-based Rounds developed the “Live” function as an offshoot of its original social platform that combines live communication and social activities, letting groups of people watch videos, play games and share photos while video-chatting across networks, operating systems and devices.

“The development of Rounds Live was a direct outgrowth of our experience creating Rounds Mobile, providing our team with unique insights into how to best merge communication and media into one unified social experience,” said Dany Fishel, CEO and co-founder of the company. “The combination of exclusive content partnerships and the ability to turn any website into a viewing party gives users a truly dynamic experience that we believe will change the way people consume online content together.”

Viewers can invite their own friends to watch and comment on shows simultaneously or join other “fans” of a show (with some degree of anonymity) to chat during a streaming video telecast, explained Natasha Shine-Zirkel, the company’s chief marketing officer.

Rounds is negotiating with U.S. content suppliers to establish program alliances for marketing campaigns. Although Shine-Zirkel declined to identify prospective content allies, she said that she expects some deals to be completed soon.

“We’re currently working on partnership deals with multiple partners in a variety of verticals including sports, music, gaming, talent and reality TV,” she told TV Technology. She expects “the most likely” first deals will be with “upcoming artists looking to engage their users in a fun, innovative way.”

Shine-Zirkel said the company is working with a major talent agency to recruit content and shows for the platform.

CHATTING WITH FRIENDS VS. OTHER FANS
The company’s first TV alliance was with the Israeli version of “X Factor,” where users spent more time engaged with a show when video-chatting. Viewers who were online with real “friends” spent 53 minutes per show with an average of five other people during the program. Those who joined a group of other anonymous “fans” spent 35 minutes with an average of 6.5 other people in the virtual “rooms” that are set up for such viewing sessions.

Rounds uses its patent-pending technology, which Shine-Zirkel said can handle up to 12 simultaneous viewers in a “room” connected to a single show and “millions of viewers” overall. Currently, about 10 million users have signed up for the free service in the United States and England.

While watching a program, users can create a personal video “bubble” (actually a circle with their photo or video stream in it); by hovering over a stream, they can move, resize or interact with other people in the room.

Rounds’ monetization plan is still amorphous. The majority of revenue will come through partnerships, although they “might have micropayments,” said Shine-Zirkel.

“Partners are looking for ways to engage with fans and will pay to be able to build relationships,” she said, citing the “scope of integration” available through the platform. She said the objective is to help programmers “extend the narrative of their content—before, during and after it goes live.”

Rounds is currently on servers at three vendors: Amazon Web Services, Digital Ocean and Rackspace. All of them have hosting facilities on the east and west coasts of the United States as well as in Europe, said Shine-Zirkel. “We try to be as agnostic as possible to cloud providers so that we can basically run everywhere.”

Late last year, Rounds and Vidyo Inc. signed a strategic agreement to integrate technology into the Rounds platform to combine shared entertainment with multiparty high-definition video conferencing and mass scaling capabilities.

Shine-Zirkel called the Scalable Video Coding solution developed by Vidyo an “impressive compression” service with the ability to adapt to bottlenecks and give users “a non-intrusive experience.”

The Rounds Live patents focus on the initiation of a room; every room has a unique identification that consists of two keys: the current URL for the user and the social identity of a user.

Initially, Rounds Live will launch as a Chrome browser extension; Rounds’ current mobile app is available for iOS and Android devices. By summer, the company plans to add multi-user capabilities for its mobile apps and then connect mobile and Web solutions. Support for additional browsers such as Firefox, Internet Explorer and Safari are all in the works.

Since its 2009 debut, Rounds has morphed from a “speed-dating/matchmaking” site to a “communitainment” platform, combining video chat and social apps. Using the platform’s intelligent “Meet New People” feature, participants can “pair up with new people for a meaningful chat discussion,” with the “advanced system [helping] users by suggesting conversation topics and tips based on their mutual likes, interests and social graph,” according to the company.

Rounds has raised a total of $10.5 million in funding from investors, including Verizon Ventures, venture capitalist Draper Fisher Jurvetson’s Tim Draper, Israeli funder Rhodium and other private investors.

Gary Arlen is president of Arlen Communications LLC, a research and consulting firm. He can be reached atwww.ArlenCom.com.

Gary Arlen

LOS ANGELES— During post-production, Deluxe Entertainment puts a metatag on every scene when a character drinks a beverage, drives a car or puts on a pair of shoes. If specific product brands appear in a scene, they also get a metatag.

Months or years later, when the show appears on a screen—be it living-room flat-panel, mobile handset or anything in between—the distributor of that video asset will be able to sell a commercial or create a “time-in,” including a second-screen promotion triggered by metadata, to an appropriate advertiser.

That’s just one of the multiscreen opportunities that Chris Rittler of Deluxe Digital Distribution envisions for the evolving integrated content and distribution channels that his nearly century-old company serves.

“We’re making certain that our cloud catalog can be distributed onto any system,” said Rittler, who is senior vice president of sales, business development and marketing at the Deluxe unit. “This is where the value lies. Distributors and advertisers want [this metadata] in content catalogs,” focusing on the increased importance of future-proofing multiplatform material.

ENHANCED SEARCH
Metadata accompanying the original video files also provides enhanced search recommendations, which media companies use for dynamic ad insertion, Rittler said.

“Many of our customers, since they are going beyond the set-top box, want enhanced metadata,” he said, describing several ways in which Deluxe has handled that capability. “We’ve automated our metadata,” because customers have different needs. For example, TV networks or online video services may want to highlight individual actors for a theme series, and the metadata helps single out those performers. Rittler also explains that review and ratings metatags can help programmers select programs on a variety of scales, including (as he notes with a chuckle) the “Rotten Tomatoes” critiques.

“We’ve invested in enabling all kinds of distributors to get their content to all kinds of platforms in both linear and video-on-demand formats,” Rittler said. He emphasizes the interweaving of the emerging platforms: “The combination of getting content to screens for both VOD and linear is hugely important.”

Deluxe on Demand clients include ABC, CBS, NBCUniversal, Fox, Viacom and Discovery plus premium cable channels such as HBO, Showtime, Starz and Epix. The company also works with its legacy studio clients such as Sony, Warner Bros., Universal and 20th Century Fox along with many other studios.

Rittler acknowledges that the diversification of today’s market makes the metatagging task so complex, especially with the goal of assuring that content reaches various screens as networks and carriers expect. While cable distribution is “very standardized,” he said—either 15 Mbps for HD or 3.5 Mbps for SD, the multiscreen universe requires 50 different formats, or more.

Deluxe’s multiscreen solution architecture.

And even the 15 Mbps format is not a simple matter, Rittler said. “You have to look at resolution, screen size, audio and a number of other variables” to assure that viewers see the program the way the producers and distributors intended to.

Adding to the current complexity is that, as Rittler sees it, “distributors’ engineering teams may think their content looks better on different devices. It comes down to bitrates,” he adds, noting that “you’ll see it differently” on an iPad Air or living room flat panel displays.

STANDARDS NEEDED
Further complicating the encoding task is the lack of digital rights management standards, he said.

Deluxe has developed a workflow process as it prepares content for multiplatform distribution. Its video catalog now includes 40,000 titles, and the company is adding “thousands more every month.”

The first step is encoding content, for example compressing 200 MB of content into a 9 MB package. Then it is “chunked up” into a packager, such as Smoothstream. Finally, the show is encrypted.

The lack of DRM standards represents merely one of the challenges as video content is prepared for multiplatform distribution, Rittler said. One of the reasons that there are no standards is that “technology is changing so fast between devices, DRM and encoding capabilities.” For example, he points out that there are only a handful of distribution platforms in the cable world (such as Arris and Seachange), but there are many more platforms for over-the-top channels.

“No one can keep up,” he said. “We say [to clients] that with what we’ve done, we will keep up with it for you. We call it a ‘content factory in the cloud,’ and we use it to keep up with the changes in specifications.... As content is flowing, it all goes though our system. As specs change, we can retool the system on the fly.”

Deluxe also provides hosting and content delivery network services for its customers, providing what Rittler calls “integrated service” to feed the final-leg distribution systems. Deluxe works with other CDNs such as Akamai and Limelight to assure that content reaches clients in the format needed.

For media companies, a core workflow feature is the “media library” function that applies metadata APIs (application programming interface) to push content through the appropriate retail channels. For example, some clients want UltraViolet information integrated into the identification.

Deluxe is adding multiscreen capabilities as well, according to Rittler. Tweets are often part of the mix of information about a show, so Deluxe is feeding data from social media into its material and then assures that such tweets play on any viewer device.

The company is also preparing to develop data-gathering options from mood sensors and other devices that are part of the evolving “Internet of Things” process.

“When you look at the developments in [content] search based on metadata it makes sense,” Rittler said. This rich metadata is enabling program selection and recommendation based on moods affected by what you watch, he suggests. He believes that this is an area where “we can provide viewers with an enhanced content service.”

“We want to connect viewers to content,” Rittler said. “Now we can make sure that viewers can find the content that interests them. It’s a big challenge.”

Gary Arlen tracks media and multiplatform services from Arlen Communications LLC,www.arlencom.com.

GARY ARLEN

It’s not so much that “Videocracy’s” producers can make a TV series “ripped from social media,” as they say, but rather that an entire network can be built as “the first TV home for the social media generation.”

When HLN rebranded itself early this year, the network formerly known as Headline News proclaimed that its focus on “millennials and the millennial-minded” would seek to “debunk the myth that the world of social media is only about videos of cats riding skateboards,” as executive vice president and general manager, Albie Hecht, described it.

He insisted that the revamped network’s approach “will mirror what consumers are really doing digitally.”

“Videocracy,” one of a half-dozen new series that HLN is launching, was created by “My Damn Channel” which has produced online short videos since 2007. The new HLN series will feature a panel—presumably glib millennials plus a few wizened media veterans—discussing the “shared content we’re all talking about,” according to the companies’ joint announcement.

JUMPED THE SHARK?
Whatever the underlying significance of HLN abandoning newscasts (some would say that happened long ago) to focus on social media (some would call it the new kind of news), the move is another signal of the increasing importance of social TV in the viewing pantheon.

It also may mark a “jump-the-shark” effort, coming too late in the social media evolution. The show arrives at a moment of growing—and conflicting—research about how viewers are embracing social media.

Fig.1: Comparing tweets: selected shows Since many TV companies are exulting and/or fretting about their commitments— and their viewers’ on-going relationships— with social media, the contradictory information makes it even more difficult to develop plans that incorporate a social component.

For example, AMC’s “The Walking Dead” has consistently been a top-tweeted show, according to Nielsen’s SocialGuide, which tracks the connection between TV viewing and social media usage. February’s mid-season series premiere drew 26 percent more tweets than did the comparable 2013 show. Yet the comparative viewership was up 28 percent, which suggests that some of the new viewers were not tweeters. (There could be many reasons for that.)

During the same week, the NBA All-Star game saw a drop of 21 percent in tweets. A couple weeks earlier, tweets during Super Bowl XLVIII telecast were down 3 percent even though the audience was up 3.5 percent (nearly four million more viewers) compared to the 2013 game, which (to be fair) was a more exciting and “tweetable” event with its Beyoncé halftime show and its stadium power blackout.

While SocialGuide’s ambivalent report raises warning flags, other research continues to indicate popularity for TV-related social media. For example, Shareablee found that the January 2014 TV premiere season generated 49 million social media interactions. The company, which characterizes itself as “powering the social data arms race (in a good way),” called the aggressive social media agenda an “effort to... keep devoted audiences tuning in.”

Shareablee’s evaluation of the top 10 returning and new TV shows identified that Facebook is the overall dominant social media platform, “driving 95 percent of all audience interactions,” according to the company’s report. “Pretty Little Liars consistently a top-tweeted show on the ABC Family cable network, had the highest level of “actions” via all social media, nearly five million engagements for its January premiere episode, according to Shareablee.

THE BIG PICTURE
As these data points bubble up, analysts are looking at the bigger picture for social media. A Pew Research survey of Facebook, released to coincide with the social network’s 10th anniversary last month, found that barely 10 percent of users update their status daily, a figure that would translate to a tiny portion who engage in social TV experiences. Pew did not specifically analyze social TV behaviors on Facebook, so analyses are speculative in this realm. Nonetheless, the impact can be significant, given the current scale of Facebook’s U.S. usage. The Pew study also found that about 44 percent of Facebook users click on “Like” to respond to friends’ postings, suggesting that comments about TV shows or other media experiences may have a far-reaching role.

And the research keeps rolling out.

A Facebook study, conducted by the research firm SecondSync, identified many behaviors for second screen usage, including ongoing conversations about what people are watching and the content of the shows themselves. Among the findings: up to 25 percent of the TV audience is posting Facebook comments “related to the show they are watching.”

The SecondSync study takes several swipes at Facebook’s dominance over Twitter, so not surprisingly the Nielsen SocialGuide “TVxTwitter” report shoots back with data points demonstrating that, for example, “hashtags in TV ads drive positive brand conversations” and “Twitter makes TV ads more effective.” Among the Nielsen findings: viewers watching TV and using Twitter had a 53 percent ad recall compared to 40 percent who watched without a second screen.

Such discontinuity in the social TV realm escalates the challenge of predicting a sustainable social media landscape. A Carnegie Mellon University computer model unveiled last month claims it can predict which social media are here to stay (at least for the next five years). It says Facebook will be around, boldly contradicting another academic study that predicts an 80 percent drop in Facebook membership by 2017. However, CMU researcher Bruno Ribeiro acknowledges that “even sustainable sites are vulnerable to upstarts that steal the attention of their members.”

Further complicating the outlook are studies such as the recent “TV Network Report” from a Tennessee research firm called SmartyPants, which indicates difficult times ahead for conventional media. The study focused on streaming, rather than second-screen applications, and its findings showed young audiences are very comfortable with, and looking toward, alternative platforms.

According to SmartyPants, networks such as Nickelodeon, Disney Channel and Cartoon Network fell below YouTube and Netflix on the “cool” scale. More significantly, the online services beat the kids-oriented cable channel on the “Offers Variety” question. Kids also said the online services were easy to use, convenient and portable. The study acknowledges that every network has a website and apps, but that streaming services are more appealing in what the researchers call “Kidfinity.”

Collectively, the research projects are a reminder that new media is still new and that viewers, as always, are fickle.

Gary Arlen is president of Arlen Communications LLC, a research and consulting firm. He can be reached atwww.ArlenCom.com

BETHESDA, MD.—“Mad As Hell: The Making of ‘Network’ and the Fateful Vision of the Angriest Man in Movies,”a book that explores the production of an outlandish film about the television industry, was just published. The film remains a classic examination of how broadcasting works, at least at some levels.

To many people, the script was a prescient prediction of what TV became in the subsequent decades. For production and operations insiders, as well as anyone who appreciates the creative process, “Mad As Hell” presents fascinating insights into how a high-profile movie takes shape, including historic decisions about the look of TV four decades ago.

Here are a few of my thoughts about the book and the movie, starting with my first exposure to “Network,” at an invitation-only screening in Washington, just before its release in late 1976.

FCC “chairman for life” Richard Wiley actually was chairman of the commission when “Network” debuted. At a reception after the screening, I asked him about one of my favorite scenes in the film, the one in which the TV network president frets about the plan for a “pornographic news show” as proposed by the aggressive programming vice president, Diana Christensen, played by Faye Dunaway.

“The FCC’d kill us,” says the top executive.

“The FCC can’t do anything except rap our knuckles,” sneers Robert Duvall’s Frank Hackett, the factotum from the corporate giant that has acquired the TV network.

I asked Wiley what the FCC would do in that situation. With his famous smile and evasive political acumen, the regulator-in-chief grinned, “We’d probably just rap their knuckles.”

The scene came to mind as I read “Mad As Hell,” by The New York Times writer Dave Itzkoff. Its release conveniently coincided with the angry howling about how the FCC should handle the proposed Comcast-Time Warner Cable merger and the issue of Network Neutrality. After all, an underlying theme of “Network” is the corporatization of media, along with anger about media consolidation.

That’s the milieu that inspires Howard Beale (Peter Finch’s Oscar-winning “mad prophet of the airwaves”) to proclaim the titular mantra, “I’m mad as hell, and I’m not going to take this anymore!”

The current confluence of media politics and public malaise makes a great backdrop to revisit the best media movie ever made. As Itzkoff reports, “Network” is the favorite film (and we assume a formative inspiration) of Stephen Colbert, Glenn Beck, Keith Olbermann and Bill O’Reilly: Modern incarnations of Beale on networks that are far less concerned about knuckle raps.

Unfortunately, Itzkoff never bluntly declares that screenwriter/producer Paddy Chayefsky’s “United Broadcasting System” was a prescient forbearer of Fox and the many opinionated cable networks that fit into Chayefsky’s concept of what the “dehumanizing institution” of television would become.

The culmination of Howard Beale’s revelatory arc is the come-to-Jesus harangue that Arthur Jensen (played by Net Beatty) delivers to him in a darkened cathedral (played by the New York Public Library boardroom; Chayefsky’s first choice was the New York Stock Exchange boardroom, but NYSE reneged when its managers figured out that corporate America would not look good in this scene. They were right: it doesn’t).

Jensen, as the head of the Communications Corp. of America, chastises Beale for “meddling with the primal forces of nature” and reminds him of the “corporate cosmology” that includes a “perfect world” controlled by “one vast and ecumenical holding company.”

“There is only one holistic system of systems. Dollars!” thunders Jensen. Beale gets the message.

Conveniently, HBO ran “Network” on the day that Comcast and Time Warner Cable unveiled their merger. Of course, I have copies of the movie close at hand or could quickly find it in the cloud, but I DVR’d the show to watch as I read the book. Seeing the movie, which I highly recommend doing on a regular basis, and reading Itzkoff’s book are vivid reminders about how today’s media-driven culture has inserted itself even more substantially into our lives than Chayefsky, co-producer Howard Gottfried and director Sidney Lumet could have imagined.

As an admirer of Chayefsky’s perspicacious writing, I was fascinated by the backstory that fomented this script. My main question was, “Why did it take 38 years to write this book?” It’s a worthy quick-read, especially for TV industry people who enjoy the gossip—albeit it 40 years late—and for movie buffs who appreciate production trivia (Kathy Cronkite, daughter of Walter, plays the kidnapped heiress-turned-gun-toting terrorist; William Holden was best man at the wedding of Ronald Reagan and Nancy Davis; Dunaway demanded control over her nude scene).

While the book is padded with peripheral contemporaneous stories and interviews with current TV luminaries, “Mad As Hell” adds countless insights about how and why the movie was made this way. It triggers the desire to see this great movie again.

As is true of much great literature, your perceptions of a story and characters change as you see them from different places in your own life. At that swank Washington screening when I first saw “Network,” I appreciated its insights on business, love and personal relationships based on what I knew and understood at that young point in life. Clearly, this movie has looked different every time I’ve seen it through the decades, when I understood more about business, work, marriage, world affairs and the machinations within our multichannel media ecosystem.

It’s the same movie, but it says something different every time. “Mad as Hell” fleshes out how the grown-ups who made the movie in the mid-1970s brought big truths to the story.

