Can our beloved “old” television channels survive the Internet revolution? (part 1/2)

That’s a good question and it is still too early to tell. But one thing has recently changed: until now, we were considering television and Internet as two different channels when they are, de facto, complementary. Internet is a medium, an amazing way of improving, increasing, changing… the efficiency of any other industry.

Unfortunately, television owners still see Internet as a threat instead of the open door to new possibilities (I think I heard that one before…!!)

Let’s have a look at the actual situation of TV channels and the related advantages for this “old” media against Internet:

Comparative advantes of Internet and Television

I could have add, on the television side, partnerships with content providers but it is already happening on Internet with Hulu, Youtube, Spotify or the French football championship with Orange TV.

As you can clearly see, the advantage is in one camp and only one: INTERNET.

Television channels are still making a good living but for an easy reason: whenever you want to watch a football game with your friends, a film with your family, or just relax after a long day of work, it is still easy to simply turn on your TV instead of watching it on a computer screen.

But take away this “advantage” and what’s left? NOTHING

Don’t take me wrong, I’m not saying that television channels are useless, what I mean is that the content is king and it does not matter if it’s coming from CNN, TF1, TV1 or any other channel. What truly matters is what we all want to watch, share and interact with our network of friends, colleagues…

However, regarding latest events and evolutions, we can make some assumptions and actually consider that television channels have everything to win from Internet.

The first example I may give is the, now, famous CNN / Facebook example regarding the investiture speech of Barack Obama. By integrating their live flux into the Facebook platform, CNN allowed not only US citizens to share their thoughts in real time but also viewers from all over the world. I’m a European citizen and I could enjoy this speech as much as any other American citizen without having to rely on any Spanish, French or German voice-over…

It is a clear example of how CNN aggregated on his flux the generation Y, which normally does not watch any television. There are plenty of other examples like this one but it clearly shows how “classic” media can use “new” media in an interactive way in order to retain AND attract users. I may also mention the fact that anyone posting a comment while watching the event was also sending an implicit invitation to all his Facebook friends to join him. But that’s another subject.

The second notorious example was clearly shown at the last Berlin IFA event where almost all television constructors where showcasing televisions integrating an Ethernet cable or a wireless connection ; Basically, the ability to plug-in a television set into the infinite world of Internet. It was already possible, thanks to Internet boxes like the ones you can find in France (Free, Orange…) but directly connecting the hardware without using an external system completely changes the possibilities. If you integrate a hard-drive of course!

Those boxes already allow us to get access to services like Catch-up TV, Video On Demand services… but possibilities are way higher than those systems which do not integrate advertisement, targeting, social features…

Now let’s see what are the advantages for television channels to get access to their viewers through Internet directly on their television sets:

1. Better targeting: instead of relying on panels of viewers and base their advertisement spots on assumptions, they will be able to push real numbers to advertisers and include more details about their viewers ; consequently increasing their CPT in the same way as websites are doing it (for one thousand ads on a certain webpage, it will cost more to an advertiser to target a 35 yo. man living in Boston with a yearly income of 100 000 dollars, who likes to travel instead of a panel of 35-49 yo. householders with an average income of 80 000 / 150 000 dollars a year).
2. Personalization: if you look at the currently viewed videos on Youtube, you will realize that most of them are actually professional content directly coming from television channels. What happened is simply that we do not want to be obliged to seat in front of a television at a certain time (Again, I repeat, except for certain occasions like sportive events) ; we simply catch up on it later on, on Internet. By using Internet, television channels will be able to propose personalized content based on personal preferences without even thinking about timing (same as catch-up but way more advanced).
3. Interactions: I just spoke about the CNN / Facebook example but that’s just a beta testing of possibilities offered by this mix of social interactions and television programs. I recently heard about an Internet company which created online games like Who wants to be a millionaire. This company, instead of providing a constant  access to it, decided to gather its audience on a certain time, on a daily basis. What for? Benefit from real time interactions on live events. Now, let’s imagine reality shows or television games where you could interact with the program instead of just watching it or sending a SMS. Wouldn’t it make it more addictive and interesting? Especially if you can participate with your friends thanks to push notifications on their own television sets!
4. New revenue sources: Connect a television set to Internet and you immediately add interactivity to it. Instead of just viewing a specific ad for a certain product, a viewer might be able to directly order it or ask for more info, a test-drive (in the case of a car advertisement), a delivery at home (in the case of a food advertisement)… Television channels will consequently be able to propose more diverted advertisement campaigns to advertisers and though, increase their prices and their sources of revenue as described previously for Internet.

Let me give you a simple but significant example:

You’ve been dreaming about a brand new car during the last few months and read all articles and reviews about it all over Internet. While you’re watching your favourite television show, you suddenly see this car on television, driven by your favourite actor. And what’s best, you can ask for a test-drive in one click or, even better, order it, including a 10% discount if you do it before the end of the day. (Behavioural targeting [don't be surprised, that's what Facebook Connect and Google Chrome are all about]) Given the fact that Rich Internet Application allow you to customize almost everything and get an in-depth feeling of what the product is, what are the chances that you will buy it or at least ask for a test-drive to your closest concession? Quite high I believe! You can even go further by displaying the best price currently available on Internet and create affiliation partnerships with E-commerce websites.

That’s just a quick overview of all possibilities offered by Internet from a television channel point of view but as you can see, we are currently exploiting less than 10% of it (like our brain it seems and winners will be among those being able to emphasize it instead of trying to fight against it.

Just be aware of one thing: the battle hasn’t start yet but there will be lot’s of competitors.

Just to use the Facebook / CNN example once again, who was the real winner? Facebook obviously. While CNN was surfing on the trend and showing an innovative face, the real win was for Facebook.

In the same way as Youtube is doing it, television channels are regaining some control on their content and making money on it (do they actually have a choice?) but each and every time, Facebook and Youtube are taking a share of it and bringing the audience, not the other way around.

As for the television sets being connected to Internet, television channels might benefit from it but only if they can control the technology behind it or sign the right partnerships. Do you really think that Philips or Thomson will do that as an action of grace and beauty? Or that Youtube or Justin.tv will seat and wait? All of those possibilities, I previously described, will be based on widgets or web-apps and all big players are already at the door, waiting to enter. Yahoo has already pushed his widgets on certain devices, partnerships are being made between the current big players and if I may make a judgement, “old” media are still waiting to see…

And I’m not even speaking about Google and its Androïd platform…

I actually gave you the point of view of how television channels can benefit from Internet, but I should make a difference between television channels (broadcasting systems) and content producers. And the image is actually not pretty at all for television channels. To follow…