INdustry: ACR TV at CES 2012: News, Rumbles and Outlook
There were a lot of ACR announcements at CES. Most, though, were about companion app plays of various types. Civolution and Audible Magic both showed up with really their first market moves with a plethora of new partners. RCDb inked new deals with Zeitera and Audible Magic. It was a partner press cornucopia.
On the ACR TV front, established player Gracenote entered the ACR tech competition with Gracenote Entourage, a new audio fingerprinting tech offering for both mobile devices and TV.
So far, nothing earth shattering and in reality, ACR TV was kinda muted at the show. But, it was actually there and, actually, with more portent than it might seem.
Oddly, the mathematically most important ACR TV news of the show was barely noted, from what I can tell. Yahoo! Connected TV announced full deployment of their IntoNow-based ACR TV system on Sony TV's. I saw the live demo of David Preisman's Showtime app and it looked, well, very natural.
They use a simple, low-profile grey banner across the bottom of the screen to tell the viewer that there is supplemental content (my phrase) available for the show they are watching.
It's about what you'd expect from an ACR TV system...and that is good. What surprised me, though, was the relative lack of coverage. According to the Sony booth staff, Yahoo! Broadcast Interactivity, as it is called, will be added to 500,000 TV's already in the field, and will be available on ALL Sony 2012 model TV's. All.
While some speculate that Sony may be exiting the TV business, in the meantime the company ships around 4 million TV's per year in the US. It's a good start for ACR TV and a big enough base to get the market moving.
But that wasn't the only news. As expected, the other major TV manufacturers all had ACR TV demos at CES. They were, however, behind the curtains. I'm not going to tip anyone's hand for them by providing specifics, but I think it's okay to say that the reports from the show floor were basically: one ready to launch with spring models, one showing strong but maybe not quite ready to launch, and one apparently in a bit of a tumult.
Looking back to the forecast that I produced back in Q2 for TVOT 2011, I think we're actually more or less on track. Sony should ship around 3 million TV's in 2012. Figure around 50% of those connect to the Internet, or 1.5 million. Add back the 500,000 field upgrades (presumably all connected in order to upgrade) and we have 2 million connected ACR TV's. Add to this another 6 million units shipped from at least one more vendor that seems to be (80% confidence) ready to go in a few months with a 50% connect rate (low in this case) we get to 3 million connected ACR TV's from vendor two, for a total of 5 million connected, ACR-enabled TV's by the end of 2012. Those two vendors alone get us to 13 million by EOY 2012. However, I expect the other two tier-one vendors and a good chunk of the rest of the field to be shipping by 2013, so 18 million connected ACR TV's by EOY 2013 still looks right.
(Beyond the top four, I wasn't able to gather any new news on ACR TV demo's, though I did learn that several have RFP's out or in process for ACR tech.)
Google TV's second coming was probably the reason that news on Yahoo! Broadcast ITV was met with little fanfare. For my part, I gotta say, I really don't get it. I walked the floor with several really smart folks and there was some consensus that the really important TV technology from Google is actually Android. Lenovo, for example, announced an Android TV. Manufacturers can license the Android operating system for free and use it to provide a quite robust technical platform for all things Smart and Connected. The incremental value of Google TV is an interface and an aggregation of content. Is Google a UI company? A content aggregator? I just don't think so and frankly, I think Google getting into content aggregation is a mistake. Time to punt and start noodling how apps on TV are different from apps on mobile phones.
But back to ACR. On the TV front, one interesting new observation. I had a chance to discuss the Yahoo! Broadcast ITV development with a gaggle of engineers from a major programming group. They were quite positive on it, but lamented that "just as Yahoo! TV is getting their act together, they are sorta fading from the scene."
Then they shared something interesting. Turns out that the different ACR systems run quite different sample rates, or the time between fingerprints. One engineer expressed a strong preference for continuous sampling. That's not really news as that's used for dynamic ad insertion and this crew is famously interested in such (sorry to be cryptic). But the more interesting fact is that the different ACR vendors have systems that are either incumbent systems built for other uses (e.g. forensics) or are new systems purpose-built for interactive TV. As a result, depending on the port of origin, the underlying systems have very different sample rates--some as long as 6 seconds. That may be fine for forensics, but it's not going to work well for launching interactive ads. I expect this is an easy change, but it's something to keep an eye on.
So, that was what I took away from CES regarding ACR TV. As we look forward to 2012, I think we'll see a lot of experimentation. While the large stakeholders bump shoulders looking for a way to share this new marketplace, we'll be looking for proof that consumers like smart, connected ITV. If they do, then more TV's will be sold, ad CPM's will rise and more homes will get broadband. That should be enough motive to drive ecosystem formation and pour a bit of fuel on the fire.
Michael is the president and CEO of MediaTech Strategies, a consulting company that helps investors and operating companies develop and capitalize on emerging media technologies. He has over 18 years' experience in the media technology business, including previous CEO roles at Ucentric Systems, where he pioneered the multiroom DVR category and PhyFlex Networks, where he developed a new access network solution for cable. Michael previously held senior executive positions with OpenTV, ICTV (now ActiveVideo Networks), Motorola and Playboy TV. Through his consulting practice, he has provided services to more than 50 companies of all types, stages and size.