Media bosses hope mobile devices will help, rather than hurt, television

Media bosses hope mobile devices will help, rather than hurt, television

Oct 12th 2013 | CANNES AND SAN FRANCISCO |From the print edition

IN THE television business, as at buffets, people crave seconds. A series is deemed a success if it is renewed for another season. The industry is currently obsessed with the “second screen”—mobile phones and tablets that people play with while they watch TV. Around three-quarters of American internet users regularly fiddle with a mobile device while watching the gogglebox. Media executives are abuzz working out how to turn this distraction into profitable transactions.Twitter, a social-media firm which published its filing on October 3rd for an initial public offering, has big ambitions for little screens (see Buttonwood). It trumpets its role as a complement to TV, pointing out that Americans sent 24m tweets during this year’s Super Bowl and that 45% of the TV ads during the event invited viewers to tweet about them. The firm has launched Twitter Amplify, a service that lets media firms and others tweet clips of shows or sporting events. These carry sponsorship messages from advertisers and make money for both the TV company and Twitter.

Old-fashioned TV companies see the opportunity too, and insist the second screen will not hurt their first, and primary, source of advertising revenue. Viewers who are multitasking with other devices tend to tune in for longer, because they are commenting on the shows online or interacting with extra content through the networks’ apps. A survey by Bravo, an American network owned by Comcast, found that viewers using mobile phones were also more likely to sit through adverts. TV executives predict it will become more common to sync TV and mobile ads, so marketing messages are reinforced across the two screens. On October 7th, Nielsen, a firm whose ratings determine how much TV networks get paid for ads, launched a new product that analyses how many people comment about shows on Twitter.

Sporting events and talent shows present the greatest opportunity, because they attract passionate fans who like to chatter online. Some shows, such as “The X Factor”, encourage voting, and others feature social-media comments on live TV. There are now as many start-ups vying to profit from the second screen as there are “Real Housewives”. A daft name, like Zeebox or Viggle, is mandatory.

But with more screens, advertising may become confusing. Firms will start to advertise on mobiles while viewers watch a TV ad for a rival product, predicts Charles Muirhead of Rightster, an online-video platform. And media firms must be careful not to besiege viewers with too many ads and novel features. “There’s a fine line between providing consumers with information they want and annoying them,” says Alan Wurtzel, president of research at NBCUniversal, a media firm.

The second screen is unlikely to be as lucrative as many hope. For one, its impact will be limited to certain shows. Second-screen applications work best when people watch live TV, says Jonathan Reynaga of Tiny Horse, a digital-media firm. But more people are watching shows on demand. No one is sure whether the money spent on advertising will grow thanks to the second screen, or simply come out of marketers’ overall TV budgets.

At a recent gathering of TV executives in Cannes, Dan Rose, who oversees partnerships for Facebook, gave a slick presentation about his firm’s ambitions for making money from TV. He did not discuss whether the advertising pie would shrink for TV companies. The audience must have found themselves wondering. He left the stage without taking questions.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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