Social TV – Hype at its Low Point?
The social TV hype and the buzz around second screen applications are over. When we ask experts the question if social TV is “hot” or “not”, they tend to say “not”.
Companies are suffering. Beamly, established under the name Zeebox as a social network for television viewers, entered voluntary administration in August in Australia this year. IntoNow, which was bought by Yahoo, shut down in the beginning of 2014 . Many other start-ups that tried to make the television experience more social, including Matcha, Tunerfish, Screentribe and Bee TV, have shut their doors.
Does this mean that the era of spreading content and engagement on multi-screens and platforms is over – their relevance less important?
The first part of our blog series takes a look at the current state of the market and on-going changes. User behaviour is changing and demands different solutions for different platforms.
The State of the Industry
The conversation about changing media markets is hardly a new one. The production and distribution of content has transformed, as well as how content is consumed by users. While some of the print industries consider themselves a doomed sector, the broadcasting industry, too, is affected by fundamental transformations.
For years the biggest revenue share for commercial broadcasters came from advertisers: commercial breaks used to reach a broad mass of engaged TV viewers and potentials buyers. Changing user behaviour and market structures are threatening the ad effectiveness and as a result the business model of the broadcaster. The current business models within the industry are not working as effectively anymore and ask for innovative changes.
Additionally, new technology has lowered the barriers of entry for over-the-top television providers like Netflix. Netflix can be seen as a catalyst and driver for changing viewer behaviour by allowing viewers to watch what they want, anytime, anywhere. Over-the-top television offers over-the-top content, services and simultaneously attracts advertisers.
Moreover, platforms like Facebook, Twitter and YouTube are entering the market by providing dedicated tools for social TV engagement and engage with the consumer.
However, as the hype cycle by Gartner shows, the hype around social TV seems to be over. But this does not mean that multiscreen approaches are becoming less relevant.
It is definitely not the case that the connection between the Internet and television has become less relevant. Research finds that ‘TV [is] by far the most effective advertising medium’.
The earlier mentioned shift in viewer behaviour and market investments drive broadcasters to create, design and deliver multi-device and multi-platform content. Users want to enjoy content the easy way and not download different apps, create subscriptions and accounts to consume content. A good example is Channel 4, which bundled their social TV, live and on-demand service in their new 4now app, which is available on the web, mobile and smart TV’s. This automatically offers solutions for different advertisers on different platforms.
Success stories like those of Netflix and Hulu can be seen as a threat for the traditional broadcaster: they face declining advertising revenue and a decrease of viewers. They are not only threatened by competition from OTT services and VOD platforms, but also digital players like YouTube, Snapchat and Facebook who all battle for eyeballs.
This is why multi-screen is not just a necessary approach, but in fact a strategic requirement for broadcasters.
Multiscreen Strategies are essential
The new Ericsson report on TV and Media found that millennials are drifting away from watching content on the big TV screen and switching to other devices. They found that 16-34 year olds spend 53% of video viewing on smartphone, tablet or laptop.
The attention shift is a continuous process and makes it necessary to attract the viewer’s attention on multiple screens and devices. Multiscreen solutions allow the gathering of knowledge about the viewer through profile creation and this collected data allows programmatic advertising.
With knowledge about viewer and audience behaviour, personalized ads are becoming more valuable. This is also mirrored in the Gartner hype cycle: Programmatic advertising seems to have a bright future and: it only just started.
Clicks, views and visits can be measured in real time. Therefore, another challenge for the broadcasting industry is to identify an effective way to measure the gathered data and to find a way to utilize this data in real time to create and identify additional revenue streams. A big shift from the overnight ratings is happening.
An additional problem occurs from the user’s perspective: as mentioned, the attention towards the first screen, the TV screen, is going down. Research has shown that in the beginning of the 1990’s, the percentage of ads fully watched and hence getting a lot of attention, stood at 97%. Today, the percentage of fully watched ads has sunk to approximately 20%.
It’s not only necessary to increase the number of eyeballs, but to reach the ones not focused on the first screen. Applying a multiscreen strategy and creating cross-media content enables the implementation of new revenue models.
A range of multiscreen opportunities deliver new revenue possibilities for broadcasters: Whether building a long term relationship with customers or finding new forms of direct or indirect revenue – multiscreen delivers value. In part two of this series we discuss which forms of value we can identify and what role the relationship towards the user plays.
How we can help you
ComingNext.TV is specialized in working with broadcasters to define their next generation TV strategy.
New strategies to reshape the TV landscape while trying to blend offline, social and mobile activities into one coherent whole and start to build a long-term relationship. Contact us to find out more.
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