A recent study by J.D. Power and Associates reveals that only 11 percent of consumers purchasing HDTVs are motivated by 3D capabilities.
The “2012 High Definition (HDTV) Report” was released last week, based on research of 1,000 consumers who purchased HDTVs during the past year.
Price is often a factor, according to Sara Wong Hilton, a director at J.D. Power and Associates. Another is the requirement of special media players or 3D glasses, which many find to be an irritating necessity and expense.
“The study said that 75 percent of customers surveyed gave price as the primary motivation for making their HDTV purchases,” reports TV Technology. “This was followed by brand reputation (60 percent), positive reviews (37 percent), past brand experience (36 percent), construction quality (33 percent), styling (29 percent), and ease of use (21 percent).”
“Half of the customers responding to the survey said they purchased 41- to 50-inch sets,” adds the post. “The poll also showed that LCD displays were more popular than LED or plasma models and that Vizio led the field in customer satisfaction, scoring 887 on a 1,000 point scale.”
Maxwell Wessel discusses the inevitable disruption of television in a guest blog for Harvard Business Review. Wessel is a member of the Forum for Growth and Innovation, a Harvard Business School think tank focused on disruptive innovation.
“Periodically, technologies or business model innovations allow start-ups to enter industries offering services that are generally cheaper and more accessible, but of far lower quality,” he writes. “However, over time, these start-ups tend to invest in performance improvements in such a way that allows them to displace industry incumbents.”
Already, for a fraction of the cost of cable, consumers can subscribe to streaming services such as Netflix and Hulu Plus, which may not have all desired content, but are becoming increasingly viewed as “good enough” alternatives.
And as more people opt into these disruptive services, “the big studios and distribution companies, armed with their outrageous overhead structures, will be unable to compete with small production studios designed to leverage novel distribution channels at much lower cost,” writes Wessel.
But he also notes that a change in the overall ecosystem will be difficult (though not impossible and still inevitable) because it is currently built around “multi-billion dollar wire infrastructures” and a consumer base in need of high-speed wireless Internet access.
Change on a massive scale will happen slowly, according to Wessel. “Academics have noted that disruptive cycles take place over periods of 15-30 years. Even if those cycles are faster than ever with the ever-falling costs of distributing information, educating the public about new ideas, and producing innovative products, it will still be a number of years before we see meaningful change.”
Television networks are experiencing a change of heart, recognizing the additive potential of digital platforms and no longer viewing them purely as a threat to ratings, reports Variety, noting that broadcasters are now leveraging new platforms to boost on-air ratings.
Where before top networks would never offer new TV pilots on VOD or online streaming prior to the broadcast debut, Fox, NBC and others are now releasing full-length shows before their TV premiere.
“At first blush, the gambit holds out the possibility of cannibalizing audience by giving the viewers most likely to watch a show’s premiere a reason to opt out of the TV exhibition window, where most money is made through ratings guarantees to advertisers,” explains Variety. “But the flipside notion taking on increasing currency is that advance screenings could be the best way to generate buzz, converting early birds into grassroots marketing machines.”
The article also notes the potential to create damaging negative buzz, making the move a somewhat risky proposition.
“On demand is now becoming a meaningful platform for networks to find audiences and sampling for their shows,” says Comcast executive Matt Strauss. “That’s a pretty fundamental shift in how programmers have historically looked at on demand.”
Comcast has released new data that suggests a connection between early exposure on video-on-demand to increases in ratings on linear channels.
Last year, Fox debuted “New Girl” online two weeks before the on-air premiere and saw 2 million views before the show hit TV. There was some concern that all this traffic would reduce ratings, but “New Girl” still had a strong premiere. The network is slightly tweaking its online rollout; online or VOD offerings are now available almost a month before the on-air premiere but are taken down some time before the debut.
UPS has placed $2 million of faith in same-day delivery service Shutl. The company will use the investment to “expand its engineering team, sign up new retail partners and prepare to launch in the U.S. early next year,” reports AllThingsD.
Shutl offers 90-minute delivery windows as part of its retail partnerships. Customers can also pick a customized one-hour delivery window. All deliveries are same-day as purchase.
