It appears Apple and Google are picking up where Netflix left off, before its Qwikster debacle, to advance universal interface for television by integrating all forms of streaming and static video.
Like Netflix’s original winning proposition, the latest TV iterations from Apple and Google are premised on the ease with which consumers can access any kind of video they want on any device. Anyone who has struggled at home using a routine remote to access a YouTube video on their living room TV screen, crisscrossed the walled gardens of a cable’s TV Everywhere and Apple’s iTunes, and played mix-and-match the video collections of Netflix and Hulu knows universal video navigation and access remains a big nightmare.
Google’s debut of a new YouTube app and original channels showcasing talent and targeted content, and providing a simpler search interface, is just the latest step to easy access to video on all screens. It is chipping away at the home TV screen, which is worth most because of the advertising dollars attached.
Google’s move comes on the heels of renewed anticipation since the recent death of Apple founder Steve Jobs about his company’s preparation of a new Siri voice activated search and access interface to revolutionise home television next year. All the false starts are partly rooted in stalemating by TV manufacturers. Replacing endless, mostly useless remote controls with a universal, voice-activated interface as seamless as all forms of video from screen to screen and the exploding economics that eventually will disrupt cable television’s stranglehold.
Google inviting third-party developers to do for next generation TV what they did for the Android phone is brilliant and necessary. It will advance everyone’s efforts.
But it is not about video content so much as it is about the billions of advertising dollars still tethered to conventional out-of-touch television. And the ultimate golden egg is the e-transaction — or sale — that is the end game of advertisers and marketers.
For now, U.S. mobile ad spending is growing 47% to nearly $2 billion next year and more than doubling to nearly $5 billion by 2015, backed by significant shifts in mobile ad spending by major marketers, according to eMarketer. Television remains the dominant media at more than $60 billion in advertising spending this year, according to ZenithOptimedia.
As the lines blur between viewing experiences, convenience, ease of access, and types of video (TV shows and homemade YouTube videos), the advertising dollars will be redistributed across the all-screen video universe.
Increasingly pervasive social media and networking will assist in the ultimate integration of universal video access and monetization. But it’s interesting to note that Google, Apple and Netflix wrestle with the social applications that will be critical to their mass video efforts.
It could be that the first one to align with Facebook wins that battle.
Facebook in particular is emerging as the premiere social network filter for creating value through “frictionless,” real-time sharing and transacting. It will constitute the majority of the anticipated $670 billion in global mobile payments anticipated by 2015, according to eMarketer.
Facebook’s new Timeline feature on user profiles is an interactive marketer’s dream and a create way for video-providers to interface with users as they mark their favourite movies, TV shows and other entertainment over the course of what Facebook founding CEO Mark Zuckerberg calls “the story of their lives.”
As Google, Apple and even Amazon continue down the universal video path, they would do well to heed the relevant hard lessons learned by Netflix and its founding CEO Reed Hastings.
- The most important: do not second-guess or manipulate the connected the consumer. You will lose.
- Disaggregating old and new transitioning technologies is a bad idea. Consumers clearly prefer to transition to new technologies at their own pace. (Netflix’s abrupt separation of its declining DVD mail-in business and its streaming video businesses is dramatic proof.)
- Companies must carefully and strategically help consumers, advertisers and related companies shift to new video dynamics at a natural, reasonable pace. Netflix lost more than 800,000 subscribers in less than two months because it failed to skillfully manage the two most important facts about the video evolution. Connected consumers love the convenience of watching video on their mobile devices. And they remain attached to the sedentary confines of their home televisions.
- Constantly study consumer behaviour and whims. Netflix presumed it knew consumers’ changing expectations. Constant vigilance and assessment are required. Monitor timely marketplace data and then do something meaningful with it. Create a framework to analyse, understand and immediately act on it.
- Study and respond to your ever-changing competitors; they will beat you at your own game if you let them. Or, you could make them your best ally.
- Be prepared for your entire business model to be upended. Even under the best circumstances, it will be.