What is TV today and what does it mean to your small business future?

I have been watching the announcements coming out of the Consumer Electronics Show this January in Las Vegas and many have been about the changing face of TV technology. If you have been watching the news about TV recently the announcements about “going digital” have pervaded the airwaves. At the same time companies like LG, Samsung, Sony, Comcast, Cox, and Time-Warner have all been making product and service announcements. Meanwhile the major networks like CBS and NBC have reported write downs or losses in the billions of dollars. Advertising revenues are flat or down. Even the Super Bowl advertising slots have not sold out. So lots of changes are happening to TV and the impact is profound.

The TV of "Christmas" Past

To put a little Dickens into this blog let's explore where TV was, where it is today and where it will be in the future. When I was a youth in the 1950s, TV was a standalone cabinet with a picture tube that received black and white signals from broadcasters over the air. These signals were captured by an antenna on the roof or by rabbit ears on top of the set. We settled in front of the set to watch the Ed Sullivan show or the Cisco Kid and the Lone Ranger. Broadcasters included the big three in the US. In Canada we had the CBC and a few independent stations providing local programming content. That TV of the past, like other media, was a one way communicator. The TV signals were free, the infrastructure to deliver them was not, and advertisers paid through the nose to reach the viewing audience. For the next 50 years nothing much changed about the business model while the technology evolved.

Colour television arrived on mass in the 1960s. By 1967 most TV broadcasters’ signals were in colour. The first communication satellite was Telstar launched in 1962. By the 1970s the evolution of communication satellites created a new way of delivering TV signals. The cable TV industry was born. Cable TV providers took satellite signals and broadcast them over copper wire directly into homes. The first satellite dish manufacturers and service providers started making satellite-to-home TV accessible to the few. For the first time the TV over-the-air broadcasters had competition for audiences.

The TV of "Christmas" Present

Cable evolved from copper to fibre optics, delivering 65,000 times more information to TV viewers producing better quality pictures, more opportunity for programming and more competition for viewers. Satellite dishes got smaller and satellite service got cheaper making it more affordable for the average home viewer. Satellite meant even more competition for the broadcasters and the burgeoning cable TV providers. At the same time TV went from low-definition to high-definition (HDTV). TV sets went from small tubes to huge flat screens.

By 2007 the US consumer could choose to receive TV content many ways: through over 1,200 cable and satellite operators as well as the old way over the airways to an antenna or rabbit ears. By 2007 more than 50% of US consumers were receiving their TV signals in digital format. TV viewers could choose what they watched and how they watched it using the latest Digital Video Recorders (DVR). A few channels became thousands of channels. By the end of 2007 video-on-demand (VoD) had reached volumes of 3.3 billion program downloads, competing with movie theatres and video rental stores.

With the arrival of ever faster and more powerful personal computers TV came to the desktop with the arrival of Internet Protocol TV (IPTV). Users could access services like YouTube or Joost or one of many other online TV viewing sites to get a personalized viewing experience. The Internet brought another dimension to TV watching – interactivity, the ability to point and click and alter the viewing experience.

When compared to the traditional TV viewing experience, the Internet provided for personal preference even though the screen was smaller. The best you could do for interactivity with a TV was use a DVR, do a video download, or use the remote to surf the hundreds of channels that were now available. As an alternative the viewer could experience interactivity by hooking up a Nintendo Wii, Playstation or Xbox 360 and playing games.

The TV of "Christmas" Future

This is where we are going and very, very soon. The announced move from analog to digital TV beginning February 17, 2009 in the US (in Canada, August 31, 2011) will make it possible for TV to become fully interactive rather than the one-way passive medium that it has largely been. What this means is TV will open the door to a personalized experience for viewers.

Interactive TV means a 2-way street. New standards for creating content such as OCAP (now called Tru2way), and ACAP will allow software developers to build Internet-like applications for TV. These applications will run on new technology already being delivered to set-top boxes and TVs today. This new technology supports 2-way interaction, allows for viewer personalization, and provides secure e-commerce.

What does this TV revolution mean for small businesses trying to reach potential consumers?

Traditionally TV has been a very expensive way to reach an audience. We always read about the cost of 30-second advertisement at the Super Bowl with the number in the millions of dollars. Big dollar advertising has been the lifeblood of TV broadcasters, but that is about to change too.

With thousands of channels to view, and interactive TV becoming ubiquitous in the US and elsewhere, TV service providers and broadcasters can no longer demand advertising fees for 30-second slots in the millions or even the thousands of dollars. In fact, TV advertising can no longer be built around the 30-second slot. Instead it must become more Internet-like with “select” on the remote becoming just like a mouse click. This represents an entirely different advertising business model for TV, much more like the click-through, banner and sideboard advertising that we have become familiar with on computers. Suddenly TV can be an accessible medium on which to advertise even for a small business serving a local market.

Recently I started working with a company that is delivering on the promise of much lower costs for companies to advertise and market themselves on TV. The company is OrderTV and they have created 3 products for the new emerging interactive TV market:

• a comprehensive information guide called iCityGuide, where a company can get a directory listing and small ad just like the Yellow Pages, and at Yellow Pages pricing
• an interactive online shopping information channel, iShoppingTV, that lets the viewer watch MPEG videos and click through menus to learn about products and services and even connect to sellers
• a dedicated fully interactive shopping channel called OrderTV featuring the ability for a business to interact live with a viewing audience
  

What is even more exciting about this interactive capability is the data gathering that can occur giving advertisers an accurate profile of the viewer. And because the interactive experience on the TV is Internet-like, it is no surprise that companies such as OrderTV plan to combine their TV presence with Internet websites that have a similar look and feel, adding social networking capability as part of the total interactive experience. TV viewers can go on the Internet to enhance their experience staying connected with a local distributor or the company itself, sharing information with other viewers, reviewing past purchases or checking on the status of new orders.

For small businesses this represents a new way of doing marketing and selling. They can reach TV audiences at a fraction of what it would have cost in the past. And they can learn more about those who view their ads than ever before, creating stickier viewers that can become sticky customers, an exciting future for small business advertisers on TV.