Why Are TV Channels Still Numbered, Anyway?

In the on-demand, programmatically-bought future, fitting content into numbered slots will seem antiquated and superfluous. Our great-grandchildren will hardly believed we ever did things this way.

When I was a kid, we had a small black & white TV with a dial. We had our choice of channels 2 -13, plus another knob for the vast UHF wasteland. No offense, Weird Al.

Television was presented to us as an ordered list, because that was how it was broadcast. Since each TV station needed to broadcast on a different frequency, they were assigned orderly little slots. Since geographically adjacent markets needed to alternate which slots they used, and TV-makers didn’t want to manufacture new knobs for each market, the slots were assigned numbers and the numbers were put on the knobs in sequence. Channel 4 broadcast at a slightly higher frequency than Channel 3, but a lower frequency than Channel 5.

Then along came cable TV. Cable inherited this legacy even though it was not bound by broadcast frequencies. Consumers needed to know that if they subscribed to cable, they would still get “Channel 2” and “Channel 7”; plus they get new cable networks, which get their own arbitrary numbers. Why train people on a whole new system, right? Cable is just like “regular” TV, except with lots more of it. Also, it’s easier to show a number on the front of the cable box than the name of the channel. So the numbering model was still useful. Also cable companies could use “low” numbers as negotiating leverage with networks.

This model doesn’t hold for newer forms of content. The Huffington Post isn’t “Website number 802.” Of course it isn’t, trying to number websites would be superfluous and silly. You don’t have to navigate up and down through a list of websites, you just type in what you want based on its descriptive name and go there. Your only hurdle perhaps is remembering which vowels to leave out of the domain name.

A slow revolution of sorts is beginning to take hold that will finally challenge the numbered-TV model. You may have heard this referred to as “cord-cutting” or as the adoption of “over-the-top” entertainment options. This trend doesn’t just mean people cancelling cable and watching Netflix instead. It challenges the 70-year old definition of what a “network” is and the 7-year old definition of what an “app” is (vis a vis entertainment).

Right now, we have cable networks with linear programming, and we have apps with supplementary content about those cable networks. The logical conclusion of the current trends is that the two merge; the linear TV broadcast of live events plus on-demand shows all live within an app that is ad supported (e.g. Hulu), subscription based (e.g. something like HBO Go or Netflix), or some sort of hybrid. Imagine a world where you subscribe to “cable”, but instead of 500 numbered channels, you get access to 500 apps. Each app then has the “TV network” as you used to know it embedded within, plus supplementary functionality. So your ESPN app includes live coverage plus a widget showing scores, and your History Channel app shows an interactive map with the best routes for ice road trucking along with the show of the same name.

You don’t necessarily lose the ability to bundle content the way cable does currently. For instance, a parent company with many cable networks could bundle them together into one subscription app, effectively becoming a mini-cable company unto itself. A user could then rebuild an approximation of current-day cable service by subscribing to some of these bundles. The idea of assigning numbers to these apps at that point would seem completely ridiculous. As content providers shift to this model, so begins the decline of the channel number. The last vestige will be over-the-air broadcasts; but even then any remotely modern digital tuner can list channels by name rather than number with a simple firmware upgrade.

And what would that then mean for advertising? Well it’s a whole new world entirely. The 30 & 60 second spot formats will erode in favor of a new set of standards for video and interactive ads. These new standard units will be distributed across a vast sea of platforms, apps and experiences in real time based on programmatic algorithms. In parallel there will be enormous opportunities for specialized sponsorships, apps, games and experiences that can rise above the clutter and integrate themselves with audiences’ lives. If you need help imagining what this future will be like, just take a look at where digital display advertising has been headed.

We’re already reading about Apple skipping the cable companies and going directly to content providers for their long-awaited TV offering. Netflix original programming is another example of what this future may look like (albeit without ads). The more Netflix produces original programming, the more they begin to resemble what we currently think of as a TV network. Except they never had a channel number, and never needed one, and never will.

The Next Big Emerging Media Device Has Four Wheels

Consumer Electronics Week is in full swing here in NYC , and one of today’s featured events was the Connected Car Conference (“C3”). The afternoon featured a variety of panels discussing the future of the telematics space from a variety of different angles.

A major theme throughout the day was the disparity in product life cycles between cars and “normal” consumer electronics. Whereas a car goes from the drawing board to the dealer in something like 8 years, consumer electronics typically make the journey from design to store in 18 months. So in order to keep pace with consumer expectations, automakers have a lot to learn from the consumer electronics industry.

