Connected TV Outlook Tempered by Privacy, Content Issues, CEA Conference Told

SAN FRANCISCO -- Connected TV is a “survival game” for the industry, Gaurav Arora, senior manager of Broadcom’s consumer electronics group, said on a panel at this week’s CEA Industry Forum. The Internet-centric purchasers of five to 10 years from now are in college and if TV sets aren’t connected for them, “the product will die” and be replaced by an iPad, laptop or smartphone, he said.

With the TV industry turning to connected TV as the next big thing -- DisplaySearch predicts worldwide connected TV sales of 40 million units this year and 118 million by 2014 -- new challenges will emerge as the TV viewing model shifts from passive to active. How to reach consumers amid an overwhelming world of content is one challenge, and navigating consumer privacy while trying to personalize content is another.

Connected TV “turns TV into a million things for a million different people,” said Arora. The shift from serving viewers en masse to serving them individually will mirror what the Internet did with the computer. “People have access to more targeted information and that’s what it means for TV, too,” he said. This will “change the TV model in a lot of different ways,” he said. Connected TV offers opportunity for content providers, but having content discovered is a challenge. How content can be integrated with electronic program guides currently provided by cable and satellite providers remains to be seen. “If you're a company spending $100,000 on an app, how will it get discovered?” Arora said. One option is a featured section and another is “auto-detection based on viewer preferences related to what they watch,” he said. “Content ID is one way the industry is headed."

But privacy issues loom large, because consumers will have to open their viewing habits, likes and dislikes to content aggregators for connected TV to reach the personalized potential that its supporters promise. Issues that TiVo has faced in the past with gathering viewing data, and viral pushback that Facebook has seen over the past year, indicate that consumers will resist data gathering by third-party sources as connected TV takes off.

Privacy is “one area we haven’t had time to explore further,” Sheau Ng, vice president of broadcast and consumer technology for NBC Universal told Consumer Electronics Daily. Consumers should be “enabled and empowered” with the technology available now to control what kind of information they're exposed to, he said. He suggested there’s an opportunity for CEA to standardize privacy practices to simplify those issues for consumers, who now either accept or reject privacy agreements that appear in pages of small-print legalese on websites. “It would be ideal to have consumers able to choose what to say in a commonly understood language,” he said, because today consumers “tend to stay on the safe side” and opt out of sharing altogether.

Ng said that leaves a black-and-white situation in which information is either private or not, when consumers really want something in between. Consumers today opt out of sharing to avoid giving up sensitive information including Social Security numbers, Ng said, but that action blocks access to data that could benefit their viewing experience in the growing world of entertainment content. Questions like, “do I like Coke or Pepsi?” he said, are answers consumers seem happy to share if that nets them something in return. “We are not quite getting the consumer to address ‘what benefit do I get out of'” releasing preference information, he said. He envisioned a possible business model emerging from a company acting as an intermediary between marketer and consumer in the age of interactive TV. Consumers who provide tracking data might get a Starbucks reward code or a discount off purchases from a particular manufacturer in exchange for that information, he said. “That kind of transaction never happens today because consumers aren’t sharing that information,” he said. Development is under way, he said, for ways companies can collect data useful for them and for consumers without intruding into areas consumers want to keep private.

Privacy is extremely important,” Ronald Jacoby, senior director of Yahoo Connected TV, told us. “It has to permeate everything you do.” Internet content providers have to understand the legal limits of data collection, what consumers are comfortable with and then “be transparent in what you do,” he said. Then you have to “give them the choice to participate or not,” he said. Facebook has had some struggles, he said, as it has ridden a steep growth curve. “Any time you don’t do something you say you're going to do or do something you say you didn’t do, you will run into problems,” he said. Yahoo has an internal group that deals with “public policies on down,” he said. “We tread carefully on these grounds to make sure we're on the right side of things.”