What’s Really On?

I spend a lot of my TV watching time (ok, maybe all of my TV watching time) with a computer on my lap. Historically, it was a MacBook Pro laptop, but more recently it’s an iPad. I like to think this is a positive reflection on my ability to multitask, but in reality, I also browse a lot of unrelated content during commercial breaks (I will admit to regularly checking fantasy baseball results in the spring and summer time). I do often make use of the Internet to fact check political news, get detailed stats for a game or search for content relevant to the program I’m watching. Essentially, I’m making the iPad into a modern implementation of WebTV. Recent studies show a rapid shift in TV watching toward this type of behavior, though I imagine a huge percentage of the eyeballs are focused on Facebook rather than the TV. In the meantime, broadcast ratings are down considerably and the rate of cable rating growth has slowed.

To “answer” this problem, the major distributors and content owners are partnering (in fits and starts) to bring high quality content to every screen; be it laptop, tablet or phone. I will write about this “TV Everywhere” phenomenon in a future post. For now, I will only say: this is a solution in search of a problem. After a four year cycle of cheap 50” and then cheap 32” LCD TVs, people have very nice a HD sets in their homes and want to watch high quality content on them. In the consumer’s ideal world, they are able to watch it whenever they want (and it’s ad-free). But the TV business doesn’t operate in that world and doesn’t have to move that way any time soon, despite the shouts and murmurs of the over-the-top (OTT) crowd. In a bizarre way, the TV business is actually quite healthy.

Total hours viewed per household is up. TV’s share of aggregate advertising dollars is up. Broadcast and cable CPMs are at all time highs and expected to increase at this year’s upfront. Cable affiliate rates continue to grow at mid-to-high single digits and broadcasters are extracting retransmission consent fees from their distributors. Those same distributors are regularly raising prices (though typically faster on the HSD product than TV) to offset their rising programming costs. Despite all of this additional money flowing into, and around, this system and lots of noise about OTT, industry churn rates haven’t increased dramatically after accounting for a crappy housing market.

Ok, I’m rambling. As I said, I want to save that discussion for another time. There is actually a point that I was attempting to make before I got sidetracked. A major risk to the PayTV model over the next three to five years isn’t that people find other stuff to watch, it’s that advertisers finally realize people aren’t watching what’s literally on their TVs. And I don’t just mean skipping commercials; it’s the laptop effect. Distributors and content owners must figure out a way to reengage those viewers before the advertisers figure out they are more likely to reach that customer through facebook, twitter, google, etc. They view TV Everywhere as the solution. Right platform, wrong solution. High quality content should stay on the high quality screen. These extra screens give content owners the opportunity to develop deep, rich, interactive applications with extremely relevant information.

There is a mish-mosh of content related apps out there; some are pretty intuitive. Most of them are crap (seriously, it’s crazy how bad the TV Guide app is…I can only imagine the content in the TV Guide vault after nearly 50 years of publication and on-air broadcasting). Most, however, are relatively one-dimensional, static and require an additional step of manually indicating the content actually being consumed on the big screen. To a certain extent, these apps lack the awareness necessary to provide the user with relevant interesting and fun that enriches the on-air broadcast. The more ways I’m directly engaged with what’s on TV, the more likely I am to pay attention to what’s on the big screen (including ads, sponsorship, product placement, etc.).

I’m very interested to see Yahoo!’s purchase of digital signature/fingerprinting startup Into_Now today. They plan to pair it with their audio fingerprinting product. I found Into_Now a few weeks ago and was immediately impressed with its TV Show recognition (including live airing sports content). As excited as I was about this technology, I was equally disappointed when Into_Now moved focus and implementation into a lame check-in app. Really, with the ability to know exactly when someone is watching in real-time, the primary goal is to get them to tell friends (or strangers) what they are watching? Do I want to know what my friends are watching? Yes, maybe. Feels like an uninspired platform choice that hopefully the people inside of Yahoo! will beef up considerably.

Let’s imagine a pretty basic, but useful implementation: turning food porn into dinner. I often find myself sitting on the couch, drooling over an episode of Man vs. Food or Top Chef. I also really enjoy cooking and experimenting in the kitchen. Now, to get the food featured on a TV show onto my phone in the form of a followable recipe and, in turn, that recipe into a usable shopping list is extremely tedious, if even possible at all. Different sites/apps provide similar functionality (I can search a specific recipe on epicurious and add that to my epicurious shopping list), but no one integrates it with the TV and the resources available from the content owner. I want to make what Paula Deen is making and the hard part should come AFTER I get home from the grocery store.

I realize Lionsgate was unlikely to spend the $27mm Yahoo! committed to Into_Now to make it a part of TV Guide, but it would have made a lot of sense. Just seems like a modestly valuable property that is basically wasting away (actually, it’s almost an accelerating decline considering Lionsgate paid for the property and has done nothing with it…excluding bidding for syndicated TV content for the TV Guide channel).