Beale spells it out in one of his harangues about who controls the media: “Woe is us if it ever falls into the hands of the wrong people.”

After all the hoopla and Oscars for Chayefsky and three actors, “Network” did not win that year’s Academy Award for Best Picture. That Oscar went to “Rocky,” the story about a powerhouse from Philadelphia.

How appropriate.

Gary Arlen waxes on digital developments from Arlen Communications (www.Arlencom.com).

Gary Arlen Talk about short-attention-span TV! The BBC has been testing 15-second video “newscasts” beamed to tablets and smartphones. The Beeb’s video headlines “show” is tortuously long compared to the 6-second news videos that New York-based “NowThis News” has been producing since last year. “NowThis” also runs 15- and 30-second newscasts and produces even longer segments.

Both explorations into short-form video news are initially aimed at social media platforms, especially Instagram’s ability to deliver videos. Steve Herrmann, head of BBC News Online, acknowledges that the initial month-long trial, which started in mid-January, reflects the changing audience patterns. December 2013 marked the first time that mobile and tablet viewing of BBC content was greater than desktop use, Herrmann told Britain’s Guardian newspaper.

The BBC has been testing 15-second video “newscasts” beamed to tablets and smartphones.

NEWS IN A HURRY
NowThis, which last month received significant but undisclosed financial backing from NBC, is “working on native content and native advertising with brands,” Steven Belser, vice president for production and creative services of NowThis Media, told TV Technology. The company is working with Instagram as well as Vine, Snapchat, Google+ Tumblr and other websites to deliver syndicated news content. Much of NowThis’s short-form video comes from NBC resources, and many “shows” conclude with a tune-in message for NBC News telecasts.

Collectively the very short-form news headline services such as Instafax and NowThis reflect the movement of video newscasts to portable platforms. Unlike mobile DTV embedded into broadcast signals, these products are running, for now at least, via conventional wireless telecom bandwidth. Both Instafax and NowThis cater to time-pressed viewers who want professionally produced news, but want it in a hurry.

BBC News acknowledges that the Instafax name pays homage to “Ceefax,” the pioneering teletext service that BBC ran for more than 30 years until shuttering it in 2012. Ceefax was transmitted as a signal embedded within the broadcast signal, initially in the vertical blanking interval of analog TV transmissions.

For the trial, BBC is producing and uploading at least three Instafax newscasts per day. The typical Instafax format is three images—either still photo or motion video—with a few words superimposed in san-serif white letters atop the images. Serially, the words and pictures tell a specific story, such as one about Iran’s nuclear program or a Korean credit card incursion. Alternatively, the three segments sometimes cover different headlines; a recent Instafax feed had three separate stories about Ukraine protests, Syria peace talks and Grammy winners.

There is non-intrusive ambient audio behind each video clip, although no verbal sound bites or news reader (anchor) descriptions. The current version does not include hyperlinks to any other BBC news site, nor can the viewer share the Instafax feed with social media friends. One British blogger commented that “voiceovers [would] convey the idea faster.”

An anonymous BBC official, cited in blog comments about Instafax, allegedly explained that the segments can be produced faster and less expensively without voiceovers, but that after the initial test, the BBC will determine whether that will change if the service is introduced as a regular production.

Patricia Fili-Krushel, NBCUniversal News GroupREACHING THE YOUNGER AUDIENCE
At NowThis, every segment features a stand-up announcer or voiceover audio. Recent clips ranged from Secretary of State John Kerry’s testimony—14 seconds of it—at a congressional hearing to a one-minute history of the Marlboro man and how many of the actors died from lung diseases.

NowThis News, which uses the slogan “The News In Your Pocket,” produces more than 50 daily video updates for Facebook, Instagram, Snapchat, Twitter, Vine, YouTube plus Apple and Android apps. Since its inception, it has created more than 10,000 short videos, most of them timely news items but many of them “evergreen” features or celebrity reports. It is developing archives of related videos, currently bundled into six main categories: U.S. World, Entertainment, Politics, Food and Science/Technology.

Sports and business, usually mainstays of online news services, are notably absent on NowThis, although in recent weeks there was extensive Olympics video material. None of the video seemed to come from NBC, the U.S. broadcaster for the Olympics, but the NowThis coverage could certainly be identified as enhancing its high-profile investor’s high-priced February programming centerpiece.

NBC’s rationale for backing NowThis is the quest for younger audiences. Patricia Fili-Krushel, chairman of the NBCUniversal News Group, said in a statement that the company knows that “news consumption among younger audiences continues to grow, but in order to reach that audience, we need to continue to create video for the platforms they use most.”

NowThis currently carries no advertising, but Belser says the company sees “a transition to native advertising.” Although declining to explain how such revenue-producing commercials would work, he hinted at the creation of vertical content silos that would feature news and information that lends itself to targeted advertising.

Both Instafax and NowThis News, along with other online and mobile video news ventures, such as Net2TV’s “Portico” newscasts are counting on young viewers’ short-attention spans and quest for non-traditional TV newscasts. Still unclear is whether—or how—viewers will discover these newscasts, or if there is some “push” technology in the background that will enable the producers to send these short shows to interested audiences without becoming some sort of video spam.

Perhaps the most fascinating part of the short-form newscasts is their integration from the start with social media platforms, such as Instagram. The deals may augur improved collaboration between the different cultures of broadcast news and social media, not to mention the economic bases of each participant.

Conceptually, Instafax and NowThis provide divergent examples of how news is changing. One thing for sure: it’s not only faster, but shorter.

Gary Arlen is president of Arlen Communications LLC, a research and consulting firm. He can be reached atwww.arlencom.com.

Gary Arlen

Tom Morgan, founder and CEO of Net- 2TV, the developer and operator of Portico streaming video services, sees an opportunity for his company’s TV-like content package via a new array of wireless broadband channels being packaged for Verizon Wireless, AT&T Wireless and possibly other mobile and wireline carriers.

Morgan also expects a “casting war” as rival technologies battle to deliver wireless video content through the final few yards from wireless receivers, mainly tablets and smartphones, to big flat-panel display screens.

In Morgan’s vision, the handheld devices will become “tuners,” pulling IP video from LTE airwaves, then transmitting—or “casting”—the shows to the big screen. The casting confrontation will become a smackdown between protocols such as Google’s Chromecast, Apple’s Airplay and the Miracast peer-to-peer wireless screen-casting standard. It may take several years for a marketplace leader to emerge, but there’s no hurry since the surrounding infrastructure (including spectrum availability) will be a work in progress for several years to come.

Net2TV, in Redwood Shores, Calif., has an obvious stake in this process, if the casting wars rage on. Like other content producers and aggregators, the young company wants to make sure that its content reaches viewers’ preferred screens. Although other technology developments, such as the new “1 Mainstream” software-as-a-service (see below) would enable multiple-format delivery, the potential casting wars may create unanticipated hurdles for the creation of telco-run, end-to-end wireless programming services. Such program packages could compete with cable as well as broadcast.

Net2TV’s Portico user interface screen What follows is a speculative scenario, stitched together from a variety of sources, spurred by my conversation with Morgan and other interested observers.

TV-LIKE PROGRAMMING ENVIRONMENT
Portico’s aggressive drive to create a TV-like programming environment is a good example of the effort to develop over-the-top streaming video channels of news, lifestyle features and entertainment content; maybe even sports, if anyone can get the rights. Portico, which debuted in October, is believed to be negotiating carriage deals with wireless carriers as well as cable operators, who are also seeking IP content for their broadband packages.

Many other video content producers and aggregators are also likely to be negotiating with Verizon, AT&T and other carriers which are escalating their plans to create video channels to be transmitted via the TV spectrum they hope to acquire at FCC auctions.

Where’s the evidence for the telcos’ efforts to create a wireless, on-demand competitor for broadcast TV channels? Start with Verizon’s recent acquisition spree. In the past couple months, Verizon and its subsidiaries have snapped up Intel’s nascent “OnCue” Internet TV venture; Edgecast, the content delivery network service; and up- Lynx, a cloud-based streaming multiscreen video solutions provider.

Verizon CEO Lowell McAdam, at last month’s UBS Global Media and Communications Conference, called wireless broadband channels a “win-win” for all parties. He acknowledged that Verizon has had “lots of discussions” with sports leagues, which, he said, liked the idea of out-of-market video delivery. (He acknowledged that a major obstacle is distribution rights currently held by other TV networks.) McAdam did not reveal any specific plans, but just knowing Verizon’s intent to carry live sports via wireless networks adds to the credibility of such services.

Tom Morgan

Collectively, these new assets contribute to the growing expectation that Verizon, which has frozen its landlocked FiOS agenda, is now turning to the airwaves for multichannel content delivery. AT&T’s purchase of Qualcomm’s FloTV spectrum two years ago similarly set the stage for national delivery of IP video; overall, AT&T has been less acquisitive, but it is also believed to be stocking its arsenal to deliver wireless video.

Aiding and abetting this vision of home TV delivery via licensed and unlicensed wireless systems is technology such as WiDi (Wireless Display), developed by Intel, which enables viewers to stream or “cast” video and other content from a desktop — or in this scenario—a tablet or other portable device to any HDTV, UHD or other big-screen digital displays. WiDi supports HD 1080p video quality, 5.1 surround sound, and low latency for interacting with applications that are sent to the TV.

That’s a collection of capabilities that fits wireless carriers’ visions for multiple revenue sources as well as measurable interactivity (including video-on-demand). It also incorporates the home networking plans of many technology providers, including the casting wars combatants such as Apple, Google and Intel.

‘AN ART, NOT AN ALGORITHM’
Net2TV’s Morgan, a 30-year “new media” veteran, sees an immediate value in establishing content niches that will be embedded into the alternative video lineup before the casting wars begin.

“Our objective is to build new channels, longer-form content,” he said. He cites the twice-daily newscast (typically about 10– 12 minutes long) that Portico offers, curated from Associated Press video stories and hosted by a Portico anchor team.

“We clip out the [AP] intros… add familiar channel motion graphics,” Morgan said, then insert a couple of commercial pods, typically only two ads per break. With more and longer shows on Net2TV’s agenda, he said the goal is to provide a familiar TV experience to viewers watching on-demand Internet content, streamed via their tablets or other devices, and sometimes then “cast” onto their big-screen monitors.

Portico’s essential ingredient, Morgan insists, is its human decision-making process, contrasted with the automated curation of many other content aggregators and distributors.

“Television is an art, not an algorithm,” he said. “We have a production system that makes it easy for anyone to produce shows.”

MORE TOOLS
Indeed, the effort to create TV-like shows for Internet distribution is bubbling up as a major factor in the next phase of IP television. For example, last month 1 Mainstream debuted as a “software-as-a-service” platform that automates app creation and streaming; it also manages ad serving and billing for Internet TV devices.

The company, founded by former Apple, Roku and Tivo executives, is using scalable cloud technologies to provide native applications on a variety of platforms and CDNs. Its first customer is British Sky Broadcasting and its initial line-up of supported devices includes Apple TV, Google TV, Samsung Smart TVs, Roku, Xbox, iPad, Kindle Fire and Android tablets.

With this and other emerging tools, the Internet TV wannabes have plenty of resources to build and distribute the programming that will be part of the casting wars. The complicated interactions between content suppliers, such as Portico— and carriers, such as Verizon and AT&T— will shape the competitive home media landscape.

The casting wars—affecting the final delivery leg—and the big providers who want a stake in the wireless pipeline add more complexity to the evolving competitive landscape.

And that landscape is already perplexing for viewers and for those who want to control (or keep control) of the airwaves.

Gary Arlen is president of Arlen Communications LLC, a research and consulting firm. He can be reached atwww.ArlenCom.com.

Gary Arlen

While dozens of recent studies and forecasts tout the growing significance of second-screen viewing, a new white paper from Nielsen and the Association of National Advertisers gets quickly to the lifeblood of the television business: Advertising revenue.

The report’s message is that a transfusion is underway, siphoning—or redirecting— money from traditional broadcast budgets to multiscreen campaigns. It’ll be a quick process: barely three years for a more-than-doubling of multiscreen ad spending from today’s 20 percent to nearly 50 percent by 2016.

THE DECLINE OF THE TRADITIONAL TV SCREEN
The report on “Optimizing Integrated Multi-Screen Campaigns” also delivers a strong message about “the importance of screens,” showing a continuing decline in the role of the “traditional TV” screen (see Fig. 1).

Whereas 82 percent of respondents (media sellers, marketers and ad agencies) rank TV sets as “very” or “somewhat important” today, that level drops to 75 percent by 2016 (see chart), putting it at the lowest level among the six types of “screens” ranked (computers, mobile phones, traditional TV, tablets, digital place-based media and connected TVs).

The ANA/Nielsen analysts point out the inconsistency of the expectations versus real-world performance. Specifically, the study notes that the mobile phone is today rated as the second most important screen (at 86 percent) as an advertising vehicle, “yet that rating is consistent with actual spending [on] mobile advertising.”

Fig. 1: The importance of screens today and in three years Such analyses may raise questions about respondents’ expectations that mobile phones and tablets will be “somewhat/ very important” in 2016—respectively 98 percent and 99 percent—as ad platforms.

Nonetheless, the study’s fundamental finding indicates that the people who buy advertising will put their money where their mouths are (see Fig. 2). Nearly half of the respondents believe that multiplatform campaigns are “very important in delivery of marketing messages today,” according to Nielsen. And 88 percent predict that multiscreen campaigns will be very important in 2016.

Today about 12 percent of advertisers spend more than half their budgets on “integrated multiscreen campaigns.” By 2016, 46 percent of advertisers will devote that level of spending to multiscreen campaigns, according to the ANA/Nielsen study. (The spending ratio can be interpreted in several ways, such as the overall average spending devoted to multiplatform options: the mean level is 20.3 percent now, 49.3 percent in 2016).

SECOND-SCREEN ENGAGEMENT
Not surprisingly, Nielsen emphasized the importance of metrics on development of multiscreen advertising. Given its new relationship matching Twitter usage and TV viewing, the ratings firm pointed out that 73 percent of survey respondents would “prefer to use just one set of metrics across all screens.”

In particular, all categories of respondents consistently cited the need to determine if the advertising was delivered to the desired audience and whether such advertising produced the desired effect.

ANA President/CEO Bob Liodice used that finding to call for more cross-industry collaboration.

“An industry-wide initiative including trade associations and senior leaders from across the advertising ecosystem must be established to help foster standards and best practices for multiscreen campaign measurement and management,” Liodice said. “This would build on Making Measurement Make Sense (3MS), an industry-wide initiative to advance cross-platform comparability through improved digital advertising metrics and standards.”

Meanwhile, the enthusiasm about multiscreen marketing raised familiar questions about the distraction factor. A couple weeks after the ANA/Nielsen report surfaced, Eric Ferguson, Nielsen’s vice president of media client services, appeared in an online video interview, acknowledging that second-screen usage is both an enhancement and a distraction. But he emphasized that since 75 percent of TV viewers multitask at least once a month—using a tablet or smartphone while watching TV programming—that the human acceptance process is already in place.

Ferguson called the two-screen experience “engaging” and “highly complementary” for both program content and advertising. He cited a recent Nielsen study for Viggle, another second-screen developer, which found increased ad effectiveness during two-screen viewing.

“Results were very positive in favor of additional ad effectiveness among the dual exposed,” for both Viggle add-ons as well as basic video content, Ferguson explained. He also noted that “ad memorability” trickles down into other viewing measurements.

Ferguson also addressed the question of whether a double hit of advertising on two screens could turn off viewers.

“Additional frequency across platforms tends to benefit overall [ad] performance,” he said. “There’s a misperception that hitting people over the head with the same ad, the same brand, the same message [makes] people get sick of it and tune out.”

“That’s really not the case,” he continued. “More times than not, it enhances performance. We’ve found [on] both single platform and now across platforms… additional frequency tends to benefit performance, and hitting them over the head is not going to be a bad thing.”

EXPLOITING REAL TIME
Among the significant findings of the ANA/Nielsen research was the value of “real-time measures for optimization.” The study cautioned that the “decline in the perceived importance of traditional TV” is part of an online evolution. ANA/Nielsen’s evaluation points out the “almost universal interest” in having the TV industry adopt such online practices as “targeted/addressable advertising, behavior-based planning and real-time measurement.”

Fig. 2: Percentage of total media spend/sales attributed to integrated multiscreen campaigns
Although it was not mentioned in the study, some of these factors are part of the ATSC 3.0 agenda.

The study identified the ad formats “considered to be best-suited for integrated multiscreen advertising.”

“There is a strong interest in video as a platform, across multiple screens, and the opportunity for the use of video [will] grow,” the report concluded. “There are increased opportunities for branded entertainment and native advertising, as interest in content marketing is on the rise.”

ANA/Nielsen’s report cautioned that barely half of marketers believe that “standard TV commercials are best-suited for integrated multiscreen advertising opportunities” although media sellers and ad agencies overwhelmingly adhere to the value of standard commercial formats.

That finding alone may testify to the disparity in the multiscreen world ahead. Legacy providers like their traditional way of doing business—even as product manufacturers and audiences are quickly revising the ways in which they use television.

Gary Arlen is president of Arlen Communications LLC, a media/telcom research firm. He can be reached atGaryArlen@columnist.com.

Gary Arlen

BETHESDA, MD.—If you missed the U.S. Open Squash Championship tournament in Philadelphia last month on “Squash TV,” the Professional Squash Association’s global real-time, paid, video-streaming service, you could see it on ESPN3.com provided you’re an authenticated ESPN subscriber.

If you knew where to look, you could also see parts of it on U.S. Open Squash’s website and some early tournament matches live and free via YouTube, which also archived reruns for on-demand viewing.

One World Sports, which distributes live events via linear satellite and cable channels, also carried the Open as part of its subscription package. Semifinal and final matches were telecast worldwide, often on ad-supported channels, via a satellite feed coordinated by Total Sports Asia, which up-linked from Philadelphia. The two weeks of squash matches were played on courts at Drexel University.

MULTIPLE CHOICE
That’s at least five platforms and three pricing structures to see the fast-paced events in both men’s and women’s tourneys, all fed from a single video production team run by British-based Perform Group.

Although none of the organizers or distributors has yet revealed the viewership or financial results of the two-week tournament, their tactics may offer a model for future distribution of esoteric content aimed at high-value audiences.

Kevin Klipstein, CEO of U.S. Squash, the sport’s governing body in the United States and organizer of October’s tournament, acknowledges that the audience may be limited, but the demographics are top notch. He estimates that there are about 1.2 million squash players in the United States, with an average annual income of $350,000 and average net worth of $1.5 million.

Kevin D. Klipstein That’s the target market for the digital distribution, and it’s the sales pitch program suppliers have been using as they seek sponsorships for the elite sport and its major events, such as the U.S. Open Squash Championships. Hence, no surprise; the primary sponsors are upscale financial firms.

The multiplatform approach represents an expansion strategy that could be duplicated in other categories beyond sports.

“Up to now we’ve been content with streaming,” Klipstein said. “Now we’re going after broadcast distribution deals for the next few years and build sponsorship packages.”

