Connected TV: Yet-to-be-Matched Supply and Demand

Great perspective on connected TV (From AppMarket.tv)
Posted by Gianluigi Cuccureddu SMP in Writers on October 31, 2010

Two articles refer to two opposite insights on the Connected TV space and its supply and demand side. On Advertising Age the article "Enhanced TV Will Be Great for Viewers, Chaos for Marketers" analyzes the -potential- experience for the demand side being greater than the challenges of the supply side. At the Forrester blog, the article "Connected TVs Will Sell, But Will They Get Used?" analyzes the enthusiasm on the supply side and the ignore-modus of the demand side.

Technology innovations are not neccesarily value innovations, sustaining the following remarks from Forrester:

In the report, we show that thanks to the enthusiasm on the supply side, connected TVs are going to sell like proverbial hotcakes. By 2015, we forecast that more than 43 million US homes will have at least one. That's a remarkable number, especially considering that we entered 2010 with fewer than 2 million connected TV homes in the US.

But the big number masks a terrible truth that I can't hide from you: most of the connected TVs currently on the market are not sufficiently powerful to create the digital home I envision above. And in fact, some of the connected TVs currently selling at retail actually impede our progress toward the digital home of the future because they are so lackluster that more than a third of people buy them, bring them home, and then ignore the connected features of the TV altogether.

Sadly, at least 14% never bother to connect them to the Internet. There is a long list of reasons why this is the case, but the most prominent is that these TVs are built with the wrong set of assumptions (and technology). TV makers have put only enough power into these TVs to keep TV prices from falling, assuming that people wouldn't pay extra for a connected TV. Seems reasonable, right? Yet at the same time, millions of people are finding from $500 to $850 to buy an iPad, a device they don't truly need. 

The Advertising Age article refers to the Forrester research (in the Forrester blog) as well by adding the following statement:Despite the hoopla accorded web-enabled TV sets, consumers' ultimate reaction to them is yet to be determined. "Very few people want to engage in online chat, follow friends on Twitter or vote for their favorite TV-show contestants through the TV," Forrester found in an August report, noting that some owners of the newfangled TV sets didn't use the web connections very often. Those that did used the TV set primarily to watch offerings from Netflix and YouTube. 

Not straightforward
The latter statement refers to a preferable two-screen Social TV experience and sustains the findings by MIT concerning the clutter that single screen Social TV creates:

The most important point she raised is that social TV shouldn’t mean cluttering the big screen with Twitter status messages and other widgets.

This statement could mean that incremental changes in behavior and technology are more realistic, than a truely disruptive set of changes.Two-screen solutions adhere this, giving focus to the TV content via the TV screen and additional contextual enhancement via a second screen.

Taking technology innovations (supply) and value innovations (demand) together, creates or suffice new markets/trends/developments. Right now, technology innovations are leading the convergence and end-users are yet to discover new opportunities, benefits and created(?) needs. It's also a matter of awaiting the Millenials / Generation Y, being much more raised in the digital space then their precedent generations.


Marketers will have challenges with the current unmatched supply and demand, digitization of the TV industry opens up new opportunities, creating an integral digital experience, but if devices are simply bought for its tech, and not used for their true -innovating- purposes, discrepancies between experience and expectation will arise.

Hype Cycle

The yet-to-be-matched supply and demand also has origins in the Hype Cycle, a graphic representation of the maturity, adoption and social application of specific technologies. Here as well, supply ("specific technologies") need to meet demand ("adoption and social application") in order to reach the "Plateau of Productivity".

Not only Chaos for Marketers

It won't be only chaos for marketers, as Advertising Age's article claims, it's also chaotic for end-users (at least for the non-Gen Y generations), being offered a multitude of new -digital- opportunities, new devices and new content. This won't easen decision-making and choices if end-users are willing to try all that is new. And if not, results as the aforementioned (14% not connecting) will still occur for the time being.