The 2nd Screen: Transforming video consumption - Q3 Update

Third Quarter, 2013: Impacting the 1^st Screen

The first 9 months of 2013 have been explosive for 2^nd Screen, though confidence by the trade press and investors has wavered somewhat during the summer.  Apps have continued to improve, new apps have kept coming, monetization evidence is in plain site through several engagement models, and the convergence of 2^nd Screen companion experiences and 2^nd Screen viewing experiences has continued to gain momentum.  The rise of the 2^nd Screen Ecosystem continues to be a blessing and curse for nearly all of the players in the video ecosystem, especially the content distributors and the brand advertisers.

In this brief summary, I am going to make references to our published research (“2^nd Screen: Transforming Video Consumption”, a 252-page report published during our 2^nd Screen Summit @ CES on January 7^th, and the Q1 and Q2 Updates of the same published on April 7^th and June 27^th ), as well as to blogs and conferences we have hosted and attended during the last 9 months.  However, the information should still be relatively coherent regardless of your attentiveness to those events. I have also included the introductory Executive Summary below for your reading clarity.

2nd Screen By the Numbers - Q3 2013 - an infographic

A review of Hulu Plus on Chromecast

I was probably as eager as everyone else in this business to investigate Hulu Plus on Chromecast yesterday.  As I noted in my previous blog, I think Chromecast is potentially the ultimate incarnation of the promise of second screen, giving the consumer the ability to use a device they are interacting with all of the time (smartphone, tablet) to Discover the program they want to watch, then using it to Control the first screen where by Chromecast takes over the stream management of what is being played and the second screen is then freed up for Enhanced viewing experiences and Social engagement.

Publishers and Advertisers Score with Ad Insertion Technology

Originally posted here (http://bit.ly/19f1iOq) and on the Unicorn Media blog.

Just a few years ago, sports fans had to either rely on their memories or wait for a sports roundup show on TV to review a crucial play or controversial call from a big game. However, now that more than half of Americans own smartphones and hundreds of millions of individuals worldwide use their tablets and mobile phones as portable media players, fans can see clips of amazing touchdown catches, incredible trick plays and game-changing penalty calls on demand.

You’d think these technological advances that expand the viewing audience would be a goldmine for the publishers that own the content. A broadcaster with the rights to footage of a balletic downfield catch, an impossible two-minute drive for the win or a fortunes-reversing penalty flag would have millions of eyeballs on that clip — and an opportunity to cash in with a spike in ad revenue. Advertisers looking to generate brand impressions would have easy access to a wider audience. But, it’s not as simple as that — or, at least, it wasn’t.

One factor that complicates the picture is that mobile devices come in all shapes and sizes and operate on a variety of platforms and networks. In the recent past, publishers who wanted to monetize compelling, time-sensitive content, like the latest sports highlights, had to isolate the relevant clip (which they could do fairly quickly) and then prepare it for viewing across multiple device types, networks and operating systems, which used to take several hours.

It was a labor-intensive, time-consuming process because, to format content to accommodate different devices, networks and operating systems, publishers had to break down the content into thousands of files, which then had to be stored and managed. Additional challenges arose around ad insertion, where lack of universal support technology made monetization even more difficult. By the time publishers dealt with all of these factors and stitched in ads, the clip was often old news, and the potential goldmine had been transformed into a cost center.

New technology now allows content owners to upload a video file one time and get a single URL that delivers content across all smartphones, tablets, connected living room devices, game consoles and operating systems, including iOS and Android. New ad-insertion solutions also make it possible for publishers to dynamically integrate ads into time-sensitive content, enabling real-time analytics and targeting.

With these new technology solutions, publishers can monetize and analyze content across all Internet-connected devices. They can seamlessly integrate content with existing ad-management systems and increase profitability through targeted dynamic ad insertion, providing a personalized viewing experience for sports fans on thousands of connected devices that use native-media players.

To maximize monetization, publishers can place pre-roll, mid-roll and post-roll ads strategically throughout the content and target users to generate additional revenue. By using the sophisticated cloud-based technologies that are now available, publishers can drastically reduce time to market, eliminate the need for client-side code, plugins or SDKs and eliminate ad blockers.

This means they can cash in on time-sensitive events like game highlights, buzz-generating clips of crucial plays and non-sports content, including breaking news, political-debate highlights and much more. These new technologies deliver a win for viewers, who can now get instant access to popular content on their mobile devices, and publishers and advertisers, who can now score big with ad-insertion technology that helps them capitalize on monetization opportunities with incredible speed.

- See more at: http://www.agencypost.com/publishers-and-advertisers-score-with-ad-insertion-technology/#sthash.oi6Ps6kz.dpuf

A Review of Google's Chromecast - Leveraging the Discovery and Control Powers of Second Screen

We have often discussed in this blog the 4 major features sets of second screen (To Control, To Discover, to Enhance, to Share - relevant research linked here and here).  We have also reviewed what Netflix was experimenting with for leveraging the 2nd Screen as a discovery and control device via DIAL (try opening Netflix on your iPhone while it is also running on your PS3, find the blog here).  Finally, we have predicted what a DIAL-enabled world might look like with its major backers (Netflix and YouTube) driving the protocol acceptance into every new device launch since early 2013 (DIAL blog here, 10 predictions here).

Well ChromeCast is the incarnate of all those opportunities and at the same time evidence of where the industry will head with rapid adoption.  While we have tried to tell the SmartTV industry that the best implementation for their platform is to be the launch pad for the stream, Chromecast demonstrates that use case out right.

Ad Supported Video's Potential Impact on Pay TV Providers

15 months ago, I wrote a blog in about the resilience of the Pay TV providers (Cable, Telco, Satellite) in response to the enthusiastic self-espoused "cable killers" I met at Greg Fawson's OTTCon in the Bay Area during March, 2012.  The blog (linked here) essentially described the forces as work in  both the TV and movie distribution worlds, where the money flowed, how people access content, etc.

