Social TV,

Forecasting

and Innovation

Why didn’t we foresee

the rise of social TV?

Colin Donald

Director

www.futurescape.tv

Overview

Social TV: a synthesis of TV and social networking1. Transforming the medium of TV2. A radical shift in power for the TV industry3. How does social TV power manifest itself?

Forecasting and Innovation4. The future of TV as seen from 19955. What we didn’t foresee in 1995 – social TV6. Why didn’t we anticipate it?7. Implications for forecasting and innovation

1. Social TV – transforming the medium of television

The social TV revolution

• Social TV – the biggest change in television since it was invented

• Qualitatively different from improvements to TV: colour, satellite, HD, 3D – all forms of better TV

• Audiences engaging with television via second screens (eg laptops) and connected TV systems

• Transforms medium and industry• Gives social networks significant commercial

roles in the TV business• Why did we not foresee this major development?

What is social TV?

• Enabling technologies + viewer behaviour have significant business impact on TV industry

• People talk 24/7 about television on Facebook and Twitter

• Discuss, criticise, recommend and share it

Broadcasters embrace it

• BBC using on-air Twitter hashtags so people will discuss its shows

• Have I Got News For You

Broadcasters embrace it

• The official Oscars hashtag

• Host James Franco actually tweeting during the live show

Connected TVs enable social TV

• New connected TV sets and services are integrating social activity

• Twitter in a Sony Google TV

Social TV in EPGs

• Social functionality integrated into set-top box middleware

• NDS prototype EPG lets you share your viewing via Facebook within EPG

Social TV and online TV

• Similar integration with broadcasters’ online video players

• BBC iPlayer using Facebook and Twitter for viewers to recommend shows

Social TV via pay-TV platforms

• Social TV increasingly available via cable, satellite and IPTV

• Facebook integration from American IPTV operator Verizon FiOS

Social TV via consoles

• Social networking through game consoles

• No shortage of ways viewers can participate in new era of social TV

How big is social TV?

• Facebook and Twitter user numbers comparable to biggest TV audiences

• Two-screen usage widespread

• Claims 500m users globally – July 2010

• USA: 150m+ (30% of 500m)

• Compared to 2011 Super Bowl:

• Most-watched US TV broadcast ever

• 111m viewers (average home audience)

• Claims 145m users globally (Sept 2010)

• Only 6% of US adult population use Twitter (Pew Internet study)

• 8% of US adult Internet users (Pew)

• Considerable potential for growth

• And for growing influence over television

Two-screen usage

• Nearly three-quarters of US consumers multitask while watching TV

• 42% are online

• 29% talking on mobile phones or devices

• 26% sending instant messages or texting

• Deloitte, February 2011

2. Social TV – a radical shiftin power for the TV industry

Two-screen viewing andInternet TVs give social activity

considerable influence overthe television industry

Social activity gives more power to the companies facilitating it

Facebook and Twitter are now major players in global television

Without makinga single programme

Without broadcastinga single TV channel

3. How does social TV power manifest itself?

Impact on

• Viewing

• Distribution

• Production

• Revenue

Impact on

• Viewing – people discussing shows can increase audience size and engagement

Impact on

• Viewing – people discussing shows can increase audience size and engagement

• Distribution – social networks becoming alternative distribution to cable or satellite

Impact on

• Viewing – people discussing shows can increase audience size and engagement

• Distribution – social networks becoming alternative distribution to cable or satellite

• Production – bringing the audience into the production process

Impact on

• Viewing – people discussing shows can increase audience size and engagement

• Distribution – social networks becoming alternative distribution to cable or satellite

• Production – bringing the audience into the production process

• Revenue – social networks enable audience pay-to-participate

Viewing: The Game

• BET launched new series of The Game, comedy-drama about football player

• Tapped into strong online fan base

• Twitter popular with African-Americans (25% of Twitter users vs 12% US pop)

• 600,000 Tweets during broadcast

• Second-most-watched show in BET’s 30-year history: 7.7m viewers

Distribution: movies via Facebook

• Warner Bros deal with Facebook to rent movies to Facebook users, March 2011

• First title: The Dark Knight (no. 7 of all-time box-office grossers)

• Uses Facebook credits payment system

• Costs 30 credits ($3) for 48-hour access

• Successful trial – more titles added: Inception, Harry Potter

Production: Goa Hippy Tribe

• Documentary on history of hippies in Goa

• Social media commission by Australian broadcaster SBS, with Screen Australia

• Filmmaker Darius Devas set up Facebook group to contact interviewees

• Group discussion gave him feedback

• Short video episodes released through the Facebook group page

Revenue: X Factor voting

• X Factor in talks with Facebook

• Will use Facebook credits for paid voting

• Similar to phone voting

• X Factor to receive split of revenue

• To launch in time for autumn TV season

Television can benefitfrom social networks

However…

Facebook CTO predicts

Social networks will disrupt media – just like gaming

Facebook CTO predicts

“We haven't seen tons of other industries as impacted as games by Facebook, and we think that the next big change is seeing the next few industries being disrupted by social platforms in the same way gaming has been.”

