Social TV: How Facebook, Twitter and Connected Television Transform Global TV Advertising, Pay-TV, EPGs and Broadcasting

Futurescape, July 2010, Pages: 150

Facebook and Twitter are fighting for key roles in the worldwide television market, particularly TV advertising and pay-TV, as Internet-connected television makes TV into a social medium.

This report is the first critical appraisal of how the battle between the two major social networks over social TV is shaping twenty-first century television and challenging the TV industry.

The winner will take a dominant strategic position in socially-targeted TV advertising, pay-TV content recommendation, TV show marketing, next-generation EPGs and interactive viewing.

- Facebook aims to tap the $180bn worldwide TV ad market – Google TV and other connected TV systems will put Facebook and Twitter targeted ads on TV screens

- Global pay-TV, estimated at $250bn in 2014, needs social recommendation and discovery services because these encourage viewers to subscribe to more expensive packages and buy more video-on-demand – Facebook and Twitter are major social data providers

- Middleware and EPG providers similarly need social network data for recommendation and discovery – the European EPG market alone will be worth $555m by 2014

- Facebook and Twitter buzz affects TV ratings and the social networks know in real time how people react to TV programming – an essential supplement to Nielsen-type viewing data

This report maps out the emerging social TV landscape and analyses how the battle over social TV between the social networks, and other Internet companies such as Google, permanently transforms the TV market, as connected television arrives in our homes.

1. EXECUTIVE SUMMARY

1.1. Facebook and Twitter are battling over the future of TV

1.2. Internet connectivity transforms TVs, platforms, business models and the viewing experience

1.3. Facebook and Twitter enter the entire TV value chain

1.4. CE manufacturers need social networks for consumers’ expectations of TV social interactivity

1.5. Cable, satellite, IPTV operators need social networks for content recommendation

1.6. Facebook and Twitter will compete for $180bn global TV ad spend – via the TV

1.7. Data sales: the opportunity for Facebook and Twitter to diversify revenue streams

1.8. Connected TVs will increase social networks’ influence over TV ratings

2. CONNECTED TVs AND SOCIAL NETWORKS ARE CREATING SOCIAL TV

2.1. Consumers demand an enhanced and social TV experience like never before
2.1.1. Research: Consumers want the Internet and social networks on their TVs
2.1.2. Research: Consumer interest in TV apps
2.1.3. Panasonic and Verizon: Consumers want and use social interactivity via TV
2.1.4. TV viewers are already two-screening and connecting TVs to the Internet
2.1.5. The Internet is widely regarded as a leading form of entertainment
2.1.6. Edelman: Are social networking sites better value entertainment than television?
2.1.7. Facebook and Twitter – adding the social dimension to two-screen viewing

2.2. Four reasons why consumers want connected TVs
2.2.1. Personalize the TV experience
2.2.2. Customize the TV experience
2.2.3. Discover new content based on existing interests
2.2.4. Enjoy a more social TV experience

2.3. Further research on socialising and television
2.3.1. Thinkbox: Viewers want to view TV socially
2.3.2. Intel: Social networking is a key driver for connected TV adoption
2.3.3. Facebook and Twitter are essential partners for connected TV

2.4. CE manufacturers and platform operators: New business opportunities and challenges
2.4.1. CE manufacturers are becoming online service providers
2.4.2. Platform operators respond to consumer demand and manufacturer competition

2.5. Social networks: Facebook and Twitter in connected TVs herald a new era of social TV

2.6. Broadcasters, content owners and advertisers confront a social TV landscape

2.7. Providing Internet content on TVs: apps or complete Web sites?
2.7.1. Offering the most popular Internet services – video-on-demand and social networking
2.7.2. Prime locations for Facebook and Twitter in app stores

3. THE CONNECTED TV MARKET: DATA AND PREDICTIONS

3.1. TV apps – market size estimates
3.1.1. $1.7bn apps market by 2013
3.1.2. $1.9bn apps market by 2015

3.2. How many TV sets are already Internet-connected?
3.2.1. Connected CE devices globally
3.2.2. Connected CE devices in Western Europe
3.2.3. 24% of US households already have a TV connected to the Internet
3.2.4. Connected TVs’ ease of use leads to rising TV connectivity
3.2.5. Is the TV set poised to become the home’s connected entertainment hub?