As an example of the blending of formerly disparate industries, one panel featured the CTO of General Motors sitting alongside a VP from AT&T, along with other automotive electronics representatives. Tim Nixon from GM was quick to point out how the Chevy Volt platform already gives drivers access to vehicle data from their smartphone, and that consumers are going to grow to expect this kind of integration.

Another interesting topic of discussion was design aesthetics. In a dialog that seemed to echo debates about mobile interface design, panelists discussed how different car makers have different philosophies on interaction design. For instance, BMW eschews touchscreens in favor of a jog wheel placed down by the gear shifter. And much like the dueling gadget interface designs we’ve seen over the last ten to fifteen years, carmakers will duke it out as consumers decide which input methods work best for them.

Carmakers are constantly experimenting with new integrations between media and the car environment. A panelist from Gracenote described an interesting proof-of-concept experiment they did with Ford, wherein the driver triggers Madonna’s “Ray Of Light” when the headlights are turned on.

Several panelists also discussed Apple’s recent announcement of “iOS in Car”, wherein certain car models would be able to take deeper advantage of iOS7 on in-car touchscreens. While this sounds like a big breakthrough at first, the functionality is being very strictly limited at launch for safety reasons, and much of it is available on other platforms such as Pioneer’s App Radio.

Driver distraction was also a hot topic, and Gloria Bergquist of the Alliance of Automobile Manufacturers highlighted the tension between public policy and observed user behavior. At one point, regulators had considered banning dynamic (aka “moving”) maps from in-car nav systems, because they can be distracting. The counter-argument from the industry was that if you degrade the in-dash experience in this way, drivers will just start to try navigating with their smartphones. This obviously creates more danger than there otherwise would have been in the first place.

All in attendance agreed that while there are many nuances and challenges, apps were coming to the in-car experience and many lessons could be learned from the smartphone space about user behavior and demand for services.

Similarly brands should be aware of this shift and be ready to take advantage of the time people will spend interacting with apps rather than listening to radio and radio ads.

Let’s Talk Hardware

A big theme on this, the final day of TechCrunch Disrupt NY 2013, has been hardware.

On stage upstairs, Limor Fried of Adafruit sat down with TechCrunch to discuss her company and philosophy on hardware and education. Adafruit is a NYC-based electronics design and manufacturing company. We profiled one of their products, litleBits, on this blog a few months ago.

The goal of the company is to teach people how electronics work and to have them become comfortable making relatively simple things. Relatedly, they want to help encourage kids to get interested in engineering.

Underlying all of this is Ms Fried’s perspective on open source hardware. While open source software is widely known about (insomuch most companies are running at least some of it) open source hardware is less so. Beyond just source code, open source hardware includes such items as CAD files and material specs. The idea is that someone could take digital files provided and go make an exact working replica of the hardware in question. This is similar to how someone can take open source code and compile their own perfect working copy of a computer program.

Ms. Fried shared an anecdote of how she had posted a design for an efficient solar battery charging mechanism. After some time, someone reached out to her to let her know they aimed to use her designs as the basis of a new Kickstarter project. The project aimed to create solar charging stations for mobile devices in developing nations. Instead of being protective of her designs, Ms. Fried was more than happy to bless the project in the name of the overall advancement of innovation.

Meanwhile, downstairs on the expo floor today is a dedicated area called Hardware Alley. While most of the startups showcased on days 1 & 2 were primarily software-oriented, today’s focus is on hardware. Displays include home automation systems, 2D and 3D printing technologies, tech for dogs, and a little drone helicopter the size of your palm.

Your Eyeballs Are Money

Today at TechCrunch Disrupt NY, executives from Google, Facebook and Twitter were assembled on a panel to discuss advertising. The participants expressed some common views on the industry but also some sharp philosophical differences emerged.

Neal Mohan of Google stressed that for advertising they are trying to embrace context, for example mobile vs. desktop and lean forward vs. lean back settings. He also highlighted that measurement represents one of the biggest unsolved problems in the landscape today. It’s critical to be able to measure the efficacy of digital ads in terms of driving sales. Google is currently investing a lot in solving this problem.

Gokul Rajaram from Facebook agreed that context was important, and pointed out that Facebook has been focusing heavily on creating an optimized mobile experience. In fact, a full 23% of Facebook’s advertising revenue comes from mobile at this stage. The guiding philosophy behind the recently-launched Facebook Home was to put your friends at the center of your mobile experience rather than your apps. It was key, he indicated, that advertising not be interruptive, but that it fit into the flow of the natural way people are using an application.

