Driving the Future of Innovation in Television Technology

Those of us who dedicate ourselves to innovation in television services and their relationship with the online world use the term “traditional TV” to refer to the “other” TV, the one of all life, but this qualifier is somewhat arrogant and ignores the incredible vitality of TV as we have known it for 75 years: every night, 4 billion people gather in 1.5 billion homes across the globe to watch television. Traditional TV is perhaps the most eminent icon of world popular culture of the 20th century, and if it seems certain that its future will be linked to that of the next icon of the 21st century, the Internet, the truth is that this evolution has only just begun.

Innovation in Television Technology

Ultimately, the appeal of television lies primarily in its content. What are the content exploitation models that have brought about the undeniable success of traditional TV? The television grid is thus nourished by two different sources:

That of the TV networks themselves, both public and private, that produce their own content or add that of third parties and distribute it openly or through paid services.

The world of cinema, controlled very strictly by the big Hollywood studios, which exploit the films according to a sequential model of distribution windows like the one shown in the figure.
Timeline of cinema distribution windows

According to this scheme, you can enjoy a movie at home shortly after its theatrical release by buying or renting the DVD, or wait a few more months for the movie to be distributed on a pay-TV service or, later, on free chains. Other delayed content, such as series, have also evolved into sequential exploitation models with different window configurations, initially distributed on television and later on the rental and purchase market.

Traditional TV then relies on a very closed scheme of a general selection of content and temporal control of its distribution. On the Internet, on the other hand, the personal decision as to what and when to enjoy the content prevails. It is normal then that when these two opposing worlds collide in the audiovisual field, sparks begin to fly:

Internet cinema consumption services are becoming more and more popular, with Netflix in the US as a paradigmatic example. These services allow the enjoyment of recent releases for a price more or less equivalent to the rental of a DVD and also give access to older catalogue collections for a fixed monthly fee.

If online video services undermine the enormous profitability of the DVD rental and sale market, Internet piracy represents the dreaded arrival point on the path to destroying the value of audiovisual content. Interestingly, even in the case of piracy, there are agents who obtain commercial benefits, such as mass storage providers in the network or link pages that profit from advertising added to their portals.

Some analysts predict the intensification of the so-called cord-cutting or loss of pay-TV users, due to the appearance of alternatives in the consumption of delayed content, notably the cinema. In this scenario, the value of pay-TV would be reduced to that of its live events, which are still very effectively controlled outside the online world.

Advertising, an alternative source of profit for TV networks (and the only one for which they are distributed freely) may lose value in the market due to the evidence that more and more people are distracted from TV or follow it in a way little concentrated while using her mobile devices and tablets on the couch at home The entire industry recognizes that this attention needs to be recaptured by proposing second-screen experiences, but no one yet knows how to do it effectively.

New to this continent without maps of the television of the future, perhaps the industry has been too busy analyzing business risks instead of observing user behaviour and asking what it is they want. At Telefonica Digital we have used the CDI ( Customer-Driven Innovation ) innovation methodology to analyze the problems and needs, latent or explicit, of users in the field of new TV services. What have we learned in the process? Some example user insights are:

Content discovery: People are overwhelmed not only by the vastness of content available but also by the sheer number of recommendations they receive, explicitly or implicitly. Even the most valued recommendations, such as those from trusted friends, end up being forgotten when deciding what to see. The preferred form of discovery should integrate recommendations from trusted sources when searching for content for immediate viewing.
TV and the social environment: Live television connects people with a shared reality and offers opportunities for socialization.
Video ecosystem: using a PC, tablet or smartphone is the easiest way to search for content and plan what to watch, but television is still the preferred screen to enjoy it.ยบ

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