5 Comments

Summary:

TV manufacturers hope that by bundling developer platforms with TV hardware, they can move up the stack and increase margins on TVs. Just as mobile apps were pivotal in accelerating smartphone adoption, apps on the TV will usher in a new age of connected TV usage.

tv apps

A plethora of Internet-connected TVs were announced at CES this year, each with their own developer platform. TV manufacturers are hoping that by bundling developer platforms with TV hardware they can move up the stack and increase margins on TVs. Just as mobile apps were pivotal in accelerating smartphone adoption, the bet is that applications on the TV will usher in a new age of connected TV usage.

There are more than five major connected TV platforms today vying for developer attention, and there’s likely to be many more. The living room TV is an attractive market: TV alone is annually a $60 billion market, and that estimate doesn’t include the spending on console games also played on the living room TV. But so far, consumer adoption of Internet TV has lagged behind the hype; a bit more than 50 percent of consumers have bothered to connect their “smart TVs” to the Internet, and usage of the Internet platform among those who have is still low.

Today, manufacturers flaunt the number of TV units shipped to woo developers, but that number is largely irrelevant. For example, by market share Nokia is still the largest player in the smartphone market, but developer mindshare largely belongs to iPhone & Android because those have users that actively engage with the app platform.

The more users that actively use the Internet platform on the TV, the larger the potential audience a developer can actually reach. TV manufacturers should focus on several core areas to increase engagement with, and ultimately developer attention to their connected TV platforms.

1. Have a great zero-app experience. Don’t rely on developers to come and fill gaps. The out-of-the-box platform experience should be compelling enough such that a user actively uses the platform without a single app installed. This is where tight integration with movie and online video recommendation services can really help: Every time a user opens the connected TV interface, incredible, personalized content should be waiting for him or her.

2. Offer an incredible web-browsing experience. Leverage the fact that consumers already have favorite entertainment websites that they want to visit, and make it really easy to visit those sites on the TV. Google TV does a great job of this: They’ve implemented a version of Chrome on Google TV that works with most websites, and they’ve baked search directly into the TV. If you’re looking for something, it is just one button press away. In the long-run, websites will start offering more TV-optimized interfaces.

3. Innovate on the TV remote. Many consumers throw away their TV remote after connecting the TV to a cable box. Manufacturers like LG are rolling out “magic remotes” that offer improved ways to navigate the TV, while Google TV and Samsung let users control the connected platform with their phone. Remote innovations will spur innovations in application interfaces as developers will develop experiences that move beyond the simple ‘up/down/left/down’ right of traditional remotes, and make consumers less likely to toss the TV remote.

4. Help Developers Monetize. Enable developers to easily tap into mechanisms that let users pay for content and services, similar to iTunes on the phone. Partnerships with ad technology companies such as BrighRoll or ShareThrough to give developers turnkey monetization tools would also be helpful. Specialized ad networks optimized for connected TVs will likely evolve with usage of the platforms, but developers need a solid monetization starting point. This is especially important for large developers with existing audiences elsewhere; connected TV initiatives can only be a hobby if there is no reliable way to monetize it.

TV platforms are an incredible opportunity in the long-run for developers, but it will take substantial improvements of the core platform for it to really take off.

David McIntosh is founder and CEO of Redux, a social video recommendation startup.

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  1. Richard Bullwinkle Thursday, January 27, 2011

    Hi David,

    Can you please site your source for the 50% of users who have connected their smart TVs to the net? I have heard numbers more like 15%, so actually your number would be great news!

    Thanks,
    Richard Bullwinkle
    Chief Evangelist, Rovi
    @rbullwinkle

    1. Hi Richard – I heard internet activation numbers of around 50% from both the folks at LG and Samsung, and apparently that number is increasing as more Connected TVs are shipping with wireless internet capabilities. Please note that I was just referring to the internet activation rate – not the % of people who actively use the platform.

      That being said, published stats on activation rates are hard to come by, and it’s likely that the activation rate varies across different manufactures.

  2. Rick Mainstreethost Thursday, January 27, 2011

    I do not think the numbers are that high, it is on the verge of exploding on the market but it might take another year.

  3. Richard, I believe David’s comments are in the ball park. The companies that we do business with that have wifi-connectivity are seeing far higher (above 50%) connection rates than wired. Connectivity numbers are distinct and separate (much higher) from actual usage numbers. However, the actual usage numbers are growing quickly and that will radically change the television content landscape.

    Ken Reeves
    Vice President and General Manager, AccuWeather Television Network, AccuWeather, Inc.

  4. Metro Milwaukee Wednesday, May 11, 2011

    .
    I have deemed June 12th 2009 “TV Liberation Day.” In America that was the day the over-the-air (OTA) oligopoly was finally compelled by law to broadcast digitally which in so many words is a synonym for Internet Protocols.

    That was the day that has made it possible for the rest of us to now take part in that ~$60 billion in annual revenue which the OTT oligopoly and the corrupt and collusive TV manufacturers shared amongst themselves –exclusively– controlling what our own TVs could be or could not be used for; our own private property.

    Many people have much to say about TV Liberation Day but when all is said and done and for whatever reason it was done for one fact about TV Liberation Day is indisputable:

    TV IS A GLOBAL PLATFORM AND IS NOW WIDE OPEN FOR BUSINESS.

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