Your future TV experience won't look anything like it does today, but are people really cutting the cord? Will we ever have a la carte cable TV? Which disruptions are shaping the future of television? Presentation to Refresh Dallas on June 14, 2012.

1. THE FUTURE OF TV
June 14, 2012
Presented by: John Keehler & Micah Les Boswell

2. EVOLUTION IN ENTERTAINMENT

3. THE DEATH OF TV BUSINESS?
“ We almost never watch television shows when they are
broadcast anymore”
“ We watch a lot of TV and movie content, but always on
demand and almost never with ads”
Source: Business Insider, 2012

4. 10 TRUTHS ABOUT TV… NOW

5. 1. TV STILL DOMINATES OUR TIME
We spend almost twice as much time watching TV
than using the Internet
TV = 4:34 daily
Internet = 2:47 daily
Source: eMarketer, 2011 Flickr: mao_lini

6. 1. TV STILL DOMINATES OUR TIME
Source: Mary Meeker: KPCB, 2012

7. 2. THE DVR IS STILL CATCHING ON
Only slightly more than 40% of US households
have a DVR
Only 17% of TV viewing occurs on a DVR, while
83% is still live
Source: Nielsen, 2012

8. 3. NO ONE’S REALLY CORD CUTTING
90% of consumers still pay for a TV subscription
Less than 5% are “cord cutters”
Not many options
Source: Nielsen, 2012

9. 4. CORD CUTTING REQUIRES DATA
Average bandwidth consumption per household is
12GB of data per month
18 hours of standard definition content, 7 if HD
Most households watch 250
hours a month, which would
require 161 GB of data
per month for SD
Justice department probe
Source: Nielsen, eMarketer, 2012

10. 5. XBOX LEADS STREAMING TO TV
12% of US households stream video through an
Xbox 360 or Playstation 3
Source: Strategy Analytics, 2012

11. 6. CONNECTED DEVICES STILL NICHE
External connected TV market (outside of gaming)
is only 12 million users:
Apple TV = 32% market share
Source: Apple Insider, Strategy Analytics, 2011

12. 7. SMART TVS STILL BEING ADOPTED
Only 10% of US households have a smart TV
40% of TVs sold in 2011 were Internet connectable
Source: Leichtman Research Group, Parks Associates

13. 8. MOST STAY UNACTIVATED
You may not know you have a smart TV
“The number of Smart TVs that today goes
unactivated, meaning it’s not actually connected to
the Internet, is north of 50 percent. Some people
have told me it’s closer to 75 percent.”
- Ajay Shah, CEO of TVPlus
Source: Leichtman Research Group, Parks Associates

14. 9. APPLE IS LOSING THE MOVIE WAR
Apple’s 2011 online movie market share through
iTunes was cut in half
Netflix grew by 44%
Apple integrates
Netflix into iTunes
Source: IHS iSuppli, 2012

15. 10. SOCIAL TV IS ALREADY HERE
Social TV and companion apps are very niche
Traditional social channels are preferred
•57% chat via text
•56% chat via phone
•51% chat via social
Source: Viacom, 2012 Scott Macklin www.mcdm.uw.edu

16. NETWORK TV = MASS REACH
Network TV is still the only media that has the
potential to reach almost the entire US population in
the course of a month
Why TV advertising still dominates

17. 10 TRUTHS ABOUT TV… TOMORROW
(OR WHY YOUR CABLE PROVIDER SHOULD BE SCARED)

18. 1. RAPID, RECENT CORD-CUTTING
Cord cutters have grown 23% since last year,
and the numbers are accelerating
They stream video twice as much as the general
population and watch half as much TV
Source: Nielsen, 2012

19. 2. THE GROWING COST OF CABLE
Wages are flat, but the average cable bill $86 a
month, without internet or phone charges
Growing 6% yearly
$126 by 2015
$220 by 2020
Source: NPD Group, 2012

20. 3. WE ONLY WATCH A FEW CHANNELS
Standard cable/satellite packages
include around 200 channels
Yet most consumers only view
around 20 channels in a month
Source: Nielsen, 2012

21. 4. LIVE TV IS DECLINING
“Live ratings for network programs have declined for
14 consecutive quarters.”
- NY Times
Source: Nielsen, 2012

22. 5. TV OWNERSHIP IS FALLING
For the first time in 20 years
Fallen from 98.9% to 96.7% of US households
Source: Nielsen, 2012

23. 6. NO CORD TO START WITH
“A small subset of younger, urban consumers seem
to be going without paid TV subscriptions for the
time being.” - Nielsen