Friday, industry stalwart Jeremy Toeman published a great blog (in his "rant" style) about people in the market place enthusiastically promising to "disrupt" the TV industry.  In a similar fashion he described where the ad money is placed, how it flows to TV productions and distribution, how much major shows like House of Cards cost to make, etc.  Fully agree with his points.

I do wonder though what happens when the forces of an ad supported TV economy on personal (digital, IP-driven) devices runs into the access provision economy built around gating access to TV and movie content.  As we discussed a week ago (link to blog), TVOD or transactional VOD came of age in the early- to mid-2000s, culminating with iTunes being the dominant player.  But the Pay TV provider industry countered with their own PPV and VOD services, assaulting the consumer on the UI where they are still spending the majority of their 37 hours each week--the plain old TV mostly served by a cable box of some sort (and yes, an ugly grid guide).  The IP-enabled OTT internet launched SVOD or subscription VOD services in the late-2000s, with Netflix taking the crown rather early and with Hulu and Amazon Prime now moving quickly to take their share of that market.  Cable's answer?  StreamPix (Comcast) and Redbox powered by Verizon.

Having moved on 4 or 5 years, we are now seeing Aereo assault the Pay TV providers by offering access to broadcast TV that used to be "free-to-air" for nearly all consumers, but became part of the cable package for them decades ago and became the "re-transmission drug" that all content creators got hooked on.  The obvious question here is what will Pay TV providers do to respond to the rise of AVOD or Ad Supported Video on Demand?  We have seen the TV content creators and primary distributors (the Networks like ABC, NBC, CBS and Fox) respond already.  They created Hulu after all in an effort to get closer to their consumer and to help AVOD get through the ad supported digital video market birth canal.  We've see them develop "free to air" TV windows in the US and in the UK, but essentially offering "catch-up" TV in these and other services, making the episode available 24 hours after the broadcast airing and then available for only 3-4 weeks before being "vaulted" again under a TVOD or SVOD window.  But what if the rest of the networks follow CW's lead and start putting their shows out on the iPad, Apple TV, Roku, and Xbox in an ad supported model without the requirement of a subscription?  What if they do the unthinkable and start simulcasting their content, attempting to improve their CPM mix with their advertisers by adding in the naturally higher CPMs a tablet can offer the distributor over classic broadcast because of the personal knowledge about that consumer.  What if Samsung or Amazon go all in with an ad supported video strategy, aggregating the content from the 4 major TV networks in an Apple-esque model where the content rights holder keeps 70% of the advertising revenue instead of the 50% often seen in channels today?  While the industry loves to write about a la carte programming, unbundling of content, and the impact of cord cutters and "cord nevers" on Pay TV providers, having simulcast access to ad supported TV may actually be the catalyst that changes the landscape cataclismically. As a consumer, you might one day be able to subscribe to MLB TV, the NBA Seasons Pass, or even the NFL (DirecTV's Sunday Ticket rights are up the end of next year) for your sports fix, subscribe to HBO Go and Netflix for your movie fix, and leverage Hulu Plus or a yet to be announced aggregated AVOD service from a major CE player like Samsung, Xbox or even Apple for all of your "broadcast" TV needs.  While I agree 100% with Jeremy Toeman's point that at the end of the day, the total money flowing back to content creators has to be the same or we will not have shows like House of Cards being created for $100m, it is very conceivable that the consumer's "$85 Cable Bill" is a mixture of SVOD services, sports subscriptions, and access to ad supported TV.  Looking at Amazon's assets (strong and growing TVOD and SVOD services already being offered), it would almost be obvious for them to make a run at this exploding market place by adding AVOD to their repertoire, allowing consumers get their content when and how they choose.  

Regardless of who brings it to market, it seems to be inevtiable that strong content discovery UX tools like NextGuide, BuddyTV or Vidora combined with "micro SVOD" services like HBO Go, sports league subscriptions, and an aggregation of transactional, subscription and ad supported content are going to change the way consumers access their 37 hours of content each week in ways we don't yet understand--and this is going to happen much faster than we think with mobile video forecasted to grow more than 25% per year thanks to the continued proliferation of smartphones and tablets in nearly every western market.

Conclusion?  I would expect the current Time Warner Cable - CBS battle over re-transmission fees to become the norm until the confidence in simulcast IP-delivered ad supported digital video rises to the point of revenue parity for the broadcast networks...and then the world will change (or at least the living room will).

An Explosion of Ad Supported Video on the Horizon

I am sure most of you remember the excitement in the industry when digital video downloads were just getting started.  While Curt Marvis had taken CinemaNow to market in he early 2000s, it was in 2005-2006 when iTunes hit the scene that serious investment started pouring into the space.  And then in early 2007, iTunes launched its TV episodic product and later that year Hulu launched.  While real transaction numbers started to build, I had a curious conversation with an Xbox executive who, while on one hand was excited at how well the Xbox Live Video Marketplace was doing, he was on the other hand dismal about the prospects for growth.  "If consumers are really watching 37 hours of TV a week, no one can afford $1.99 per episode to do it--that would be larger by far than even the biggest cable bills."

Renewed Investment in the 2nd Screen Industry

In the last few weeks there has been notable activity in the 2^nd Screen space.  Watchwith raised $5 million and ConnecTV raised $1.4 million.  In the Discovery space, Matcha closed its operations while Squrl and Vidora launched consumer-oriented services.  Yahoo bought Qwiki (for creating user generated 2^nd Screen content) and Samsung acquired Boxee (presumably to attack the digital video end of the living room).  And then over the weekend, billionaire Carlos Slim announced he was investing $40 million into Shazam to accelerate their pivot from a music service to a second screen TV advertising service.  So while we have predicting that the space would consolidate (with some evidence that consolidation is taking place), there is enough market interest in the growth potential of the space to attract new investment and new services.

2nd Screen by the Numbers Q2 infographic - ever upward

Q2 data points continue to reveal the trajectory of the 2nd Screen Ecosystem. 

