'We will change the way you watch TV forever.' As sales pitches go, this one has long since lost its lustre. Faced with a dizzying number of services and devices, viewers are seeking a more straightforward viewing experience, one that offers more intuitive, intelligent ways to choose what they watch.
The living room has become rather crowded. The TV screen that once sat alone, sacred, in the corner is increasingly likely to be internetenabled or connected to other devices, whether a games console or, as of July 2012, a YouView box. With virtual and physical platforms competing in a confined space, the battle is intense and the endgame blurry.
But if the variety of ways in which we consume television and the number of people watching services over the internet is increasing*, the revolution in how we watch television is slower in coming. It seems we are creatures of viewing habit.
Linear viewing habits unchanged
Olswang's latest convergence report, which has been examining digital trends since 2005, found that the traditional role of the broadcaster to make content available at a particular time is as strong as ever. These 'linear' viewing habits are not set to change anytime soon, especially as prime-time Saturday night series and sports still create 'big event TV' for group viewing.
Our convergence report did, however, identify a significant shift in television consumption that has implications for consumers, advertisers, broadcasters and content providers: namely, the rise in use of 'companion' screens.
The rise of social tv
Social television is already big in the US. A Nielsen survey in April 2012 showed that 87% of tablet users and 88% of smartphone owners used these devices at least once a month while watching TV. And TV shows are capitalising on this tendency. The most recent example is the USA Network's Suits Recruits, a largely Facebook-based interactive campaign that accompanies hit legal show Suits. Fans follow a webisode storyline, and assist the show's characters on a case. They can also take part in games and contests on both the Facebook page and the website. The current series interweaves the TV show's and webisodes' plots, making fans part of the storyline.
Social television is also starting to gain traction in the UK. App developer Zeebox estimates that almost a third of internet usage occurs in front of the TV, with more than half of viewers using a laptop to browse while watching the box. These figures are particularly interesting when you consider Zeebox sold a 10% equity stake to British Sky Broadcasting in January 2012.
Anthony Rose, the co-founder and CTO of Zeebox, has built an app that allows viewers to interact with their favourite programmes while watching TV. It uses the power of social networks and displays information in real time, allowing you to buy products, access additional content, and converse with friends about what you're watching.
Alongside its equity investment, Sky has integrated Zeebox's technology into its own screen applications. It means viewers will be able to control their Skybox through a smartphone or tablet, rendering electronic programme guides (EPGs) defunct.
In many ways we are going back to move forwards. Before, we sat with TV listing magazines in our laps to make our viewing choices. Now, control is back in our hands, but it's more intelligent.
Zeebox believes users of a second screen want three things: instant information on the programme they're watching; to find more episodes; and the ability to buy. For Rose, these behaviours will ultimately see the broadcaster acting as the distributor/ISP, while the content owner and consumer enjoy a much more direct relationship.
With contextualised ads that synchronise with live TV and display on companion devices, viewers will watch an ad on TV and be able to buy the product directly from their tablet. The implications for advertising and programme funding models could be profound.
If it's not yet clear who will benefit most from companion screens, or indeed how these relationships will be monetised, it is indisputable that data holds the key. The 'black gold' of the digital economy has already disrupted the traditional media-buying model, but we believe there remains a vast disconnect between the capabilities of mining data and what businesses are actually doing with it. Take Amazon. If you buy a kitchen bin from Amazon, you receive emails saying 'we notice you've recently been looking at kitchen bins'. But it must know that this is a once-a-decade transaction and that you recently bought one. Businesses will need to be much more effective to exploit the second screen.
Paying for television
Pay TV providers are waking up to the second screen phenomenon because they know they need to keep pace with technology. There has been plenty written, mostly prematurely, about the death of cable TV. After all, if you have a big enough broadband pipe and the right content, why pay for a subscription?
The experience of the UK provides a definitive response: customers say that if they had to cut their spending, they would find it hardest to do without pay TV. Viewers are more comfortable with a 'no surprises' monthly charge than a pay-as-yougo video-on-demand service. And the huge customer base of pay TV operators gives them a head start over the competition. It will take quite a big shift in the market to change this, but there is an increasing clamour for the 10 million viewers who don't subscribe.
Foremost among the propositions is YouView. The joint venture between BBC, ITV, Channel 4, Channel 5, BT, TalkTalk and Arqiva launched in July 2012. Viewers don't pay a monthly subscription but require a set-top box and broadband access to choose between 100 digital TV and radio channels. YouView is banking on the tendency for viewers to default to the BBC, ITV or their five favourite cable channels through brand loyalty. But once viewers have accessed their favourite internet brand channels through their internetenabled TV, the decision-making becomes difficult - and more interesting.
As the third most visited website in the world, YouTube is almost certainly among those favourites. And with more than 800 million unique users visiting the site each month, companies are tuning into its enormous potential. One such TV production firm, Shine Group, acquired online broadcaster and content producers ChannelFlip in 2012, its second digital business acquisition in a year. It was, more than anything, an investment in the power of its network of premium YouTube producers, who account for more than 500 million views.
YouTube's premium channels, and its move into original content creation (it launched more than 100 channels in 2011), are seen as hugely significant, especially for advertisers and brands who want new ways to reach consumers. Like Zeebox, YouTube is looking to capitalise on more personal relationships between programming and people's passions.
But as the world's giants - Apple, Google and Microsoft - compete on content, delivery and devices, the viewer sits back and wonders whether their world is getting smarter or just more complicated.
As one of 30 senior executives interviewed for our convergence report put it: 'This is revolutionary stuff with traditional behaviours. Perhaps it's time to press pause and reflect that our televisual needs haven't changed all that much.'