TV's Second-Screen Migration: Intelligence Report - Stewart Schley-One Touch Intelligence

In our latest market intelligence report (available for complimentary download here), we offer a detailed look at Social TV, an emerging and promising market that brings elements of social media into the television business, with implications for content producers, video distributors, advertisers and research companies.

As those of us who attended the Social TV Summit last month learned, there's significant momentum emerging for interactive television applications that blend social/conversational media elements with in-program content to create a rich (albeit occasionally distracting) viewing experience.

If that sounds like the long-sought dream of interactive television pioneers, it is. But there's a big difference here: The screen where all the interacting is taking place is typically a handheld tablet computer or smartphone, not the television set.

"For decades people have been trying to scale ITV," said Lostremote.com publisher Cory Bergman during the summit. Now, he noted, it's happening through the "side" channel of independent, second-screen devices, and there is no shortage of enthusiasm over the pairing.

"We believe that five years from now everybody will be using a second-screen device," said Somrat Niyogi, CEO of the social TV application developer Miso. "No matter what you watch or when you watch it, we're all going to have a second-screen device. We all believe that."

Even the largest distributor of interactive applications for TV sets appears to agree. Yahoo Inc., whose Yahoo Connected TV platform is embedded into 8 million TVs (with 16 million projected by the 2012 first quarter), also is moving to embrace the smaller, mobile screen with a newly introduced application that moves many of its partners' applications to companion devices in addition to the mainstay television.

"You need to be wherever the consumer might be when they're sitting down to watch television," said

Russ Schafer, senior director of global product marketing for Yahoo Connected TV.

The dual or simultaneous-screen environment itself is not a new phenomenon. Television researchers began reporting about an organic consumer embrace of multi-screen multitasking in the mid-2000s when

surveys began to detect that large numbers of TV viewers were using laptop PCs while they watched.

Today, the movement is widespread, with a recent Harris Poll reporting that 44% of the U.S. TV audience typically engages with a social media site while watching television. Propelling that number are smartphones and tablets that are quickly supplanting laptop PCs as the device of choice for companion viewing.

Giving the category renewed appeal today is the combination of three important contributors:

· Smartphones and tablets support rich multimedia content in small footprint, companion devices that are well-suited for personalized conversations and interaction.

· Social media platforms including Facebook, Twitter and in-app conversational tools offer ready-made forums for real-time dialogue that have large user bases early interactive TV deployments lacked.

· Audio detection technologies automatically synchronize television output with companion content available on phones/tablets, creating a harmonious, integrated experience.

How they work: Second-screen, program-synchronized platforms push out program-related content optimized for smartphones, iPads and other tablet computers. Most rely on a program-detection technology such as Shazam's audio application that knows not only what program is playing, but what's happening at an exact moment. That allows content providers to link Twitter messages, rich media content and advertising to what's happening on the larger-screen television in real-time.

From a business perspective, in-program synchronization to second screens allows for networks to extend advertising inventory and impressions beyond the mainstay television broadcast, and/or to enhance their existing TV ad messages with interactive features. In an example cited by Shazam during a Social TV Summit presentation, two national commercials placed by the retailer Old Navy in 2010 extended their reach by applying a Shazam icon that invited users to browse for additional content through the application. Some 27% of those who did so ended up shopping for Old Navy merchandise, according to Shazam.

There are also opportunities for real-time advertising enhancement tied to commercials appearing on the larger TV screen. Because watermark detection and other program-recognition technologies also can sense what commercials are playing, it's possible to produce a synchronized second-screen experience tied to advertising messages. This was the approach taken recently by automaker Lexus in a second-screen sponsorship of ABC's Grey's Anatomy that produced impressive click-through numbers.

A drawback, however, is that scale is difficult to achieve. Not only must users be sufficiently compelled to download an application, they have to take the additional step of launching it while a show is being televised -- otherwise there's no way to synch the second screen in real-time. Shazam, one of several application developers with an audio-recognition scheme, thinks the breadth of its platform gives it an advantage here. More than 50 million devices in the U.S. are equipped with the Shazam application, a number that gives it unusual scale in a nascent category and helps to overcome a fundamental challenge: "It's difficult to get people to download an application," said Shazam EVP of marketing David Jones.

This excerpt comes from One Touch Intelligence's latest VIDEOTRAK ®InFocus report on Social TV, which is available in fullfrom the homepage of: www.onetouchintelligence.com. The report can be found in the "Featured Intelligence"section on this page.

About Us:Simply put, One Touch Intelligence transforms information into valuable insights. Today's business world is awash in information—more than any organization can possibly digest alone. Our analysts monitor all relevant material and filter, analyze and format it into understandable and intuitive reports for company staff. On top of that, our proprietary online intelligence portals bring all the articles and data you need right to your fingertips.

Stewart Schley is Senior Director of Industry Intelligence for One Touch Intelligence, a leading provider of competitive intelligence, business analytics and market assessment services for leading providers in the cable telecommunications, TV content and filmed entertainment industries. One Touch Intelligence's VIDEOTRAK™ intelligence service provides analysis and perspective around the online video sector. To find out more about VIDEOTRAK, contact Stewart at stewarts@onetouchiintelligence.com.

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