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.
Global Advertising And Marketing Industry
1. EXECUTIVE SUMMARY 1
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 5
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 13
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 18
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 31
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 42
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 46
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 51
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
8.4.3. Top 10 TV shows with the most Facebook fans
8.4.4. Facebook Pages on connected TV increase their importance for audience engagement
8.4.5. Content owners want TV apps integrating Facebook Pages and merchandising
8.4.6. The Facebook Platform is highly effective at driving traffic to entertainment and sports sites
8.4.7. Do Facebook and Twitter on connected TVs lock in TV show promotion and interaction?
8.4.8. Will content owners be compelled to advertise TV shows via Facebook and Twitter on TV?
8.5. How connected TV amplifies broadcaster-social network relationships
8.5.1. Social networks stimulate conversations on TV screens, beside TV shows
8.5.2. Twitter and Facebook offer real-time feedback direct from the TV viewing context
8.5.3. Will Facebook and Twitter on the TV increase the significance of live programming?
8.5.4. Who controls the Facebook Live Stream for live TV?
8.5.5. A social EPG requires broadcasters to be socially visible
8.5.6. Can social network data supplement ratings Figures?
8.5.7. Do broadcasters creating branded apps need to partner with Facebook and Twitter?
8.5.8. Broadcasters must pioneer connected TV entertainment and business models
9. TV ADVERTISER STRATEGIES 64
9.1. Facebook has a large – and fast-growing – advertising platform
9.2. Twitter is developing its Promoted Tweets ad platform
9.3. Viewers can already receive brand messages via status updates and tweets on TV
9.4. The opportunities for targeted advertising on connected TVs via Facebook and Twitter
9.5. Co-ordinating TV commercials and Facebook ads on connected TVs
9.6. Will Facebook video ads on connected TVs bypass broadcasters?
9.7. Advertisers and agencies confront a social context for TV commercials
SOCIAL TV MARKET RESOURCES – INTERVIEWS AND BRIEFINGS 67
10. INTERVIEW: NDS PRODUCT MARKETING MANAGER, INTERACTIVE, MARK GROVES 67
10.1. NDS: About the Oona concept user interface for TV and Facebook
10.2. Interview with Mark Groves
11. INTERVIEW: BT RESEARCH LEADER ANDY GOWER ON SOCIAL TV RESEARCH 72
11.1. BT research project on social TV
11.2. Interview with Andy Gower
12. CONNECTED TV COMPANIES: POSITION STATEMENTS 74
12.1. Mitsubishi
12.2. Panasonic
12.3. Philips
12.4. Verizon
12.5. Vizio
13. PLATFORM BRIEFING: FACEBOOK 80
13.1. Facebook is a social utility
13.1.1. What functionality does Facebook provide its members?
13.1.2. Facebook Pages for TV shows
13.1.3. Apps for TV shows
13.1.4. Independent video apps
13.2. The Facebook Platform
13.2.1. Digital identity
13.2.2. Credit cards and micropayments
13.2.3. Socially-targeted advertising
13.2.4. Improvements to the targeted advertising platform
13.2.5. Opening up the platform to the whole Web
13.2.6. Open Graph
13.2.7. Login
13.2.8. The Like button
13.2.9. Social plug-ins
13.2.10. Meta tags
13.2.11. Credits
13.2.12. The API
13.3. How Facebook users can share TV shows, movies, trailers and actors
13.3.1. Facebook for entertainment sites
13.3.2. Movies, actors, and TV shows
13.3.3. Movie trailers and celebrity photos
13.4. TV, media, news and entertainment launch partners for the Facebook Platform
14. PLATFORM BRIEFING: TWITTER 86
14.1. The Twitter Platform
14.1.1. Twitter is a real-time information network
14.1.2. Twitter is a public forum for discussion
14.1.3. Twitter, social relationships and digital identity
14.1.4. How the structure of tweets creates data and metadata
14.1.5. The user profile – people and companies
14.1.6. What business functions does a company Twitter profile serve?
