Monthly Archives: May 2013

The $148 billion reason why TV is still so complicated

It’s 2013 and we live in the future. We have little glass slabs in our pockets connecting us with anyone in the world or all the information ever written. Aluminum tubes rocket us above the clouds to other continents within hours. We cook gourmet meals in seconds using the magic of microwaves. We can even buy robotic vacuum cleaners if we don’t worry about scaring the dogs or cats.

But TV is still clunky. Cluttered. And despicably complicated. We may have large, beautiful flat screens, but most require numerous remote controls — one for the screen, one for the cable box that feeds it content, a third for the DVD or Blu-ray sound system, and likely a fourth for a game controller. Because most homes have three TV sets, this means you likely own 9 to12 different remote controls. As if the Gods of media were playing dice with our quantum entertainment universe, while most Americans spend 4 hours and 38 minutes a day zoned out in front of screens, using TV requires many different control systems or on-screen “Smart TV” apps all punched into different states.

If a rocket scientist were teleported into your living room from the 1950s, he’d by like, “WTF?”

The multibillion-dollar prize
The trouble is $148 billion in video dollars is at stake, and numerous players are fighting voraciously to defend or gain share of that huge pie. This week the latest grab was made by Microsoft, launching its Xbox One, a gizmo that plays TV shows or video disks or Internet or games effortlessly via voice commands, knitting all your home entertainment systems together. Beyond selling this gadget, Microsoft — like Apple and Netflix and Vudu (a Mediassociates client) and others — is angling for more of the $74 billion spent on U.S. television advertising each year and the additional, coincidental $74 billion spent by U.S. consumers on cable subscription fees (from 83 million tethered U.S. households shelling out $900 a year each).

The thinking is this: Consumers are waking up to the fact they’ve been overpaying for TV content, and oversaturated with the television commercials that support it. So eventually, that tsunami of money is going to flow somewhere else.

Yes, you now get too much TV content. The average U.S. person gets 130 cable or broadcast channels on their TV system, but tunes in to only 18 per year. (This is due to the intriguing habit that most people don’t “channel surf” by clicking up or down the dial anymore; instead, you punch in 1033 for CNN because you already know it’s there.) You also get too many ads. As much as 40% of any given TV hour is now paid promotions — up from just 18% in the 1960s — which means you are theoretically exposed to 6,000 TV commercials every day. This overload is neither good for marketers, who must compete among all that clutter to break through, or viewers, who look away to second screens or magazines when commercials now come on out of disgust.

Faced with such bloat, consumers are responding by changing their habits. TV use is slipping each year as more consumers, especially younger ones, give up on this clutter and stream video directly from the Internet. Nielsen reports the TV-viewing population in the United States has declined each of the past six quarters; some 60% of TV viewers age 18-24 watch video content online, and more than 1 in 4 of them do so for more than 5 hours a week. While this younger demo still watches more than 3 hours of traditional TV daily, this trend terrifies the incumbent networks, because consumers have a way of locking in to media habits in their youth and carrying those same habits as they age.

‘And then the wall will crumble’
Just as consumers are radically shifting behavior, technology is going through a period of rapid video and gadget experimentation, similar to what the railroad industry went through playing with different gauge distances before it settled on one coherent standard. You can watch video on iPhones or Droids. There are 108 million game consoles in U.S. homes now, and most can stream video from the Internet. Over The Top (OTT) services such as Hulu and Netflix try to lure you with subscriptions, sales or rentals. Smart TVs, such as Panasonic and Samsung, offer tablet-like apps on screen for various video connectivity. Old cable offers movie rentals on channel 1. And dedicated third-party devices like the Apple TV or Roku also invite video streaming. Behind it all, the big networks such as ABC and CBS force the cable middlemen, now called “multichannel video programming distributors” or MVPDs, to sell bloated packages of content. You can’t just get ESPN without subscribing to a bunch of other channels in the package, too.

Industry analyst Alan Wolk recently wrote a brilliant piece dissecting who makes what money from TV, and how the result is a traffic jam of content crashing into consumers’ living rooms. Wolk suggests the only way this mass of ugly technology will change is for some upstart revolutionary to lob a brilliant new system into the mix, one so radically different that it will break the lock of bloated packaging and conflicting systems. “At some point,” he writes, “someone will launch a virtual MVPD (e.g. cable-like system) … with a beautiful interface and all the bells and whistles of advanced TV systems … popular enough that it will be in the best interest of ESPN to allow this new MVPD to break up their bundle. And then the wall will crumble.”

Steve Jobs did this a decade ago by getting the music industry to walk away from CDs to sell songs on iTunes for $1, and consumers loved it. Someday, your simpler TV/Internet/video system will come, led by such a revolutionary. Until then, have fun playing with your complicated 9 to 12 remotes, smart TV apps, and numerous subscription fees.

Because you love the big screen so much, everyone is going to fight to clutter it up, leaving you to scratch the remotes tooth and nail.

Image: Future Atlas

Hey, look. Your website won’t fit.

Would you send out 1 million direct mail pieces if you knew 37% of them wouldn’t fit in consumers’ mailboxes? Of course not — but this is exactly what many publishers and businesses do when their websites don’t display well on iPhones or tablets. With 37% of all U.S. consumer digital time now spent on smartphones or tablets, companies are waking up to the need for responsive design.

Responsive design is a solution that reflows your web content based on the size of the viewing screen. If a consumer visits via Google Chrome, detailed information fits across the wide browser window. But if she is on an iPhone, the content modularly reflows to render on the much-smaller screen. The first “crunch” faced by businesses or publishers is to wake up to how important responsive design is in this new world where people are using smaller web windows. (For a glaring example, boot up your smartphone browser, visit, and try to read an article.)

Jack Marshall over at Digiday notes a second looming crunch. Even if sites are redesigned for mobile, digital ad units don’t fit well into that newer, smaller space. Jack notes, “responsive design is a no-brainer on the surface. Publishers get their content automatically arranged based on the screen viewed … (but) it’s often difficult to serve appropriate ads to specific devices.” While some units like the boxy 300 x 250 digital ads can squeeze into tiny mobile screens, wide leaderboards and other common IAB ad units won’t.

The third crunch is one faced by businesses that focus on direct response: Lead forms. Much of online marketing drives users to click to landing pages that hope to get you to “convert” to a potential business transaction, often by filling out an initial lead form. Insurance companies, solar firms, and Barack Obama all hungrily ask consumers for their name, emails and addresses, for future remarketing. Lead forms don’t fit well on tiny screens, and mobile doesn’t support typing into boxes well, either.

So there it is: First, your digital content may not fit on mobile. Second, if you rely on advertising, banners won’t fit either. And third, if you hope to identify your mobile visitors, good luck having them fill out a form. With comScore reporting 10% of all consumer media time is now spent on mobile, perhaps you should set up a meeting to figure all of this out.

Image: Patrick Hoesly