Digital Television and the Impact of Global E-Commerce and Social Media: Strategies and Stakeholders in the Transition to Internet TV

Anthony J. Pennings, PhD

New York University

Panel Presentation at the EWC/EWCA 50th Anniversary International ConferenceHonolulu, HawaiiJuly 2-5, 2010

Overview

• The Post-Network Era• Rise of Internet TV• Many Stakeholders

• e.g Broadband Providers, Advertisers• Strategic Advantages of Google• TV and the Digital Divide?

Eras in Television

• Network Era• Big 3 (ABC, CBS, NBC), BBC

• Multichannel Era• Remote Control, VCR, Cable, Satellite

• Post-Network Era• 3 Screens, mobility, DVR, e-commerce,

social media

Rise of Internet TV

• Streaming or Downloading Video• Media Player Applications (BBC iPlayer,

Adobe Flash, Media Player• SD or HD• Web-based, CDNs (Akamai) buffering for

continuity• Archived, on-demand• Hulu, Netflix, Apple TV, YuMe, YouTube

Post Network Era

• http://apennings.com• Video: What is Google TV?

Internet TV Stakeholders

• Advertisers• Advertising Agencies • Application Developers

and Designers• Broadband Providers • Broadcast Networks• Content Owners

• Equipment Manufacturers

• Guilds and Unions• Measurement

Companies• Operating Systems• Regulatory Agencies• “View”sers

Advertising

• Global advertising sales are expected to increase during 2010 by 4.2% to total of $377 billion according to MagnaGlobal

• Television continues to lead with the highest sales around the world, with more than 40% of the advertising sales, a total of $151 billion,

• TV is growing

Advertising

• Online advertising expenditures will reach $61 billion in 2010, and paid search advertising will make up nearly half of that, according to MagnaGlobal

• Google had US$20 billion revenues in 2009

Google TV

• Google’s stated goal is to “organize the world’s information”

• Video: What is Google TV Ads: Flexibility?

Google’s Competitive Advantage

Economies of ScaleNetwork Effects, Fixed Costs

Customer CaptivityHabit, brand, switching costs

Proprietary TechnologiesCrawlers, indexers, query processors, advertising systems that bypass traditional advertising co.

Government ProtectionNet neutrality

Digital Destruction?

The transition to Internet TV will be one of the great cultural and economic transformations of our time. The integration of television into the World Wide Web will continue to add choice, control, customization, and convenience while exploring new realms of community and commerce. But will it also continue the trends of digital destruction and divide?

TV and the Digital Divide?

• National identity• Language harmonization

• Social mobility