2009 is the year of the Connected TV

(sorry to long-time readers for the recent radio silence — between traveling and coming down with two successive bouts of some kind of flu, I have not been keeping up my end of the deal. I’ll make it up to you, I promise :)

I wrote about Yahoo’s TV Widget Engine in January, calling it the Belle of the CES Ball. I still stand by the sentiment, so much so that I wrote a very deep dive on the concept for Forrester clients which was just published this week. If you’re a client, check out the report here (and even if you’re not a client, you can see a summary at the same link). I won’t give away the precious detail here, but let me riff about the report’s implications a bit.

The most important thing Yahoo’s TV Widget Engine does is open a platform for innovation in the connected TV space, I said that before in the original post. However, the innovation that will matter most is programmer-led innovation that enhances TV viewing, by adding interesting information and interactivity over the live TV experience.

Why should content owners do this? Becuase this is the first technology innovation in a decade that will actually encourage live viewing of television. 

What do I mean? Already, there are people who keep their laptops on their laps (where else?) during American Idol or Dexter so they can chat with friends or follow Twitter conversations related to the show. NBC even encourages people to text to a special SMS number during Heroes to get special updates and clues during the show. But all of those exepriences are outside of the TV screen and therefore limited to the few people willing to manage multiple devices. Imagine if broadcasters and programmers could do the work for you, overlaying the experience on the TV screen to increase your enjoyment of the show — as well as your desire to watch it live when the online buzz is the greatest.

The problem is we have a short window in which content owners (networks, producers, publishers, etc.) can establish the habits that will favor them in the long run. If they don’t catch on quickly, they’ll miss this chance to drive *gasp* actual live viewership and instead, technology innovators will focus on widgets that deliver other benefits that aren’t programming-centric. I personally think weather, horoscope, and personal ad widgets — while of interest to specific subgroups — will never catch on on the TV to the degree that program-specific widgets will. Why? Because people watch TV to watch TV, not read the news or scan personal ads. That’s what the PC is for.

Am I right? We’ll find out soon enough because Verizon just announced that later in the fall it will be pushing an open-widget development platform to its Verizon FiOS TV customers’ set top boxes. For those who did not know, Verizon has been developing widgets since 2006. However, the widget environment was proprietary and did not allow outside parties to contribute. Verizon has changed that with this latest version and as a show of force, it has built a Twitter widget designed to automatically scour tweets to find any that mention the show that you are currently watching — change the channel, and the widget will search for and display any new tweets related to the new show on your screen. 

This is a genius move. It demonstrates the value of synchronizing widgets with live TV without waiting for the Yahoo! widget platform to find its way into homes.

If I’m right (and Verizon finds a way to let customers know about this feature — which is always a problem when you push free features to set tops, most people never know they’re there), Verizon’s 1.6 million customers will be a very attractive test best for interactive TV widgets. If you are a developer, get hopping, let’s see what you can do.

The global growth of online video vs. mobile video

I spend most of my time analyzing online video in the US (all of my datapoints on my FAQ are US only as well). But I get a lot of questions from clients around the world who share with me their anecdotal experiences, including juicy bits like:

• In Spain, online video is spiking, driven largely by illegal downloading because there’s very little available through legitimate channels.
• In European markets, even if they are next door neighbors, the behavior differs dramatically based on how much local-interest content has been cleared for online distribution.
• English-speaking markets like Australia and Canada are less and less willing to wait for legal access to consumer American media. When Heroes hits the Web in the US, it gets picked up via BitTorrent in the rest of the English-speaking world. 
• In Japan and Korea, online video is growing like gangbusters, in addition to high mobile video adoption.

This last one caused me to do some thinking because both mobile and online are growing at the same time. This is part of a bigger question, namely: Does online video ultimately compete with other video channels or complement them?

It’s a question that I have blogged about before when it came up among a panel of online TV giants in the US, but there hasn’t been a need to consider online video compared to mobile video, which is very immature in the US. However, globally, there are markets with a third or more of mobile users watching mobile video. 