14.1.7. @Anywhere Platform
14.1.8. Twitter third-party apps
14.2. Twitter’s business model: data, advertising and commercial accounts
14.2.1. Data for search engines
14.2.2. Promoted Tweets and @Earlybird advertising
14.2.3. Commercial accounts
14.3. The Twitter Platform and the TV industry
14.3.1. User login and authentication
14.3.2. CE manufacturers, platform operators: how mobile integration preFigures TV integration
14.3.3. Broadcasters and TV shows: live commentary to and from viewers
14.3.4. Broadcasters: Twitter integration with third-party sites for live streams of opinion
15. VIEWER BEHAVIOUR WITH CONNECTED TV SYSTEMS 91
15.1. How sharing is a key motivation for using the Internet together with TV
15.1.1. People want a more social experience with TV
15.1.2. Shared TV viewing – the Internet is a “virtual sofa”
15.2. From two-screen viewing to connected TV: Integrate communication into the TV set
15.2.1. Nielsen research: Viewers now use Facebook on PC while watching live events on TV
15.2.2. “Viewers only want more TV on their TVs” – end of an era?
15.3. Research into communication via the TV set 93
15.3.1. AT&T Research Labs: CollaboraTV – people want person-to-person interactivity via TV
15.3.2. Carnegie Mellon University: real-time chat is “distracting but enjoyable”
15.3.3. TNO: ConnecTV – a field trial of social networking with TV
15.3.4. Potential commercial benefits
15.4. Actual uses: Consumers’ Facebook social interaction on Verizon FiOS
15.4.1. Testing and launching Facebook on Verizon FiOS – two use cases
15.4.2. Case 1: Enriching the core TV experience with social networking
15.4.3. Case 2: Auxiliary or an extension to the TV experience
15.4.4. Unexpectedly high Facebook photo usage
15.5. Potential uses: Keeping in touch or meeting new people?
15.6. Possible barriers to use: Privacy and multiple viewers
16. MARKETING CONNECTED TV APPS – THE CONSUMER PROPOSITION 99
16.1. The Vudu app platform
16.1.1. What it offers consumers
16.1.2. Vudu’s launch of Facebook and Twitter apps
16.2. The Vizio app platform
16.2.1. How Vizio markets its apps and the keyboard
17. CHALLENGES IN IMPLEMENTING SOCIAL INTERACTIVITY ON TV 101
17.1. How do consumers use the Yahoo Connected TV platform?
17.1.1. The keyboard and text entry challenge
17.2. Should platforms offer pre-written Facebook and Twitter updates or let users write them?
17.2.1. Pre-written updates: BT and NDS
17.2.2. Write their own updates: Motorola and Verizon FiOS
18. SCREENSHOTS 103
Screenshot 1: Yahoo Connected TV – widgets in dock at bottom of TV screen
Screenshot 2: Yahoo Connected TV – interface for viewer to access Flickr functions
Screenshot 3: Yahoo Connected TV – thumbnails from set of Flickr photos
Screenshot 4: Yahoo Connected TV – full screen view of Flickr photos in slideshow display
Screenshot 5: Yahoo Connected TV – Facebook in widgets dock
Screenshot 6: Vudu movies app – viewers can share movie ratings via Facebook and Twitter
Screenshot 7: Vudu movies app – posting a movie rating to viewer’s Facebook profile
Screenshot 8: Vudu apps store – interface
Screenshot 9: Vudu Facebook app – Facebook status update, below video
Screenshot 10: Mitsubishi implementation of Vudu apps store
Screenshot 11: LG set with Skype app and contacts list
Screenshot 12: Panasonic Viera Cast apps store
Screenshot 13: Cello LCD TV Twitter app by Oregan Networks
Screenshot 14: Vizio TV with Facebook app
Screenshot 15: Vizio TV with Twitter app and app selection interface
Screenshot 16: Vizio TV Bluetooth remote control with slide-out QWERTY keyboard
Screenshot 17: ABC user registration via Facebook – ABC still requires more details from users
Screenshot 18: Social distribution for Dr Who, Facebook fan shares BBC America YouTube trailer
Screenshot 19: CNN Facebook social plugin, showing users their friends are sharing CNN stories
Screenshot 20: Desperate Housewives Facebook page cross-promotes Jamie’s Food Revolution
Screenshot 21: Desperate Housewives Facebook page - store tab
Screenshot 22: Co-buying movie tickets on Facebook, a model for connected TV VOD co-buying?