24. 7. 100% SMART IN 3 YEARS?
Most TVs replaced every 3 years
10% of US households have a Smart TV
40% of flat panels
shipped in 2011
were Internet
connectable
Source: Strategy Analytics, 2012

25. 8. STREAMING BEATS GAMING?
“ More than half of all time spent on Xbox Live
consuming music and videos.”
- Yusuf Mehdi, Xbox head of Marketing & Strategy

26. 9. MORE DEVICES = LESS TV
More devices means more options
Source: eConsultancy, IAB, 2012

27. 10. TV PIRACY ECLIPSING VIEWING
Dexter and Game of Thrones both had episodes in
2011 with more downloads than TV viewers
Game of Thrones
the most pirated
TV show in 2012
Source: Torrent Freak, 2012

28. WHAT VIEWERS WANT

29. THE VIEWER JOURNEY
I’m willing to pay for HBOGO, but I
It’s not available on Netflix need to go through a Cable
Provider?!?
[Should I borrow
Game of Thrones sounds cool. a login?]
I want to watch it.
iTunes? Season 1. When is
season 2 released?
Screw this, I’m going to Pirate Bay.
Forced to watch a bastardized
Who do I download it from? EZTV,
version hours to days after my
AMEET6233? How do I know I’m
friends with Cable see it. Will the
getting the right one?
FBI break my door down now?

30. THE BUNDLING DILEMMA
“ Disney, for instance, charges TV distributors about $5
for every subscriber that gets ESPN. And, by some
estimates, only about 25 percent of cable customers
actually watch ESPN on a regular basis. So if you
unbundled ESPN, the per-subscriber cost might shoot up
to $20 or more, to account for the 75 percent drop in its
customer base.”
7 to 10 year deals
Source: AllthingsD, 2012

31. DISRUPTIONS

32. HBO GO
Authenticate with your cable/satellite subscription
Not all providers available for authentication

33. TAKE MY MONEY, HBO

34. MLB TV
Live, on-demand, multi-device
$25/month or $100/year
Home and away games, but subject to live blackout

35. XBOX SMART GLASS
Companion device
Internet Explorer for Xbox
NBA, NHL and ESPN content deals

36. GOOGLE TV, THE NEXT ROUND
Google TV hasn’t been very successful
Content partnership issues
Android smartphone connection

37. APPLE TV
No new Apple TV announcement at WWDC, other
than mirroring from Mountain Lion
Future speculation
Actual TV
Siri integration
“A la carte” options

38. YOUTUBE’S 100 CHANNELS
$200 million investment in 100 new channels
across all devices
40-50 launched
Rain Wilson, Jay-Z,
Amy Poehler and more

39. AEREO’S NEW MODEL
Internet connected antennas
HD broadcast channels, on any device
$12/month
New York only
Litigation pending

40. AEREO’S NEW MODEL
Photo: Gizmodo, 2012

41. NIMBLE TV - IN THE CLOUD

43. Future of the TV User Experience

44. SMART TV EXPERIENCE
Smart TV experience isn’t easy
Just pick up a Samsung Manual
How do I build one interface for all content?

45. REINVENTING THE REMOTE
Evolution in TV is giving the least usable device on
the planet a makeover

46. TOUCH
Leveraging the companion device as a remote or
brining touch to the remote itself

47. VOICE
Leveraging the companion device as a remote
Apple, Samsung & LG.
Nuance is a platform agnostic solution
Xbox already has voice search

48. GESTURE
The future of gesture remote control is already here.
Kinect, PrimeSense
GestureTek, Ballit,
Oblong and others.

49. Future of the TV User Experience
In the interactive world, we
Have ‘lean back’ and ‘lean forward’
To express engagement level. What is
watching TV with a companion device?

50. Future of the TV User Experience
UX will need to step back to understand a
multi-engagement, cross-screen universe.
We will need:
- Cross-platform research tools
- Cross-media analytics

51. Future of the TV User Experience
We’ll also need to step back and understand
the nature of storytelling.
How do UX practicioners help create an
interface that empowers both a personalized
and shared experience?

52. Future of the TV User Experience
One scenario is the surround vision concept.
Multiple cameras, multiples views and you
choose your story perspective.

53. Future of the TV User Experience
What are the best tools for choosing
your content?
Once your content is chosen, what’s the best
way to choose your level of engagement?

54. SUMMARY

55. THE BATTLES AHEAD
Content will try become platform agnostic
Platforms will acquire and create content
Manufacturers will want to control both
Viewers will get more choice, but at first, that
choice will be frustrating and splintered