Kevin Weil of Twitter discussed how the site is “a bridge, not an island”, insomuch as it drives action from sponsored content out into the world. He described the platform as the social soundtrack to TV, pointing out that 95% of social commentary about TV is on Twitter. He feels the two platforms thus make each other stronger for advertisers. Mr. Weil also pointed out that no one typically screenshots a banner ad and shares it, the way people actively retweet promoted tweets within their Twitter feeds.

A difference of opinion emerged into how to credit different digital marketing tools for effectiveness measuring purposes. Facebook’s point of view is that the last click before purchase doesn’t necessarily deserve all of the credit; they feel that brand-building interactions (e.g. Likes, Suggested Posts) play a more important role in driving purchase than conventional wisdom would currently say. Meanwhile Twitter feels as though engagement with Tweets and links therein that drive to purchase are critical, and the “last click” before purchase deservedly gets the lion’s share of attention.

Buzzfeed: Everyone is Literally* Crazy

Today at TechCrunch Disrupt NY, Jonah Peretti of Buzzfeed delivered an entertaining keynote touching on content, social networking and cats. The key theme was that many Internet users’ online behaviors actually roughly correlate to DSM-IV-recognized mental disorders, including:

Histrionic Disorder
Narcissistic Personality Disorder
Oppositional Defiant Disorder
Caffeine Intoxication

As he dove into each of these mapping them to online behavior, he made a number of interesting insights that align with Buzzfeed’s approach to curating compelling content and driving eyeballs. In the end so much of how people embrace some content and not others reflects traits that are inherently human. A slide from Blade Runner was shown and the Voight-Kampff test was referenced.

One example was the role of cute/funny content in our lives. When you and a friend laugh together about a good joke, the next day you may not remember the joke as much as you remember being with your friend and sharing a good time. Similarly, cat pictures are not about cats – they are about connecting with other people.

A content-related tip was to “publish into the zeitgeist”. You try to capture a fleeting moment when everyone is interested in the same thing. An example of this was Buzzfeed’s picture of tipped-over yogurt as “earthquake damage”. A more recent example could be the now-famous Oreo tweet during the Super Bowl blackout.

Jonah’s presentation also contained a nugget of direct advice to marketers. When creating ad creative that you hope to go viral, consider the extent to which the content is the sort of thing someone would be proud sharing. He noted that the things people search for on Google the most (e.g. “sex”) rarely correlate with things they share on social networks. So from a creative standpoint, this drives a divide between a brand’s SEO and display ad strategy and their content/social strategy. As Jonah pointed out, women in bikinis may drive browser clicks, but that same content is unlikely to be proudly shared on social networks even if it is otherwise compelling.

On another note, Jonah shared that 50% of Buzzfeed’s video traffic happens during Primetime TV hours. This could indicate Buzzfeed has become something of a competitor to many of the emerging second-screen applications that tether to the TV programming being watched.