“We’ve spent this last year taking Shutl national across the UK; now we are ready for the U.S., a market that we estimate will be worth around $26 billion by 2016,” claims Shutl founder and CEO Tom Allason.
As more consumers shop online, the demand for premium, fast shipping services has increased. Amazon’s Prime Two-Day Shipping allows customers to pay an annual $79 fee for unlimited two-day shipping. Amazon reports it now ships more items with this service than with its Free Super Saver service.
While eBay has also experimented with same-day shipping, Amazon maintains it has not found an economically efficient way to employ the service.
In a recent survey conducted by market research company Lab42, it was found that 66 percent of consumers prefer Web retailers to brick-and-mortar stores and about 73 percent of survey participants do nearly half of their shopping online.
“Shopping online allows us to skip the lines, crowds, travel expenses and the hassle of parking,” notes Mashable.
The Web can also be a great place to find bargains. Nielsen recently reported that nearly half of all U.S. smartphone owners regularly use shopping and deal apps such as eBay, Amazon, Groupon and LivingSocial.
“About 45 million smartphone owners access shopping-and-commerce apps each month,” details the post.
Lab42 created a great infographic to help visualize the data. One interesting statistic: “45 percent of online shoppers have bought something online that they would not buy in person.”
Recent numbers indicate that smartphone sales have surpassed PC sales, “meaning that smartphones are rapidly becoming the most common device connected to the Internet,” according to Business Insider.
This is affecting habits both within and outside of the work environment.
Apple is winning at mobile enterprise because of the rising BYOD (“bring your own device”) culture in the workplace. According to Goog Technology, more than 72 percent of its clients had a BYOD program, offering “formal support for users to access corporate information on their personal devices,” notes the post.
The iOS platform is becoming increasingly popular in the workplace, reports Business Insider: “Between 65 percent and 74 percent of all new phone activations per quarter for the last year and a half have been with iPhones, according to Good Technology.”
That data is even more tilted in Apple’s favor when it comes to tablets. The iPad is the clear favorite, responsible for more than 90 percent of all tablet activations.
“Don’t count the competition out: IT departments are growing to accept Android, as they work through some of the complications — such as more device types and platform updates — presented by Android,” explains the post. “And Microsoft, of course, still has many strengths in the enterprise and an aggressive new product strategy to build on them.”
Nearly 100 million tablets were sold in 2011. That’s a big number, especially considering the tablet craze only began with the launch of the first iPad two years ago.
“Tablets and smartphones will not completely displace PCs. But they will quickly overwhelm them in terms of unit sales,” suggests Business Insider, adding that “when, where, how and to what degree this occurs will have tremendous implications across many businesses and industries.”
According to a report from BI Intelligence, it’s estimated that tablet sales will reach 400 million units by 2016. The report offers four reasons:
1) “The average sales price of tablets are falling.” Even the all-powerful iPad’s price has dropped 11 percent since its launch in 2011. This drop has much to do with the introduction of the mini tablet by Amazon and the likely appearance of more such devices soon.
2) “Increased penetration in existing markets. Increased adoption will be driven by falling prices and the tablet market’s subsumption of the e-reader market, which sold more than 20 million devices in 2011,” writes Business Insider.
3) “Tablets are disruptive.” Tablets are far better for media consumption than any PC and are cheaper alternatives for consumers.
4) “Multiple emerging markets are ripe for tablet disruption.” The report notes that “tablets have only started making their way into the enterprise — a hardware market that will top $420 billion this year.” It mentions education as another opportunity, noting that “U.S. K-12 schools spent about $5.5 billion on textbooks in 2010, and college students spend hundreds of dollars per semester on textbooks they’ll only use once.”
Even amongst the giants of music streaming, financial situations are unstable. Both Spotify and Pandora, two streaming services with millions of users, are losing money because of music royalties, according to The New York Times.
“Pandora, which went public last summer, has never had a profitable year, and in its most recently reported quarter lost $20 million on $81 million in revenue,” writes NYT, also reporting that “Spotify’s accounts for the last year, recently filed in Luxembourg, show that it lost $57 million in 2011, despite a big increase in revenue, to $236 million.”
