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    Connected TV Summit Confirms a Market Expanding in Every Direction

    Written by

    Michelle Maisto
    Published June 2, 2013
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      In the connected TV market, the only thing that’s for certain is that no one knows what’s going to happen next.

      At the Connected TV World Summit in London May 22 and 23, Strategy Analytics analyst David Mercer saw an industry “moving in multiple directions,” he said in a May 31 blog post. The firm is now planning a major study on emerging TV behaviors and ecosystem changes.

      “The geographical, regulatory and cultural divides between the U.S. and Europe were as chasmic as ever, and never more so apparent than during the debate with U.S. pay TV operators Comcast, Cox and DirecTV at the end of Day One,” Mercer wrote.

      “After eight hours of hearing about the success of emerging services like Roku, Viaplay, SF Anytime and Netflix, the U.S. cable industry came across as reactionary and indifferent to the changes swirling around it.”

      While no one doubts that televisions are still the primary source of content, TV viewers are being broadly divided into one of two categories—the “lean-back loungers” and the “mobile snackers.”

      In a Strategy Analytics study that asked consumers whether they’ve watched TV content or movies via the Internet over the last month, during the third quarter of 2012, 72 percent of people said they had (up from 62 percent in 2011), 66 percent said they’d used a connected TV setup (down from 84 percent in 2011), and 38 percent said they’d watched on a smartphone (down from 50 percent in 2011).

      “The tablet is now the preferred TV consumption device for OTT video, beating both notebook and desktop PCs, connected TV devices and smartphones,” wrote Mercer.

      Although as speakers at the event confirmed, Mercer continued, “Tablets can hardly be described as ‘mobile’ devices: 90 percent of this consumption is happening in the home.”

      NPD Group reported in April that 87 percent of U.S. entertainment consumers say they use at least one screen while watching TV. Nearly 50 percent of the time, viewers are within reach of a tablet while watching. These viewers are now also being catered to with complementary content, and nearly 20 percent of those tablet users are either voting on something for the show or following or contributing to streams of comments.

      Mercer added that at the event, by 10 a.m. on Day One, he’d lost track of the number of times he’d heard Netflix mentioned, though there was hardly any talk of Apple—”a stark contrast to last year.”

      Apple CEO Tim Cook has repeated that televisions are in desperate need of being updated to the current decade, and that they’re an area of interest for Apple, but he’s promised nothing. That hasn’t stopped analysts from insisting Apple is at work on one and will deliver it soon. More optimistic bets were on 2012, but with that year behind us, 2013 is the new hope.

      Apple will have some kind of competition from Samsung, which has had an app store for TV apps since January 2010. Foxconn, which assembles Apple’s iPhones and iPads, is reportedly looking to diversity its business, if not also offer hardware under its own brand. According to a May 28 report from Focus Taiwan, Foxconn, too, will offer flat-screen televisions.

      At the D: All Things D event this week, Cook did say, though, that Apple isn’t interested in offering original content, but simply access to great content.

      As for Netflix, the streaming service made a successful bet, with House of Cards, that original content could be its key to bringing in customers and boosting its brand. On April 22, it announced quarterly revenue of more than $1 billion—a first for the company—and an addition of more than 2 million subscribers during the quarter, bringing its total to 29.17 million.

      On May 30, Netflix joined the Nasdaq 100 Index, replacing Perrigo.

      In summary, the Connected TV World Summit highlighted the “many and varied perspectives” in the evolving space, said Mercer. “I would not want to suggest a clear thread emerged.”

      Follow Michelle Maisto on Twitter.

      Michelle Maisto
      Michelle Maisto
      Michelle Maisto has been covering the enterprise mobility space for a decade, beginning with Knowledge Management, Field Force Automation and eCRM, and most recently as the editor-in-chief of Mobile Enterprise magazine. She earned an MFA in nonfiction writing from Columbia University.

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