- online video ads up 60% YOY in converged companion / viewing experiences

- iPhone and sports dominate social engagement

- over 100m adult Americans now own a tablet

Monetizing the 2nd Screen - the debate continues with "Cost per Touch" introduced

A few weeks ago in a blog post on the same subject, I presented the current approaches to monetizing second screen companion and converged viewing experiences in the market place.

Last Thursday, we had the opportunity to put the heart of the discussion to a live debate (audio available here) at the Jefferies 2013 Global Technology, Media & Telecom Conference held in NYC.  We had a "Star-Studded 2nd Screen panel" including Jesse Redness (@JesseRedniss) from USA Network, Tara Maitra (@TiVo) from TiVo, Adam Rymer (@MLB) from MLB, AJ McGowan (@UnicornMedia) from Unicorn Media and Rick Liebling (@RickLiebling) from Young & Rubicam.

Second Screen turns the corner towards monetization with clear examples in sight

In 2012, it seemed that everywhere I turned, analysts, pundits and critics were saying either the second screen was distracting or that while second screen usage seemed to be a new consumer behavior, those consumers were all just checking email, playing angry birds or on Twitter/Facebook.  Sometime in early 2013, the shared view in the industry seems to have changed, with some general level of acceptance of both the potential of consumer engagement in content and brands, but now there is a new skeptic demand--"Engagement?  So What. Show me the Money!"

The Masters 2013 - another strong showing for sports in second screen

Last year, the Masters 2012 had one of the strongest showings as a second screen app. Building on a converged experience use case (both as a companion experience while in the living room and presenting a viewing experience for consumers on the go AND for video footage not shown on television), the 2013 version has continued to emphasize its strongest features (the ability to follow your favorite players, get alerts when they are on live TV, the ability to see video recaps of their efforts, etc) and has developed the converged viewing experience opportunity even further (integrating "free" broadcasts and Pay TV authentication when appropriate).

The UI is clean and easy to navigate and the alert setup is well done (letting you know when you turn on live streaming to see your favorite players live).  While they still have not embraced the Social TV side of second screen, they are knocking the ball out of the park on delivering an Enhanced experience (Stimulating) and have used a converged experience to deliver the Control and Discovery feature sets.  Expect this trend to continue in dedicated sport event apps (Enhanced experienced combined with a Converged companion and viewing experience) similar to the other apps shown in this graphic (ie March Madness).

2nd Screen Sunday @ NAB 2013

With NAB Show just about to wrap up, we thought this would be a great time to recap Sunday's second screen event in Las Vegas.

Registration kicked off a little early on Sunday as were expecting "a few walk-ups"--we ended up with an incredibly long line that would not abate and actually had to start the program late to get the most of people into the room for Hardie Tankersly's keynote, which kicked off the event to standing room only of 350-400 people.

Hardie delivered a great keynote in a fireside chat format (lead by Seth Shapiro), helping the audience to understand why getting the metadata that powers the rich second screen applications syndicated to key partners is so important.  Those key partners joined Hardie on stage after the keynote to talk through the challenges and take audience Q&A.

We tested the waters with a "2nd Screen 101" session where we expected 15-30 attendees to join in a parallel program track--and were surprised when 100-115 joined the 45-minute session.  The industry is clearly now mature enough that we need to facilitate great thought leadership to at least two segments of participants: 1) experts who live and breathe this stuff every day, and 2) new entrants who are just starting to figure out what all the fuss is about.  Expect to see more of this type of content from us at our 2nd Screen Summit in NYC in late June.

iPowow, one of our newest members, delivered an incredibly engaging live second screen experiment during a technology spotlight, engaging the audience in 3 live voting scenarios and show the results live on stage and then showing the parallel scenario that was recently aired on a live broadcast with the same live voting technology.

Kit Digital launched their "2Si" social discovery platform at the event, with industry thought leader Alan Wolk on stage guiding the audience through the features and consumer use cases it was designed for.

We had an incredibly engaging session on the direction of the second screen app market moderated by Marty Shindler, with industry veterans such as Alex Terpstra from Civolution and Tom Engdahl from Magic Ruby trading views with Tracey Garvin from Sony Pictures Home Entertainment.

Joe Inzerillo from the MLB dazzled the audience for 30 minutes, taking all of us through an incredibly detailed case study of their MLB At Bat product and how complex it is to have the level of success they have captured as the industry's #1 monetized app in the iTunes Appstore.

That was followed by Andy Batkin moderating a very engaging sports panel with Tyler Slocum from the NFL and Joe Inzerillo from the MLB discussing their brand engagement needs with industry startups TOK.tv, Kwarter and iPowow.

Jason Kint from CBS Interactive Sports had the closing keynote, taking the audience through a Super Bowl 47 case study and reminding everyone just how far reaching second screen can be for major events and the brands that sponsor them.

The conversation over cocktails buzzed along for quite awhile before a smaller group broke off  to engage further in second screen dinner that was sponsored by Kit Digital and Civolution.

Finally, and perhaps most importantly, about 30 of us gathered in a conference room on Monday to conduct a 2nd Screen Society Advisory Board meeting, discussing and progressing key industry initiatives around the DIAL protocol for device access and ad agency measurements.

Add all of the focused action to the incredible buzz of the NAB Show floor (which seemed to scream 2nd Screen and 4k) and it was an 2nd Screen packed week in Las Vegas.

You can check out the Twitter engagement during the show (#S3NAB) and, for conference attendees, we will be posting the audio and presentations under a password protected link shortly (with an email notification).

Look out for our webinar series on "Successful 2nd Screen Strategies" and join us in NYC during CE week June 24-28 to continue the discussion at our 2nd Screen Summit NYC, jointly presented with Broadcasting and Cable.

@ChuckParkerTech
@S32Day

First Quarter, 2013: Are we on track? An update to the definitive research "The 2nd Screen: Transforming video consumption"

The first 3 months of 2013 has been explosive for 2^nd Screen.  Apps have improved, new apps have continued to launch, clear evidence of growth in the revenue associated with the market can be seen, and the convergence of 2^nd Screen companion experiences and 2^nd Screen viewing experiences has continued.