Pandora, which offers both free and paid services, relies most heavily on advertising for revenue, but can’t earn enough to offset its royalty costs. “Last year, Pandora paid $149 million, or 54 percent of its revenue, for ‘content acquisition,’ otherwise known as royalties,” notes the article.
Spotify was able to earn 83 percent of its revenue from subscriptions, with 4 million of its 32.8 million users paying the $5-$10 monthly fee rate.
Its royalty negotiations with labels are private, but “Spotify’s chief executive, Daniel Ek, has said that the company had paid in its history about 70 percent of its income ‘back to the industry.’ But a closer look at its recent financial statements shows that the ratio may be even higher,” reports NYT.
It’s difficult to predict what might solve the music industry’s issues, as declining sales over the past decade make it difficult to imagine record labels will lower their royalty rates. “But the graveyard of failed digital services, and the financial struggles of Pandora and Spotify show that the music industry hasn’t yet figured out the balance between licensing costs and how much money a digital service can make,” concludes the article.
Bloomberg L.P. expanded its analytics offerings with the launch of Bloomberg Sports in 2010. The service now serves 25 Major League Baseball teams, will launch a soccer-based service in the United Kingdom in September, and offers a fantasy football tool called Decision Maker 2012.
President of Bloomberg Sports Bill Squadron expects “to be within all major sports in two years, maybe three on the outside.”
The company’s most successful product to date has been its tablet application for Major League Baseball players. The application offers video of upcoming pitching opponents, including individualized videos of past performances against opponents.
The soccer application targets fanatical soccer supporters and betters in Europe. The app will use metrics, statistical comparisons, and projections to aid betters.
Squadron told Mashable that the growth of Bloomberg Sports has essentially followed his projections, and that when he formed the entity he had planned to establish a presence “in baseball especially, then build a platform that could be expanded to other sports from there.”
Created ten years ago by MLB Advanced Media, the online video service MLB.tv has since become one of the most successful video services, earning millions of dollars in revenue for its popular baseball content.
MLB.tv’s success is due in part to its devoted fans. The first game offered on the service — NY Yankees vs. Texas Rangers in 2002 — had 30,000 viewers worldwide.
“Those 30,000 fans have turned into millions of fans across the world and that little experiment is now a mega-million dollar business,” GigaOM reports. “Since its launch, the service has broadcast 1.5 billion live video streams and has accumulated a total of 3.7 million subscribers.”
The service also rose to the top by being ubiquitous. Offered on a variety of platforms and devices — from Apple TV to the Kindle Fire — MLB.tv is available to customers no matter how they access their content.
“So far in 2012, MLB.tv has seen 27.3 million mobile live video streams,” notes the post. “In the first week of 2012 baseball season, MLB saw 3 million downloads of its At Bat 2012 iPad app. At present there isn’t a professional sports league that holds a candle to MLB’s online arm.”
According to new figures from Nielsen and Kantar Media based on TV viewing data from ad targeting company Simulmedia, many U.S. TV advertising campaigns are failing to reach a “large portion of their target audiences,” reports the Financial Times.
The data shows that “in many cases as many as three-quarters of marketers’ TV ad impressions are viewed by just 20 percent of their target audiences,” notes the article.
Multi-million dollar campaigns for Axe body spray and Progressive insurance, for example, are falling far short of expectations.
Even as viewing habits are changing, “TV ad spending remains the bulk of many companies’ marketing budgets,” explains the article. In fact, U.S. advertisers are still expected to allocate 42.2 percent of their total spending to TV ads this year, a figure up from 39 percent five years ago.
While the allocations are still proving to be profitable, a change should be considered in light of those evolving viewing habits, says David Cohen, global chief media officer at Interpublic’s Universal McCann.
“When you are sitting fat and happy, there is not a lot of impetus to make a change,” he suggests. “But I am fairly certain that whether we like it or not, the horse is out of the stable.”
