It seems a day doesn’t go by that we don’t come across the term “connected device.” But what does “connected device” really mean? Our traditional understanding has included smartphones, tablets, and only recently, connected TVs. However, device owners may not always consider their wireless picture frames, gaming consoles, automobiles, and household appliances (yes, appliances) as part of this category. Recently, my three-year-old son was watching a video on our tablet and asked if we could switch the video onto the big tablet instead. If you didn’t figure it out yet, he was talking about our big-screen TV. It’s imperative for video stakeholders to recognize that today everything with an internet connection is a connected device. With consumers’ increasing desire for media consumption across every screen they use, producers, publishers, and advertisers need to be everywhere. If my son can’t watch a certain show on the “big tablet,” he will switch to watching something else when he wants a larger screen. Video stakeholders must reach their audiences everywhere they go.
Households have come a long way from the computer being the only device connected to the internet. A study by Allied Business Intelligence (ABI) Research has found that an estimated 27 million (21%) of U.S. households currently have either an Internet-ready TV, game console, standalone Blu-ray player, and/or smart set-top box connected to their home network. On top of that, the number of connected devices is expected to increase to an estimated 24 billion by 2020, from the approximately nine billion in use today, and make up about $1.2 trillion in mobile service provider revenue (1Machina Research). Consumers now expect every electronic device they interact with, in and outside of the home, to be internet connected and able to provide all types digital content. In-car GPS devices are a good example of this. Originally only providing turn-by-turn directions, vehicle GPS systems, such as the TomTom GO LIVE, have evolved into connected devices that consumers use every day, not only for directions, but also to access weather reports, real-time traffic alerts, social media, applications, and more. With how commonplace these devices have become in drivers’ environments (revenue expected to rise to more than $8 billion by 2017) for much more than navigation, it seems like a logical next step for GPS systems to become integrated as backseat and handheld video entertainment screens inside of cars.
Consumers’ demand for their devices to be multifunctional has even expanded to their TV sets and gaming consoles, which now offer much more than local broadcasting and game play. For example, ABI Research says that gaming consoles are considered the most popular video device for connecting to the internet and their evolution is equally worth studying. The original Nintendo, PlayStation, and others, were just for playing games, but with internet connections incorporated in the mid-2000s, gaming systems have evolved to allow for co-op games on the internet, photo sharing, web browsing, and what seems to be the most important in today’s market, video content streaming. Case in point, when you visit xbox.com, the gaming system is first described as an “entertainment experience,” for the entire family instead of just a holiday gift for young males wanting to play Halo 4. The adoption of smart TVs has been equally impressive. 6Wresearch forecasts that global shipments of smart TVs will hit 198.2 million in 2017, growing at a CAGR of 20.8% from 2012. Even electronics that seem far from the realm of connected devices are starting to come with internet features for enhanced efficiency. Samsung’s Wi-Fi Smart Fridge comes with the Epicurious app that enables food lovers to search for professionally created and tested recipes, make interactive shopping lists, follow step-by-step stove-side instructions, and save and share their favorites. In the future, refrigerators will most likely offer producers and advertisers a new way to reach their cooking audience. Connected devices will only continue to evolve as consumers expect more electronic efficiencies in every aspect of their daily lives.
What an Expanded Definition Means for Video Stakeholders
Producers, publishers, and advertisers will need to find ways to reach their audience across multiple screens or risk losing them to fragmentation. Luckily, for those who adapt their business models to the evolving digital video landscape, content is going to be in demand more than ever before. Cisco estimates that the consumption of mobile video will comprise 71% of all mobile data traffic by 2016. And these impressive numbers show that the new opportunities for digital stakeholders to position themselves in front of their audiences will only continue to grow exponentially. Several innovators in the video industry are already tapping in to get ahead of the curve. The Wall Street Journal has integrated its WSJ Live video content into applications for Samsung 2011 Smart TVs, Sony Internet TVs, VIZIO Internet Apps, Boxee, the Yahoo! Connected TV platform, and several others. Video consumption has even expanded to the connected devices inside of retail outlets like malls and restaurants. TheBITE, a network powered by indoorDIRECT, Inc., can be spotted on screens inside Taco Bell, Arby’s, Wendy’s, and Denny’s. These types of screens offer additional engagement options to stay with the audience even when they leave the location. Denny’s most recently launched a Middle Earth menu alongside The Hobbit movie, and some features include the ability for customers to scan QR codes that will provide them with additional movie-related content, such as exclusive videos and behind-the-scenes looks at the national TV ad spot. These are examples of how stakeholders in the video industry have and must continue to keep innovating and plan their media for consumption across all shapes, sizes, and places of screens if they want to reach their audience.
The industry needs to recognize that EVERY device is a connected device. With the technology already available to producers, publishers, and advertisers, it is imperative for all to be forward looking and push their presence wherever there is an internet connection. And, wherever there is an internet connection, there are people waiting to connect and consume video.