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I Don’t Care About Internet & TV Convergence

I loved this Forbes Article. Because after 30 years working with consumer goods and technology, I don’t think tech companies have yet figured out how to listen to what matters for consumers.

Here’s some things they should hear:

—> TV works pretty well today. It’s fun, compelling and interesting. And the latest studies indicate that it’s paying out better than ever for consumers, for advertisers, for networks, and for cable systems.

—> People are watching more TV than ever. The internet has settled in their lives as the top secondary activity – replacing radio.

—> More channels don’t help. Looking at the jump from 75 channels to 250 channels, consumers told us they didn’t think more channels would help (they were right). The “what’s on” issue isn’t solvable by jumping to 6 billion channels. In fact, TiVO plus any of the many types of on demand combine to solve most of the problem. 

—> TiVO almost blew it – by focusing on their least meaningful value:  “pause and rewind live TV”. Fortunately their customers figured out you can watch what you want, when you want, and as you want. But TiVO’s mistake let cable companies bring out less effective DVR’s. If TiVO had known consumers, that would never have happened.

—> DirecTV also nearly blew it – by focusing on techie enthusiast value. They pitched digital picture quality and bunches of channels. But consumers were okay with the existing picture and had lots of channels. Eventually DirecTV discovered a better value:  offering passionate sports fans access to games they couldn’t get on cable or broadcast.

—> WebTV proved that browsing the internet and checking email is not an audience activity – it’s more private.

—> HDTV shows us picture quality is merely one of many factors. HDTVs offer three things:  (1) picture quality, (2) better convenience (size/weight), and (3) more attractive sets. I’ll bet that a majority of sets are bought to get a good looking big TV in the living room without calling Allied Van Lines to bring it in. Oh, and the picture is better when compared with than those crappy projector TVs.  

To be clear, it’s not that I don’t care about convergence. But if convergence matters, it’s not for it’s own sake.

It will matter because it delivers products that make consumer lives better – with better viewing experience and minimal hassle at a good value.

Copyright 2010 – Doug Garnett

Categories:   Big Data and Technology, Communication, Digital/On-line, Direct Response, DR Television, Human Tech, Technology Advertising, TV & Video

Comments

  • Posted: May 28, 2010 12:11

    Russ

    It doesn't matter if you care or not. The convergance is happening. You need to really walk into a Costco some time soon or read any tech magazine. Netflix on your TV so free movies with a small subcription. Hulu Free with no edits with a ad every 14mins (acceptable) Google TV coming up... Comcast will probably join soon and you will no longer have a box but login to get your TV streamed to your tv Streamed TV has a big advantage over regular TV for Comcast etc. It is called NUMBERS They can get REAL LIVE NUMBERS of exactly how many TV's have watched a comericial Program etc.. No more guessing.. And as you know DataMining and Selling informtion is BIG Business Neilson has made a living off of Datamining... The Intigration is comming and here to stay.... It is all about the Numbers..... You will soon have all Programs STREAMED Via Internet to your TV They have been working on this for years now....
    • Posted: May 28, 2010 14:26

      Doug Garnett

      All good points. And my subtle comment about "on demand" was intended to include these options. My point really is that the pipe doesn't matter - it's the consumer value that matters. And, people love having quick access to movies. That's a great consumer value. In the long run, the pipe that delivers them disappears. Thanks for the thoughts. ...Doug
  • Posted: May 28, 2010 13:59

    mark Burrell

    Interesting stuff Doug Although I;m not so sure about the internet being the secondary medium. I've read, and can speak for anyone under the age of 25, that they spend far more time online per day than in front of a tv. I also know that I haven't watched a network program or an ad outside of live sports in 5 years. I think the cable model is where it all seems to be going. Long tail stye in which a select group of loyalists will pay a premium to be catered to.
    • Posted: May 28, 2010 14:31

      Doug Garnett

      When I say “TV”, I include that combination of network and cable. Because to the consumer, it’s all a blurr. The question is: on what channel is the content I want to watch. I’m with you – I mostly watch cable content. Get really tired of creepy murders that dominate primetime network. (Although you’re missing 30-Rock.) I hear the “under 25″ discussion regularly (and I teach at the university here). There’s some cultural change. But the fact remains that tracking statistics show that viewership is high among all ages. What seems to be happening under 25 is that there’s more “dual-tasking” – watching TV while browsing on the internet. Thanks for the comments… …Doug
    • Posted: May 28, 2010 15:39