In this brief summary, I am going to make references to our published research (“2^nd Screen: Transforming Video Consumption”, a 252-page report published during our 2^nd Screen Summit @ CES on January 7^th), as well as to blogs and conferences we have hosted and attended during the last 3 months.  However, the information should be relatively coherent if you have been paying attention to the space even a little bit.  If you are attending today’s 2^nd Screen Sunday @ NAB, you will have the opportunity to buy discounted copies of the Executive Summary, Market Starter Pack, or the Full Report as required.  

1. Market Trends.  Perhaps the best way to gauge where the market is headed to look back at the predictions we made in the report (page 77 and in our blog on New Year’s Eve) and to see if we are on track:
1. The "digital land grab" continues, marked by consolidation,
   
   failure, and improved user experiences.  Well Viggle didn’t successfully complete the acquisition of GetGlue, but the market itself has continued to consolidate.  Dijit did acquire Miso, giving the consumer branded NextGuide app which excels in the “To Discover” segment a strong head start on developing its features “To Enhance” the consumers’ viewing experience after they have found a show.  Additionally, zeebox continues to develop its consumer feature set out as have other app notables (Yap.TV launched v.4.0, Turner launched a new March Madness app that was even better than last year, and the Super Bowl, the Grammys and the Academy awards all got their own bespoke app experiences for second screen).
2. Social feeds will be a feature, not the experience.  There has been a decent amount of debate in the blogosphere and at conferences, led by industry thought leaders Alan Wolk and Jesse Redniss.  Twitter is perhaps the best and most used tool for Social TV, but Social is only one component of the second screen experience, being aptly rounded out by the features making up the “To Control”, “To Discover” and “To Enhance” segments.  I am sure this debate will continue as Social TV continues to enjoy continued growth and press.
3. "Discovery" will become a household word.  Well, we’re making progress, but we’re not there yet.  Expect DirecTV, Dish, and Time Warner Cable all to make announcements around their platform discovery in the coming months and for start-ups like BuddyTV, Dijit (NextGuide), Yap.TV and Matcha to continue their progress as well.  While Digitalsmiths continues to make progress in the Pay TV and CE space, larger industry service providers have been making their push (Kit Digital, Gracenote) as well.
4. Tablet and smartphone usage reports will become about activities related to the TV.  Nielsen launched a social measurement service (after buying SocialGuide) and Twitter bought BlueFin.  More and more the statistics are pointing to behaviors while watching TV (shopping, looking for a show to watch, voting, etc).  Expect this trend to continue.  It is no longer a question of whether or not people use a second screen but rather what they are doing with them.
5. Studios and networks save money, apps grow in 2 directions.  We saw announcements around CES where CBS Connect and Fox Now are consolidating multiple shows into their consumer facing app.  More importantly, we predicted that these branded content apps would create alliances with 3^rd party apps like NextGuide and ConnecTV to expand their reach by syndicating their official metadata and content to promote a quality branded experience—and today Hardie Tankersly from Fox will be on stage to discuss exactly that.  
6. Gamification will begin to lose favor with the press and consumers, only to begin to add value again towards the end of 2013.  Perhaps it is a bit too early to weigh in on this trend.
7. Amazon and eBay will engage in a battle for the Second Screener's M-Commerce.  While Amazon is making progress with its “X-ray” feature for Kindle, there has not yet been a push from them on commerce and “Watch with eBay” is still massively under marketed.
8. Cloud-based digital lockers will finally be taken seriously by consumers and the rest of the ecosystem.  There has not yet been evidence of discovery platforms scanning or presenting results from the UltraViolet locker service, but there are now 11m accounts on record and Saffron Digital announced an end-to-end service in partnership with Akami for UltraViolet retailers.  Progress.
9. Device makers will jump into second screen with both feet.  Samsung certainly is “all in” on the concept, launching several second screen efforts to drive real connectivity amongst their smart phones, tablets and Smart TVs.  Expect Nokia, HTC, and Motorola to come to the party soon.
10. ACR and the battle of the digital video ecosystems.  Prior to CES, there had already been market rumors of Netflix working their streaming ecosystem towards a second screen platform.  Now that DIAL (owned by Netflix) is out in the open and supported by  Google, there is a real possibility that an open API system will decrease the cost and complexity for 3^rd party apps to connect to devices in the living room including Smart TVs and set top boxes.  Additionally, companies like Flingo are creating white label ACR ecosystems for smart TVs and other digital video devices, allowing the ecosystem owners to go to market quickly with a synchronized content capability.  Watch this space closely.
2. Market sizing.  We took a bold stance in our research report (page 55) on revenue in the 2^nd Screen space, claiming that 2012 had already seen $490m of attributable revenue from this market segment and the we expected the market to reach $5.9B by 2017.  When I stood on stage at CES to discuss this, I saw a lot of disbelief in the crowd.  We walked the room through the breakdown of mobile and online video advertising  ($6B growing to $17B) and m-commerce ($76B growing to $158B) and out logic for the incredibly small sliver of those markets that will be captured by 2^nd Screen experiences in the living room (forgetting the opportunities in the convergence place between companion and viewing experience).  Right out of the gate, Super Bowl 47 had press for CBS Interactive claiming to have sold $10-12m in advertising for the 2^nd Screen along.  Then the stats for living room shopping while watching TV started to pour in from various analytic agencies (very high percentages of smartphone and tablet owners are shopping while watching TV).  Throw in the content syndication model for apps sponsored by the NBA and MLB, and you quickly get a sense that this market is on a strong upward trend.
   
3. Consumer app experience.  To round out the Q1 view, we should look at what applications have significantly improved their feature set.  This is important because no matter what the revenue or business model is for a particular app experience or ecosystem, if the consumer isn’t engaged and using the app on a regular basis, there is no opportunity to attract revenue.