“It's probably going to be orientated around media or news, because they are so social. When you watch a television show with your friend, it's such an engaging social activity.”

BBC interview with Facebook CTO Bret Taylor, 10 February 2011

Facebook and Twitter can compete for ad revenue, too

Withsocially-targeted

advertising

Adidas World Cup video ad

Why did we not foresee this social TV revolution in television?

And what does this mean for forecasting and innovation?

Forecasting and Innovation

4. The future of TVas seen from 1995

1995

• Netscape went public, sparking off the dotcom boom

• I was launching first Web sites for UK satellite TV channels

• A year when the new media future was actually taking shape

Why the future seen from1995?

• Moving house, reshelving books

• This one caught my eye

• The future of TV

• From 1995

Television at the Crossroads

• Authors were international design experts, working with young designers at Philips

• Speculative essays• Concept artwork• Prototype TV designs• Scenario photos of homes of the future

Television at the Crossroads

• So what was the future of TV in 1995?

• Key essay

• Roadside Romance: TV Marries Computer on the Electronic Highway

Four accurate predictions

1. The TV is a “telecomputer”• Processing power, network connectivity and

videoconferencing all built into the set

2. Viewers accessing video-on-demand and

networked multimedia (ie the Web)

3. Video production tools: prices fall, quality rises

4. Video production democratised• People will be producer-consumers or “prosumers”

The TV is a “telecomputer”

• 2011 TV set full of silicon, particularly Google TV

• Internet connection will soon be standard feature for all flat screens

• And you can now buy a Skype videoconferencing TV from LG and Panasonic

VOD and networked multimedia

• VOD is ubiquitous

• “Networked multimedia” is the Web

• 4oD in the Channel 4 Web site

Cheap video toolsdemocratise production

• “Prosumers” taking on new role, as highly effective political activists in Middle East

• Libya: from smartphones to YouTube to broadcast TV

5. What we didn’t foreseein 1995 – social TV

What we didn’t foresee in 1995

An Internet social sphere

that is democratised –

and also thoroughly commercialised

What we didn’t foresee in 1995

Massive social networking companies that affect the

entire TV value chain

What we didn’t foresee in 1995

The emergence of social TV and its major implications for viewers and the TV industry

What we didn’t foresee in 1995

And that much ofsocial TV has its rootsoutside the TV industry

6. Why didn’t we anticipate it?

The blind spot

• Innovation coming from outside the TV industry and combining three factors:

1. People’s needs – for self-expression and socialising2. Money – massive investment creating huge companies to meet those needs 3. Data – how the Internet enabled data to be integrated in so many novel ways

People’s social needs

• Broadcasters did appreciate social needs

• TV Web sites I launched had forums

• Viewers talked to each other and to the channel

• Trouble TV site: mouth icon for forums

People’s social needs

• But the main Internet social arena in 1995 was thoroughly non-commercial

People’s social needs

• But the main Internet social arena in 1995 was thoroughly non-commercial

• Unclear if commercial social businesses could even succeed on the Internet

• AOL, CompuServe just launching Web access in 1995

Money

• The major social innovation and aggregation came from outside television

• In successive generations of well-funded, fast-moving Internet start ups

Data

• The Internet has enabled data to be integrated in many novel ways

• Including connected TV systems

The future of social TV from 2011

• In 2011, we can’t easily see the long-term impact of social media integration with TV

• But key elements in shaping the future of social TV remain:– People’s social needs and behaviour– Internet start-ups– Innovation with data

7. Implications forforecasting and innovation

How can we generalise fromthe experience of forecasting

the future of TV?

Forecasting and blind spots

• Focused on the future of television – but not how the TV industry might be disrupted in the future

• Focused on linear improvement – but the future always includes non-linear disruption

• Linear improvements did take place – HD TV

• But significant discontinuous change came from outside the TV industry – rise of social networks

Remedies for blind spots

• Actively look for sources of discontinuous change and disruption

• Particularly external innovation – outside own sector / country / continent

• Engage in more cross-company / sector / country information exchange and innovation collaboration

The future of television

• For more Futurescape analysis on the future of television and social media, see our white paper

• “How Connected Television Transforms the Business of TV”

www.futurescape.tv

Colin Donald

colin@futurescape.tv

www.futurescape.tv