(The following post was written by Nova Spivack and Sanjay Reddy, founders of Live Matrix. Spivack will be speaking at our fourth annual NewTeeVee Live conference on Nov. 10 in San Francisco. To learn more about the show and to get your tickets, click here.)
The digital home is going to change the definition of television –- not just television programming, but the actual meaning and use of the physical TV. The digital living room will replace traditional TVs, computers and remotes with a set of connected screens on which content is going to be projected via mobile devices, tablets, a central in-home server or the cloud. The new TV will be a desktop, a tablet, a TV, a radio, a gaming screen, a digital picture frame, a stationary phone. It will change what we project and consume.
But what will content for the new digital living room entail? Third-party video will be a big part of it, but so will personal video and images along with audio, interactive chat and sales, to name a few.
When it comes to Internet-connected television, WWW really stands for What we want, When we want it, and Where we want it. If you consider the “what,” consumers think in terms of their interests: be it Lady GaGa, the San Francisco Giants, technology news or wine. And we want to know what’s going on with our interests on the web. Within the context of video, it means we want to have the choice of consuming all the relevant video around that interest.
The current frustration with cable is that it’s still based on mass audience, has very little customization in its schedule and doesn’t encompass all the video that’is available. The next iteration of integrated video programming will provide access to mainstream television programming along with web video.
Which brings us to one of the biggest questions about the scheduled aspect of video: the “when” part. There is live, pre-recorded and on-demand video. In most cases, video related to sporting events and news is highly perishable and consumers prefer live consumption. Outside of news and sports, most traditional TV programming is pre-recorded; it’s just the broadcast that is “live.”
This is why people have chosen to DVR and watch scripted programming after the fact in a lot of cases. There’s a push for big shows to be consumed live when you want to be part of the water cooler conversation or not have the outcome spoiled by the barrage of real-time show updates. For the rest, there isn’t much incentive to watch a show live if you have a DVR and don’t have the time then and there to watch it “live.”
That changes in a broadband environment that is interactive, as opposed to the unidirectional nature of traditional television. Look at the success of American Idol. Yes, Simon Cowell is entertaining, but it’s the faux interactivity that underlines the show that has generated the popularity. In a broadband world, the participatory element around shows is going to drive more live consumption because you now get a more social experience. The demand for an integrated, second-screen experience –- see the success of Miso, Philo and BuddyTV’s social TV applications –- will give way to a more integrated one-screen experience when people want it. That’s what the web will provide.
Who will be the content winners in this environment? Network programming has already evolved; look at the increase in reality programming as the cost of scripted shows goes up. So will it be death by a thousand paper cuts for network programming, as small groups of online video creators collectively accumulate enough market share to bring down the current incarnation of media companies?
We believe that consumers will always demand more –- of their technology, content and choices. Think of VHS or the early days of YouTube, (s GOOG) where sub-quality video was acceptable. Now people want to watch high-quality video streams, especially on their new HD TVs, which are only going to get better.
Incumbents can still be incredibly relevant for large hits, as evidenced by the music and gaming industries. We believe that the networks will start to create better and more pervasive online programming to supplement the one-stream broadcast show. You like Mad Men? Great. AMC will bracket the live show with complementary lead-in and lead-out online content, along with daily programming that’s available online. This complementary online programming could be outsourced to smaller production companies to be cost efficient.
The current World Series is a good example of the type of choice today’s broadband offers consumers. There’s live video streaming of the games on MLB.com, live audio streaming of the games on ESPN Radio (s DIS) and live online chats on multiple platforms. Today’s younger consumer avails of all three in different variations. This will be the norm in the near future in the digital living room.
And why stop there? Integrate fantasy leagues, related e-commerce ticket sales, merchandise or special offers, images from fans in the stands -– you could even wind up with authorized Flip Video streams that show you different views of a game based on where your “friend” is sitting in the stadium.
This is the world we are moving to. It will be one where TV is a combination of video streams from multiple sources, and the consumer has the choice to personalize the video stream(s) he chooses to consume at any point in time.
In a broadband-connected living room, apart from consuming different types of video, consumers will consume more than video. They already do this in terms of private sales, audio, interactive chat and much more non-video content. That’s our thesis with Live Matrix, and that’s why we believe our guidance approach is going to be the one that resonates with consumers as the digital living room evolves to a bunch of connected screens and the term “TV” loses meaning. It will be content and not just video/TV that will be what is consumed on those screens.