3.3. Connected TV and CE device sales and shipments – analysts’ forecasts
3.3.1. Connected TV sales and shipment forecasts: USA, Americas, European countries, China
3.3.2. Global connected TV sales and shipment forecasts
3.3.3. Connected CE device sales and shipment forecasts
3.3.4. Will connected CE devices become ubiquitous globally?
3.3.5. Falling Blu-ray player prices are driving mass-market adoption
3.3.6. Marketing soars for connected TVs and 3D sets

4. KEY PLAYERS AND PARTNERSHIPS IN BUILDING SOCIAL TV

4.1. How Google TV, Yahoo and Microsoft compete in the connected TV market

4.2. Google, Intel and Sony partner for Google TV
4.2.1. Does Google TV support Facebook and Twitter as competitors in targeted advertising?

4.3. The Yahoo Connected TV app platform and partners
4.3.1. The platform’s development 2008 – 2010
4.3.2. Yahoo widgets for Facebook, Twitter and other social media
4.3.3. Yahoo widgets for TV and video
4.3.4. Could Yahoo identify which TV show the consumer is viewing?

4.4. Microsoft embedded software for IPTV

4.5. Figure: Facebook and Twitter apps reach TV via Google, Yahoo and Microsoft middleware

4.6. Major app platforms and which CE manufacturers have adopted them
4.6.1. App platforms partnering with CE device manufacturers
4.6.2. The rationale for multiple partnerships

4.7. CE manufacturers and their app platform partners
4.7.1. Hisense
4.7.2. LG Electronics – NetCast
4.7.3. Mitsubishi – StreamTV
4.7.4. Panasonic – Viera Cast
4.7.5. Philips – Net TV
4.7.6. Samsung – Internet@TV
4.7.7. Sanyo
4.7.8. Sharp – Aquos Net
4.7.9. Sony – Yahoo Connected TV and Google TV
4.7.10. Toshiba
4.7.11. Vizio – Internet Apps (VIA platform)

4.8. Set-top box and middleware providers and their app platform partners
4.8.1. Motorola
4.8.2. NDS
4.8.3. Nagravision
4.8.4. Rovi (Macrovision)

4.9. US cable, satellite and IPTV operators and their app platform partners
4.9.1. Cable operators
4.9.2. Satellite: DirecTV and DISH
4.9.3. IPTV: Verizon FiOS TV

4.10. Cable, satellite and IPTV operators outside the USA
4.10.1. BT Vision – UK IPTV operator
4.10.2. Virgin Media – UK cable operator
4.10.3. HBB in Europe
4.10.4. Liberty Global cable systems in Europe, Chile and Australia
4.10.5. Portugal Telecom – Meo IPTV
4.10.6. Indian cable operators

4.11. Internet TV set-top boxes
4.11.1. Boxee
4.11.2. Google TV / Logitech
4.11.3. Roku
4.11.4. TiVo
4.11.5. YuiXX / Conceptronic (Intel)

4.12. Game consoles integrating Facebook and Twitter
4.12.1. Microsoft Xbox Live
4.12.2. Sony PS3

5. SOCIAL TV AND THE TV INDUSTRY: INNOVATION AND DISRUPTION

5.1. Why Facebook and Twitter are already major forces in television

5.2. Figure: Facebook and Twitter in the TV value chain – innovation and disruption

5.3. Social networks have user numbers equal to top TV audiences
5.3.1. Global reach: Facebook’s user base is half a billion
5.3.2. Twitter’s user base exceeds 100m
5.3.3. Facebook’s US user base compared with TV audience size
5.3.4. Twitter’s US user base compared with TV audience size

