Smart TV: Enterprises Invade the Living Room

Like smartphones before them, televisions are raising their IQ. Be prepared for the coming change in the way the world thinks about television, and the inevitable consequences for the enterprise.

This note will discuss:

  • What smart TV is, and how it will transform the living room.
  • Who the major players are in the television revolution.
  • How this technology will affect the enterprise.
  • The current state of smart TV, and what is slowing down its adoption.

Understand where the television industry is headed, and be sure your organization is ready to keep up.

Trend Point

The Rise of Smart TV

A revolution in media consumption is underway. The recent release of Google TV is the latest herald of a move from traditional broadcast cable to consumption of online content. Several devices already bring digital media to big screens, but such devices are only starting to mature.

All devices allow access to free and paid content that is streamed or downloaded from the Internet to a television. They also bring tasks that have traditionally stuck to the desk, such as Web browsing, social media, and online shopping, to the living room. On the way are custom applications, with potential for using TVs in ways that capitalize on the unique form factor of a large screen and a couch.

A pivotal point in the delivery of entertainment has been reached. The rise of the first smart TVs is likely to be as impactful as the release of the first smartphones.

Situation Analysis

Major Players

Apple TV: Apple recently released its second generation Apple TV, with a smaller size and lower price than other offerings. Apple TV integrates with the existing iTunes store ecosystem, allowing streaming from a computer with content, or from the iTunes store itself. It can also access other media sources such as Netflix and YouTube.

Roku: Roku’s set-top boxes claim to allow access to the largest collection of digital entertainment, partnering with providers such as Netflix and Amazon’s Video On Demand. Although aimed more at tech-savvy early adopters than user-friendly offerings from Apple and Google, Roku is a promising up-and-comer in the Internet television race.

Playstation 3, Xbox 360, and Wii: Gaming systems cannot be ruled out as contenders. Their powerful hardware is more than capable of accessing and playing digital media without purchasing another device. All three major consoles already support streaming from Netflix. The Playstation 3 will soon offer Hulu Plus as well, and separate video stores are available on the Playstation 3 and Xbox 360.

Google TV: Google has always insisted that it is a search company, and its approach to TV reflects this vision. A search bar allows viewers to search directly for a station or program, and see Web search results along with TV listings.

Another stellar feature is that in addition to being available in dedicated media boxes, it is directly integrated with some televisions. Sony’s Internet TVs have built-in Google TV, without the need for more boxes and wires. New televisions will become increasingly smart out of the box, driving adoption of IPTV with little effort on the part of the consumer.

Google TV’s tight integration with the familiar method of consuming television makes it the most ambitious of the current media hardware offerings. Its release may be the tipping point in the television revolution.

Many Roads, One Destination. In the end, it doesn’t matter which device is used to access the riches of the Internet. The main implication of increasingly smart televisions is that entertainment will come from the Internet rather than from cable or physical media, bringing with it the interactivity and customization that have transformed other connected devices.

Info-Tech Predicts

Enterprise Implications

For many organizations, smart TV represents an opportunity to improve customer engagement and brand awareness, and potentially drive new revenue. If this sounds familiar, that is because these are the same benefits that were touted in the mobile space six months ago, and many are now realizing the payback. While the enterprise objectives of IPTV are not yet clear, business leaders who see the opportunity that smart TV brings will stand out from competitors.

Video. If your organization already delivers content to consumers via YouTube, podcasts, or any other video on the Web, smart TV represents an additional outlet to reach your audience. If not, this might be an area for your organization to consider as a way to provide information about products or services.

Content. Organizations that provide news, tracking, alerts, or any other notifications, may be able to extend their service to the television through native applications, thereby improving customer communications. For example, NBA’s “game time app” for Google TV lets viewers see scores around the league while watching TV; NBC is working on an app to track stocks and news.

Transactions. The opportunity for retail transactions has serious potential. In the short term, smart TV could be an easy way to look at products, pricing, and inventory, or to make online purchases. On the horizon, associating well-placed advertising with video may be an effective method of enabling impulse purchasing. Imagine if viewers could purchase a product directly on their TV after seeing the advertisement or product placement.

Analytics. At face value, smart TV appears to be an opportunity to gain more information about consumers. It will certainly drive more Web traffic, but from an analytics perspective, it will be difficult to determine whether Web traffic is coming from a TV or a PC; a click is a click. This will be an important consideration for Web analysts, and may be enough reason to develop a Website targeted at smart TV, as is often done for Websites in the mobile space.

A Long Way to Go

The full potential of smart television is yet to be realized. They are not popular or user-friendly enough for mainstream adoption; it will be some time before your grandma is setting one up. Integration between television and online capabilities is also incomplete. Smart TV is currently accessed from a separate device or as a layer superimposed over traditional TV. Issues with net neutrality and competing with piracy further hamper the domination of smart TV.

Most importantly, smart TV as a development platform is still limited. However, when TVs have app stores comparable to those on smartphones, the way that organizations interact with customers will change.

Key Takeaways

  1. For now, optimize your website for smart TV. While most Websites should already be viewable on a TV screen (many have the same resolution as computer monitors), it will be increasingly important to maximize use of the entire screen, especially since TV is most often viewed by more than one person at a time. If the Website is core to your business, it will be crucial to have a version of the Website optimized for TV viewing. Form factor and functionality are also important considerations. While current Google TV offerings come with a keyboard, many users of smart TV opt for a smartphone or other remote device as a controller. This makes it extremely important to provide auto-complete options for text entry and to simplify menu and navigation controls.
  2. Integrate with existing online media. Piggy-backing onto sources that will immediately get play time on smart TV (YouTube being the most obvious candidate) should be considered as a cost-effective method of getting products and services into people’s homes.
  3. In early 2011, repurpose applicable mobile apps for TV. If you’ve already published to Apple’s App Store or Google’s Android Market, consider the appropriateness of the app for the TV. For example, for games or media intensive apps (e.g. video, photos, audio), a native TV app may simply be a matter of recoding for the device capabilities of the TV. For others, especially where video is not a focus, it may make more sense to allow the app to function as an extension of regular TV viewing, so that viewers can interact with your app while watching their favorite programs.

Bottom Line

Almost half of North American households already have televisions with smart capabilities (most through a separate device, but increasingly through features built-in to new televisions). More importantly, Info-Tech predicts that by 2013, the majority of the public will be comfortable with, and expect smart content on their TVs. Make sure your organization is ready to provide that content as soon as there is demand for it.

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