      Doug Garnett

      BTW, those TV viewing statistics and the internet study are quite reliable. If you like this stuff, there's an excellent series of studies last year from the Journal of Advertising research about all media and how they related. There's also interesting in-depth studies with in-home observation that are quite solid. One caution to take as well is that the "anti-TV" research is primarily funded by investors who make money when we all believe the internet is dominant. So, a large number of organizations stand to make money if they convince people of the idea (and they make money whether it's true or not). The investor research firms are the worst. Part of the problem is that people who are hyping alternatives have rarely worked in TV and certainly not in my direct response portion of the business. So they have never experienced TV's power. Imagine feeling the difference between accelerating in a prop plane vs. accelerating in the Air Force's F22. TV has that F22 power. We make TV advertising. What have I seen? TV rules. And the internet is extremely important. So is social media. ...Doug
  • Posted: May 28, 2010 16:12

    Lee Zell

    Doug, The next loophole to close is the convergence of current store bought hard disc music and videos owned by consumers and our viewing location. So many viewers are now enveloped into the DVR to go back and forth watching their multitude of favorite shows, downloads of movies and concerts that they really want all of their entertainment to be just that easy to review and choose what to watch tonight. This actually can or could be the same for user interfaces for all media. Adding the ability to watch, hear, or just experience the music or movie that you own or downloaded where you want it, when you want it is what is separating us from total submission to our desires. The missing link is getting the recording industry (movies, music, live concerts, and recorded TV) to realize the absolute ability to get ALL of their possible viewers is now capable but they just have to release the controls so that time and location shifting is acceptable to them for all of these sources. It is already to the mass of viewers through the limited window of a DVR and we are focusing our time on those sources that allow this and understand its possible magnitude. Lets open our minds and realize how large the world is when we remove the box!
    • Posted: May 28, 2010 16:46

      Doug Garnett

      Excellent points about the value that might be delivered for our music. Appreciate the comment... ...Doug Garnett
  • Posted: May 28, 2010 19:34

    Marty Zanfino

    Doug, I'm with you on nearly everything you've said. However, there are also other forces at work. The TV manufacturers need differentiation and the perception of being leaders. "We give you only what you need" is not a successful marketing strategy. Nor is "Just like last year's models but better". They need to keep pushing the envelope. Unfortunately, there is only so much TV manufacturers can do, as much of the control belongs to the content owners and delivery systems. So they will add features and technologies within their reach, such as 3D and Internet access in the short term and even thinner designs (via OLED technology) in the near future. Like many other leading edge features, they first start appearing in high end models and gradually trickle down. This is why I am certain that 3D and Internet access are here to stay. Whether they are used a lot is a separate issue. As they trickles down, they will eventually become expected features. By the way, 3D, Internet access and OLED are the obvious "next big things" that every TV manufacturer is aware of, and they won't be differentiators for long. The difficult strategic task is figuring out less obvious new features that will catch the competition off guard. Regards, Marty
    • Posted: May 29, 2010 13:35

      Doug Garnett

      I agree that the manufacturers are desperately searching for an HDTV follow-up. At the same time, it's clear that they'll only get high sales volume if they deliver value - not merely the Internet on your TV. Everythinjg I see says consumers need more value and they already have a better solution for merely accessing the Internet. Thanks for the comment...
  • Posted: May 29, 2010 12:29

    Kimberly Strong

    Doug I am interested in your thoughts on Mobile DTV and how it will impact tv viewership.
    • Posted: May 29, 2010 13:40

      Doug Garnett

      Excellent question. From what we've seen in the studies to-date, mobile DTV isn't likely to take away from traditional TV viewership. Instead, it increases viewing because people can watch in places and times when they couldn't previously. So despite the "TV killer" claims that are so popular these days, that means mobile DTV may increase overall TV viewership. Speaking of which, we should remember that the VCR was supposed to kill TV advertising. It didn't. The DVR was supposed to kill TV advertising. But the latest studies show it hasn't - and may have even increased ad effectiveness.

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