Screenshot 23: ITV invites users to rate and recommend shows for Facebook friends to discover
Screenshot 24: From the ITV site, sharing a rating to Facebook friends
Screenshot 25: ITV News integrates Facebook Live Stream for viewer chat in Leaders’ Debate
Screenshot 26: Sky News integrates Facebook Live Stream for viewer chat in Leaders’ Debate
Screenshot 27: Lost – Facebook event invitation to set up viewing parties
Screenshot 28: MTV visualization of tweets during Video Music Awards – see timeline at bottom
Screenshot 29: NBC site – login with Facebook (top right), become Jay Leno Facebook fan (left)
Screenshot 30: 30 Rock Facebook page – newsfeed tells fans about NBC.com catchup viewing
Screenshot 31: Adidas World Cup high definition video ad on Facebook, with Like buttons
Screenshot 32: Adidas World Cup Facebook page, prediction contest
Screenshot 33: Adidas World Cup Facebook page Wall, with more videos and graphic novel
Screenshot 34: Twitter’s Promoted Tweet adverts for Starbucks and Toy Story 3 in search results
Screenshot 35: NDS Oona concept interface, TV shows now and next, with Facebook friends
Screenshot 36: NDS Oona concept interface, choosing YouTube, Facebook and IMDB apps
Screenshot 37: NDS Oona concept interface, widget shop with free and premium widgets
Screenshot 38: Verizon FiOS TV Widget Bazaar
Screenshot 39: Verizon Facebook widget – navigation
Screenshot 40: Verizon Facebook widget – starting status update
Screenshot 41: Verizon Facebook widget – status update text entry
Screenshot 42: Verizon Facebook widget – finished status update
Screenshot 43: Verizon Twitter widget – navigation
Screenshot 44: Verizon Twitter widget – logging in
Screenshot 45: Verizon Twitter widget – send Tweet
Screenshot 46: Verizon Twitter widget – choose to Tweet on current TV show or new topic
Screenshot 47: Verizon Twitter widget – writing Tweet
Screenshot 48: PS3 BUZZ Quiz World – publishing story to Facebook
Screenshot 49: PS3 BUZZ Quiz World – story in Facebook user’s Wall
Screenshot 50: Xbox Facebook – home
Screenshot 51: Xbox Facebook – profile
Screenshot 52: Xbox Facebook – photos
Screenshot 53: Xbox Twitter – home
Screenshot 54: Xbox Twitter – user profile
Screenshot 55: Xbox Twitter – reply, retweet options
Screenshot 56: Xbox Twitter – trending topics
Screenshot 57: Xbox site – promoting Facebook and Twitter services
Tables
Table 1: Connected CE devices in Western Europe, 2010
Table 2: Connectivity solutions for US households with an Internet-connected TV, March 2010
Table 3: Connected TV sales and shipment forecasts: USA, Americas, Europe, China
Table 4: Global connected TV sales and shipment forecasts
Table 5: Connected CE device sales and shipment forecasts
Table 6: Forecasts for connected CE device shipments and uptake globally
Table 7: Google TV – companies partnering and refusing to partner
Table 8: The Yahoo Connected TV app platform – growth, forecast and target Figures
Table 9: The consumer proposition for Yahoo’s Facebook, Twitter and other social widgets
Table 10: The consumer proposition for Yahoo’s TV and video widgets
Table 11: App platforms partnering with CE device manufacturers – June 2010
Table 12: Facebook and Twitter users as percentage of the total US TV audience
Table 13: US broadcasters utilizing Facebook and Twitter logins in addition to own login
Table 14: Top Web sites for US viewers while watching major TV events
Table 15: Cost of selected 30-second TV spots in the US market
Table 16: Facebook as a top video viewing site, by unique viewers
Table 17: Top 10 TV shows with the most Facebook fans – June 2010
Table 18: Do people tweet more about live television?
Table 19: Facebook online ad revenue compared with Google, Microsoft, Yahoo – 2009
Table 20: BT social research topics – 2010-2011
Table 21: Facebook Platform TV, media, news, entertainment launch partners – April 2010
Table 22: The five main principles of shared TV viewing
Table 23: Three benefits to viewers from participating with a Facebook TV group
Table 24: Four types of Facebook user
Table 25: Key findings from the ConnecTV field trial
Figures
Figure 1 Facebook and Twitter apps reach TV via Google, Yahoo and Microsoft middleware
Figure 2: Facebook and Twitter in the TV value chain – innovation and disruption
Figure 3: Internet users prefer to login with their Facebook digital identity – April 2010
Figure 4: Twitter / Oxygen trial of social media driving ratings for Bad Girls Club
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
