Most consumers say they want their primary television set to be capable of connecting to the internet. When that happens – and it almost certainly will – the television business model will undergo tremendous turmoil.
A study from Ernst & Young’s Global Media & Entertainment Center looked at what might happen if the same kind of widget applications people increasingly use on computers and mobile devices become readily available on the living room television receiver.
The results will likely challenge basic concepts of the television business. “Advertising issues are inevitable: As TV viewer attention migrates from programming to TV widgets, broadcast ratings and advertising rates may need to be protected against further erosion.” It notes that widgets will likely enable split screens and simultaneous viewing of multiple programs, another conflict with the traditional video model, particularly things like exclusivity.
E&Y speculates that until such issues are resolved, “TV widgets will likely be restricted to marketing trailers for example, potentially preventing consumers from experiencing the wealth of content offered through TV Widgets.”
Regulatory agencies are expected to be very busy sorting all of this out.
Also expected to feel shockwaves are the underpinnings of the television news business. Competition for programming and content will also rise to a new level.
E&Y believes that the television will not be an adequate replacement for a desktop or laptop computer.
“TV widgets present content providers with an immediate opportunity to strengthen their relationships with consumers,” said E&Y’s Howard Bass. “Content and technology companies that respond to consumers’ need for a simple and elegant user interface will likely have the most success with TV widgets.”
In conclusion, E&Y writes, “TV widgets will likely allow content companies to reinforce their brands and promote their programming. Long-term, consumer adoption will ramp-up and advertising and pay-for-play will prove significant. When this occurs, content companies and advertisers will finally be able to strengthen their relationships with viewers/consumers through Web-enabled television.”
RBR-TVBR observation: If the television companies of today want to be around tomorrow, they’d best pay close attention and participate in the developments in this area.