5.4. How the dynamic connected TV market benefits social networks

5.5. Facebook and Twitter on three screens – a better service for users

5.6. Providing real-time conversation and social interaction via the TV

5.7. The social networks target the TV data market, to supply social data to the TV industry

5.8. Transforming EPGs into social EPGs with social recommendation of TV shows

5.9. Gaining increasing power over TV ratings

5.10. Facebook and Twitter will compete for the $180bn global TV ad spend – on connected TVs

5.11. COO Sheryl Sandberg: Facebook is challenging TV advertising as a brand building channel

5.12. Twitter’s Promoted Tweets and @Earlybird – bound for connected TVs?

5.13. Facebook and Twitter will be ad platform competitors on connected TV

5.14. How Twitter and Facebook already compete for TV industry partnerships
5.15. Twitter – real-time conversations, a living EPG, and audience data

5.16. Facebook – social media integration for VOD and set-top box middleware

5.17. The future for social networks on connected TV
5.17.1. Will Facebook Credits facilitate VOD purchases and gifting?
5.17.2. Competing via functionality and developer communities
5.17.3. New regulatory and privacy challenges?
5.17.4. A possible key role for legitimate P2P content distribution
5.17.5. International opportunities

6. CE DEVICE MANUFACTURER STRATEGIES

6.1. Incorporating social apps into connected TV sets

6.2. A real-time interactive social context for all video viewing – TV and on-demand

6.3. Viral marketing for connected TV from the TV set

6.4. Boosting VOD sales through content recommendation

6.5. Incorporating additional social functionality

6.6. Accessing social network data for content recommendations

6.7. YouTube Leanback and Facebook integration

6.8. Integrating social apps with TV broadcast

6.9. Should manufacturers standardize a widget platform to encourage innovation?

6.10. Is the iPad a rival social TV device to the connected TV?

7. PLATFORM OPERATOR AND MIDDLEWARE PROVIDER STRATEGIES

7.1. The threat of disintermediation by connected TVs

7.2. Platform operators respond with better-integrated social apps

7.3. Social activity via TV benefits the platform operator business model

7.4. Massive content choice on connected TV platforms requires a new kind of EPG

7.5. Social discovery and recommendation: the key to finding connected TV content

7.6. Facebook and Twitter data can power social EPGs

7.7. Should platform operators rely on Facebook and Twitter data?

7.8. Wanted – the next-generation of socially integrated middleware

7.9. TV apps arms race: CE manufacturers vs platform operators

7.10. Independent set-top boxes

8. BROADCASTER AND CONTENT OWNER STRATEGIES

8.1. Broadcasters engaging with audiences via social networks – a Faustian pact?

8.2. Why are broadcasters sharing their audiences with social networks?
8.2.1. The significance of tools that integrate social networks into TV Web sites
8.2.2. Pros and cons for broadcasters in implementing Facebook and Twitter logins
8.2.3. Internet users prefer to access sites with their Facebook identities
8.2.4. Facebook – a dominant identity provider

8.3. Do social networks drive TV ratings and online video viewing?
8.3.1. TV ratings: Facebook and Twitter are considered to be significant viewing drivers
8.3.2. Twitter and cable net Oxygen trial whether social activity boosts ratings
8.3.3. Facebook drives Web video viewing: Third-biggest video site by unique users – Nielsen

8.4. A pivotal role in TV show promotion
8.4.1. How broadcasters and TV shows leverage Facebook as a digital marketing channel
8.4.2. The value of Facebook Pages for promotion

Companies and sectors covered in the report include:

Social networks, Internet and software companies
- Facebook
- Twitter
- Google
- Yahoo,
- Microsoft

Connected TV manufacturers and their partners
- Hisense
- Intel
- LG Electronics
- Mitsubishi
- Panasonic
- Philips
- Samsung
- Sanyo
- Sharp
- Sony
- Toshiba
- Vizio

Pay-TV platform operators
- BT Vision
- DirecTV
- DISH
- Liberty Global
- US cable operators
- Verizon FiOS
- Virgin Media

Set-top box and middleware companies
- Motorola
- NDS
- Nagravision,
- Rovi (Macrovision)

Game consoles
- Microsoft Xbox Live
- Sony PS3

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