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Is the era of the Set-Top-Box behind us?

I don’t know about you but my cable box or set-top-box drives me absolutely crazy.  The pipes are old, the system is strained, and the cloud is still a puffy thing that drops water sometimes.  Not to mention I now have 3,000 faster and cooler ways to go find mind numbing content.

To stop the hemorrhaging, the cable industry needs to figure out how to seriously increase value for subscribers.  All too often new interactive television cable technologies focus on new ways to generate ad revenue instead of investing in user interface and performance.  Some of this new technology will generate massive amounts of data about subscriber which is seriously awesome (trust me) and scary (but definitely more awesome).  It’s awesome because soon you and your neighbor will be watching the same program on the same channel and see completely different commercials through internet like targeting (no more Cialis and Viagra for me).  It’s awesome because soon you’re going to log into your guide screen with a four digit pin and have an incredible totally customized, maybe the better word is curated, dashboard at your fingertips.  It’s even more awesome because you’re going to be able to buy, interact, and share things you see on TV just as seamlessly as you do on the web by taking all the heavy processing out of the box and into the cloud.  All made possible by that thing we mentioned at the beginning of this article, the set-top-box.

In order to make any progress cable companies must collect data on you.  The difference is that cable is much older than the internet; there was time to actually regulate it- The Cable TV Privacy Act of 1984. GET OVER it people, you’re out there both overtly on social media and indirectly with credit cards, text messages, and simple web navigation.  All those experiences have become better, companies use big data to evolve their thinking.  They look for patterns to predict the future and figure out what you as an individual care about most.

None of this magical substance called data will ever be collected without subscribers.  The subscription fees and ad $$ will not flow to pay to for all these cool innovations if people leave for over the top content.  You’ve all heard the hype about connected tv’s and the likes of Hulu and Netflix.  I’ll spare you for now but beware the spice must flow.

So what’s next anyway?  The truth is that the cable industry, advertising industry, and importantly the tech industry have no freaking clue.  Everyone is throwing the proverbial shit against the wall and hoping it smells worse than the next guys.  I think that one thing is for certain; your television will never get replaced.  This main screen in your home will always exist, you may get more of these screens and most of the surfaces in your house might actually BE screens but that only means more televisions.

The key will be WHAT feeds the content into the televisions of the future.  Will it be cable operators? Gaming consoles (Xbox for $100 with subscription)?  Connected TV’s?  Apple TV (lol)? Over the top? Youtube $100 million spend on original content?

TV Watching is Not Passive Sometimes Passive

Let me begin by saying I am not a “second screen hater” as Amritha describes.  In fact second screen, third screen, and …nth screen is the only path that makes any sense for media.  Which screen will rule them all?  Now that’s a question for another epic.                            

That said all-or-nothing TV claims drive me totally crazy.   First of all it is nearly impossible to categorize television viewing into one extreme or another regardless of how convenient it may seem for the interactive scenario.  This is especially true when the claims are based on focus groups and journals since actual consumer viewing behavior is notoriously different from reported viewing behavior.  Regardless my issue isn’t with how people engage when using second screen devices, it’s really with the misleading title that greatly oversimplifies TV viewing habits.  This type of oversimplification and overgeneralization currently plagues interactive TV media buys and is one of the largest contributors to a pessimistic perception of the technology.                                     

There are in fact many significant (in the GRP and Ad Revenue Sense) circumstances where Television viewing is passive and STB data proves it.  Cable operators have introduced a variety of Interactive Overlays reaching over a wide range of networks.  Everyone from Comcast to Verizon and Dish has some form of the same technology that enables viewers to click on an overlay (EBIF or otherwise) and interact with :30 content.  Each time an interactive overlay appears and is clicked behavioral data is collected about that viewers’ action.  Without going into specifics, there are clear differences in engagement with this type of technology by network, day part, and even down to the program.  Let’s take two examples, ESPN and MSNBC.  How do you (or your colleagues, friends, family members) typically watch this kind of programming during the day.  I bet if you peek around to adjacent offices on your floor TV’s are tuned to these channels all day whether or not there is anyone watching.  This is only a small example and it can be extended to daytime programming like soaps.  All this kind of ‘TV viewing’ is background noise while people move through their day.                         

Based on the ESPN example people assume sports programming is a poor place to interact with consumers.  In fact it’s the specific nature of ESPN programming that makes this sports network a poor place to try to engage with viewers not sports as a vertical.  Live sports events like the NBA All Star game or pretty much any major league game generate huge engagement with EBIF enabled (or comparable technology) :30 second spots.  My point is just that over generalization and simplification is a dangerous game to play, by making such statements the power of interactive TV gets diminished.  Interactivity with viewers has its place, when viewers are actively watching TV.  Otherwise the promise and power of interactive TV to connect viewers to advertisers fades into the background.