London-based PSA has contracted with OWS, a relatively young U.S. network that streams all PSA world series events in its Racquet Sports package. OWS currently has distribution deals in the United States with Dish, Cablevision’s Optimum TV and some MediaCom cable systems.

The company acknowledges that it has faced challenges with cable operators about where to place OWS. Operators favor putting it on an international tier or in multicultural bundles because of its focus on global content, while OWS wants to be in the sports tier.

One compromise, as evidenced in the U.S. Squash tournament: Cablevision’s Optimum TV service offers OWS as a standalone á là carte channel for $2.95 per month, a fee that included the squash matches.

ESPN3, the online-only streaming video channel for authenticated ESPN subscribers, also carried the tournament. It is part of the TV Everywhere initiative, even though the squash matches never made it to ESPN’s primary linear channels, apparently not even to the “Sports Center” highlights segment.

Squash TV, PSA’s official live and video-on-demand website, streamed the matches to its own subscribers and to affiliates, primarily local and regional squash organizations that operate their own websites. Squash TV charges the local equivalent of $13.99 per month (or $120 for an annual pass) to receive all its sanctioned events. Its online affiliates get a revenue share for members they bring to the video stream.

PSA has distribution partners worldwide (such as Fox Sports Australia) that carry the matches on major TV networks in regions where the sport is more popular than it is in the United States.

PRODUCTION: ONE FEED, MANY VARIATIONS
Perform Group, a London-based sports production company, handled all video capture, editing and transmission for the Philadelphia matches, including distribution to the multiple delivery platforms, under PSA auspices.

Marc Bousfield, a Perform producer/director, led a production team of seven people (two camera operators plus graphics, editing and other crew members) who handled every squash match from Philadelphia.

Two manned cameras covered the Center Court games, which were played in a Plexiglas cage, equipped with remote-controlled cameras, including aerial and floor-level angles to capture the speed of the games. Grandstands surrounded the glassed-in court on all sides. (Similar glassed-in courts were set up in New York’s Grand Central Station and other venues for previous U.S. Squash events.)

Production at the U.S. Open Squash Championship Earlier rounds were played on conventional courts at Drexel. The Perform team included slow-motion operators for replays that were available as part of the Center Court productions.

“We use the same crew for the global squash tour,” Bousfield said. The group includes commentators who can provide verbal coverage of the matches, although he pointed out that the free YouTube coverage was presented as single-camera video with no commentary.

He and Klipstein agree that the YouTube “test” was intended for real fans who want to see every match or follow specific players and would be satisfied with the static camera coverage.

“Squash carries the reputation of not being good on television,” Klipstein said. “It’s intense. I think we’re climbing our way into broadcasting. We’ve spent the last 24 months working to enhance the streaming and broadcast products. We’ve consulted with major national broadcasters on how to improve production.”

Klipstein cites advice, such as creating better floor lighting to improve the visual experience.

As for business factors, the squash tournament’s options of limited free access, subscription viewing and (in some locales) ad-supported broadcast delivery will provide valuable case studies in how audiences respond to the multiple options of digital delivery.

The options—from linear big-screen to wireless mobile viewing—will also provide guidance on how to proceed in squash television and other content. Thanks to the metrics capture that streaming media enables, PSA and its online colleagues will get an efficient gauge of who watches what and when.

Squash promoters hope they have a smash on their hands.

Gary Arlen is president of Arlen Communications LLC, a media/telecom research firm. He can be reached atGaryArlen@columnist.com.

Gary Arlen In this season of annual budget planning plus fourth quarter product releases, it’s easy to get lost in the endless flow of predictive pronouncements and ebullient announcements. They vie for attention and generate increasing confusion about what to do with “new media.”

The glut of upbeat outlooks and the gush of promotional promises thundered with particular intensity on a couple of overwhelming days recently. Studies and forecasts surfaced, offering divergent views about viewing migration to multiplatform systems. Simultaneously, a gushing torrent of product introductions offered updated digital devices and software intended to pave the path for the delivery and reception of such multiplatform services.

Since our job around here is to interpret these promises, the deluge made for a hectic week. And it required some rumination about how business planners will handle this range of information.

Do you design your tactics based on broad forecasts and spot-check studies? Or should you absorb product information and start building digital platform options based on new product availability?

Not to be overly skeptical, but the field studies and predictions are inevitably optimistic, often created to reassure investors and technology providers. Similarly, product announcements are opportunistic and don’t necessarily assure market acceptance.

Fig. 1: Sources used to watch movies at home
Source: Parks Associates: “Video-on-Demand: The Road to Revenue,” September 2013 Yet plan you must. Inevitably, it’s a combination of broad market outlooks mixed with specific tools and processes that suit your role in the emerging digital marketplace.

VIDEO-VIEWING NUMBERS

Nonetheless, the glut of forecasts and the gush of product promises tend to daze as well as dazzle. For example, in its new “Video-on- Demand: The Road to Revenues” report, research firm Parks Associates found that in the first quarter of this year, 44 percent of U.S. broadband homes subscribed to some kind of online “over-the-top” (OTT) service such as Netflix, Hulu Plus or Amazon Prime, (Fig. 1). That level of paid online VOD was just slightly lower than simultaneous viewing of TV and second-screen content.

Parks’ Senior Analyst Heather Way points out that, “Online video is now a common source of video viewing in U.S. households, while Transactional VOD [“TVOD”: TV-set-based VOD viewing] is near the bottom.”

Not surprisingly, the Parks study found that young viewers (ages 18–24 years old) are the most likely to subscribe to OTT video services.

Viewers are far more likely to watch such programs on a mobile device or tablet, Way told TV Technology when we sought amplification of her report. “More and more, consumers are using a smartphone or tablet to view video content when the primary screen [the TV set] is not available.”

Separately and simultaneously, FreeWheel Advisory Services’ “Video Monetization Report, 2Q2013” provided another upbeat outlook on Americans’ broadband video viewing patterns. It, too, focuses on the dramatically fast uptake of mobile viewing and especially the increased acceptance of online advertising by both viewers and marketers.

Online video usage increased 38 percent from the second quarter 2012 to the same period this year, says FreeWheel, a San Mateo, Calif.-based marketing research and support agency. It emphasizes that online video advertising “increasingly [resembles] the linear TV experience.”

Again, the impact of tablet viewing is clear: tablets accounted for 13.27 percent of video viewing in the second quarter of 2013 compared to 7 percent during the same period last year and 7.5 percent in the fourth quarter of 2012. Watching video on smartphones or other mobile devices also doubled during the year: 2.2 percent in 2Q2012 and 4.3 percent in 2Q2013.

While the FreeWheel analysis confirms other researchers’ upbeat predictions for “non-traditional” viewing, its core message stresses the migration of advertising to these addressable platforms. But the migration will not be simple, the company observes.

Yet another report came up with similar trend data about the movement of digital video advertising. An eMarketer study, sponsored by Adap.TV, concluded that “more digital viewers means more marketers jumping on the video advertising bandwagon, trying to take advantage of the branding opportunities afforded by video.”

This study’s data deck includes the high hopes that marketers bring to digital platforms: 47 percent of marketing professionals expect higher product awareness, 58 percent anticipate greater engagement. It also lists reasons why advertisers will move toward broadband video platforms: 73 percent cite “better targeting;” 67 percent mention “measurement;” 54 percent cite “scale and reach” as rationales to increase their digital video spending.

And, according to another report, young viewers are not the only ones embracing online video. Ericsson’s Consumer Lab found that 41 percent of people in the 65– 69 age bracket watch more than one piece of streaming content per week; Hulu and Netflix topped their choices. Analysts took this factoid to mean that even traditional TV’s “most adamant supporters” are being tempted by the new digital alternatives.

Finally, VEVO issued its viewership report for the first half of 2013, revealing that 50 percent of its U.S. video views now come from mobile and connected TV devices. That’s even higher than the Parks and FreeWheel reports, although as is usually the case with such studies, the data sources—the audience universes for each study—are not identical. VEVO CEO Rio Caraeff said that non-desktop viewing is the fastest growing part of VEVO’s business.

VEVO’s experience, of course, is skewed by its core content: mostly short music videos that are a mainstay of mobile viewing. The connected TV factor is noteworthy, though, especially when Caraeff told CNET that 80 percent of his company product development now focuses on such at-home devices. VEVO has deals with Roku, Xbox and Apple TV, and analysts expect that Google Chromecast and Samsung smart TV deals are in the works.

DEAL-MAKING AND PRODUCT EXTENSION

Indeed, that’s where this collection of bullish forecasts tips into the world of product evaluation.

In September, Roku unveiled plans to expand its video streaming service by adding an Android App. Barely a month after updating its mobile iOS app, Roku introduced v2.3, which lets users of Roku set-top boxes stream videos between their Android smartphones, tablets or other devices via the STB to their big-screen TV monitors.

Aside from sharing family videos, such technology opens the door to more “user-generated content” if and when that opportunity resurfaces for commercial media operators.

In a speech at the Edinburgh Television Festival in September, actor Kevin Spacey warned that traditional television program producers and broadcasters could be left behind if they fear the risk-taking and “warp speed” technological changes that are part of the new video era. Roku also revised its interface (an augmented grid system) for cross-platform remote control of online viewing.

And Facebook, which has quietly been upgrading its video offerings, acknowledged that it is testing a system that allows videos to play automatically on mobile versions of its service.

Reuters described this capability as “setting the stage to turn the 1.15 billion-member social network into an attractive venue for lucrative, television-like video ads.”

According to reports, only videos posted to Facebook by individual users, especially “celebrities or musicians,” will have the auto-play function. The inclusion of professional performers suggests that Facebook will increasingly rely on video as a revenue-generator, with some analysts expecting that the social network will charge brand marketers $1 million to $2.4 million for a 15-second auto-play video ad.

Meanwhile, Samsung is accelerating its TV apps agenda. At the Internationale Funkausstellung (IFA) consumer electronics trade show in Berlin, Samsung introduced two new applications for its SmartTVs, expanding the pool of upscale content available to its customers. The “Opera” app features about 100 performances from Austria’s Wien National Opera House; the “Gallery” app allows users to see high-definition photos taken by popular photographers. Both free apps can be downloaded from Samsung’s proprietary TV app platform.

The concentrated flurry of new media forecasts and product upgrades came barely a fortnight after the celebrated Kevin Spacey speech at the Edinburgh Television Festival. The iconic actor/director espoused the “third golden age” of television, citing the high-quality content of made-for-video programs, including the Netflix “House of Cards” series in which he stars. In his MacTaggart Lecture, Spacey warned that traditional program producers and broadcasters could be left behind if they fear the risk-taking and “warp speed” technological changes that are part of this new video era.

Dazed by the options and choices? Of course, everyone is. Does the data and product deluge prompt inertia or statis? It better not.

Nonetheless, the forecasts are generally not issued with a warning that past performance does not guarantee future successes, at least not at the same growth rate. And the products, which provide just a glimpse of tools coming into the market, are similarly not guaranteed to succeed in a competitive market.

No wonder these multiplatform decisions are so complicated.

Gary Arlen is president of Arlen Communications LLC, a media/telcom research firm. He can be reached atGaryArlen@columnist.com.

Gary Arlen

BETHESDA, MD. “The Holy Grail of advertising is still the living room on the high-definition TV set,” said Nick Meyers, vice president of sales and business development at Denver-based Accelerated Media Inc., which creates interactive advertising and on–demand local content, including newscasts, for broadcasters and other media firms. “Now that those sets are more connected to the Internet, there is the opportunity to be interactive as you couldn’t do before.”

“The push for the past year has been to get a localized message,” Meyers added, citing the work that his company has done for TV groups including Fox’s owned-and-operated stations, Fisher Communications, Hubbard Broadcasting and Capitol Broadcasting.

At the core of these projects has been Accelerated Media’s Companion Ad Network, an advanced TV ad platform that inserts local and national advertising into companion apps—including smart TV apps as well as apps for tablets and smartphones.

“The CAN gives programmers additional ad inventory and gives advertisers new inventory within companion apps,” said Meyers, citing the ability to deliver pre-roll ad units, interactive ads (an app within an app) and addressable ads.

Nick Meyers His pitch to advertisers focuses on the “immersive brand experience” all on the TV screen.

ECONOMIES OF SCALE
“When we build applications for a broadcast station, they are not getting just one platform,” said Meyers. “We simultaneously build the app on all four of the most significant footprints: Yahoo!, Samsung, Google TV and (coming soon) the Smart TV Alliance, all for one fee.”

Accelerated Media has built apps for broadcasters’ local news, weather, traffic and other content, in the process achieving “economies of scale,” Meyers said.

Accelerated Media is part of the year-old Smart TV Alliance, which is defining technical specifications. The group’s software development kit lets application developers create apps that run on multiple TVs regardless of the platform. Through Alliance connections, Accelerated Media has established relationships with Samsung, Vizio, LG and other manufacturers to install its apps onto those brands of smart TV sets, making them ready for viewing in markets where a broadcaster is transmitting TV apps.

Meyers claimed that the relationships with TV set makers helps enable broadcasters to deliver their interactive ad and news content at a very low cost—a fraction of the price of conventional app development, although he declined to specify the prices.

Accelerated Media, formerly known as Accelerated Interactive Media, has been working on advanced TV features for more than a decade. Its earlier (and still ongoing) projects involve interactive development for cable networks.

Even as the company focuses on its broadcast app ventures, it is implementing “EagleVision,” a set-top box add-on device aimed at small- and medium-sized cable companies. The device, built by Technicolor, with Accelerated Media creating the software and middleware, enables cable operators to provide interactivity by connecting an existing set-top box to any TV set (“smart” or not). It has HDMI input and output connectors and the capability to capture Automatic Content Recognition data triggers for supplemental information.

“It makes a regular TV into a smart TV,” said Meyers.

The first “beta” prototypes of the EagleVision box came out in late July; the next step is a field trial at three cable companies. Accelerated Media is working with the National Cable Television Cooperative Inc. to test the devices during the coming months.

The pickup of Accelerated Media’s schedule coincides with continuing research findings about growing use of apps and simulmedia, as well as multiplatform video consumption.

For example, comScore’s latest online video usage figures showed impressive adoption by American viewers: 183 million Americans—about 85 percent of the U.S. Internet audience—tuned into online video during June. Collectively, they watched more than 44 billion online videos. Most significantly, video ad views topped 20 billion, up from 15.8 billion the previous month; comScore observed that video ads accounted for 31 percent of all video viewing and 3 percent of all minutes spent watching online video. The duration of the average online content video was 5.3 minutes, while the average online video ad was 0.4 minutes, comScore found.

AND THERE’S MORE
Separately, a Parks Associates study in July observed that 14 percent of smartphone/tablet users had recently used a TV content app. The research concluded that “consumers are developing preferences for TV-content apps,” citing the growing pool of apps to accompany shows such as “Glee” and “The Walking Dead” as well as apps from MTV, Nickelodeon, USA Network and other networks.

WNYW-TV Main interactive screen for smart TV, developed by Accelerated Media Parks’ study found that nearly 75 percent of these users are satisfied with this app experience and that the most frequently used apps included purchasing music or merchandise related to shows.

“The latest round of apps is from content providers, not satellite and cable-TV companies,” said John Barrett, Parks’ director of consumer analytics. He cited programmers’ desire “to increase viewer loyalty… and enhance the viewing experience.” Parks also acknowledged that “the most important implication may be for advertising.”

While both the comScore and Parks studies encompassed all types of online video—not just TV-related content or material watched on smart TVs—the continually expanding adoption of on-demand video bolsters Meyers’ outlook for his company’s services. He points out that Netflix, Hulu, Pandora and other online video providers have “been telling viewers to watch us on their connected TV sets, not just tablets.”

“That has driven a lot of usage” to smart TVs, he observed.

Meyers expects the growing appeal of TV-centered online video as being most attractive to traditional broadcast advertisers, especially automotive and consumer packaged goods clients. Accelerated Media has worked with Ford, Lincoln, Clorox, American Express and other advertisers on second-screen projects.

“There’s money to be made if we can localize a campaign,” he said, citing streaming solutions that allow advertisers “to leverage the local car dealer ad buys.”

Meyers also cited other national brands with a local presence, such as furniture stores, fast food and other franchises. “They can leverage the national buy with a localized message on the smart TV,” he said.

It is “critical” for TV stations to promote their video apps, constantly reminding viewers that additional material—both news and advertising—is available on their smart TV sets, said Meyers. With the advanced analytics (which Accelerated Media also provides), broadcasters can track how the on-demand content supplements the linear telecasts.

For its first TV news offerings, the company has worked with Fox stations and WRAL-TV (Capitol Broadcasting’s Raleigh, N.C., station) to offer a livestream option. Meyers cited examples of extended news coverage during emergency news events.

“When a station returns to its ‘regularly scheduled programming,’ it can advise viewers to go to apps on their smart TV or other devices to continue watching the news reports,” he explains. For commercials, including national spot ads, the station can point viewers to on-screen widgets for a local dealer, including scheduling test drives.

While such concepts have floated around the interactive TV and online realm for decades, Meyers believes that today’s widespread adoption of smart-TV apps finally makes these services viable.

“Fragmentation is starting come together,” he said, citing the work of the Smart TV Alliance.

“We see the opportunity as being localized for broadcasters,” concluded Meyers, with enthusiasm.

Gary Arlen is president of Arlen Communications LLC, a media/telcom research firm. He can be reached atGaryArlen@columnist.com.

Gary Arlen

Anyone seeking a clear vision and valid roadmap for the role of tablets and other companion TV devices in the multiscreen landscape should stock up on headache pain relievers and “alternative” routing software.

Last month’s The Cable Show (the National Cable & Telecommunications Association’s annual convention) was laden with a predictable variety of possibilities, much as vendors at April’s NAB Show posited their visions of how viewers will want to interact with programs and commercials.

As previously interpreted in this space, some envision the smart TV set itself as supplying both the traditional video and interactive add-on features on a single screen, while others believe that viewers will prefer second-screen services to be delivered and customized via a mobile handheld device to supplement the primary big-screen TV set.

Add “the cloud” to this conversation about how best to deliver multiscreen experiences. At The Cable Show, Comcast CEO Brian Roberts focused on cloud-delivered services as he unveiled X2, an upgrade to his company’s year-old X1 user interface, which enables subscribers to obtain a personalized guide, navigation and interactivity (including on-demand ordering) via cloud systems. The approach fully integrates access via any device, especially mobile handsets such as tablets.

ABC has recently expanded availability of its Watch ABC OTTP app in new markets. Roberts’ presentation came just days after the Pew Internet project released its latest report, which underscored the boom in tablet usage. About 34 percent of American adults now own a tablet, says Pew, with the significant finding that the highest penetration is among 35 to 44 year-old adults, the prime advertising target audience.

Pew noted that there is “no statistically significant difference in tablet ownership between men and women or between members of different racial or ethnic groups.”

The only age category in which tablet penetration drops below 30 percent is among people older than 55 years, with another drop-off (to 18 percent) in the 65+ year-old seniors audience.

