TV Widgets - A Revolution In Interactive Media

For those of us who watch the media landscape (and make our living in the entertainment business), the development of truly interactive television is an elusive landmark that has been slowly approaching for years. It has become almost a myth, with millions of dollars already lost because it failed to develop as quickly as many hoped it would.

In the past year or so, I have written fairly often on the development of the new generation of web-enabled TV's and the various deals being made between web-based companies and hardware manufacturers. It has been clear for some time that web-based media is finally heading for the living room big screen. This should be the key to real-time interaction between consumers and content providers. However, the actual mechanism for this interaction has not been clear -- at least not to me.

This article in yesterday's Hollywood Reporter gives a simple explanation of the missing link between consumers and big-screen web content -- it's widgets. With companies like Yahoo taking the lead, there is a quickly growing inventory of software widgets which will sit on the screen of web-connected televisions. These widgets will allow viewers to interact with the programming, or keep track of information unrelated to the programming, or engage in any variety of online activities without pausing the program or looking away from the television.

Up until now, a growing number of consumers have been simultaneously using their computers to access web content while they are watching their favorite programs on TV -- risking neck injury as they quickly look back and forth between the big screen and the small screen. This chiropractic dilemma will soon be solved as widgets will allow consumers to create custom web interfaces that sit in the corners or edges of their TV screens, allowing them to enhance or supplement their viewing experience in any number of ways.

From a business standpoint, the article outlines the cost of developing these software tools vs. the lack of a clear revenue stream. The revenue potential is obvious to me. This is the "buy" button that has been fighting for space on TV remote controls for years. Using the same payment system that powers pay-per-view (or pre-loaded secure credit card information or prepaid debit accounts or PayPal or any number of other methods), we will be able to order any product or service at the very moment it is being shown to us. We will be able to participate in game shows as the broadcast is unfolding. We will be able to engage in genuinely shared viewing experiences with friends on the other side of the room or the other side of the country. The possibilities are almost endless.

Read the article and then just think about it for 10 or 15 minutes and I bet you will have a half dozen great ideas for how this technology will be used. Those ideas are the basis of a huge business opportunity. Interactive television will be its own media category. Decades from now, these widgets will be looked upon as one of the developments that completely changed the media landscape. This has the potential to be as revolutionary as television or the Internet itself.

Recorded Programming Has Not Significantly Altered TV Viewing Habits. Will it ever?

Today's Hollywood Reporter carries an article on the impact of digital video recorders (DVR's) on television viewing habits. The article tracks a study on the topic, and makes a couple of interesting points.

First, although many homes (36%) now have DVR's as a part of the home entertainment system, over 90% of TV viewing is still done in the traditional linear sense. The programs recorded on the DVR are generally treated as alternative programming to be viewed when nothing better is currently available. In other words, viewers still ask "What's on?" and when the answer is "Nothing," then they turn to their DVR.

I'm thinking about what might drive that behavior. Perhaps it is the social aspect of knowing that when you are watching a program at its scheduled time, you're seeing it "first" -- at the earliest possible moment, along with millions of other viewers. It is an experience shared by the fans of that program - each in their own home, but watching together.

When you watch a recording of the same show at a later time, psychologically you know that those millions of other people already know what happened. You are no longer part of the "club;" you don't feel like a true fan of the show. True fans like to be on the cutting edge of the developments in our favorite episodic programs. The DVR takes us out of that club.

When other people are talking about the program at the office the next day, we don't want to be left out of that conversation. In fact, we will probably exclude ourselves from the discussion so we don't hear a "spoiler;" finding out what happened before we get a chance to see it for ourselves. We actually lose a real social touchstone by not having watched the program along with the other fans.

The other point which I found interesting was that even though many programs are available on Hulu or other services, 99% of programming is still watched on the television screen, and not on a computer screen. This doesn't surprise me as truly seamless integration of Internet-based programming into home entertainment systems is just emerging. (I had lunch with Jonathan Handel this week and he told me about a spectacular deal he got on a 1080p with integrated web access. With prices dropping so fast, that technology will surely spread very quickly.)

But when Hulu is just another channel on your television, will the true fans still have a desire to see their favorite programs at the earliest possible moment? Honestly, it's a phenomenon I had not considered before now. I have been assuming that digital technology would eventually eliminate the traditional TV model all together -- that programming would eventually just be produced and released for viewing at each consumers' individual leisure -- one giant YouTube of media. I had actually envisioned traditional broadcasting as a dying medium. In reaching that conclusion, I had completely discounted and ignored the social aspect of broadcast television.

Now, I remember sitting with tens of millions of viewers watching the final episode of MASH, knowing that I was likely part of the largest viewing audience ever. I remember the feeling of knowing that most of the country was simultaneously watching those images and experiencing emotions similar to my own. It was very powerful -- perhaps more powerful than the program itself. Yet, in the face of digital technology, I have been assuming that this "social event" quality of popular programs would be inevitably and easily sacrificed to personal convenience.

Sitting all alone at my computer, in a quiet house in the middle of the night, I am now forced to reconsider. Our actions are motivated first and foremost by our emotions, and perhaps there is an emotional component to broadcast television programming that cannot be recorded on the hard drive of a DVR or computer.

Cross-Platform Synergy Isn't Just an Advertising Strategy

A day doesn't go by without some media executive talking about "promoting a brand across all of our platforms." In normal person speak, this means, "I think we're finally figuring out how to make the Internet work for us."

Initially, I think traditional entertainment companies viewed the Internet as a threat (of course) and then as another place to advertise their films and programs. Now they are recognizing that digital media is not only a powerful tool to educate and attract an audience, but it has the potential to drive new revenue, as well.

The key is interactivity. This has always been the magic of the Internet. It is the only medium that allows instant, individualized feedback and action. You see something you like and - click - you're on it. This dynamic interactivity has given a tremendous boost to research departments. The instant feedback allows creative and media approaches to be adjusted almost on the fly in order to maximize impact and efficiency.

But even more important, digital media brings the impulse buy into the living room. Take a couple beats to think about that. When the programming on your TV screen is being served from the Internet, you have the capacity to see it and buy it, without leaving your chair. That is a development with enormous impact.

That was the holy grail that was envisioned a decade or more ago when the first "BUY" button was put on a remote control. As it turned out, those buttons never did anything. But now that vision is finally becoming reality. We have the infrastructure and the technology that has turned TV advertising into point-of-sale advertising. That's huge and it will be the norm, probably within a couple years.

Whether it's Tivo or the new Netgear box or the Netflix Roku box or one of the Vudu joint ventures with TV makers, or any other similar device. As long as it has an input from the Internet and an HD output to your TV, it is part of the revolution.

So, while the media producers are crossing their platforms, the guys upstairs are getting ready to sell stuff. When you can point your remote at the sweater on a Desperate Housewife, and it shows up at your door the next day, the decreased value of content won't sting the entertainment companies nearly as much.