Thursday, January 3, 2013

The Future of ACR: A Major Weapon in the Digital Video Ecosystem Arms Race

We’ve been talking about ACR (automatic content recognition) in blogs and at conferences for quite some time now (most recently, the 10th prediction for second screen trends in 2013).  For many players in the ecosystem (including consumers), the ability to trigger an event on the second screen based on what is happening on the first screen is somewhat of a holy grail of enabling technology capabilities.  But as we discussed at NAB in April and at IBC in September, this has so far remained elusive in terms of real scale for consumers reached because of the challenges inherent in each of the various approaches.

Let’s take a moment first to re-examine the prize that awaits the company or value chain of companies that can solve this problem:
  • Contextual advertising.  The holy grail for interactive advertising, allowing for placement of appropriate brand messaging not only based on demographics of the viewer, but based on what is happening on the first screen, reinforcing brands in immediate fashion.
  • Contextual commerce.  The opportunity to finally deliver the “Jennifer Anniston’s Sweater” use case by making buy (or want) clicks presentable with immediacy for the consumer.  
  • Enhanced contextual content experiences.  Delivering relevant information to the consumer when it is happening (the background music, explanation of that geeky joke in Bing Bang Theory, links to actor bios and director’s notes, etc) creating a more compelling super-fan experience.
  • Contextual and spoiler-proof social feeds.  Imagine being on the West Coast and not knowing the ending to your favorite show just because you are following it on Twitter, and then taking that to the next level and allowing for asynchronous connected experiences where social comments are available at the right time during the programming instead of only working well when the programming is live.
But is there more?  What are the business drivers pushing the ACR technologies forward?
  • Advertisers.  They need scale.  Today that means a technology which can span across multiple second screen apps to pool enough potential consumers to have scale.
  • Device makers and OTT content distributors.  Would prefer to have a proprietary ACR capability, allowing them to create enough value for themselves in the chain to insert some level of control and attract a fee.
  • Operators.  Would prefer to continue to use the same scale systems they use today to manage their subscribers, but are unlikely to reach out to 3rd party apps and experiences.
  • Broadcasters.  Would prefer to team up with their advertising partners and find a way to create scale, focusing on the interactivity and data reporting this technology provides.
  • Content creators.  Would prefer to have the best experiences for their content, focusing on fail over techniques when preferred methods are not available and to develop a system that allows them to publish to many ACR systems with as little cost as possible.
So where does that leave our industry in 2013?
  • Audio driven ACR will continue to remain the most prevalent.  It is relatively cheap and easy to deploy, even though it is perhaps the least effective at the consumer level.
  • Stream capture (NOC) ACR will begin to deploy in the industry.  Advertisers and broadcasters will team up with a few 3rd party technology and service providers that can create a triggering system that multiple apps can easily adopt and deploy.
  • Video driven ACR will begin to deploy, with systems in the devices working to using video finger printing to create event triggers—but this will face the same scale problems in 2013 that multiple second screen apps present today—lack of a large install base.
  • “OS level” ACR will create a digital video ecosystem arms race.  The industry will quickly realize that Xbox already has 40m+ active installs in the U.S. and that its SmartGlass platform gives it an immediate capability to deploy “OS level” ACR to any and all content (video, music, games).  Netflix, iTunes, and Google Android will not sit idly by to watch this unfold and will deploy systems of their own in early- to mid-2013.  The majority of Pay TV operators will be caught flat footed, with Comcast and DirecTV leveraging their currently very capable second screen apps to respond by late 2013 or early 2014.  However, the challenge this leg of the ecosystem war presents is that is requires and ability for the platform to work with multitudes of developers through a well-structured SDK and publishing system.  iTunes is already set up for this, as is the Google Android system.  Microsoft has already deployed an SDK and already has a publishing platform for Windows 8 phones, but Netflix will be the most challenged to respond in this fashion.  Additionally, the Pay TV operators will struggle to engage in this manner, preferring to attempt to develop solutions internally and to closely guard APIs as the gatekeepers rather than the marketplace operators they could become.
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