Analysts attribute recent cost-cuts at NBC, which included the elimination of about two dozen jobs on “The Tonight Show with Jay Leno,” to Comcast focusing on “improving the financial performance” of the network.
In an opinion piece published in Multichannel News, Gary Arlen writes that this reported 10 percent decrease in payroll for the “Tonight Show” staff (Leno reportedly took a significant salary cut to avoid further layoffs) won’t likely be detectable to the average viewer, perhaps making it a good move for Comcast.
“More significant to the TV industry as a whole — and especially to the growing stable of Comcast-owned content channels — are the implications of this cost-cutting,” suggests Arlen.
“Beyond the lavish pay scales for celebrities (both in front of and behind the camera) is a new TV economic landscape,” he writes. “Improved, and admittedly costly, technology is bringing down the price of production and making possible new kinds of appealing entertainment. (Let’s not even talk about el-cheapo reality programs.)”
This new landscape includes individuals with online video channels and hundreds or thousands or more subscribers.
“These conditions and more are paving the way for what I’ll call ‘good enough TV,'” notes Arlen. “Certainly, second-tier cable channels have survived for years on ‘adequate’ quality shows: well-produced made-for-video movies and series that would have qualified as ‘B’ films a half-century ago. They’re good enough for prime time, a launch-pad for young talent and a sinecure for past-their-prime performers.”
Google’s financial infusions into its YouTube channels, much of it designated for original programming, is a great example of the “good enough TV” ethos, writes Arlen. “Other ‘good enough’ shows take advantage of the interactive capabilities that young producers can now create on a financial shoestring.”
TV screens are becoming an increasingly popular way to consume online video — a medium that’s grown exponentially in the last three years.
According to a study by NPD, about 18 percent of 14,000 users surveyed are accessing online video on TVs on a daily basis while around 25 percent access it several times a week. Movies are driving much of that growth, reports TechCrunch.
The rise in online video viewing on TV has been made possible by televisions with built-in Internet as well as game consoles such as the Xbox and set-top boxes that link up with broadband-enabled on-demand services.
“China is coming out as the most online-video-friendly country at the moment,” notes the post. “China’s urban users beat every other country surveyed, across every device. This may be down to simple user behavior, but it’s also, NPD says, because Chinese users can access a lot more video content online than they can from domestic broadcasters and pay TV providers.”
“Online content is mostly viewed on computers or mobile devices such as tablets and smart phones, but TVs are increasingly becoming devices of choice for consumers, particularly since an increasing numbers of sets have either built-in connectivity or can be connected to the Internet via a peripheral device such as a connected Blu-ray player or set top box, among others,” said Riddhi Patel, NPD DisplaySearch research director, in a statement.
Some music services let you stream music based on mood, but how would you like to watch videos based on how you’re feeling? This is a new concept that YouTube is trying out with its Moodwall.
Featured on YouTube’s home page in random limited testing, the Moodwall shows a collection of video thumbnails for various categories including “funny,” “adorable” or “catchy.” The page offers users the option to “explore videos by vibe.”
Google gave exclusive access to various users to test out the new feature, but most feedback has been bewilderment, Mashable reports.
“My browse page in YouTube has been replaced with some weird page that calls itself Moodwall,” commented one user. “Does anybody [know] what is a Moodwall and how it can be removed?” asked another.
According to insiders, YouTube will be cutting some less successful original channels by the end of the year, continuing its effort to clean up the quality of its content.
YouTube execs will also be deciding on new projects to fund, “as it hones in one the most lucrative models,” the New York Post writes.
“The weeding out of the less-popular videos comes amid a new emphasis at YouTube on the time viewers spend on the channel — and not just how many views each channel gets,” explains the article. “YouTube is also looking to upgrade the quality of its videos and tweaked its algorithm in April to help the move.”
The added emphasis on quality and the funding of original content may have contributed to an increase in viewing. “Since January total hours watched on YouTube jumped 33 percent to 4 billion from 3 billion,” notes the article.
And as viewing goes up, so does YouTube’s advertising revenue. One Citigroup analyst anticipates the site’s revenue to increase 50 percent from 2011 to $3.6 billion.