1. Events.  The Super Bowl (Keynoted today by Jason Kint), the Grammys and the Academy Awards all got their own bespoke app from their network sponsors.  March Madness upgraded their amazing 2012 experience to deliver an even more eye-popping 2013 app.  I would expect the Masters to double down on their strong 2012 showing and deliver an event better experience next week.
2. 3^rd Party Apps.  zeebox has continued to develop new feature sets for its app. 
   
   Yap.tv launched its 4.0 version and a Microsoft’s Xbox SmartGlass continued to expand its presence by launching an exclusive experience for The Hobbit.
3. Network apps.  Fox Now, CBS Connect, USA Anywhere and Bravo Now continue to improve their app experiences, with Fox and NBC distributing their metadata to 3^rd party apps to improve their branded content consumer experience across multiple apps.  HBO Go continues to invest in its converged 2^nd Screen companion and viewing experience app as Game of Thrones hits its 3^rd season.
4. Sports apps.  The NBA continues its great 2^nd Screen season, cleaning up on the Social side of the experience set and the MLB is just underway with a new set of features for MLB At Bat (presented on stage today by Joe Inzerillo).
5. Finally, converged experiences are continuing to
   
   be a trend, helping consumers manage the transition from the living room scenario where a companion experience is desirable and a mobile scenario where a viewing experience is what is required.  March Madness and HBO Go leverage the authenticated Pay TV network for their video experience and I am expecting the Masters to do the same next week.  MLB and the NBA give you the opportunity to have a “lite” stats-only experience for free and a paid subscription for viewing out of market games.  With significant advertising and subscription revenue at stake here (and the converged experience being highly desirable by consumers), expect this significant industry trend to continue despite its increased development costs.  Expect sports apps and premium branded subscription TV to lead the way forward here.

So a relatively short but very action-packed summary for nearly 100 days of market activity.

We are looking forward to continuing the conversation today at 2^nd Screen Sunday @ NAB, through a few webinars over the coming weeks, at our 2^nd Screen Summits in NYC on June and IBC in September, and, of course, through our blog and Twitter activity (@ChuckParkerTech, @S32Day).

Look out for the next major update on this comprehensive report on June 27^th in NYC.

Second Screen by the Numbers - infographic

How did the first quarter stack up vs. our projected growth of the industry?

Come join us in Las Vegas for 2nd Screen Sunday @ NAB this weekend to discuss from 1-6pm (cocktails follow).

We have a content-packed program being kicked off by Hardie Tankersly from Fox and being closed by Jason Kint from CBS Interactive Sports with a lot of great panels and presentations in between.

www.2ndScreenSummit.com

(if you have trouble with registration, please follow the instructions here)

• zeebox reportedly had over 3.7m
downloads and Viggle is approaching
2m active users
• 2/3 of Americans under 44 years old who
own tablets and smartphones are
shopping on them while watching TV
• NBA games have been garnering 1-3m
social impressions, making the games
consistently the highest socially active
events each week
• The Academy Awards, Grammy’s
and Super Bowl 47 each were given their
own “network developed” special
purpose app, helping to drive incredible
increases in engagement year on
year:
– 13m+ social impressions for the
Academy Awards
– 19m+ social impressions for the
Grammys
– 52m+ social impressions for the Super
Bowl

NCAA's March Madness Second Screen App--a great 2012 app made even better for 2013

If you haven't been paying attention to March Madness, then you may still appreciate this for the second screen value alone.  Last year, this app demonstrated one of the best UIs and second screen feature sets in the industry (see last year's review here).  Developed by Turner Sports, the app continues to lead the way in terms of a Stimulating or Enhanced experience and is leading the market in Converged Experiences (where the app behaves both as a Companion experience and a Viewing experience).

Examining Second Screen through the eyes of "TV Experts"

Last week, Noel Murray wrote a well-thought out piece on his recent second screen experiences called "The 'Second Screen': Is This App Really Necessary?"  He did a good job at describing what many consumers experience when they encounter new technologies or new experiences driven by technology.  Noel did a decent job of trying different apps during different major events (Super Bowl, Oscars, Grammys) and during every day television, but I think his logic erred slightly when he made his conclusion.  Let's briefly examine.

First, he describes himself as someone who does not understand the seemingly popular desire to participate in social media (whether Twitter or badge driven experiences like GetGlue).  But as Noel himself states, "But the second-screen phenomenon has become increasingly difficult to ignore."  That fact that this is a phenomena means by definition that it is a change in consumer behavior--perhaps fueled by social media or perhaps by the uber-availability of smartphones and tablets, but it is a set of activities that many people are participating in despite the fact that most experiences are poorly designed.  Now that is powerful--imagine what might happen if the consumer was consistently presented with a strong UI/UX--it might be like the change in smartphone usage when Apple entered the market place and created the first experience for the "everyman" vs. the techie.

Second, Noel does a good job at working through what feature sets he would like to see as a consumer himself (though he is self-admittedly a niche demographic).  He starts to describe "Stimulating" features to Enhance his viewing experience.  When we look at most consumers, we find that they tend to pick up a device in the living room for 1 of 4 major reasons: 1) To Control the first screen (think of your classic remote), 2) to Discover something to watch (either an archaic EPG or a sophisticated Discovery app), 3) to Enhance their viewing experience (the companion experiences Noel desires), and 4) to Share their experience (yes, the Social TV aspect of second screen).  While I agree that not all of the apps Noel tried are great at Stimulating features (to Enhance the viewing experience), the apps he did try do have some strengths.