TechCrunch Disrupt Hackathon

“Team #10 needs a Leap Motion Controller. Does anyone have a Leap Motion Controller?” asks the man with the mic. Half a dozen hands go up. So goes the TechCrunch Disrupt NY Hackathon final presentations.
The programmers assembled here today in the Manhattan Center in midtown NYC have been up all night coding “hacks”, simple and rough tech product ideas. They will soon each present their ideas and be judged by a panel composed of VCs, entrepreneurs, and folks with backgrounds at Y Combinator, Techstars and the like.
Sometimes the ideas come out half-baked and don’t make much sense. But sometimes these projects turn into real companies, like GroupMe. The presentations are lightning-fast, with a hard limit of 1 minute each so they can get through the 160+ teams.
Here are some fun ideas that were presented:
Rendevous – Tracks people you crossed paths with throughout the day who are also using the app. Helpful for when you see the same person on the train each day, but you’re not completely sure.
Weather To Golf – App that monitors golf courses in your area. When weather is good and a tee time is available, sends you a text message and allows you to auto-dial the course to reserve a golf game.
Hangout Later – Built on Foursquare API. You check in to the app and it uses 4sq “Where To Next” feature to pick a cool spot (based on previous checkins) in between you and where a friend of yours has checked in. It auto-creates a text message to send to those friends who are nearby, suggesting the auto-picked spot.
Rambler – Tool to let you visualize your credit card spend on a map, using the plaid.io API for transaction data.
SocialPhish – A simple Visa-sponsored game that entertainingly educates users about phishing issues with an Asteroids-like game involving cute animated fish.
Squirrel – Crawls through your evernote notes and delivers a personalized newsletter of relevant content.
Machine Learning mapped news reader – Allows you to browse news articles on a big story pinned to a map based on where they were published. Lets you scroll through time to also see when each article was published. Learns what news to surface based on your behavior.
“Oh Shit I Need Olivia Pope” – Playing off of a character from the TV show Scandal, responds to user inputted questions or major issues of the day scraped from the New York Times with quotes from the character Olivia Pope. Basically, a content-branded online magic 8-ball.
GeoHue – Uses Google Image search for buildings overlaid on geography to determine a given geography’s recommended color palette.
Lightning Poll – Location-based mobile polling. You log on and see polls going on within your vicinity.
Bar Power – Gameifies a night out drinking. Earn points for doing good things lose for bad things. Overlays your score across various neighborhood on a map.
Menu AR – Point your phone camera at menu item, augmented reality mechanism shows images of the menu item via Google image search.
weatherLight – LED lightbulb that changes color and steadiness based on weather forecast and location. Configured and controlled via mobile app.
Yumbites – Scan UPCs of products in your fridge, matches against recipe database and tells you what you can make for dinner.
Bounce – Mobile app that uses the Foursquare API  to pick a nearby highly-rated restaurant when you’re hungry. The twist is that it only gives you one suggestion, and you can’t hit the search button more than once every two minutes. It is meant to make a decision for you when you are indecisive.
One of the featured APIs at the event was GM’s infotainment platform (alternately called MyLink or  IntelliLink depending on the brand). A handful of the projects that used this technology included:
Kar Nanny – Tracks a car’s location, fuel level, speed etc. For parents to watch over teens who are driving around.
Learn To Drive – This GM API project was by teens instead of just for teens; the coders who made it are still in high school. The app acts like a virtual driving instructor letting a person who is just learning know specific steps to take(e.g. use turn signal) as they navigate around.
News.io – App for GM cars that can read NY times articles to you as you drive.
Hail – App on GM platform & mobile. Allows people to offer money for rides. People make offers on mobile app. People using car app can see who is offering how much to go where. You can then pick them up. You basically act as a one-person Uber on an as-needed basis. Might be against several laws, local ordinances, and serial-killer-avoidance strategies.

Mobile & Shopping

Yesterday at Mobile World Congress, a panel of marketers and tech leaders discussed the role of mobile in the retail shopping experience. A number of interesting thoughts and insights emerged from the lively discussion.

Danielle Lee of AT&T presented a project born of AT&T’s AdWorks. Under this program, AT&T customers can opt-in to receive special deals and promotions via SMS. Once a consumer confirms via SMS that they do indeed want to receive the messages, the AT&T network keeps track of where they are based on the cell towers their devices are talking to. When a customer enters a pre-defined geo-fence, the customer gets a text message containing a special deal.

Consumers can also log into their AT&T accounts and customize which brands/products they most care about. For those that have opted in, the program has been very well received and they enjoy getting deals delivered to them that are relevant.

Another location-based approach to mobile marketing was presented by David Katz of Groupon. He shared that a fill third of Groupon’s transactions are now coming from mobile. Beyond the classic flash sale experience that the company is famous for, it is evolving into a “Commerce Discovery Experience”. In their mobile app, they can plot Groupon deals on a map, populated in significant part by “evergreen” deals that are not time limited like their classic flash sales.

Response to this model has been very large. Mobile drove more than 40% of their sales on Black Friday.

Ambarish Mitra, the CEO of Blippar, discussed the potential of Augmented Reality in the shopping experience. As an example, he cited a very successful campaign for Heinz designed around consumers scanning bottles of ketchup in the store. The Augmented Reality experience generated by the Blippar app presented consumers with recipes and videos. The campaign captured over 219,000 unique consumers who scanned bottles in stores and they interacted with the experience over 475,000 times.

A forecast that was very interesting to ponder came from Sandra Alzetta of Visa. She predicted that by 2020, 50% of Visa’s volume would come from mobile.

It’s stories like the ones offered during this session and the last statistic in particular that helps explain why mobile payments and mobile retail experiences are such hot topics at Mobile World Congress this year.

NFC Out-Of-Home Shopping

In 2011 Tesco’s Home Plus stores launched a highly-praised installation in the Seoul subway, which allowed shoppers to scan a QR code and make purchases from their mobile device. At the lab, we’d always wondered whether this concept could be extended to an NFC implementation.

Well apparently UAE carrier Etisalat had similar ideas. This week in Barcelona at Mobile World Congress, Etisalat showcased a grocery shopping solution they deployed earlier this year in the Dubai metro.

It allows you to tap a product and add it to a cart on your mobile device. Then you can pay for your purchase using Etisalat’s mobile wallet technology.

