A minority of viewers already get Internet access and content on their TVs through an IP hookup or set-top box. Akin to that Netflix is doing lots of streaming deals with set-top box makers. Yahoo! has its widgets initiative, and so on. There’s lots of activity in the space. LG, Samsung and Sony all have Internet-enabled TVs on sale this holiday season.
While I was in Best Buy this past weekend I saw two prominent “Interactive TV” displays for Samsung and LG. Here’s the LG display.
It’s very clear that once Internet content (broadly defined) is available to mainstream audiences on TV it will create an interesting new market that is in some ways parallel to mobile, because it will need to change to accommodate the limits and capabilities of the device — in this case a large screen “10 feet away.”
It will also eliminate the need for many to subscribe to conventional cable TV, although they’ll need an IP connection from some source. This also potentially marginalizes TiVo or other cable DVRs because it offers broader content and it’s all on-demand. In this world we also quickly get the convergence of online and TV video advertising. Pre-roll that runs on YouTube runs on my TV if I’m watching a show or content on YouTube “in the living room.” And what about Hulu? That’s even more like conventional TV today. Will Hulu ad rates go up, will there be interstitial ads? Will there be an ad-free subscription model?
Think about: Facebook on your TV . . . Skype . . . Google Street View . . . interactive/social shopping on TV. Think about new “social programs” where people watch and chat at the same time. Then there’s gaming and how it might evolve. Very interesting stuff to consider.
Cumulatively all these changes will radically transform advertising for “television,” which could result in a massive decline in traditional ad rates and revenues. And that in turn will affect production budgets, the nature and quality of programming and so on.