Finally, Noel comes to a conclusion that the apps he tried didn't seem to solve the use cases he was after and seemed to be trying to solve problems he didn't have, and that the networks are just trying to slap a logo on top of Twitter and Wikipedia functionality to call it their own--which presumably leads us back to his title that the app isn't really necessary.  And this is where I think the error in logic exists.  What we know is that a very large percentage of consumers who own smartphones or tablets are engaging in second screen behavior.  We know that the majority of "developed" experiences need improvements, but that a majority of consumers tend to find an app better than a self-developed collage of Wikipedia and Twitter experiences (otherwise apps on Smartphone would never have taken off and we'd still be using a web browser on our small devices instead).  And as to the intention of the publishers of the apps (very often the TV networks or 3rd party start-ups), we can rest easy in knowing that regardless of the business model intent, no app can succeed that does not first create utility or entertainment enough for the consumer that they come back to it on a continuous basis.  So, rest easy Noel.  This nascent market will find its way forward and app user interfaces and user experiences will improve, and you will eventually be able to point to your own use cases desires and say "There is a second screen app for that."  

And for the industry, this is a great reminder that the user experience is paramount to any particular apps success.

If you are interested in more discussion about this topic, join us at NAB on April 7th for 2nd Screen Sunday at the Encore Hotel in Las Vegas 1-6pm (cocktails follow).  If you would prefer to read about it, I would encourage you to check out our 252-page research report on the subject at www.2ndScreenSociety.com/research/

@ChuckParketTech
@S32Day

Robert Tercek: Inventing the Future of Second Screen

Last Tuesday, a little over 250 industry professionals gathered for a 2nd Screen Summit in Beverly Hills.  No one in the audience had any idea that they were about to see the most thought provoking keynote presentation on the future of TV and Second Screen.

Robert Tercek has been "Inventing the Future" of media and entertainment throughout his 25-year career.  He is passionate about inspiring audiences to seize their own destiny by thinking creatively and taking decisive action. His business strategies are informed by his personal experience as a pioneering executive for MTV, Sony and OWN, and as an entrepreneur in disruptive startup ventures.

Special Purpose vs. Multi-screen: the second screen debate continues

We've spent time in blogs (including this one) and on conference panels debating the subject: as the industry evolves, will there be one app "to rule them all" or will the market evolve into a collection of specialty apps for major events or niche interests?

The Oscars and Second Screen

I am not sure how you felt about the Oscars, but while the show was entertaining, I felt like there was a seriously missed opportunity between how the brands were advertising and how social media and second screen was being used.

Need a #SecondScreen companion for the Oscars and the Red Carpet preshow?

This is going to be a great test of "special purpose" vs. "multi-function" apps and I would love to get feedback / comments on my blog (below) or on Twitter (@ChuckParkerTech, @S32Day, hashtag #2ndScreenOscars).

My wife is hosting a Red Carpet and Oscars party and I plan to run a few iPads and a Samsung 10.1 Tab 2 on a mixture of different apps to see what the reactions are.

On special purpose, here is what I will review:
- The official Oscars app. Last year it sported 6 camera feeds for the red carpet preshow, but also sported some technical glitches. High expectations this year.
- E! Live from the Red Carpet. Tend to a do a great job at all of these events.
- TOK for Oscars. I love their Football and Baseball app (think of 2nd Screen and Skype voice combined) and am very curious to check out their Oscars version.
- The Oscars Guide and Awards Hero (both have voting and tracking features).
- The Race to the Oscars (from the Hollywood Reporter).

For the multi-function apps, I will be spending time with:
- zeebox. They did a great job on the Grammys and Golden Globes--I am expecting more here.
- ConnecTV. While I am still getting used to the new UI, they have promised a special Oscars experience.
- Shazam. Continue to develop their features and functionality in this space.
- Viggle. Gamification / trivia -- earn rewards while you and millions of others watch.
- IMDB. Also promising a special experience for the Oscars.
- BoxFish. I am interested to see what they do with their live speech to text capabilities.
- GetGlue and IntoNow. Hugh "check-in" numbers--curious to see what they do beyond that.
- Yap.tv. Tend to have a decent social and stimulating experience for most shows.

Share your experiences with me on the blog, on Twitter, or live on Tuesday at the Beverly Hilton (1.30-6pm) at our 2nd Annual 2nd Screen Summit in LA (www.2ndScreenSummit.com)

@ChuckParkerTech

Can second screen drive renewed growth in home entertainment?

On Tuesday, we will gather with industry peers to learn the latest developments and engage with thought leaders in a discussion around 2nd screen’s impact on how we interact with our home entertainment consumer.  To begin the dialogue we’d like to emphasize the opportunity Second Screen presents to you and your business to help revitalize the home entertainment industry by giving the consumers an experience that is worth buying (vs. renting or subscription).  We are also suggesting that we unite to create a visual marker that tells the consumer both the movie or TV title and the app will deliver an enhanced companion experience that promotes the proliferation of a 2nd screen ecosystem that is available to the consumer when they buy an UltraViolet enabled title digitally or on Blu-ray Disc.  The premium experience we collectively create is a reason to buy, helping to promote UltraViolet in the process and ensuring the success of a feature rich ecosystem with the distribution power of today's physical and digital retailers.

The 2013 Grammys and Second Screen

Last year, the Grammys were the most social single event of 2012 with over 12 million social impressions.  CBS just released their stats confirming that the 55th Grammys were the most viewed Grammy show since 1993, with over 28 million viewers on CBS.

But for second screen, I cannot honestly say we made a huge leap forward in the last 12 months.  Somethings are better, some worse, and some continue to be interesting to watch as consumer engagements around the experiences drive the market forward.

The interesting:  This was the 2nd opportunity we have had recently to really test "special purpose" apps vs. 3rd party "multi-function" apps.  CBS deployed an updated "special purpose" app for the Grammy's a few weeks ago (with updates coming just a few days before the event itself).  zeebox, Viggle, and E! Live from the Red Carpet lead the "multi-function" effort for this type of event.  As a consumer myself, I can't say the special purpose app was significantly better than the 3rd party apps--in fact, because I am now used to the UI of zeebox, Viggle, and E! Live from the Red Carpet, I actually found them easier to use.