It’s a great example of the intensive amount of work going on all around the world on establishing standard practices and user experiences around mobile payments, particularly with regards to NFC. This week at MWC alone, there were big announcements along these lines from Mastercard and Visa. Meanwhile in Hall 7, there was an entire “NFC & Mobile Payments” Zone with smaller vendors trying to support the ecosystem.

The Future of NFC in Retail

Yesterday afternoon at Mobile World Congress, a panel gathered to discuss the opportunities and challenges facing NFC in the retail space presently and in the near future.

Before diving in to what was covered, there’s an important technical detail to discuss that is often not covered at the lab because it is a little too in-the-weeds technical, but is relevant in this context. When we tap a phone to read an NFC tag, the phone is acting as the reader and the tag is being read. In a mobile payments scenario, the Point Of Sale system (or in the UK, “The Till”, as was discussed today) is the reader and your phone is being read. Specifically, it is the secure element that is being read and more often than not that circuitry lives inside one’s SIM card. The carriers in particular are enthused about this arrangement since they control the SIM card and would enjoy having the future of payments standardize around their equipment.

In any case, SIM-based NFC is gaining momentum. There are now 80 million NFC-capable handsets out in the world and 40 million NFC SIMs in those handsets. So to recap, if an NFC-capable device has a regular SIM in it, then it can act as a reader but cannot itself be read, or at least cannot be used for payment.

The panel identified 4 core challenges facing the wide adoption of NFC:

  • There needs to be a robust ecosystem of services across multiple verticals to entice consumers to demand the technology of their providers
  • There need to be killer apps for the technology beyond payment. Transportation is a good example of a space that could take advantage of this.
  • The specification needs to be standardized globally, and the testing and certification process needs to be streamlined
  • There needs to be common iconography and a standard global customer journey. If that sounds difficult, consider that there are only 1 or 2 customer journeys that are standardized for plastic credit card usage globally. So there’s hope it can be achieved.

Retailers are not feeling pressure right now to adopt NFC-capable terminals. Consumers are not demanding it yet. One suggestion would be to add some kind of analytics layer, or some kind of mechanism of consumers tapping a check-in when they enter the store. The extra data stores could stand to learn about their customers could sweeten the pot enough for them to invest in new equipment.

Retailers are feeling some confusion right now because lots of vendors are trying to sell them lots of divergent payment systems and their POS cycles are too long to make a big investment in the wrong technology. They by and large need more certainty before they can bet on a particular technical standard.

One hope about increasing consumer demand for paying with their phones is the general theme that phones are increasingly becoming central to people’s lives in many other ways. The hope is that by 2014 or 2015, the demand to pay with one’s phone will organically grow out of this trend requiring less assistance from big industry programs.

A possible manifestation of NFC payment that could speed this process would be a mechanism where readers are built into laptops, and users can tap their phone to their laptop to pay for items. This solves a pain point for consumers, that of having to key in their credit card number to make a purchase online.

One strongly held view among many of the panelists was that payments will not be the killer app that launches NFC. There’s got to be something utilitarian that improves people’s lives in a more substantial way that gets them interested in the idea od tapping their phones. This may not even be a tap-your-phone-to-a-terminal type interaction. Perhaps it could be a peer-to-peer tapping experience like Android Beam or tapping a phone to tablet.

In terms of non-payment use cases for NFC, many general ideas were discussed. A retail expert suggested the ability to tap as you enter a store to load your loyalty account with special deals just for you. A town manager form the UK suggested civic and public interest uses of NFC out of home in the city centers might help spur adoption.

NFC ID Badge

Here at Mobile World Congress in Barcelona, NFC is a very big deal. So much so that they have created a whole special mechanism for entering the venue based on NFC, which lives alongside the main entrance lanes that are often jammed with attendees. It is called the “NFC Badge” and it works like this:

  1. In advance of the event, you log on to the Mobile World Congress site and opt-in for the NFC Badge program once you’ve registered to attend. You are asked to upload a headshot of yourself to the website.
  2. You then download the “NFC Badge” app to your phone.
  3. When you arrive on the first day, you go to a special desk and show the app to someone who validates that the picture matches you. Within the app, the little icon next to your headshot turns into a green checkmark.
  4. When you go to enter the Fira Gran Via, you veer to the right away from the long lines of people having their regular badges and photo IDs checked.
  5. You open the NFC Badge app and tap the special reader they have set up.
  6. On a little screen above the reader, it confirms your face and you proceed into the conference

It’s worked out pretty well so far, and is an interesting practical (and non-payment) use case for NFC.