Although the Pew research didn’t correlate tablet usage with TV viewing, plenty of other studies have shown that at least 80 percent of viewers have a handset of some sort close at hand while watching TV.

TABLET FOR ONE-SCREEN SERVICES
With that in mind, one multiscreen advertising company is focusing on the tablet as a TV replacement on many occasions.

“I’m selling the tablet as the first screen… not just the companion screen,” says Long Ellis, general manager and vice president of direct media at Flurry Inc. Ellis, a long-time network TV sales executive, cites three sectors that are driving acceptance of the tablet as the primary platform for both video delivery and wireless/ online interactivity.

“Advertisers are looking for addressable advertising and will pay a premium for it. Publishers [e .g. website producers] want to reach target audiences and charge a higher price. Consumers want to get more relevant ads,” said Ellis, emphasizing that the tablet delivers on one screen what all three groups want.

Long Ellis A major evolving factor is measurement and analytics—services that Flurry offers with “a few lines of code,” he said, adding that the company can see behavior “in more than a billion devices,” that generates insights about usage experiences. That’s the kind of data for which advertisers clamor.

“Ad agencies are dying to buy the tablet,” says Ellis, especially as TV networks— both broadcast and cable—are putting more shows into their apps for mobile devices. He stresses that availability of viewing/usage data will trigger agencies to make tablet ad purchases.

In its recent analysis, San Francisco-based Flurry observed that the time spent with mobile apps is challenging the time spent watching TV. The company’s report indicated that advertisers may be able to reach “a TV-sized audience” on mobile more effectively, including more quickly, during evening primetime viewing hours (Fig. 1). Flurry’s research found that in those hours, usage of the top 250 iOS and Android apps spikes at up to 52 million viewers, a level that rivals TV viewership.

WHAT THE FUTURE MIGHT HOLD
With the familiar enthusiasm of a seasoned sales executive, Ellis predicts that in the next 18 months, more people will be watching tablets, especially in the home—“a tidal wave” as more content “moves to mobile.”

At last month’s Cable Show, Comcast CEO Brian Roberts unveiled the company’s new X2 user interface, which enables subscribers to obtain a personalized guide, navigation and interactivity via cloud systems. The approach fully integrates access via any device, especially mobile handsets such as tablets. While Flurry provides app development and ad support services for the online community, one of its core offerings is “Flurry Analytics,” which understands consumer interaction with mobile applications. The company, which debuted in 2005, says that more than 100,000 firms use its Analytics system to measure audience reach, engagement, retention and revenue on the full array of mobile devices. The software can measure all activity, gathering demographic as well as psychographic info from actual usage.

Ellis’s belief in the tablet’s dominance offers a striking alternative to other approaches on display at The Cable Show— and there’s no way to know yet whose focus is accurate. Certainly the tablet is seen as an integrated component of the new TV experience.

Qualcomm, which updated its AllJoyn service—an integrated wireless home networking service it is testing with cable operators—relies on tablets and other mobile devices as the control unit for many of its services. In that regard, its vision reflects Comcast’s Roberts’ expectation that the tablet will play a central role in the emerging multiscreen ecosystem through the cloud.

At a social TV apps session, SocialGuide CEO Sean Casey predicted that more twoscreen packagers will enter the market, a concept that, if true, will continue to muddy the multiscreen outlook as system operators, advertisers and viewers evaluate the fragmented arena. Yet Casey’s comment takes on greater significance since Comcast is a major investor and user of SocialGuide.

Fig. 1: Distribution of device models, active users and sessions by form factor
(Click to Enlarge) The debut of Samsung at The Cable Show, demonstrating its smart TVs and other devices, and LG (which was focused on its multi-platform set-top boxes) underscored the complexity of the secondscreen environment.

As Cable Show attendees and vendors tried to soak in the opportunities and options, the only thing that became crystal clear is that tablets have quickly become a key contender in the video delivery business. But no one is yet able to guarantee the ultimate role they will play vis-à-vis the TV industry itself.

Gary Arlen is president of Arlen Communications LLC, a media/telcom research firm. He can be reached atGaryArlen@columnist.com.

Gary Arlen

Jon Dakss, vice-president, converged media at NBCUniversal Operations & Technical Services, spent much of his opening remarks at the Advanced TV Systems Committee annual meeting last month, extolling the value of Zeebox, the social TV platform in which NBCU’s parent Comcast made a substantial (but undisclosed) investment last fall and which NBC is using for second-screen programming.

Dakss enthusiastically described the “new content experience” and its effects on viewers’ “content sharing and engagement,” specifically citing their involvement with advertising. More than two million U.S viewers have downloaded the Zeebox social app in the past eight months in the United States (five million worldwide since the British software company debuted in 2011).

SECOND-SCREEN RELATIONSHIPS
Like other second-screen software, the Zeebox “companion TV” lets audiences integrate tablet and smartphone participation with their TV viewing. Dakss singled out the ways in which viewers of NBC’s “The Voice” have plunged into the show’s features via their second-screen relationships.

Zeebox, which also has relationships with other U.S. networks including HBO, represents just one aspect of the growing multiplatform phenomenon discussed during the ATSC “Second Screen” session, part of the meeting’s look at the fastevolving ATSC 2.0 standard.

Panelist Tim Alessi, director of new product development at LG Electronics’ home entertainment group, characterized such interactivity as “dovetailing nicely with ATSC 2.0,” which includes the capability for non-real-time TV.

Alessi singled out “content discovery” as another app that is “going to move toward the second screen” as advanced remote controls enable viewers to find and select content from traditional broadcast providers and new cloud sources via companion devices.

Zeebox Enhanced Live TV Sponsorships

“All of these second-screen scenarios are becoming more important to viewers,” Alessi said. He acknowledged it is early in the evolution of enhanced services, so that providers are experimenting with a variety of approaches to find what viewers prefer; and he cautioned that there are almost “too many capabilities” that may distract some viewers during these early days.

Predictably, on a panel of multiscreen operators and technology providers, enthusiasm for second-screen services was high. The upbeat discussions stemmed, in part, from the positive, collective experiences of panel members, who characterized the relatively new second-screen services as “compelling.”

Roger Keating, senior vice president-digital media at Hearst Television Inc., focused on the two forces that he sees as driving second-screen popularity: “Gen Y” (also known as the millennial generation of teens and 20-somethings), and the fast deployment of devices.

Keating said that Hearst stations are “turning newscasts into two-way ‘news conversations.’” Within each station’s workflow, that has meant harmonizing the activities of the broadcast news and digital teams. Together, they have developed five types of second-screen applications, including those aimed at events, the local channel’s shows, and network apps plus social media including apps for the various systems such as Zeebox, Shazam and Viggle.

HOW DOES IT FIT WITH ATSC 2.0?
Todd Erdley, founder and president/ CEO of Videon Central, which works with consumer electronics makers, expressed the view that the “second screen is the TV”—not a tablet or phone.

“Talk about a paradigm shift,” said Erdley, who was attending his first-ever ATSC event. Citing the vendors and standards that enable TV anywhere/any device opportunities, Erdley emphasized that consumers want content “independent of the ‘technical jargon’ that enables it. Apps solve part of it, but not consistently.”

“Most studies have shown that people are using second screens to [go to] the Web to find information about the current show,” he continued. “No one wants eight apps for the eight they watch. If they are watching a show and curious, they are going to use …the Internet to find the answer.”

He characterized the “cord-not-so-of-tens” demographic (that is, young teens) as the “most interesting challenge for content and service providers.” Erdley also expects that “content disaggregation will accelerate” and he is concerned that “standards to interconnect devices have the ability to increase complexity and decrease customer satisfaction.”

“The idea of ‘content everywhere’ in a way that still maintains the living room as the center of the family entertainment is the goal,” Erdley said, urging that the industry seek to solve problems with the simplicity of content accessibility.

Erdley put in a short plug for his company’s new aVia media player, a single app that can handle integrated management of Android tablets, smartphones, Google TVs and Kindle Fire devices.

In pushing the TV set as the central device in the multiplatform arena, Erdley endorsed a view that ATSC President Mark Richer has often espoused: “Make it all as interoperable as possible.”

Nonetheless, for the ATSC “Second Screen” panelists—including Sandhi Kozsuch, Cox Media’s senior director-broadcast digital and strategy, who focused on broadcasters’ video-on-demand opportunities— the entire category is still in a turbulent creative stage.

Jon Dakks of NBCU (left) and Roger Keating of Hearst TV on a recent ATSC panel

Broadcasters can certainly take heart from the profitable opportunities that second-screen services are creating. For example, NBC’s Dakss pointed out research that indicates viewers who use the Zeebox companion app have much higher recall of live TV sponsorships (75 percent versus 56 percent of viewers who just watch a TV commercial), and have double the interest in an advertised brand when they see it via a second-screen app (48 percent versus 24 percent of the TVonly viewers).

NBC’s research also shows that the second screen-enhanced shows draw a more tech-savvy, upscale audience. The network’s study of viewers using the Zeebox app while watching “The Voice” music competition show found that 41 percent of Zeebox users had annual household incomes above $80,000 and—most strikingly— the second-screen audience was equally split between males and females. Significantly, the Zeebox users were also above-average users of DVRs, smartphones and over-the-top video devices.

This audience appeal, as Dakss explained, is encouraging NBC—including its cousin cable networks, such as Bravo and Telemundo—to pursue other companion- viewing projects. He cited ACR 1.0 and “TV Rooms 1.0.” Details about both ventures were due to be revealed in the weeks following the ATSC meeting.

Gary Arlen is president of Arlen Communications LLC, a media/telcom research firm. He can be reached atGaryArlen@columnist.com.

Gary Arlen

“We’re not going to make a bet on a single platform or app,” says Brian Handly, CEO of StepLeader Inc., a work-inducing but realistic stance for a company focused on creating on-demand TV and second-screen apps for TV stations and networks.

“This market is still too fragmented,” Handly adds. “There are so many different options. It’s hard for a station person to figure out.” Handly’s personal preference currently focuses on TV apps, putting broadcast content onto the growing base of “Smart TV” sets with Internet connectivity. StepLeader, which was spun out of Capitol Broadcasting’s “News Over Wireless” project eight years ago, now creates apps for 65 local TV stations, including Capitol’s flagship WRAL-TV Channel 5 in Raleigh, N.C., and for 16 Fox owned-and-operated stations, such as WDFW-TV in Dallas. StepLeader uses the Yahoo! Connected TV apps platform to create its apps.

Those relationships alone reflect the ways in which the TV app sector is lining up, or fragment. Yahoo and Samsung unveiled a multi-year interactive TV partnership late last year, putting Yahoo’s interactive TV software into Samsung’s SmartHub TV sets. Separately, in February, Fox Broadcasting Co. made a commitment to develop a custom sync-to-broadcast service—an extension of its FOX NOW app—for other second-screen TV app providers.

ERRATIC EVOLUTION
Handly sees the Fox initiative into synchronization as representative of the move toward using apps to serve many different platforms.

StepLeader creates apps for 65 local TV stations, including Capitol Broacasting’s flagship WRAL-TV Channel 5 in Raleigh, N.C., and for 16 Fox owned-and-operated stations. This simultaneous broadcaster and technology assault via smart TV apps and handheld tablets/smartphones reflects the erratic evolution of the multiplatform industry, which includes “TV Anywhere”-type access to content along with companion TV viewing.

“There’s room for both,” says Handly. “In some cases, you might want a private experience in a public setting,” which would be better delivered on a handheld device. Other times, everyone watching the smart TV set might want to see the same app, such as on-demand access to a news or sports segment.

“We see a lot of adoption of connected TV apps in markets where there’s a college or university.” He concludes that student viewers in such markets “may not have a cable subscription” and want to watch local content and also download connected widgets from their hometown channels, which they often view on their mobile devices.

“Some stations are surprised that 50 percent of their digital traffic is coming via mobile so they’re still trying to figure out the ’net-connected TV angle,” Handly adds. Against this bifurcated background, he says that StepLeader is “trying to bring companion functionality within our existing apps.”

“We already have that audience. We’re trying to put it into the same experience… and will adapt it as necessary,” he says. His company is working in conjunction with Accelerated Media, a Denver-area firm that focuses on multiplatform development, implementation and analytic services for advertisers and programmers.

Brian Handly StepLeader, which is demonstrating its services at a hotel suite during the NAB Show this week, typifies today’s multiplatform migration. With the options available to media and marketing companies, that migration is going in multiple directions, and will require separate-yet-compatible strategies for companion content (either on a handset or TV app) and for on-demand anytime access via any device.

Guy Finley, executive director of the Second Screen Society, a new consortium of technology, media and social TV companies, insists that “we don’t see ourselves as disruptive.”

This is meant to transition to the new way that people see content,” he says.

Chuck Parker, chairman of the Society, points out there is “more buzz around second screen applications today” because most viewing today (34 out of 37 hours in the typical home) is watched on a traditional TV set. “That’s the promise of the second screen [for] companion viewing and experiences.”

Parker and Finley believe the value of the second screen will grow as companies come up with advertising tech standards to synchronize TV video and second- screen messages and interactivity.

BEACHFRONT PROPERTY
Fox’s recent sync-to-broadcast deals with second-screen providers such as Shazam, Viggle, ConnecTV and NextGuide, emphasize the potential value of a new advertising inventory on the handheld device.

“Fox is opening up new beachfront property on the second screen,” says Zane Vella, CEO of Watchwith, the content syndicator that is coordinating the Fox “companion device” project.

Ooyala Inc., a Silicon Valley-based online video technology company that hosts video content for TV networks and stations (among other content clients) publishes regular analytical reports about how, when and how much material viewers access via its servers. The latest Ooyala Global Video Index shows that in 2012, video viewing on tablets grew threefold over the previous year, and video viewing on smartphones jumped 90 percent from 2011 levels.

“It’s all about the context in which viewers are consuming content,” Ooyala cofounder and President/Products Bismarck Lepe told me. “Media buyers and media planners are going to pay attention and spend a substantial amount” as they see this increase in app and second-screen viewing. His comments echo Vella’s concept of “new beachfront property.”

Lepe’s outlook also mirrors that of StepLeader’s Handly, including the value of standardized platforms and the need to deliver supplemental content wherever the viewer prefers. Lepe sees tablets (which are largely used in the living room, often while watching traditional TV) along with game consoles and smart TVs as key factors in next multiscreen migration.

“In 2013 and 2014, the connected living room experience will gain in overall share of consumption,” Lepe predicts.

That forecast validates Handly’s decision not to “bet on a single platform or app.” It appears that there will be room—and a demand— for everything.

And that leads to the ultimate challenge: Can broadcasters figure out the monetization formula for “everything” and “everywhere?”

Gary Arlen

BETHESDA, MD.--Cisco System’s annual Visual Networking Index anticipates an array of opportunities for mobile and wireless delivery, including vast expansion of mobile video services and multiscreen ventures. It also serves as strong ammunition for forces who want to seize spectrum for the growing global demand for mobile bandwidth.

The VNI Global Mobile Data Traffic Forecast, issued just before last month’s Mobile World Congress in Barcelona, envisions that video will constitute two-thirds of the world’s mobile data traffic by 2017, a 16- fold increase between now and then. The mobile video load will far exceed other mobile data usage, such as email, Web surfing and machine-to-machine services in the “Internet of Everything.”

Mobile video traffic accounted for 51 percent of the worlds’ Internet traffic at the end of 2012, the first time video took up more than half of all wireless bandwidth, Cisco says.

Several recent analyses and product announcements at the Barcelona mobile trade show underscore Cisco’s great expectations. For example, Parks Associates, a Texas market research firm, singles out the rapid increase of video viewing on tablets and smartphones, and Ericsson was among the technology suppliers to launch new multiplatform capabilities during the Mobile World Congress.

INDUSTRY BENCHMARK
The annual Cisco outlook, which is intended to gauge Internet traffic to identify where and when network hardware will be needed, has become an industry benchmark. In the last few years it has increasingly focused on wireless appetites. About four years ago, the Cisco VNI forecast for wired networks began to cite the dominance of video via Internet Protocol as the dominant factor in overall bandwidth consumption—and the need to expand network capacity to handle it.

In its latest outlook, Cisco focuses on the growing roles of smartphones and tablets, predicting that more viewers around the world will have access to two-screen TV services if they want to use them. And Cisco singles out a finding from its most recent “Data Meter” tally during the last four months of 2012 in which the greatest use of tablets and smartphones was for watching video.

“Video streaming and communications applications such as YouTube, Hulu, and Netflix ranks highest on both device platforms,” Cisco explains in its report. Half of tablet data consumption was for video/ communications service, as was 45 percent of smartphone traffic. Those usage levels far outpaced “information” content (such as maps and news headlines: 17 percent on tablets and 12 percent on smartphones), Web browsing (7 percent and 6 percent, respectively), social networking (3 percent and 7 percent) or music/audio streaming (3 percent on tablets, 4 percent on smartphones)

Among the many interpretations of this data is that simultaneous two-screen video experiences may become less relevant if substantial viewing is already taking place on a handheld device.

That prospect bubbles up in Parks Associates report on “Mobile Video: The Next Pay Tv Battlefront.” The study looks at the growing competition from over-the-top video services as well as shifting viewing preferences as consumers can watch video on multiple screen options.

“Smartphones and tablets will be key battlegrounds in the fight between traditional pay TV providers and over-the-top providers,” says John Barrett, director of consumer analytics at Parks. The study confirms Cisco’s tally about the increasing video consumption on tablets, smartphones and computers (desktop and especially laptops) during the past two years. Significantly, the analysis shows that in houses equipped with broadband, “occasional viewers” (people who tune in fewer than 15 times per month), are watching less on conventional TV sets but spending significantly more viewing time on tablets, handsets and computers. The Parks study also reflects data from Nielsen and others, that TV set viewing is climbing slightly, but not at the velocity of alternatives.

“Netflix currently dominates three of the four screens consumers use to watch movies and TV programs,” adds Barrett. “It is crucial for pay TV providers to establish a strong mobile video presence as part of their overall strategy to counter OTT.”

ENABLING THE MULTISCREEN MIGRATION
As options expand, infrastructure providers are preparing for the IP video future that Cisco’s forecasts portend. For example, at the Mobile World Conference, Ericsson unveiled its unified content delivery network (CDN), which it says can “unite the delivery of managed and unmanaged video content over fixed and mobile networks.”

Ericsson’s platform recognizes that the movement toward on-demand and other OTT content require high-quality video and the optimization of what Ericsson calls “traffic over multiple CDNs via a single CDN selection technology.”

The company claims that its “Ericsson Media Delivery Network” will serve the needs of content providers and operators throughout the media value chain.

“Internet traffic is growing with exponential force and becoming dominated by video,” says an Ericsson statement, reflecting the Cisco and other findings. “These disruptive trends are true game-changers for our customers.’

The company says its Media Delivery Network is “designed to enable operators to [handle]the rapid growth in managed and unmanaged content, especially the massive growth in Over-The-Top services and applications, which can present network operators with several challenges.” It cites high peering costs, expensive backhaul transit, “last-mile” bandwidth competition and declining subscription revenues.