I know from another global analysis that I did that when people in a country listen to music via their mobile phones, that listening competes with online music streaming. If one goes up, the other goes down. It was a comparison of 15 different countries where Forrester collects data (it is so cool to work here, imagine having that data at your fingertips). 

Nervously, I replicated the analysis for mobile video vs. online video streaming, and, wanna guess? They don’t compete. In fact, they correlate strongly (correlation coefficient: .57, end of nerd moment). This is the unique role of video in people’s lives. This is why OmniVideo is going to happen: more video, through more devices, in more places and times. Because we want more of it. Open the pipe and more will flow through.

Cool, huh? What’s your experience with video — either mobile or online — globally? Seeing some cool things? Feel free to share.

What I’m watching

I’m totally predictable. First, some background, I give speeches and talk to clients and the press about TV all the time, and I find it’s helpful to provide examples of what I’m talking about. So I toss in TV shows I’m familiar with.

Which is where my aforementioned problem arises: I’m totally predictable. Gee, tech geek, grew up on Star Trek, what do you think I’m watching? Yep, it’s the obvious.

 

[clearspring_widget title=”Heroes – Powerless” wid=”4727a250e66f9723″ pid=”48f72c9938420486″ width=”384″ height=”283″ domain=”widgets.nbc.com”]

I was a huge fan of Heroes from season 1, episode 1. However, this season has me concerned. I’ll stick it through to the end, but if we don’t provide some actual character development soon (instead of rushed plot points), I’m going to give up. I’ve learned from the complex J.J. Abrams dramas of the past that once a show starts to spin out of plot control, it doesn’t come back to redeem itself. I watch this one on DVR almost exclusively.

My 2nd favorite show this season is Fringe. Yes, I have fallen for a third J.J. Abrams drama, despite my warning above. This one has yet to really grab me, but I’m giving it a chance. Anna Torv‘s character is practically anonymous, that’s how little background we have on her, while the mad scientist has a deep history already. There are hints about her past; I hope we’ll get to plumb those depths soon. I watch this show entirely online, as it fits in my schedule better that way (don’t have to compete with the kids for the DVR).

Like I said, there’s no mystery about me here. And, yes, I’ll be watching Battlestar Galactica and Lost again in early 2009 when those shows start up again.

But enough about me. What are you watching? Are you following any new shows this season? I know you’re watching something, and based on how many odd looks I get at conferences, it’s not what I’m watching…so chime in.

DVRs add 42% more key viewers in some cases

The New York Times did a piece this week on Nielsen’s release of adjusting ratings that take into account DVR viewing. I love this last paragraph paraphrasing Alan Wurtzel, president of research at NBC:

[Alan] called the DVR the “ultimate frenemy” (friend and enemy) because it increases overall viewing and demonstrates that viewers are engaged enough with shows to plan ahead and record them, but “the enemy part is that there is still a lot of commercial avoidance.”

So true, so true. What’s interesting is that he’s now open to the friend part of the Frankenword “frenemy.” Remember, just two years ago, people like Alan thought DVR was the ultimate evil. We still have former clients of Forrester who refuse to engage with us because we had the audacity to (correctly) forecast that DVR use would be near 30% by now. Gee, we’re sorry we hit that nail on the head. We’ll try to be wrong next time. [yeah, you know who you are]

The ratings numbers from Nielsen revealed that hot, upscale shows like House, Fringe, and Heroes, all added an additional chunk of viewers via DVR.

House, for example, added 3.7 million additional viewers. Among 18-49 year olds, Heroes went up 42 percent. That means nearly a third of its viewers in that target age range were watching via DVR.

And let’s not forget the viewing that’s happening online. Remember that? It’s even easier to do than watchingvia  DVR. And in a recession, online viewing seems a lot cheaper than paying for a DVR. For shows like Fringe or Heroes, I could imagine that 50% of all viewing is now happening on-demand, whether via DVR or Internet. Here’s a prediction for you:

• Online viewing will account for more views than DVR viewing by year-end.

Two factors will drive this. First, more people can and do watch TV shows online than have a DVR. Second, it is less of a hassle — there’s nothing to program, no disk to keep uncluttered with episodes of Suite Life of Zach and Cody (sorry, went on a personal tangent there).