The negative:

• It was still time delayed by 3 hours for the west coast.  While some apps (Viggle for example) tried to keep out spoilers, most second screen apps didn't--and even my CNN app kept telling me who the winners were before I turned it on.
• The broadcasting network (CBS) had a very busy UI/UX with too many spoilers (including photos of the winners) that should have been better than third party apps like zeebox or E! Live from the Red Carpet.  They seemed to have attempted to make the web and tablet experience the same (perhaps to save money), but watered down both in the process.
• Most of the focus was around the "social" aspect of second screen, with little attention being paid to the "stimulating" side of the experience (unlike the Golden Globes and People's Choice awards from a few weeks ago, which were great at both).

The positive improvements:

• For consumers looking for an enhanced viewing experience, zeebox did a great job during the event, though it could not stifle the time delay of tweets.  They were not in the US last year. 
• Viggle did a decent job of managing the time shift and offering consumers a quiz-based experiences throughout the show that was decently compelling--this didn't exist a year ago.
• The E! Live from the Red Carpet app gave great pre-show experiences, mostly improved from 2012's efforts in many ways.
• The program itself paid more attention in on-screen graphics and commentation to Social TV (mostly Twitter) and Second Screen, which I think is great for the industry in total.
• There were decent showings from Shazam and GetGlue (neither of which did much last year), though some good app experiences from last year seemed to have waned in their efforts.

What are your thoughts about "special purpose" vs. "multi-function" apps?

Feel free to comment here on this blog or on LinkedIn in our 2nd Screen Society forum.  Or just reach out to us on Twitter @S32Day or @ChuckParkerTech using the hashtag #SecondScreen.

Want to continue this discussion live?   Come see us on February 26th at the Beverly Hilton for our 2nd Annual 2nd Screen Summit in LA 1.30-6pm, with cocktails to follow.

5 great reasons to join the 2nd Screen Summit in Beverly Hills on Feb 26th

I was catching up with an old friend today in LA, discussing the latest with second screen, and how the market is growing so quickly.  He made a curious comment, and then asked a pointed question,  "Second screen seems to be only really valuable for ad supported television.  As a home entertainment executive, why should I come to a conference about second screen?"

While I can think of a very long list of reasons as to why I believe second screen matters to both live and on demand content, I thought I would answer this important question with five points:

Second Screen market growth evidence: 53m Tablets ship, Twitter wins the Super Bowl and buys BlueFin

So Twitter "won the Super Bowl", bought BlueFin and last Friday we heard that 53m tablets shipped worldwide in Q4 of 2012.  So what?

When a bird breaks through its shell to be born, the world shouts its a market "revolution", but the tiny bird itself has been making progress steadily for a long while--more of a "rapid evolution" with one very publicly acknowledged milestone.

How was your Second Screen Super Bowl 47?

On Thursday, we suggested a few apps you might want to try out during the Super Bowl to see what kind of enhanced and stimulating experiences the market has dream-up for such an event.  How did they stack up?

Dijit Acquires Miso, the second screen consolidation continues

Dijit, the company lead by CEO Jeremy Toeman which has developed second screen apps NextGuide and Dijit Remote TV, has announced the acquisition of GoMiso, Inc, developer of the Miso second screen app and its signature SideShows.

Are you ready for a Second Screen Super Bowl? (#2ndScreenSB)

The big game is on Sunday and by now everyone has been reading articles about how 36% of viewers plan to use a second screen as a companion to the big game.  With 84% of Americans planning to watch the game from their (or a friend's) house, this is a second screen industry opportunity like no other.  We are even being told that the CBS has sold more than $10-12m of advertising on the second screen alone (forgetting the $3.5m per commercial for the 1st screen).

Connected TV Ad Revenue, Monetizing the Second Screen

When is the last time you saw some really good information about how well advertising is working on digital video through the first screen?  A connected TV is a TV that able to deliver OTT content from the major services (iTunes, Netflix, Hulu, Vudu, Amazon Instant and Prime, YouTube, etc) by either being connected itself (SmartTV) or by being connected to another device (game console, OTT device, Blu-ray player, etc) that can deliver that content service.

The graphic below represents the results of a study commission by YuMe which was presented at the 2nd Screen Summit at CES by Ed Haslam, their VP of marketing.

Netflix's DIAL and the Second Screen Ecosystem Battle

One things is certain about the second screen industry--it is rapidly developing.  As we have discussed at conferences, over cocktails, through dinners, and in this blog (recently including 2013 trends, the coming ecosystem war, and our comprehensive industry report), one of the biggest challenges to deploying a second screen app is to create consumer utility.  That means the consumer needs to find more reasons to pickup that second screen with your app than with other devices (eg Harmony One remote) or app options.  While there are a wide range of apps chasing Social and Stimulating feature sets for  companion second screen experiences, there are an equal number of players trying to solve Discovery and Simple control of the first screen.

The real challenge with this approach is getting the content to launch on the first screen.  If you are the Pay TV operator, controlling the first screen is "easy".  If you are the game console or CE device manufacturer, it's also "easy"--you own the protocols.  But if you are a third party app, trying to create consumer utility (and hence value) by allowing him/her to search across multiple video services and launch their chosen content to that service on the first screen--hard.  Today, most of them are becoming adept at launching the video content onto the second screen itself, deep linking into the Hulu, Netflix, YouTube, or Amazon Instant Video app directly, but only a few third parties have mastered multiple devices for the first screen (eg BuddyTV)--and most of them only work with Live TV.  Imagine the complexity in the living room: you have 5 different devices by now that have Netflix or Hulu installed, so even if you could talk to anyone of them, how do you launch the right device and get the main screen to switch to that device?

Enter Netflix and DIAL.

Taking Social to the next level - TOK Football

We've been gathering together to watch live sports in the living room for many, many years.  As our society has become busier, travelled further apart, and gotten socially reconnected with our geographically diverse friends, we have used Facebook and Twitter to stay in touch, comment on the score of a game, and even talk some trash.  But nothing replaces live conversation as well as the conversation itself.  If you don't believe that, check the monthly minutes plan on your phone or review Skype's usage explosion.