Ericsson claims that its “end-to-end business solution …enables operators to …leverage their established consumer relationship; while at the same time offering content providers and enterprises cost-effective accessibility and guaranteed quality of experience across mobile and fixed networks.”

Reflecting the evolving multiscreen delivery environment, the company is also emphasizing that the “multiservice architecture allows expansion to different CDN applications,” including Web acceleration, gaming and other IP utilities.

Other vendors in Barcelona were expected to introduce similar products to feed the needs of wired and wireless operators who are scrambling to keep up with the multiplatform juggernaut.

Hence Cisco’s VNI outlook becomes a self-fulfilling prophecy as well as an important roadmap for the future of delivery, especially the dominant video ingredient. For example, Cisco expects that by 2017, mobile-connected tablets will receive and generate more traffic than the entire global mobile network in 2012. And for historic comparison, Cisco notes that mobile data traffic last year was nearly 12 times the size of the entire global Internet in 2000.

Cisco is equally specific as it looks ahead, stipulating that, “The amount of [global] mobile data traffic generated by tablets in 2017 [1.3 exabytes per month] will be 1.5 times higher than the total amount of global mobile data traffic in 2012 [885 petabytes per month].”

Those figures include a lot of video. In fact, just measuring in exabytes (each equivalent to a billion gigabytes or a million terabytes) is a reminder of how big and how fast this multiplatform evolution really is taking shape.

Gary Arlen During their presentations at the International CES last month, Cisco executives repeatedly used the term “companion devices” to describe the integration of tablets, smartphones or other second-screen tools for “shared content” during their presentations. Their verbiage reflected the absence of any second-screen products in Cisco’s inventory, not particularly surprising given the company’s focus on network management hardware, set-top boxes and system integration.

Yet the focus on two-screen operations triggers questions about whether viewers will ultimately prefer to multitask on separate screens, or if the immersive video future rests on the integration of linear and interactive onto a single screen—be it big-screen TV set, tablet or other device. The current overwhelming use of two-screens (by up to 85 percent of viewers) demonstrates the current viability of that approach to interactivity. Yet—as underscored at CES—many vendors expect that viewers may prefer seeing all their options on one screen.

“The proliferation of content confuses viewers even more,” said Balan Nair, executive vice president and chief technology officer of Liberty Global, during the Cisco presentation.

Panasonic, Samsung, Sony, LG and other TV-set makers continued to accelerate their TV apps, many of which offer over-the-top access to Internet video services such as Hulu, Netflix, Crackle, YouTube and similar OTT content. At the same time, their CES demonstrations underscored their interest in keeping eyes glued to the big flat panel. Behind that effort may be TV makers’ financial dreams to garner a revenue stream from video apps delivered via their smart TVs. For now however, they see value in keeping viewers focused on the flat panel that still dominates most viewers’ screen time.

GET SMART

Most visibly, Panasonic—which makes neither smartphone nor tablet (except for a newly introduced 20-inch commercial tablet)—offered several approaches to integrating TV and online content on its “SmarTViera” products. (Panasonic’s branding/logo uses “TV” as the literal bridge for its “Viera” smart TV sets). The company unveiled its alliance with TV shopping network HSN, demonstrating integrated technology that expands HSN’s “Shop by Remote” service. At a Panasonic presentation, HSN Chief Executive Officer Mindy Grossman characterized the service as an escalation of HSN’s “engagement and commerce vision” made possible by smart TV technology. Viewers can order from HSN’s linear feed and also order products on demand via HSN.com’s online catalog, which uses the company’s proprietary technology.

Panasonic President Kazuhiro Tsuga and journalist Lisa Ling demo Panasonic’s Smart Viera homescreen during a 2013 CES keynote. Panasonic said the HSN implementation was the first of many such content-driven video apps it plans to introduce during the coming year. And, not surprisingly, an HSN official told TV Technology that the company will launch this shopping app on other set-makers’ smart TV platforms, although he declined to identify the next companies.

Meanwhile, Samsung is pushing its “Smart Hub” User Interface, available on almost all future Samsung TV sets. Content is clustered into five app-like sections, which appear as tiles or panels when viewers turn on the Samsung set: “On TV” (showing six thumbnail images that suggest current programs based on viewing patterns), “Video-on- Demand” (including recommended Netflix and Hulu Plus titles), “My Content” (video, music and photos available from any device hooked into a home network), “Social” (feeds from Twitter, Facebook) and “Apps” (weather, stocks and other personal preferences).

The “Social” section enables viewers to plug into the social media chatter that often accompanies viewing of popular TV shows. The “Apps” option poses both competition and collaboration with traditional TV viewing. Since all Smart Hub options tie into Samsung’s increasing “recommendation” services, they also may affect the way viewers find and navigate (via voice or gesture control) to specific shows—whether online or from conventional linear sources.

“Smart Hub will change the way you discover content,” promised Tim Baxter, president of the Consumer Electronics Division at Samsung Electronics America Inc.

Similarly, LG—which also is expanding its voice and gesture-control options—demonstrated more TV apps, with a significant focus on its third-generation Google TV enhancements. Several LG TV models include opening screens that direct viewers to traditional TV channels, “premium” video content sources, such as Netflix, Flixster, Amazon, Crackle or OnLive videogames service, or to a “My Interest” category that offers weather and other websites.

CROSS-PLATFORM

These and other “one-screen” interactivity ventures unveiled at CES did not diminish the vitality of cross-platform—or “companion device,” as Cisco might call it—services. Samsung showed ways in which tablets and smartphones—not just Samsung products, but also Apple iPads and iPhones—can mirror content from or to the TV set. LG offered similar mirroring options, using “near-field communications”—touching a smartphone (in this case an LG Android-technology device) to a TV set peripheral, which paired the handset with the TV set.

Sony, as part of its expansion into the smartphone category, included a “SideView” feature, which enables viewers to mirror handset content onto a Bravia TV set by tapping on the remote control. The Sony Mobile Xperia Z smartphone uses Bravia Engine 2. It also allows smartphone content to be shared with Sony digital cameras and includes “Exmor RS” technology, which Sony calls “the world’s first image sensor with ‘High Dynamic Range’ video functionality” for clear pictures against strong backlight.

In addition to hardware makers’ efforts to prepare for one-screen and two-screen futures, third-party technology suppliers are eyeing their role in the integrated video business. For example, Rovi Corp. is calling its “Entertainment Unbound” platform “a natural evolution to TV Everywhere and multiscreen video initiatives.”

Matt Milne, Rovi’s executive vice president of products, sales and marketing, emphasized that its “concept demonstrations” focused on “a future of TV beyond the living room in which devices, formats, operating systems and even broadcast schedules no longer dictate the entertainment experience.”

Rovi claims its platform incorporates software enabling pay-TV service providers to introduce IP-based, multiscreen services and applications to their cable ecosystem via “broader device access, more content choices and an array of consumption models.”

As part of its move into this cross-platform landscape, Rovi also unveiled its plans to support the recently approved High-Efficiency Video Coding (HEVC)—also known as H.265—which doubles the efficiency of MPEG-4.

Amidst such diverse approaches to keeping viewers’ eyes on the screen, another remark resonates from the Cisco CES presentation, which was focused on introducing its “Videoscape Unity” platform (an update to the under-deployed two-year-old Videoscape technology).

Cisco called the new version a platform “for delivering and monetizing a new generation of compelling, differentiated video experiences.” Dozens of other CES exhibitors used almost identical terminology, generally peppered with promises of personalization, individualized recommendations and immersive video experiences.

For TV producers, delivery system providers (broadcast and cable companies) and for viewers, the verbiage and glittering demonstrations offered an attractive maze of options and opportunities, yet with lingering questions about affordability and user-friendliness/complexity.

Gary Arlen is president of Arlen Communications LLC, a media/telcom research firm. He can be reached at GaryArlen@columnist.com.

LG Electronics debuted its LA8600 LED Smart TV at the International CES last week.

Gary Arlen

WASHINGTON -- Dueling data is the lifeblood of politics and new media technology.

The self-serving research and resultant promising forecasts keep campaigns (and contributors) excited in one case; and for media and advertising futurists, the analyses reinforce their visions and reassure investors.

Hence, a recent spate of studies about viewers’ appetites for TV multitasking should be keeping everyone satisfied. There’s clearly a growing audience for multitasked media consumption, especially among valuable young viewers. This process includes “social TV” which engages viewers as they watch a show. Advertisers are salivating at the opportunity to trigger T-commerce (“television-commerce”) transactions via the real-time “smart” experiences

And that’s where the upbeat, but divergent, findings raise questions about exactly how or if this idea will work and whether the various systems can coexist in a fragmented market.

During the past few years, two distinct interactivity concepts have evolved:

• The “two-screen” approach in which televised content is coordinated with auxiliary material that viewers access via a smartphone, tablet or other handheld/wireless device.
• The “smart TV” method in which video apps appear directly on the big, flat-panel display screen, either as visual overlays, picture-in-picture images or paused-video interstitials. The perceived value is that on-screen interactivity doesn’t distract audiences away from the TV screen itself.

While the recent research can demonstrate the value of each system, there is clearly no definitive finding that has convinced advertisers or program developers to optimize content for either approach. Nonetheless, thanks to the growing number of projects using one or both tactics, the industry may learn a lot this year about the appeal of each format.

In fact, 2013 may be the year in which the TV community figures out where to focus its multiplatform concentration.

Fig. 1: Graphic shows when viewers are chattering about TV. Source: CTAM 2012.
Inevitably, the studies concur that viewers are opting for auxiliary “social” activities while watching TV. “How Chatter Matters in TV Viewing,” the first phase of an ongoing research project being conducted for Cable & Telecommunications Association for Marketing (CTAM), found that 70 percent or more of enabled viewers “chatter” about a TV program or commercial while it is playing or right after it runs. More than 80 percent of viewers “talk” about the show via their social TV apps the following day or afterwards, mostly via handheld devices. (See Fig. 1)

For now, viewers’ attention is focused on the second screen--as confirmed in an avalanche of year-end research reports. Nielsen, as part of its new alliance with Twitter, reported that as of November, the overall growth of social TV chatter on Twitter zoomed up 800 percent over the previous year, fueled largely by the summer Olympics. But every month saw a doubling of second-screen usage over the 2011 levels, according to the Nielsen-Twitter report.

A report from Shazam, a second-screen enabler, claimed that viewers who used Shazam had a higher recall of a commercial and its message. This study, conducted by Frank N. Magid Associates, found that viewers using Shazam were “three times as likely to interact with the brand” compared to viewers who did not use the second-screen software.

Again, these reports emphasize that today the overwhelming factor is interactivity via smartphones and tablets. Yet, TV makers expect that their next-generation “smart TVs”—loaded with apps—may encourage viewers to keep their eyes on the big screen. Fundamentally, that’s the concept behind the “triggers” plan being rushed through the Advanced TV Systems Committee, as described in my column last month (Multiscreen Views, Nov. 19).

At the recent International CES, the revivified Google TV—exemplified by LG Electronics’ big promotion—focused attention on the TV as the centerpiece of the interactive experience. LG’s “Home Dashboard” for its TV models combined Google’s latest platform and LG’s redesigned “Magic Qwerty Remote” to enhance viewers’ ability to interact with TV content, as LG described it.

Samsung’s “Smart Hub” featured a “simplified” user interface. Additional features were expected from Sony and other TV makers at CES, which opened after our press deadline.

But with all these advancements in “smart TVs,” there’s a marketplace challenge. Of the 25 million U.S. homes that already have some sort of Internet-connected “smart TV,” barely half (about 12 million) are using the features available to them, according to NPD Group’s latest study. A follow-up analysis by One Touch Intelligence for the Council for Research Excellence called the lack of TV on-screen interactivity, “a conundrum no one industry has been able to solve.”

Separately, another Magid survey for YuMe (a digital advertising provider) indicated that a wave of new customers expressing the intention to buy smart TVs expect to use its interactive features. This Magid study concluded that 54 percent of respondents prefer free, ad-supported content across all screens.”

And that supports yet another Magid study, “The Two-Screen Television Marketplace,” issued last month. In it, Magid characterized the scores of “competing start-up ‘simulscreen’ projects as a barrier to advertisers, cable operators, broadcasters and consumers.” Magid cited the accelerating growth of simulscreening (multitasking via tablet or smartphone while watching TV) and recommended immediate efforts to establish a standardized system that will become familiar to two-screen users.

“Lock ’em in now,” said the report, citing the expected growth of new users during 2013. “23 percent of smartphone intenders and 57 percent of tablet intenders will be new to the platform,” said the Magid analysis. “The time to build relationships and capture these uncommitted users is now.”

While “locking ’em in” may be a great objective, the TV industry infrastructure still sees opportunities in its own hardware. An Infonetics Research project about video-ondemand and set-top box technology envisions a strong 2013, especially for products that provide streaming delivery and enhanced video services. Much of the Infonetics’ study focused on the growth of Internet Protocol TV delivery, which would enable more on-screen interactivity.

So, as usual, the conflicting analyses plus the hopeful (“wishful”) thinking of interactive providers raise more questions than they answer. As the reports hurtle forward, advertisers and program producers will continue to dabble in the various platforms and trumpet whatever successes they encounter. For the rest of us, it’s going to be a year of waiting for the right formula to emerge or re-emerge or co-exist in a multiscreen world.

Gary Arlen is president of Arlen Communications LLC, a media/telcom research firm. He can be reached atGaryArlen@columnist.com.

Gary Arlen

Coding that triggers interactive viewing experiences can be embedded into broadcast signals and will hasten TV stations’ ability to offer integrated, complete interactive services.

By January, the first stage of this “trigger” process may be elevated to “candidate standard” status at the Advanced Television System Committee, with a view toward summer adoption of the technical plan.

Integrated triggers would prompt smart TV sets to display content-related details, such as story-line information or star backgrounds, and, more significantly, advertiser enhancements, such as local dealers and promotional details.

But there are hurdles, including predictable challenges from the cable TV industry, which may opt not to retransmit the embedded triggers, and possibly from advocacy groups that don’t want to re-allocate some of the digital bandwidth reserved for closed captioning, which is where the envisioned triggers would ride. Moreover, some broadcasters and program producers may object to the clutter on the primary big screen that the triggers could create.

As a Consumer Electronics Association executive stated, right now, “We’re just trying to make it work.” He points out that it’s not clear if the software in all smart TV sets can be updated to handle the trigger directives, noting that many manufacturers use proprietary systems for enhanced content displays.

At the center of the “trigger” plan is the opportunity for broadcasters to insert a tiny data stream into their digital signals. When that data hits a smart TV, it would trigger an app to pop up on the screen, providing enhanced information similar to what is now available via third-party services on a tablet or smartphone being used by two-screen viewers. The data would ride in an underused portion of the 3D closed-captioning segment, as defined in the Consumer Electronics Association’s 708-D standard.

LG Electronics smart TV user interface “The key element is that broadcasters [deliver data] to cause things to happen on the viewer’s TV set,” explained Rich Chernock, chief science officer at Triveni Digital and chair of the ATSC’s Technology & Standards Group (TG1), which is developing the trigger plan. Through testing, the ATSC group has found that the triggers will work on new 3D TV receivers and will be “backward compatible” so that older digital TV sets “wouldn’t get confused.”

“Since the captions are carried within the video stream, you want them to be tightly bound, to go wherever the video goes,” Chernock said. “We came up with an extension of the 708 [standard] for 3D. By design, these triggers are very small, under 100 bytes.

“It’s a very convenient way to carry data. It will make it through a lot of distribution systems since it’s part of the video,” he said.

The signals could trigger an Internetconnected smart TV (now about 40 percent of the TV market) to recognize a “Triggered Downloadable Object” (TDO), Chernock explained. The TDO resembles Java Script, HTML and other Internet coding, and tells the receiver “to put things on any screen,” he added.

“When we first started this, the notion of second-screen viewing [on tablets or smartphones] hadn’t picked up,” said Chernock. He insists that the goal of the plan is to “allow broadcasters to keep control” of the total viewing experience.

Another factor, of course, is how to allow smart TV viewers to avoid such intrusions into their viewing. The ATSC plan is expected to include a feature that allows a viewer to override or eliminate the on-screen inserts if they choose to do so.

Among the challenges to ATSC’s plan is the reality that “a lot of people see TV without a broadcaster feed or with data stripped out,” Chernock acknowledged. His committee is addressing the barrier via technologies such as Automated Content Recognition (ACR), which senses that triggers are in the video stream through digital fingerprinting or watermarking technology. He believes fingerprints are the most likely solution.

“Once you build that infrastructure, you can do anything you could do with triggers in the signal,” Chernock said. “Broadcasters can cover their bases by feeding triggers and also installing ACR systems” to deliver total video plus enhancements on one screen.

TRIALS, PROTOTYPES, PROMOTION
ATSC hopes to distribute a first ballot for the trigger candidate standard within the coming month. A prototype and trials will take place during spring.

“There’s a lot of drive behind this, and it will probably be pretty quick,” Chernock predicted.

Future discussions will include labeling, so that buyers of smart TV sets that have the storage capacity to handle such services will know about their single-screen multidelivery options.

While the ATSC plan is aggressive, similar— but non-compatible—trigger initiatives are underway via the “Hybridcast” venture in Japan and “Hybrid Broadcast Broadband TV” (HbbTV) in Europe.

ATSC President Mark Richer agrees with Chernock’s view that these broadcast triggers are ripe for a global approach and that use of core technologies, such as apps and browsers, will generate economies of scale.

One of the goals of such plans is to let program producers and advertisers author once and then use their enhanced content on multiple platforms, including broadcast delivery.

“There are a number of things we’re bundling together, including triggers, advance video coding and non-real-time standards to download content files as well as linear TV,” Richer said. He pointed out that the triggers could enable a smart TV “to go out to find something on the Internet or drill down into specific content.”

Richer, who also chairs the new Future of Broadcast TV international alliance, said that ATSC plans to organize a working group to develop an implementation strategy for trigger technology. He expects the group will include broadcasters and consumer electronics makers, emphasizing that the current developments are part of the ATSC 2.0 project.

One objective is to pull together technologies such as the data triggers in the 2.0 version, and then move it over to the future ATSC 3.0 platform as that takes shape in 2014. Richer expects that the future ATSC 3.0 version will be more closely integrated with the global “Future of Broadcast TV” activities.

Hence, the upcoming development of TV trigger technology can become part of a larger, potentially global, venture into broadcast interactivity.

Gary Arlen is president of Arlen Communications LLC, a media/telcom research firm. He can be reached atGaryArlen@columnist.com.

Gary Arlen

“Multi-user systems are on the front line of the multiscreen and multiplatform evolution now, shaking up the TV business,” says Martin Caniff, president and founder of Solekai Systems Corp., which itself is behind the scenes for many of these developments. Caniff describes “multi-user” systems in the context of multiscreen delivery, which lets TV viewers—whether within a household or at several remote locations—watch and interact with each other, often across platforms.

To Caniff, the primary features of the multiscreen experience are essential for new systems such as UltraViolet and the TV Everywhere initiatives. Solekai has used its software engineering expertise for the design, development and integration of these multiscreen services. The assignments have further convinced Caniff that the television industry’s infrastructure is about to change dramatically.

