July 2, 2009

This is going to be big: Virtual DVR gets the green light; Digital marketers to become the new “traditional”

To date, the convergence of digital media and television (a distinction which, post-6/19 is largely semantic) has been stymied by one fundamental difference between these media: time sequencing.

Despite TiVo and OnDemand and Slingbox and others, television is still largely - for most people - a time-bound medium. Even though many cable, sattelite and over-the-air viewers are able to time-shift their TV schedules, most television viewing is still conducting in “real time.”

Now, some programming simply won’t be time-shifted; sporting events and news, for example, lose their value over time. Can you imagine tuning in for the Superbowl three days after everyone else? Do you really want tomorrow’s weather report two days from now? (The exception might be for sports fanatics, who want to watch 15 football games from over the weekend but can’t actually do it all at once; so they time-shift some of the games into subsequent days of the week.)

“Water-cooler” shows are another exception: no point in watching Survivor after everyone has already talked about it the next day. (Actually, I don’t know that there’s ever a point in watching Survivor, but maybe I’m the exception.)

But with 500-channel cable and sattelite lineups routinely accessible, time-shifting becomes less of a luxury and more of a “necessity”, at least in terms of people maximizing their leisure time. With so many choices, it’s unlikely that everything you’d care to watch is on in precisely the right order on precisely those days of the week when you’d want to watch them. So you set your Digital Video Recorder to tape the shows you want, and they’re ready for you, when you’re ready.

There are a couple of problems here, that keep this from being practical for everyone:

  1. You likely don’t have space on your DVR to record everything you’d want
  2. You can’t record something in the past (say, the first three episodes of Big Love that you missed before all your friends were talking about it.)
  3. You can’t record something you don’t already know about (this is a variation of number 2.)

There are other issues, too, in terms of the usability and practicality of some DVR’s interfaces and ability to put the show you want to watch where you want to watch it. (For instance, to play an episode of Jon & Kate Plus 8 minus their marraige on your iPhone while waiting to clear customs at Gatwick.) I’ll cover those later.

If I haven’t already bored you to tears, let me get to the point.

This week, the U.S. Supreme Court cleared the way for Cablevision to start offering Virtual DVRs. This is important for marketers because Cabelvision and other cable and wireless network operators can combine virtual DVRs with a couple of other technologies, and fundamentally change the landscape of entertainment.

With a virtual DVR, the recording resides not on a box on your entertainment system, but at the cable company. Your recording is shared with everyone else - so rather than store 100,000 copies of Most Dangerous Catch, Cablevision stores just one copy and anyone can start watching it whenever they want.

  • This eliminates most of the storage capacity problems, not only by centralizing storage of programming, but also by eliminating 99% of the redundancy.
  • If the recording resides at the cable company, it can be instantly delivered anywhere there is sufficient bandwidth - to your TV, your phone, or a flat screen in a hotel room.

So, you can watch anything you want, anywhere you are, anytime you like. Aside from being kind of neat, why does that matter?

It matters because all of the world’s entertainment content is now digitized and delivered on-demand. And for it to be delivered to you on demand, the cable company needs to know where to send it when you ask.

Which means that they are sending you a video stream, digitized, to an addressable device registered in your name. Sound familiar?

It’s called YouTube.

Now, if only there were a platform out there which could embed, in real-time, advertising that was targeting specifically to each viewer, either as part of that video stream or as a companion piece of data displayed along side of it.

That’s called AdWords.

Even though the first itteration of addressable tv commercials has been scrapped, a new launch date is set for the end of 2009. Still, the technology already exists to deploy this all pretty much right now. (And as much of a fan of Google’s tools as I am, they’re not the only player - there are other ad delivery platforms and video streaming services, and they just need to be linked up; Google just happens to be there already.)

This isn’t about watching YouTube on your 56 inch LCD screen in your living room, or having to endure text ads running alongside NBC Nightly News. When technologies converge, it’s rarely in the form of one technology simply expanding into another technology’s space. Rather, the best elements from two technologies are combined to create something new.

So let’s review:

  • Virtual DVR brings the public an unlimited quantity of high quality programming that they currently want to watch (and don’t have to find), delivered digitally in a personal, and personalizable stream.
  • Online advertising gives marketers a platform to develop, target, and deploy advertising in a highly personal way; content producers have a platform on which to sell ad space (either directly negotiated or in an auction model.)

For marketers who have spent a lot of time building large branding campaigns predicated on a broadcast model, I have some bad news: the world is going to get unmanageably complex, and that model is going to break. It may not happen right away, but it will happen.

For marketers who have been deciphering the complexities of micro-targeted online advertising, the landscape is about to open up.

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