So if you wanted to watch the playoff games last weekend with your good friends who happen to be in different cities, you can use several sports related second screen apps to post comments on plays and scores or you could open a Skype multi-party session to experience the trash talking, but what if you tried to combine the two experiences?

Meet TOK Football.

Speaking a common Second Screen Language - Launching the 2nd Screen Lexicon

When we sat down for our first advisory board meeting last June in NYC, we discussed which topics and challenges to try to tackle as a team, where the issues were on one hand not competitive and on the other hand would genuinely help move the entire second screen ecosystem forward.

Within a few short minutes, we were in a heated debate over what second screen was or wasn't.  It is very tough to work together without a common language or lexicon.

So we worked with more than 40 advisory board members to develop an initial set of 25 terms  that we felt like were the "25 Essential 2nd Screen Terms" to deal with the problems facing all of us now.

Second Screen and the 2013 CES

We kicked off the 2013 International CES show last week on Monday with a 5-hour, program-packed 2nd Screen Summit--working hard to get the "right" people on stage and in the audience.

But was CES the "2nd Screen CES" we predicted it would be in mid-December?

Watching The Golden Globes with Second Screen or The "multi-function" app vs. the "special purpose" app

If you read the news much, you would have seen E! Entertainment pushing their updated second screen app in a big way for Sunday's Golden Globe awards and you would have seen NBC and others pushing zeebox for their second screen experience.

We thought this would be the perfect opportunity to explore the "multi-function" vs. "special purpose" app debate that we (as an industry) debated last Monday during CES at the Second Screen Summit and that we explore in our recently published market report on second screen, "The 2nd Screen: Transforming Video Consumption".

2nd Screen Society announces definitive Second Screen market research study

"The 2nd Screen: Transforming Video Consumption" written and produced by The Intersection LAS VEGAS   — At the 2nd Screen Summit at International CES today, 2nd Screen Society Chairman Chuck Parker introduced data and details from his new research study: "The 2nd Screen: Transforming Video Consumption."  The 250-page document details the current state and five-year projections for this emerging marketplace, which the researchers estimate as a $490 million market today and expect to reach $5.9 billion by 2017.

Created by The Intersection, a research company owned by Parker and TV technology executive Renaud Fuchs, and published by the 2^nd Screen Society, the report presents both the global market size and segmentation of the hundreds of consumer facing apps in the market place, the build-up of the market sizing, a deep-dive on the technology driving this space, the latest trends and case studies on the leading apps in the market. Additionally, the report will cover how consumers are using their 2nd screens as 1st screens both in and out of the living room, as TV Everywhere strategies come into full effect in the consumer market place. "With 35 million tablets sold during the holiday season in 2012 and an estimated 40% of all television viewers now enhancing the experience with a 2nd screen, this is clearly the trend to watch for 2013," Parker explains.  "What can you expect to see in 2nd screen developments in 2013 and who are the current leaders?  How will the giants of today’s video industry respond to this challenge?  We answer these questions and more in this report."

The in-depth study covers everything you need to know about 2nd screen: 

• The technology status and future developments: how ACR and the “system level” 2^nd screen platform from Xbox SmartGlass will have significant impact on the marketplace
• A segmentation of the market and a scoring of hundreds of companion apps: that are used to control, discover, enhance, share and multi-task.
• An analysis of the players in the ecosystem: why studios and TV shows focus on enhancement and pay TV operators focus on control.
• A full-blown usage analysis, business models and market sizing with detailed data to 2017.
• A detailed review of the Top 50 apps:  what works and what doesn’t and identifying key feature sets
• A detailed look at trends and future state of the 2^nd screen market
• An 18-month detailed forecast:  describing trends we believe will have a short-term impact on this emerging marketplace for applications and 2^nd-screen technologies.
• A deep review of second screen as a viewing device

For more information about the research study visit: www.2ndscreensociety.com/research.

The 2^nd Screen Society represents over 40 technology leaders who are committed to collectively advancing the creation, production and adoption of content applications, devices and distribution systems within the new 2^nd Screen Engagement Ecosystem.  The Society is managed on behalf of its members by MESA, the Media & Entertainment Services Alliance.

To find out more about the Report and the Society contact Chuck Parker at: Chuck@MESAlliance.org

Digital Video By The Numbers, Q4 and 2012 Infographic

It's getting harder and harder to pull apart "Second Screen as a Companion Experience" and "Second Screen as the First Screen Viewing Experience".  The living room and the tablet are converging so quickly.

• UltraViolet has 7m subscribers, but only carries 59% of the Top 100 titles and 50% of currently popular video titles
• Best Buy / CinemaNow launched a Disc-to-Digital beta last week
• Flixster's iPad experience now has download capability--giving UV consumers the opportunity to travel (without a laptop)
• While HBO Go, Hulu, and Amazon Prime are garnering press, the traffic shows that Netflix out streams them nearly 30 to 1
• Netflix has now tied HBO in total subscribers (albeit with some international ones)
• Xbox is the underestimated player in the digital living room with 30m subscribers and a recent commitment to launch 40 new content channels
• The Wii U deployed multi-screen services for its platform and promises to combine it with its second screen controller and then "TV will never be the same"

While everyone know Netflix, Hulu, HBO Go, and Amazon Instant Video (as an app), have you tried Matcha, NextGuide, Flixster, or Plizy?  Interested in case studies on great apps that help consumers discover and watch content on their tablet?    Click here

Join us at the www.2ndscreensummit.com today at the Wynn (1-6pm, cocktails to follow).

Second Screen by the Numbers Q4 and 2012 Infographic

As we head into CES Monday, I thought I would post a teaser of some of the data we will present at the 2nd Screen Summit (held at the Wynn, 1-6pm, cocktails to follow).  2012 was certainly one helluva year for second screen, finishing with a "tablet Christmas" which delivers us into a "second screen CES".

See you Monday.

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.