NETWORK SET-TOP BOX
At the epicenter of the overhaul are new products such as a “network set-top box.” He calls it a natural successor to the “network DVR,” which has been expanding along with the growing implementation of cloud video delivery services.

Caniff’s enthusiasm for multiscreen systems revolves around work that Solekai is doing for the Digital Entertainment Content Ecosystem LLC (DECE), a consortium of Hollywood studios, consumer electronics makers and retailers, and network hardware vendors. DECE is the entity behind UltraViolet, the long-promised cloud video service backed by several studios. Major UltraViolet distribution announcements are expected in January or early next year, according to TV Technology sources.

“We focus on the design of services such as compliance testing and engineering structures,” Caniff explains. Solekai’s media, networking and hardware clients have included platform and content developers, content distribution networks (CDNs), download service providers (DSPs) and hardware makers. Among its recent projects was implementation for the Locker Access Streaming Providers (LASPs) for UltraViolet licensees.

Solekai has also been working with MediaNavi, a joint venture between Technicolor and DreamWorks, which in the past year has launched an application that aggregates content from multiple sources (live TV, movies, music, apps) and adds a discovery engine that enables users to find the content they want across platforms.

The MediaNavi service, called “M-GO,” debuted last year. Last month, the company announced deals with DreamWorks and Relativity Media, which joined its existing content distribution agreements with NBCUniversal, Paramount, Sony Pictures, 20th Century Fox, Warner Bros. and other studios.

The MediaNavi service, M-GO, aggregates content and adds a discovery engine that enables users to find the content they want across platforms. Solekai also worked with TiVo on its multiscreen and set-top box development.

Such projects have further convinced Caniff about the “inevitability of multiscreen, multiplatform, networked delivery” and its impact on the TV industry. He cites the appetite and interest in the TV Everywhere initiatives at September’s IBC2012 in Amsterdam.

“Broadcasters are joining cable operators and content providers in their quest to figure out how to position [their companies] for the on-demand environment that consumers are embracing,” Caniff said. “The negotiations are going on among content distributors, who still want to control access to their revenuegenerating assets in the multiscreen environment.”

MULTI-USER APPS IN A MULTIDEVICE WORLD
“Cloud services and smart TV sets are the new ways to deliver content to the home,” Caniff said. He believes that studios and content distributors will become satisfied that the emerging ecosystem will provide the necessary security for content and rights management.

As strong proponents of “multi-user apps that work in a multidevice environment,” Caniff and Solekai’s 100-person staff in San Diego are exploring methodologies that can deliver such services.

Much of Solekai’s efforts involve the development of tools and software for ongoing operations in the evolving environment. Its work has encompassed development of testing, validation and compliance/certification support, userinterface and hardware abstraction and porting across platforms and conditional access integration.

Also essential in this multiscreen structure is an integrated search and discovery process, including user-friendly program navigation systems. Countless ventures are pursuing some “magic formula” for cross-platform video search—including Google, Apple, Microsoft and, most recently, Nintendo. (Nintendo’s upcoming Wii U “GamePad” controller, a wireless touchscreen tablet, is being positioned as yet another approach to smart TV multimedia access and control.)

Solekai, like other technology developers, is keeping an eye on the competitive emerging approaches and the fickle consumer adoption of systems that enable them to access the content they want.

Caniff’s perception is that all media and technology operators and providers need to be ready for the inevitable changes ahead. He cites the complexity of the multiplatform processes, pointing to a recent presentation that another Solekai executive delivered at a London conference.

The central message there focused on the integrated implications of production, post-production, authoring and testing as ingredients in the creation of best practices for the UltraViolet launch.

“We keep identifying more opportunities on both the consumer use and the content delivery sides of this equation,” Caniff says. He points to groups such as the Second Screen Society as a forum where the technology providers and content creators can work together to develop “compelling new experiences for consumers in this new multi-user, networked video world.”

Gary Arlen is president of Arlen Communications LLC, a media/telcom research firm. He can be reached atGaryArlen@columnist.com.

 Gary Arlen

Are the researchers, with their various methodologies, identifying trends that are heading the same way and at the same velocity? Are their findings factored into an integrated communications landscape or merely hype for the anointed tech du jour?

One viable benchmark is the interpretation of actual usage, rather than spreadsheet speculation about future adoption rates. Discounting the “novelty effect” for new technology, actual consumer adoption is a valid metric. And most significantly, the best viewpoints are those that offer research with relevance: conclusions about how the new technology affects current operations at existing media companies, including broadcasters.

That’s why a new deluge of studies about multiscreen adoption is individually “interesting” and collectively “valuable.” Together they offer a roadmap of the evolving cross-platform ecosystem, plus a guide for how broadcasters will be part of this emerging environment.

SUPPLY AND DEMAND
The research on shifting viewing practices includes data from the demand side as well as various sectors on the supply side, including hardware, program content and delivery systems. By digging into the reports concurrently, you can design plans for a market where viewers are headed.

For example, the latest Global Video Index from Ooyala Inc. confirms a rapid shift in online video viewing toward long-form content (including movies, TV shows and live sports events) rather than the short YouTube-type videos of a couple years ago.

Ninety-three percent of viewing time of Internet-delivered shows (including video streamed from Netflix and Amazon) is devoted to long-form content, according to Ooyala, an online video management, publishing and analytics provider, with many media industry clients.

Almost simultaneously, GfK Group, another global research firm, published its measurement of Netflix viewers, which found that the average customer watches 5.1 TV shows and 3.4 movies per week. That adds up to about eight hours of weekly Netflix time in subscribing homes.

The Media Behavior Institute’s September “USA TouchPoints” cross-platform report brought the issues of social TV into the evaluation. More than 15 percent of adults use social media while watching live TV, and 10 percent are participating in e-commerce during their viewing sessions, MBI said.

Its study offered a low-ball assessment of the number of homes watching streaming movies and TV shows (barely 8 percent of U.S. homes), but pointed out that that level is up 40 percent since the previous status check six months earlier.

The MBI study also found that 20 percent of tablet owners ages 16–64 watch videos on that device at least once per week. On a more conventional level, MBI also found that 40 percent of Americans watch programs via a DVR each week, and 18 percent make use of the DVR daily. Those figures are vastly larger than usage of video-on-demand, which is watched 13 percent weekly and 3 percent daily, says MBI, whose client list includes advertising agencies, media buyers and TV networks.

Meanwhile, NPD DisplaySearch, in its “Connected TV Study,” found through its hardware-centric research that “TVs are increasingly becoming devices of choice for consumers, particularly since an increasing numbers of sets have either builtin connectivity or can be connected to the Internet via a peripheral device.”

Twenty-five percent of consumers surveyed said they view online content on their TV [sets] several times a week, according to Riddhi Patel, NPD DisplaySearch research director-consumer insights. Patel confirms that “movies are the most popular source of entertainment for consumers viewing Internet content on TVs,” with “broadcast video programming” also high on the list.

The NPD DisplaySearch study also offers an alternative view about the appetite for Internet-delivered video: 44 percent of respondents say they have “no interest in viewing that content on their TVs,” and about 30 percent do not own the necessary devices. Of these respondents, only one-third say they would be interested in viewing online content on their TV sets if given the possibility to do so, according to Patel.

LEVERAGING THE KNOWLEDGE
Sorting out and developing plans from all these data are daunting tasks. The reports extol sweeping enrichment prospects, such as Ooyala’s conclusion that longer online viewing sessions give content providers “more revenue opportunities.” With the growing amount of time spent watching online video on all platforms, Ooyala points out that “inserting multiple mid-roll ads will increase the average revenue per minute of content.”

McKinsey Global Institute takes a broader look at five emerging business models for “social technologies,” a few of which are suitable for current broadcast operations. (The others could be adopted if broadcast owners migrate toward other revenue structures).

McKinsey’s roster includes advertising, e-commerce, IT software/services, donations and value-added services such as marketing analytics and e-learning. Advertising and t-commerce, a television version of e-commerce, are the most pertinent for broadcasters, and “donations” and e-learning may work best for public media.

Although much of McKinsey’s study (“The social economy: Unlocking value and productivity through social technologies”) focuses on processes that companies can use to enhance productivity “through faster internal communication and smoother collaboration,” the analysis offers several perspectives valuable to media firms.

“Companies that depend very heavily on influencing consumers can derive considerable value by interacting with them in social media and by monitoring the conversations to gain a richer perspective on product requirements or brand image— for much less than what traditional research methods would cost,” according to the McKinsey report.

It also acknowledges that legacy corporate structures, developed well before the current interactive era, may pose barriers to implementing “the power of social technologies.”

Creating conditions that enable the use of social technologies “will be far more challenging than implementing the technologies themselves,” the McKinsey study concludes. Its fundamental premise, though, is that the revenue potential ($250 billion in the advertising category alone across all media) makes social technologies worth the effort.

Typically, this avalanche of research studies and management consultant recommendations offers an aggressive and confusing array of options. The core message to broadcasters is that audiences are definitely exploiting their alternative viewing options.

Equally important: corporate partners (including technology providers and advertisers) are revamping their priorities and ways of doing business.

Turbulent times have never been so promising—if you can figure out how to navigate them.

Gary Arlen is president of Arlen Communications LLC, a media/telcom research firm. He can be reached atGaryArlen@columnist.com.

Gary Arlen NEW YORK: Beyond NBC’s spectacular ratings for its broadcast and cable coverage of the Summer Olympics is the equally awesome data on how many viewers tuned into the Games via online and wireless devices. That huge viewership is prelude to the next plateau in the always contentious topic of measuring viewers in the cross-platform era.

For years, TiVo, Rentrak, BlueFin, comScore, Centris and other researchers have been crowing about their abilities to identify real—and real-time—viewership recently across platforms. Nielsen’s acquisition in July of Vizu, a San Francisco technology firm specializing in real-time ratings for online advertisers, escalates and expands the competitive measurement landscape.

Underlying all these efforts—including the recent assault on second-screen viewing measurement—are the needs of programmers and advertisers to use new “big data” capabilities to tailor their delivery to the latest whims of viewers who are watching on any platform. In the process, researchers are identifying emerging viewing patterns.

For example, Centris Marketing Services Senior Vice President John High said his company is beginning to see the migration to streaming in households that have a pay-TV subscription. Centris’ initial research finds that people are spending more time with online streaming, but he admitted that the industry still “needs a reliable process” to analyze how viewers “spend time in conjunction with other things they do.”

The Nielsen Co. is also trying to accelerate its multiplatform measurement process.

“We’re encouraging content providers and advertisers to add ‘tags’ to their video [when it is streamed online] so that we can measure it wherever viewers see it,” said Scott Brown, senior vice president, engineering and strategic relations at Nielsen. He said that the Vizu deal will let Nielsen integrate real-time reporting capabilities into its online ratings services through its Nielsen Cross- Platform Campaign Ratings and Brand Effect service, which includes TV ratings.

Brown also pointed out the complexity of the new on-demand environment, noting that, for example, commercials served during a VOD viewing may be different from the ones carried during the original telecast. Such changes go beyond the current “C3” standard, which tallies viewers who watch a show on their digital video recorders within three days after the original showing.

Second-screen viewing—which can include interactive ad responses on a tablet or smartphone coordinated with a TV commercial— further complicates the measurement process. Real-time ordering via the handheld device is itself a measure of success for advertisers, but programmers will want to know more about how the process affects the flow of viewers while watching the show.

“We assume that the second screen is going to become a more important factor,” Brown said.

HOW, NOT JUST WHAT, YOU WATCH
Cross-platform and multiplatform options become more important to programmers and advertisers when, as seen with the Olympics, substantial viewing is done away from the TV set.

For example, NBC says that its Olympics videocasts served more than 150 million video streams; of those, more than 65 million were live streams. The network estimates that NBCOlympics.com had more than 57 million visitors, who generated more than 1.9 billion page views across all platforms (not all of them video streams) during the games.

For the London games, usage averaged 111.4 live-streaming minutes per viewer on the Web and 94.3 live-streaming minutes per viewer on the mobile app, NBC says.

Nielsen People Meter Comcast Corp., majority owner of NBCUniversal, separately reported that among its subscribers, 1.5 million customers accessed about 25 million video streams online and via mobile devices during the Olympics. Matt Strauss, Comcast senior vice president of digital and emerging platforms, called it a “watershed event.”

“Our focus is now taking the success from the Olympics and taking it to fall TV and other kinds of programming, primarily sports, news and kids,” Strauss said an the interview with TV Technology sister publication Multichannel News.

Viewers’ embrace of nonlinear delivery underscores the networks’ and advertisers’ demand for reliable measurement tools. The data-based nature of on-demand viewing and cross-platform services is pulling more companies into the ratings mix.

In early August, a deal between Rentrak, the media measurement firm, and iTVX, a branded-entertainment analytics provider, demonstrated the value of special-purpose measurement. The companies teamed up to create a service that will let brands and programmers assess the impact when a TV show uses a brand in a story line or in a demonstration.

Separately, Harris Interactive, which has long focused on online behaviors, recently developed systems to evaluate the impact of interactive online video ads. It found, for example, that 37 percent of Facebook app users prefer pre-roll video ads compared to 63 percent who would rather initiate the video ad or see it as mid-roll during a natural break in the programming.

POSITIONING FOR THE METRICS MIASMA
Like many researchers, Centris has come up with its own lingo to describe audience segmentation in the multiplatform era.

“Cord Non-Converter” is Centris’ term for households that have never subscribed to pay-TV service and use OTT and/or over-the-air TV to see video content. Among that group (largely young/single viewers) Centris found, a lower-than-average use of live TV, which is falling fast.

This segment is rapidly increasing its reliance on streamed/downloaded content. Centris found that in late 2011, viewers in this category spent 22 percent of their video time watching streamed video; by early 2012, they devoted 28 percent of their time to such delivery, according to the self-reported data in the Centris study.

That share was less than the “cord cutters,” who without any cable/ satellite feed spent 41 percent of their viewing time online in early 2012, compared to the 6 percent online viewing time share in all TV households with an Internet connection.

Centris has also identified a seasonality factor in online viewing, similar to standard TV tune-in patterns.

“We were surprised; we thought it was more consistent,” said Centris’ High. “When we started this, online viewing was growing so fast. As it turns out, Internet viewing is the same as HUT [Home Using Television] levels.”

He acknowledged a “novelty effect” that surfaced early in Centris’ research: People who bought a Roku or similar Internet-TV access device or started using game console broadband connections to tune into Internet videos spent more time with online video for a while, until they found a way to integrate viewing into their standard usage patterns.

The challenge now is to integrate the various viewing access points, High says. Centris, which tracks viewing largely for multichannel video program distributors, has “had to bring in over-the-top and VOD” to get a more accurate way to measure the ways in which video is consumed, he explains.

comScore, which has focused on online analytics, represents another crossover-data processer approach. For example in comScore’s latest “top 10 online video properties” roster, two of the providers are offshoots of cable channels: Viacom Digital (whose websites include Comedy Central, MTV, Spike and TV Land) and Turner Digital (CNN, HLN, TBS, tru-TV and more).

comScore’s top 10 online video ad sites include Hulu and ESPN, both of which served “ads per viewer” (described as “frequency”) at rates far exceeding those of Google, the top provider by total video ads.

From all these and other measurement services, the competing avalanche of data—and interpretations—will remain both important and confusing for advertisers, carriers and content providers. But that won’t stop even more efforts to figure out a reliable way to tally the eyeballs and try to find out what viewers are actually doing as they roam across digital platforms.

Gary Arlen is president of Arlen Communications LLC, a media/telcom research firm. He can be reached atGaryArlen@columnist.com.

Gary Arlen

Despite its dubious methodology and predictably self-serving results, the June 2012 “Dyle Mobile TV Data Report” does confirm the growing demand for mobile video content. Its arrival at the same time as four other equally self-serving research reports underscores the audience appetite and industry opportunities for mobile and online video advertising and production— but it far from guarantees a role for traditional broadcasters in this emerging category.

Conveniently, the Dyle study surfaced just weeks before the group closed its first deal with a mobile phone carrier to market a Samsung handset that can pick up Dyle TV signals. MetroPCS, the country’s fifth largest wireless company with about 9.5 million customers, will offer the Samsung Galaxy S Lightray 4G handset and Dyle service.

MetroPCS has not yet disclosed if Dyleready phones will be sold in all of its primary markets, which coincide with cities where broadcasters backing Dyle are located, including Atlanta, Dallas/Fort Worth, Detroit, Los Angeles, San Francisco and selected East Coast markets from Boston to Baltimore.

The “Dyle Mobile TV Report”—sponsored by the Mobile Content Venture, a coalition of broadcast groups—found that 68 percent of viewers would watch more TV if they were able to watch it live on mobile devices. The study also identifies news, weather and sports (mainstays of local broadcasters) as well as movies, sitcoms, dramas and children’s cartoons as the favorite program categories if viewers had access to “live mobile TV service.”

Overall, the Dyle results confirm consumer interest in mobile video at levels similar to those found during 2010’s Open Mobile Video Coalition (OMVC) field trial “showcase” in the Washington-Baltimore region, according to OMVC Executive Director Anne Schelle.

Samsung Galaxy S Lightray 4G with Dyle service

Almost simultaneously with the Dyle report, several other benchmarks emerged, demonstrating the ascent of “new video” viewing, although not by any means suggesting a significant role for traditional broadcasters.

More significantly, the other studies offer a context about the shifting interests of viewers and their growing engagement with nonbroadcast platforms.

THE NUMBERS
June was a record-breaking month for online video access, according to comScore. More than 180 million U.S. Web viewers looked at 33 billion pieces of online video content, including 11 billion ads, comScore tallies showed.

In total, Americans watched 4.5 billion minutes of video ads that month. comScore estimates 53 percent of the total U.S. population saw online video ads in June, averaging 68 views per person during the month.

While the ads were not necessarily seen on tablets or smartphones, it is obvious that the increasing reliance on those devices means that viewers are watching video commercials on the same devices that Dyle’s surveyors expect to reach.

The comScore report also found that each of the top five video ad sites, including YouTube, Hulu, BrightRoll, Adap.tv and TubeMogul, also had a record-breaking June, with each delivering more than one billion video ads.

Separately, yet another evaluation of global video trends recommended that media companies should diversify their marketing plans to reach the increasingly connected multiscreen audience.

The VideoPlaza report, “A Future for TV: IP-Delivered Advertising in a Connected World” notes that big brand advertisers have not yet found a way to create brand awareness via Internet TV; but it expects marketers to develop a way to tap into IPdelivered video by the decade’s end.

“The rush to deliver content to the growing range of connected devices presents a business and technology challenge to traditional TV platforms, caught between old business models and the need to innovate,” according to remarks by Videoplaza CEO Sorosh Tavakoli. “This research highlights that, as media companies move to address the connected audience, they must complement their content with a clear IP monetization strategy.”

PEW SAYS...
As if backing up the VideoPlaza study, yet another July report—this one from the Pew Research Center’s Internet & American Life Project—confirmed that half of all adult mobile phone owners now incorporate their mobile devices into their television watching experiences.

