CES 2011: And the Walls Came Tumbling Down. The Year CES Became a Content Show.

By The Myers Report Archives
Cover image for  article: CES 2011: And the Walls Came Tumbling Down. The Year CES Became a Content Show.

Quick, answer this question: Is Intel a technology company that manufactures chips or a content distribution company? The answer, according to Intel executives at last week’s Consumer Electronics Show in Las Vegas, is both. The walls that separate technology, content distributors, content producers and marketers have come tumbling down. That was the clear message in conversations with executives from Intel, RIM, Motorola, Sony, Samsung, LG, Microsoft, Panasonic, Logitech, Invidia, Toshiba and others, who focused on their roles as content portals and distributors as prominently as they displayed new tablets, 3D, gaming and connected home technologies. The sea change driving this integration is Wi-Fi Internet access that is now being pre-installed in almost all televisions, gaming consoles, mobile devices and obviously in all computers and tablets that are being manufactured today. While cable, wireless and satellite operators will continue to be the primary link between consumers and their favorite content, consumer electronics manufacturers are no longer delivering dumb boxes that wait for other links in the chain to deliver the content. Many of the leading consumer electronics manufacturers touted their direct relationships with TV networks and studios, Netflix, Google TV and YouTube, Boxee, Roku, Facebook, Epix, Starzand others. Content is being pre-packaged into the new connected TV sets even before they leave the assembly line.

The implications are enormous for first screen access, app-based TV guides and services, interactivity, research, the battle for consumer attention, and much more. A key player in this transformation is Intel, which embeds encryption data into its chips along with content-access to assure intellectual rights protection and control.

A not-so-subtle message was being communicated to the hundreds of leading marketers and senior media agency executives roaming the CES floor: “Marketers are content producers and need to understand, explore and enter into content distribution agreements directly with consumer electronics manufacturers.”Not only do marketers need to develop relationships with an expanding array of media companies. They also now need to develop the competencies to negotiate with a new set of consumer technology manufacturers who are disintermediating the traditional media/agency/marketer/consumer/researcher relationships.

If you question my interpretation of this year’s big news from CES, consider that Verizon chairmanIvan Seidenberg shared the stage during his keynote address with Time Warner chairman Jeffrey Bewkes, Motorola Mobility CEO Sanjay Jha, and Google engineer Mike Cleron. Bewkes was there to reinforce his TV Everywhere strategy as Motorola and Google introduced the show-stopper Xoomtablet with Google’s Honeycomb operating system; Seidenberg explained how 4G wireless technology would solve perceived limitations on broadband video access.

Marketers attending CES this year (who paid attention) realized they need a radically new perspective on their role in the media ecosystem. Coca-Cola, Pepsi-Cola, Unilever, Procter & Gamble, Johnson & Johnson and other marketers that are producing consumer-facing websites, video content, branded entertainment and social media initiatives must now understand the transformed reality in which consumer electronics manufacturers are elevated to a central role in the content distribution ecosystem.

The automotive industry was also at this CES in force, and not just to show off new technology advances under the hood. Ford, General Motors, Audi and others were at CES to reposition the auto from a tool for transportation to a mobile entertainment and information center. GM announced that On Starwill be available as an aftermarket product available in all cars. Ford expanded its MyFord Touch/Sync entertainment, information and user-interface system. Cars are satellite and Internet connected, enhanced video, gaming and audio entertainment and information centers. They are GPS and navigation enabled Wi-Fi hot spots that are a new hub for marketers’ direct connectivity to consumers who are on the road.

The car is now a consumer electronics product and part of the content distribution ecosystem.

Auto manufacturers are now natural partners with content distributors like Netflix and Boxee, content studios and networks, web content producers and social media. Marketing and media-like partnerships between car companies and marketers such as McDonald’s, Burger King, Wal-Mart, Safeway, Best Buy and many others cannot be far behind.

The expansion of business opportunities was not lost on Hollywood producers and agents touring the CES floor. Producers, talent and others are no longer solely dependent on the networks, cable and satellite companies and studios to package and distribute their clients’ content. Many have launched independent content on the Internet. Expect Hollywood agents to be making deals directly with CE manufacturers.

Marketers need to understand the new connected TV, in which online integration is seamless and always-on, where marketers can deliver specific offers and immediately track results. “We can bring the capabilities to the market; it’s the business models that lag,” commented an Intel executive.

I came to CES this year with low expectations that I would see anything that was a game changer. I was far too pessimistic. In this week’s JackMyersThinkTank I will focus on some of the technological advances that are truly changing the television viewing experience. But beyond technological innovation, I experienced a shift in the force that will have resounding impact on the media and marketing business (and not just the hundred Star Wars storm troopers that appeared at the Panasonic booth to promote the Star Wars series on Blue Ray.)

Marketers can no longer look at their advertising and media partners in the same way. Traditional relationships and organizational boundaries restrict and prevent effective management of the new connected-everywhere marketing ecosystem. Marketers are in the content business, whether they are prepared or not. Those who are proactive in identifying, acknowledging and aggressively exploring the new partnership opportunities will be far ahead in managing their business realities of the future. Genevieve Bell, the Australia-based cultural anthropologist for Intel, commented during a CES panel, “Ideas, technology, resources and people are flowing rapidly across borders bringing new concepts and ideas with them.”

If there is one single imperative in business today that CES brought clearly to light, it is that media technologies are tearing down traditional corporate organizational and business boundaries as forcefully and dramatically as the Berlin Wall was torn down. Maintaining artificial and outdated hierarchies, structures and relationships without a complete review that incorporates new realities can no longer be considered the safe path into the future.

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