Pew’s research found that 38 percent of mobile device owners used their phone to “keep themselves occupied during commercials or breaks in something they were watching on conventional TV sets; 23 percent used their phones to exchange text messages with someone else who was watching the same program in a different location; and 22 percent used their phone to check whether something they heard on television was true or not. About one out of every five viewers visited a website that was mentioned on a TV show.

Although the results of each study offer a different perspective on viewers’ expectations and media/marketing companies’ plans, taken together the studies provide a larger context for Dyle’s promising, but narrow, findings.

The Dyle report, conducted by Research Now, a company owned by the Dallas-based loyalty marketing firm e-Rewards, concluded that “live TV matters” and that “smartphones and tablets are key devices.” Both conclusions are reasonable and obvious, although the online survey of 510 Americans (aged 18–54) left it up to the respondent to determine what “mobile video” meant.

From Pew, comScore and other research data, it is obvious viewers are in the process of developing their own concepts about “mobile video”—including video from ESPN, CNN, Weather.com and from the online sites of broadcast networks and local TV stations.

The Dyle survey questionnaire offered a broadcast-skewed description of mobile TV. Here’s the query as supplied by Research Now: “You will be able to watch broadcasters such as NBC and Fox exactly as you do at home—live and as presented by your local TV station. Watch the ‘The Today Show’ as you wait in line at the coffee shop. Catch the local News, Weather, or Traffic right before you head home from work. Or avoid missing a single moment of the football game or ‘Glee’ when you are the only one at home that wants to watch it.”

Given such a broad “what-if” query, respondents were likely to respond positively, based on shows with which they are now familiar, such as the online video offerings they can see on tablets and smartphones.

Although Dyle’s excited spin on the findings may have some credence, it is more likely that viewers will find their way to whatever platform offers the content they want.

And that perception comes through in a British study that coincided with the Dyle and other reports. “Screen Life: The View from the Sofa” emphasizes the value of handset viewing in the larger context of the multiscreen environment.

The ThinkBox study, conducted by COG Research, was designed to help marketers understand the context of multiscreen viewing. In a complex psycho-physiological analysis to examine actual program and ad break engagement, the study identified that 81 percent of “multiscreening” viewers stayed in the room and did not change the channel during the ad break, compared to 72 percent of TV-only viewers. Think- Box identified a number comparable to Pew’s—22 percent in this case—of viewers who texted about the show while watching.

Although mobile TV—as envisioned by the Mobile Content Venture, which sponsored the Dyle Report, and by the Mobile 500 Alliance—may play a role in the coming TV ubiquity agenda, the reality still is a work in progress.

The Mobile Marketing Association is in the very early stages of developing ad standards to be used across all mobile platforms, including broadcast mobile TV. Until those standards are set, advertisers may continue to eschew the broadcast platforms, favoring the more established online video options.

The MetroPCS/Samsung deal may supply real-world experience—not just “what if” survey results—about consumer preferences for broadcast TV content on their handsets. OMVC’s Schelle says we can “start to see” devices by October and points out that tablet makers are “starting to look at ATSC chips;” she expects an expansion of handset options in 2013.

Dyle—or the other studies—do not indicate whether or not that is soon enough.

Gary Arlen is president of Arlen Communications LLC, a media/telcom research firm. He can be reached atGaryArlen@columnist.com.

Gary Arlen Video multitasking— simultaneously watching two screens to see more about the same show—is accelerating into significant use, and the emerging service may become a battleground between Samsung and Apple.

Both companies have a significant presence in the tablet and TV sectors, although Apple’s television role is, for now, confined to its Apple TV over-the-top Internet video set-top-box “puck” and service.

Nonetheless, with its dominant iPad and much-anticipated, looming TV set, Apple could become an even more significant provider in the simulviewing category.

Meanwhile Samsung, currently the largest TV set vendor, is making a strong push for its revamped Galaxy tablet products, which include a “Smart View” feature that enables the tablets to mirror what’s on the TV set and integrate the experience.

Samsung Smart View showcasing the app’s key function, simultaneously mirroring the content of the Samsung Smart TV on a Galaxy tabletA COMPLETE EXPERIENCE

Giving the devices “the ability to share content simultaneously” will fulfill viewers’ expectations for a complete experience, says Eric Anderson, vice president, content and product solutions at Samsung Electronics America Inc. He envisions a new type of video production that encompasses simulviewing opportunities.

“We think that working directly with content developers to help them modify their way of storytelling [will create] compelling and intuitive programs [as a] new form of entertainment,” Anderson says.

Even more fundamentally, Galaxy functions and apps allow viewers to use the tablet as a remote control for their TV sets as well as accessing additional information, back-story scenes or other video or text content about the shows they are watching.

For Apple, which is typically much more secretive about its product and content agenda, the speculation is being fueled by third-party sources. In late June, Brightcove Inc., a cloud-content services provider, unveiled its “App Cloud DualScreen Solution for Apple TV.” Brightcove CEO Jeremy Allaire minced no words, describing how the “contextual interface software [opens the door] to a new kind of content experience for the connected consumer that blends the rich contextual information that fans crave with HD television viewing.

A demo of Brightcove’s App Cloud “App Cloud is transforming the iPad and iPhone app experience by marrying rich contextual content for mobile devices with online video viewing on the living room television,” Allaire added.

While a single vendor solution is not necessary, it’s easy to see why Apple, Samsung and other major consumer electronics vendors would like to unify the customer experience.

Currently, Vizio is the only major TV maker with a significant tablet presence, although Sony could enter the fray via its eReader and other handset products, (e.g. its phone handset line of business that it took over from former partner Ericsson).

Similarly, Microsoft—with its new Surface tablet—could become a factor in simulviewing for over-the-top content since the Microsoft Xbox console is a primary source of OTT content.

LG Electronics is a major smartphone provider, but has not established a sustainable tablet beachhead. Other major TV makers, including Panasonic, Toshiba and Sharp, do not have significant handset presence.

Eric Anderson, vice president, content and product solutions at Samsung Electronics America Inc. Which brings us back to Samsung versus Apple. Brightcove’s Allaire focuses on the capabilities of Airplay-enabled apps on the iPad and iPhone, which allow viewers to control and interact with their DTV monitors. The new dual-screen software leverages Apple’s AirPlay technology to let viewers use applications that simultaneously present content, interactive options and data on both the touch device and via an Apple TV set-top box today (and possibly the TV monitor eventually).

“The TV is another screen for your apps,” Allaire explains.

Skeptics continue to question the simulviewing option, fretting, for example, that it will distract viewers from watching advertisements. According to this fear, viewers will pay attention to alternative videos—such as character background— on the second screen rather than focus on commercials.

Yet, technology providers as well as networks are cultivating advertisers who want to convey their stories more deeply. Samsung’s Anderson says his company is already working with Toyota, State Farm and others to create enhanced, targeted commercials for the simulviewing opportunity.

Not yet included in this conversation are broadcast and cable networks or local stations whose viewership will inevitably be affected by simulviewing. Of course, at least 60 percent of today’s tablet owners already have their devices nearby, often in use, while they watch TV, according to Nielsen, comScore and other researchers. But most of today’s multitasking is believed to be for non-TV-related purposes, such as checking email or wandering around social media sites.

Nonetheless, a handful of content producers are already exploring simulviewing opportunities—the latest incarnation of interactive TV ideas that have been bruited about for more than a decade. HBO’s “Game of Thrones” features apps that let viewers figure out character relationships. Reality programs and newscasts are looking at ways to integrate their onscreen and online offerings, although not always ideally for simultaneous viewing.

Damon Phillips, vice president, ESPN3

Predictably sports programming is the most significant early adopter of simulviewing. ESPN did it earlier this month with its Wimbledon tennis coverage, allowing “authenticated” viewers to watch matches (such as their favorite players) on the ESPN3 online-streaming video service via their tablets while, at the same time, tuning into the ESPN2 linear TV channel to watch the primary matches.

Damon Phillips, vice president for ESPN3, points out that June was actually a banner month for such simulviewing, with more than 1 billion minutes of “Watch ESPN” consumption on tablets and other online access devices. June was the month of the National Basketball Association’s playoff finals, the Euro 2012 soccer championship and the college baseball World Series.

Phillips expects even more such simulviewing during the upcoming college football season. He points to the “Gamecast” service that ESPN has developed, which encourages a “companion experience,” as well as the availability of out-ofmarket college games, a favorite of alumni around the country.

“Our whole point is… [to] navigate people around the different platforms,” he says, referring to ESPN’s TV and online distribution options.

The integration of two-screen viewing, by Apple, Samsung as well as programmers, will mark a shift in how shows are consumed and produced.

The simulviewing wave is upon us now. Get ready to multitask.

Gary Arlen is president of Arlen Communications LLC, a media/telcom research firm. He can be reached atGaryArlen@columnist.com

Gary Arlen BOSTON—“Coopetition” among big cable multisystem operators (MSOs) and between the MSOs and Verizon Wireless took on new dimensions during The Cable Show last month.

More significantly, these cooperative/ competitive deals for mobile and wireless video services pose major implications in the ongoing spectrum battle for airwaves and for viewers’ attention.

Verizon’s video search service “Viewdini,” which the company opted to unveil at the Cable Show, consortium of large MSOs, pave the way for more viewing on mobile handsets and tablets, potentially drawing eyeballs away from mobile digital television (mDTV) broadcasting.

Viewdini is a mobile video portal that will aggregate and deliver mobile content including Netflix, Hulu, mSpot (a Samsung cloud-based media content provider), plus movie and TV sites to Android devices. It will be available on 4G LTE (“Long Term Evolution” format) handsets, said Verizon Wireless President/CEO Dan Mead.

Viewdini will offer content from cable networks as well as shows that are available via Verizon’s FiOS TV service, allowing customers to search for, and watch content from services to which they subscribe. The Android app will be free, but wireless customers will pay for usage fees for downloads based on their Verizon Wireless data allowance.

“We saw the capacity of the LTE network,” Mead said. “We saw the hunger of consumers to get this [content] whenever they wanted on whatever device they have.”

CABLE WI-FI

Separately, five of the biggest MSOs—Comcast, Time Warner Cable, Cox, Cablevision Systems and BrightHouse Networks—are launching a collaborative Wi-Fi system that will eventually have 50,000 hotspots, covering much of America’s biggest cities. Cable Wi-Fi will allow authenticated customers of any participating MSO to use the Wi-Fi facilities of the cable company outside the home.

Citing the “profound implications” of this nationwide cable wireless service, Craig Moffett, telecommunications analyst at Sanford C. Bernstein & Co., said, “The unique usage characteristics of wireless networks leave the door open for a potentially very disruptive Wi-Fi first service.”

The Cable Show's "App Pond" at Imagine Park offered a live showcase for newly developed applications playing over tablets, smartphones and other connected devices. More than 38 million high-speed data cable customers will be able to use the service, according to a Wells Fargo Securities analysis. The first markets to get Cable Wi-Fi service are New York City (and surrounding tri-state area), Los Angeles, Philadelphia and Tampa and Orlando, Fla.

The Cable Wi-Fi system will, among other things, enable cable subscribers to watch streamed TV shows and movies via Wi-Fi (thus not incurring network data charges) when they are away from home—a competitive feature versus Verizon’s 4G vision.

Offering Cable Wi-Fi service for subscribers outside the home might be more appealing than trying to find a local broadcast channel if a viewer’s handset or tablet actually has an mDTV tuner/receiver.

Some analysts see Verizon’s Viewdini offering as a next-generation successor to its VCAST service, using the greater bandwidth capacity of its 4G network. At the same time, the Viewdini deal brings Verizon Wireless closer to the cable TV infrastructure, especially on the programming side.

Verizon already has an MSO connection through its pending acquisition of the airwaves of SpectrumCo, the consortium of big cable TV operators. Long before that deal took shape, Verizon made clear its major plans for mobile video services coming this year.

These alliances, not surprisingly, won the support of FCC Chairman Julius Genachowski. During an on-stage interview with his predecessor and current NCTA President/CEO Michael Powell, Genachowski commended the industry:

Verizon's Viewdini App “Cable has been leading the way in innovating around Wi-Fi,” Genachowski said, who also commended the industry for helping to relieve the spectrum crunch.

WIRELESS AND CROSS-OVER AGENDA

The wireless and cross-over agenda at The Cable Show took many forms. Comcast announced X1, a cloud-enabled TV platform targeted to multiplatform “integrated entertainment experiences,” as the company describes it. The X1 platform uses IP technology to deliver interactivity, custom apps and social media features with Comcast’s traditional video services.

Comcast also introduced “multiscreen telephony,” as some analysts characterized the new “Voice2go”service. Comcast’s plan is to move home phone service onto devices more commonly associated with multiscreen video, such as PCs, tablets, laptops, and smartphones. Among the bandwidth-related features: “Voice2go” would offload cellphone traffic to Wi-Fi networks and enable free calling.

Michael Powell (L), President and CEO of the National Cable & Telecommunications Association, and Federal Communications Commission Chairman Julius Genachowski Separately from Verizon Wireless’s Viewdini service, Comcast introduced the “Xfinity TV Android experience” via a new Xfinity TV Player app—part of the move toward IP television from the MSOs.

The app brings 10,000 hours of the on-demand video-streaming content to Xfinity TV digital customers with Android devices (Versions 2.3/Gingerbread and above); customers will be able to watch video on smartphones and tablets using 3G, 4G or Wi-Fi connection.

This growing collection of competitive/ collaborative ventures plus the accelerating attention to wireless service, even among the traditionally tethered MSOs, indicate increased bandwidth battles. They also augur consumer confusion as viewers must choose which screens and which providers to patronize.

It looks like “wireless + cable,” but it’s still all about the bandwidth and who controls it.

Gary Arlen is president of Arlen Communications LLC, a media/telcom research firm. He can be reached atGaryArlen@columnist.com.

February's social TV trifecta—Super Bowl, Grammys and Oscars—augured encouraging prospects for the year in "social TV," the long-envisioned, often misinterpreted form of participatory television. Viewers' intense involvement with these three special events also raises questions about whether social TV engagement extends to a wider array of telecasts where timeliness and passions are not as dynamic or dramatic as they are during highly hyped live shows.

According to BlueFin Labs, a social TV monitoring service, 13 million "social media comments" (from Twitter, Facebook and other avenues), popped up during the Feb. 12 CBS Grammy telecast. That deluge marked a 2,280 percent jump above the amount of social media chatter during last year's show. The Grammys' social media activity also edged out the previous record, set a week earlier during Super Bowl XLV on NBC. That nail-biting game—and its embedded events such as the notorious half-time show, triggered 12.2 million social media comments from 5.4 million people, according to BlueFin Labs' tally. Then on Feb. 26, the 84th Annual Academy Awards on ABC drew 3.8 million comments (up 293 percent above the 2011's show levels) from 966,000 viewing participants, also respectable participation for a telecast aimed at an older—and "less Tweety"—demographic.

"TV has always been a social experience, and now we are focused on extending and amplifying the conversation within social media," says Ryan Osborn, senior director-social media at NBC News. He focuses on the process during the last few years, noting, "We are finding ways to use emerging platforms like Faceboook, Twitter, GetGlue, Google+, Tumblr and others to tell our stories in new places."

Osborn cites the tablet apps for the "Today Show," "Rachel Maddow Show" and others that seek to "encourage a two-screen experience."

"The space is still so young and we are looking to make small bets in several areas," he explains. "The real challenge is integrating across several screens in a way that adds value to the consumer. We are still learning about behavior and what people actually want."

The NBC News social TV agenda is being coordinated with the parent company and others.

"On the technology side, Comcast has driven distribution within VOD and other established markets," Osborn says. "Within the more nascent ecosytems, there is an NBC News app for Roku, a "Today" app for Microsoft XBox and we also are using technology to allow our producers to bring all these screens together. Mass Relevance is a filtering system that allows us to push content from the web across all platforms."

He also points to research showing how social TV integrates with other TV viewing dynamics.

"The social experience can help drive 'tune in,'" Osborn adds. "Whether it is fear of spoilers or just word of mouth awareness, people are encouraged to watch live TV and share the programming with friends. Big events are made even bigger. It also offers a unique opportunity for our advertisers who are reaching an audience at scale on TV and can now also reach more niche audiences with digital."

DISTRACTION OR COMMITMENT?

Not only did three major broadcast networks experience the satisfying social TV sideshows, but the blossoming growth of social TV offered encouragement to the cadre of companies that are pushing social TV as an important ancillary option. Yet in its current form, social TV is also triggering debates about whether its simultaneous chatter distracts viewers from the show and commercials or if it actually reflects a stronger impression and connection with the show and advertisers.

According to Networked Insights, three-quarters of social media chatter during the Super Bowl had nothing to do with the game itself.
While such contextual issues are being examined, broadcasters, programmers and social TV participants are also evaluating the delivery structure. There are proponents for social TV's best implementation as a "heads-up" experience on smart TV sets and as a "heads-down" two-screen process, with viewers communicating via their tablets or smartphones. With up to 60 percent of TV watchers having a digital handset nearby while watching TV shows, the two-screen option is a no-brainer - and it will become even more appealing as TV viewing itself on tablets puts the social TV focus onto that single screen.

Shawn Cunningham, chief marketing officer and co-founder of yap.TV Inc., a Los Altos, Calif.-based social TV app company, insists that users, experienced in using tablets and smartphones, "prefer not to pollute the first screen with social TV content."

"They like 1080p on the first screen and expect the second screen to be used for interactivity," he says. "Behaviorally, it's already showing up as favoring the second screen."

An alternative viewpoint comes from Merwan Mereby, vice-president of Content & Services Development at Panasonic Corporation of North America.

"If you can take away that lookdown effect and bring that experience to the TV screen … and [provide] all the functionality onto the TV screen, I believe it is more appealing to all parties involved." He cites the value from the programmers' perspective to work through social networks.

Other TV set makers envision growing value of the one-screen experience as new TV features such as gesture control and voice-recognition add to the social TV engagement.

DOES IT APPLY TO ALL?

While the hardware platform issue is playing out, the current implementations focus on whether "talk-along"—or more accurately "text along"—social TV can succeed with all kinds of programming. Even before analysts could fully digest the February examples, along came college basketball's March Madness. And with it came the massive social TV agenda of ConnecTV one of the start-ups that is working with broadcasters to create social TV offshoots. ConnecTV's March line-up included a custom Final Four "blind pool" multiplayer game, deep real-time play-by-play sports statistics, a "time-out" detector to fill action lulls with compelling info and a "go back" function to see previous plays.

Mike Abary, senior vice president of Sony Electronics' Home Entertainment of America ConnecTV co-founder Ian Aaron characterized the March Madness social TV project "an unparalleled second screen sports experience to energize the final TV match-ups in NCAA basketball." He expected that the enhanced experience would let "'viewsers'… watch, talk smack with friends and classmates and share the most exciting Madness Moments."

Which brings us back to the viability of social interaction for a wider assortment of TV show formats beyond live, competitive sports and awards shows. And that in turn leads to the bigger, definitional issue of "social TV" itself.

Cunningham of yap.tv believes the social TV applications work in all types of situations. He says that his company's research found that viewers like to use the program "discovery" features of social TV platforms to "see what my friends like and then be able to connect with friends to yap about the shows they have in common."

"We see the numbers growing constantly," Cunningham says. "We're mapping what people talk about to every TV show worldwide." He acknowledges that "the best opportunities are reality and competition shows, where there is a lot of frenetic activity." But yap.tv has also tracked substantial use with crime and drama shows, although Cunningham admits that measurement standards for social TV participation are still a work in progress.

Countless start-ups are pushing the social TV agenda, including Shazam Entertainment Ltd. (which pioneered social media applications for music) and Viggle owned by Function(x) Inc. (which offers prizes for watching shows and commercials). Yet many of today's activities piggyback on the Facebook and Twitter social networks used by millions of U.S. TV viewers.

Mike Abary, senior vice president of Sony Electronics' Home Entertainment of America, acknowledges that his company's social TV agenda includes connections via PlayStation and Blu-ray devices attached to TV sets as well as Bravia TV sets with built-in Web connections. Sony, like other TV set makers, has worked with Facebook and Twitter and others to develop social TV options.

"Clearly it's important because we've embedded it into our devices," Abary says. He expects the evolution to explore "to what depth can we create an even more compelling experience using social TV." Abary anticipates that Sony will "more tightly integrate social networks into the viewing experience," including live comments, shared viewing and more applications."

"One idea we have is to take the top-trending Twitter topics that deal with TV shows, movies and live sports and… use them as recommendations or 'trending now' [advisories] which lends to some degree of discovery," Abary says. "Everyone is taking their own stab at how to come up with their own solution," he adds.

WHAT'S TRENDING NOW

Amidst all the enthusiasm and experimentation for social TV, programmers are aware of the distraction factor. During the Super Bowl, three-quarters of social media chatter had nothing to do with the game itself. According to Network Insights, a social TV measurement firm, 42 percent of online chatter during the game dealt with commercials and 32 percent was about Madonna and other halftime show comments. Of course, to some analysts, the involvement and discussion about commercials added to the value of the ad buy.

For the Oscars telecast, the BlueFin Labs timeline shows that "responses per minute" (viewer comments) peaked above 100,000 at the moments when Meryl Streep won "Best Actress"; there were similar spikes at the points when "best supporting" statues went to actor Christopher Plummer and actress Olivia Spencer.

At the Grammys, 500,000 comments appeared during the moments when Adele's "21" won Album of the Year, then tapered off during the Paul McCartney/Bruce Springsteen finale. The show's next biggest social media deluge came during Chris Brown's performance and was one of the few times when mostly negative comments flowed, many related to the rapper's domestic abuse history.

Social TV's time has come—although "time" itself may be one of the hurdles. Time-delayed "live" shows, notably the Grammycast, irked West Coast audiences who could not be part of the live telecast interaction and who knew the results three hours before the show aired in the Pacific Time zone. Similar challenges face social TV augmentation of singing, dancing, competitive reality shows.

But the bigger opportunity for social TV in bringing viewers to any TV show—including news and scripted comedies and drama—looms large.

Mark DeBevoise, senior vice president and general manager of CBS Interactive's entertainment division, calls the social TV features "extensions" of the broadcast experience. And the ongoing deluge of social TV projects—for special events as well as routine viewing—confirms that these extensions can reach out endlessly and anywhere.

A consequence—not necessarily unintended—of the Internet-connected TV era is the inevitable avalanche of content and the concomitant challenge of finding what you want to see.

Now add in evolving navigation options—voice and gesture controls, facial recognition—and you have a completely new experience when you sit down to watch some TV.

For many years, we've recognized the limitations of the classic TV program grid, with its up-down-left-right navigation. It was barely OK in the 50-channel era and maybe even the 200-channel universe; but the current onslaught of video-on-demand content and now the integrated inclusion of Web-delivered video are making the program selection process even more complicated.

TOO MANY SOURCES

Whether it's YouTube, Netflix or any online source or multiplexed broadcast and cable channels, there's too much to see or find simply.

Many ventures are rushing in to help viewers seek whatever they want to watch, wherever the programs may reside. Companies such as Blinkx, which calls itself "the world's largest and most advanced video search engine;" Fanhattan, a digital entertainment discovery service; and Google's TV search capability offer some solutions. So do video recommendation engines such as Jinni, plus the venerable TV Guide and Rovi systems.

The Samsung booth at CES in the Central Hall of the Las Vegas Convention Center Many of these approaches are integrating traditional linear program line-ups of broadcast and cable TV channels while they try to develop a structure that doesn't overly confuse viewers who might want to find a show that is available through an online library.

Since Net-connected TV sets can deliver shows from traditional TV sources as well as broadband video hosts, the viewing options on that flat-panel display screen are unlimited. And the opportunity for confusion and frustration are also endless.

At last month's Consumer Electronics Show, exhibits were awash with video guide options—and also with interface alternatives that will supposedly simplify and make finding shows more "natural." The frustrating 48-button uber-remote controls were definitely not front-and-center.

There were plenty of integrated multiscreen systems that enable viewers to browse for shows via a tablet or smartphone, then order them to be displayed on the big-screen monitor in the room, or to be stored on a DVR for later viewing.

But the most dramatic approaches eliminated buttons and touch-based (haptic) systems, relying instead on natural language voice controls or gestures to let viewers manage their selections. This was a dramatic leap in just the last few years, some of it spurred by the Apple iPhone Siri phenomenon.

Clearly, LG, Samsung, Sony, Toshiba and many other TV makers want to shore up their interface options before the arrival of Apple TV (presumably by next year), which is anticipated to have a voice-controlled option.

The recent, rapid advances in voice control triggered my own nostalgic memories. It was at an annual International Conference on Consumer Electronics (run by the Institute of Electrical and Electronics Engineers) in the early '80s where I first encountered a Texas Instruments voice-recognition prototype—the kind that had to be customized to an individual voice and accent. Appropriately, the ICCE conference was then, as now, piggybacked to CES.

ALTERNATIVE INTERFACES

Then it was an intriguing concept. Now it's part of the TV experience. The growing focus on immersive interfaces came through at a CES panel on alternative interfaces.

Nuance introduced its voice recognition "Dragon TV" software at CES, which it plans to license to set-top box and TV set makers. Richard H. Mack Jr., vice president of Nuance Communications, which makes some of the technology behind Siri, explained how his company has developed software to understand what speech means—in other words, the context in which a viewer is searching for a show.

Nuance introduced its Dragon TV software at CES; it plans to license the software to set-top box and TV set makers.

Using Dragon TV technology, viewers could say to their TV sets: "Who's on Ellen today?" Or "Find comedies with Vince Vaughn;" or "What's on Bravo at 9 tonight?" Mack said that with increased processing power, "It's only going to get better."

Also on the panel, Adi Berenson, vice president of PrimeSense, the company that created the Kinect gesture control device for Microsoft's Xbox 360, demonstrated his company's next-generation interface, which can recognize movement in three dimensions. Berenson showed a prototype program guide that let him reach toward an on-screen movie list and "grab" a title. His motion triggered a preview clip to run.

Meanwhile on the CES show floor, LG showed an enhanced version of its "Magic Remote," the year-old gesture-controlled remote control. Now it includes voice recognition capability, allowing viewers to speak their control commands. Samsung's approach let you say "Hi TV" to turn on the set, then recognized terms like "Web browser" to take you to the online options of the Smart TV.

Computers, which are fundamentally digital TV sets with more processing power, are also stepping up their voice-response options. Lenovo unveiled its K91 smart TV, based on the Android 4.0 operating system. In addition to voice recognition, the K91 has a webcam that can be used for facial recognition to control viewing and enable advanced parental control. Expansion of such features will create greater opportunity for customization of personal TV viewing experiences.

Rovi Corp. approached the cross-platform content search option in several ways. TotalGuide G2, its second-generation content discovery system, is aimed at 'net-connect TV sets. The Rovi Multi-Source Entertainment Guides enable access to content from a variety of sources, including over-the-top video content, electronic sell-through and VOD programs, as well as linear broadcast TV, cable, satellite or IPTV content.

Hybrid integrated navigation and control systems are also popping up. Arris Group Inc., the cable technology supplier, showed off voice controls for its Moxi interactive program guide, which would let viewers speak commands into their mobile devices to change channels and search for content on a TV.

ActiveVideo Networks also privately demonstrated an ersatz system using Apple's Siri interface. An iPhone user can log into his cable system account, then speak to Siri to order shows or recordings simply by using the voice-activated interface.

Alongside such multiplatform program search and navigation systems are the evolving Automatic Content Recognition (ACR) systems such as Civilution and Audible Magic, which bring social TV features to the program selection process.

Next comes the really hard part. Customers have to figure out which search and navigation systems fit their needs, and then they'll have to determine which interfaces are available via their equipment and how the systems fit their viewing process.

It may take a while.



Clarification: An updated version of my Jan. 18 column, "Cost is Key in Zuicker's Digital Agenda" about Anthony Zuiker and his made-for-Web video series is available at www.tvtechnology.com.

Gary Arlen is president of Arlen Communications LLC, a media/telcom research firm. He can be reached at GaryArlen@columnist.com.

Anthony Zuiker, creator and executive producer of CBS's "CSI: Crime Scene Investigation" franchise, describes his $40,000-per-hour "Level 26" digi-novel series of video productions as equal in quality to the $4 million-per-hour network TV shows he oversees.

Now he's looking forward to showing off the new economics of multiplatform delivery in his "BlackBoxTV" series, which will include a cyber-crime entertainment show. The programs, a collaboration with Tony E. Valenzuela, will debut online by year's end and will be among the first "channels" funded by Google and its YouTube subsidiary to entice high-profile Hollywood creatives into making original Web programs.

HIGH QUALITY, LOW PRICE

Zuiker talks enthusiastically about the $2,000 Canon 5D camera used to shoot the video for the digi-novels in his recently completed "Level 26" trilogy for the iPad.

"The production value is so unbelievable that you can do high-quality content at a very low price," he explained.

The "Level 26" series was conceived as an electronic book with integrated video segments to enhance and expand the text narrative. At certain points in the original "Dark Origins" (which debuted September 2009), and the subsequent "Dark Prophecy" and "Dark Revelations" (published in late December 2011), the written word leads into high-production-value video scenes advancing the story or offering additional clues, character back stories and other details to enhance the plot.

In keynote remarks to the recent Media Innovations Summit in Santa Clara, Calif., Zuiker said he invented the "digi-novel" structure while sitting out television production during the Writers' Guild strike in 2007–2008.

Video clips of "Dark Prophecy" production appear about 14 minutes into the stream of Zuiker's presentation at the summit, which can be viewed at www.screenplaysmag.com.

As he pondered what "a book might turn into," Zuiker conceived his version of the integrated text/video approach, extending a traditional video game narrative form and implemented for the capability of smartphones, eReaders and tablet devices that allow storytelling to shift between presentation formats.

Although the TV producer-turned-multiplatform pioneer declined to disclose revenues for the "Dark Prophecy" series, he noted that the first segment briefly was near the top of the Apple iTunes App Store's bestseller list. At $13 a copy, it was "not a runaway success," Zuiker admitted, but he said Apple acknowledged "the win was in the doing."

Anthony Zuiker during filming

The experience also brought Zuiker credibility for the next wave of digital production. At the conference, Zuiker also dropped teasers about his next made-for-Web production, "Cybergeddon," which is in development.

"BlackBoxTV" will debut in April 2012 in multiple languages, thus becoming one of the first global online productions. Google funded $2.5 million for the "BlackBoxTV" series, which will consist of 40 anthology genre short films, each running about 15 minutes.

Independent of "BlackBoxTV," but accompanying Zuiker's future video production will be $1.2 million in apps, which Zuiker calls a "big software" commitment.

"Google wants to be in the premium content business," Zuiker said bluntly, affirming a widely held view about the ambitions of the global company that was merely a search engine provider a decade ago.

SPONSORS LINE UP

Against this production budget, Zuiker said he has already lined up $8 million in branded entertainment investments from sponsors that will be more than just product placement.

"[Marketers] want to infuse their brands inside the content," Zuiker said in his conference remarks and reinforced during my conversation with him afterwards. "Most brands just want to be on the forefront of something cool."

Although he didn't reveal the names of sponsors or the ways in which their products and messages will be integrated into the storyline, his approach underscores the new economics of program development. Zuiker said his online series will already have nearly "$5 million in revenue before we launch."

Zuicker contends the digital platform approach enables companies to get into the "tech-entertainment business" in ways that will be much more compelling than merely "buying $800,000 ads" on network primetime shows. Moreover, this type of programming is aimed at the elusive young male audience, although it also may appeal to the female-centric TV audience that likes the procedural crime-drama scripts of "CSI" and similar series.


"The challenge is to make that money back… then use that traffic to go forward," he said, indicating a growing commitment to the multiplatform ecosystem since some programs will inevitably travel from online streams into conventional syndication and distribution systems, possibly bringing a two-screen interactive capability with them.

At the core of Zuiker's vision is an overhaul of the TV production and economic infrastructure.

"As the technology of cameras gets better and cheaper, it will take the pressure off the budget," which means money can be moved to other purposes, Zuiker says. "You don't have to shoot on Panavision cameras." He admits it is "hard to ask an A-list actor to work for three grand," acknowledging the staggering economics of network TV shows with union contracts and studio overhead. He insists, "Guys like me are willing to take the hit [in order] to have ownership" of the final product in the "radical, rebellious" future.

Zuiker also attacks the traditional approach to TV programming. He sees "the value of keeping the audience engaged throughout the week, not just for an hour" of a scheduled weekly series.

"We're on the brink of extinction for television as we know it. The regime of watching pre-scheduled programming seems a bit archaic. … Advertisers simply cannot sustain [that system] to monetize and profit in the on-demand environment.

"My mission is to be thinking about how to engage in cross-platform storytelling," Zuiker said. He intends "to take advantage of the TV broadcast as a launching mechanism," then move among Web, gaming, mobile and other platforms, all as part of a "24/7 experience, not just a glorified home page."

Zuiker and his production peers are opening a door—and a veritable Pandora's box—to a whole new world of television.

Gary Arlen is president of Arlen Communications LLC, a new media research firm in Bethesda, Md. He can be reached at GaryArlen@columnist.com.

Continual Partial Attention (CPA) is a term that has been trickling into the new media vocabulary for a couple years. It's both a bane and an opportunity.

And it's Standard Operating Procedure for the growing audience who simultaneously watch TV and tinker with their smartphones or tablets, which is up to 80 percent of viewers according to a new Razorfish study.

CPA means they are refocusing intermittently toward the content—and the screen—that most engages them at that moment. Leaving aside attention deficit and advertising retention implications, CPA requires new ways, literally, to look at programming and delivery.

SECOND SCREEN

One opportunity involves encouraging viewers to use the second screen for content that reinforces what they're watching on screen #1. Fundamentally, that's the concept behind the new "ConnecTV" social TV venture involving nearly a dozen big broadcast groups.

The challenge comes in creating experiences that enhance, not distract, from the viewing experience. Achieving such unity requires synchronized content development, a complex process for programmers and especially for advertisers in the DVR and VOD environment.

Just to confuse the linguistics aspect of this process, Cox Communications last month unveiled "TV Connect," its service to deliver video content to tablets, although the delivery will not necessarily be simulcast with real-time programming.

Despite the name similarity to ConnecTV, Cox's TV Connect—like the cable industry's languishing "TV Everywhere" initiative, Verizon FiOS's "FlexView" and AT&T's U-verse subscription TV app—is aimed at viewers who expect to see "what" they want, "how" they want, not just "where" and "when."

Screenshot of ARRIS Group Inc. AdManager The second and third screens (computers and mobile/handheld devices) enable those preferences.

For more than two years, the role of handheld/wireless video has been on an exponential tear. Last month, in its first VideoMind report, Ooyala Inc., a Silicon Valley online video management and analytics consultancy, said that tablets generate a "significantly higher level of engagement" for online video viewing. Specifically, 48 percent of tablet viewers watch at least three-quarters of a video stream once they start, compared to 20 percent of desktop viewers who last that long through a video.

All these study results are reminders that we're still just beginning to understand—and figure out how to deliver content to—the fast-emerging multiscreen, multitasking, multiplatform ecosystem.

TIME SPENT

The implications have even rippled into the policy-making world. The Technology Policy Institute, a Washington think-tank, issued a report in November titled "What Are We Not Doing When We're Online?"

Among its findings: the amount of time spent watching traditional TV has increased 22 minutes per month during the past year. That is a pittance compared to time watching online video, which has increased by more than an hour per month.

The report especially emphasizes the ways in which audiences are shifting between passive viewing and active digital behaviors, especially social networking, a fundamental part of the multiscreen experience.

For the record, simultaneous TV and online connections are hardly a new phenomenon. The first known example came in March 1996 during the boxing match between Mike Tyson and Frank Bruno. Showtime, which telecast the event, decided to offer viewers the chance to score the boxers via its then-relatively new website.

Showtime researchers expected fans to enter their numbers at the end of each round when they ran from their TV set to the room where their computer was located. To Showtime's surprise, viewers' scoring was done with almost every punch, indicating the TV set and computer (with its dial-up connection in that era) were in the same room—a surprising and important finding.

Subsequent research confirmed that nearly two-thirds of homes had such computer/TV set co-locations back then. Today, with wireless connectivity, the simultaneous viewing option is nearly universal.

TOOLING UP

The role of tablets will soon become even more intense. By 2014, according to eMarketer, 90 million Americans (36 percent of all Internet users, nearly 28 percent of the total U.S. population) will be using tablets. Apple's iPad, which now has an 85 percent tablet market share, will still be dominant, with two-thirds of the 2014 tablet audience.

Need more evidence of the tablet's juggernaut? The tools for delivering and measuring multiscreen content are beginning to flow. At the Cable-Tec Expo in November, ARRIS Group Inc. introduced AdManager, a standards-based platform which lets cable operators provide ad campaigns across addressable, IP-capable devices, including tablets, smartphones, game consoles and 'Net-connected TV sets. Competitive software is likely to proliferate.

Nielsen is field-testing a system to measure multiplatform viewing, seeking details about how audiences use the tablets in conjunction with DVRs, Web services and conventional linear TV. Nielsen and its clients also want to know how multiscreen-use affects C3 ratings (time-delayed viewing).

Using these measurement tools, content providers will develop tactics to deliver more programs to tablets; and advertisers will accelerate their interactive advertising ventures.

An example is Ad-ID, the advertising identification and management project run by the American Association of Advertising Agencies and the Association of National Advertisers, and Canoe Ventures, a similar consortium for the cable TV industry.

Also in development are tools to help viewers find what they want to see. Program discovery tools—such as Google's video search functions and the IMDB (Interactive Movie Data Base) app for the iPad—are harbingers of what will be available to steer viewers to what they want to see on, as Nielsen calls it, "the best available screen," and in many cases, screens.

That should get viewers' attention, partial or otherwise.

Gary Arlen is president of Arlen Communications LLC, a new media research firm in Bethesda, Md. He can be reached at GaryArlen@columnist.com.