INdustry: Yahoo! Moves First--ACR TV on Sony

Last week, I had a chance to catch up with Russ Schafer, senior director of global product marketing for Yahoo! Connected TV. As I mentioned in my CES round-up (see the INdustry column published on, January 17th), Yahoo! Connected TV rather quietly announced a deal with Sony to deploy their Yahoo! Broadcast Interactivity service on existing 2011 Sony TV sets and upcoming 2012 TV sets. (Video:

Broadcast Interactivity is a platform feature that utilizes audio automatic content recognition (ACR) technology from IntoNow (Yahoo! acquired IntoNow about a year ago--see the article published on, April 26th, 2011). At CES 2012, Yahoo! demonstrated Broadcast Interactivity implementations including

an enhanced sports content TV app from Showtime, a shopping TV app from HSN, and an interactive advertising implementation with Fidelity Investments. The initial Yahoo! Broadcast Interactivity advertisers also included Ford and Mattel.   

More recently, Yahoo! Connected TV provided Mercedes-Benz with interactive TV advertising as part of a broad NCAA Men's Division I Basketball Championship ("March Madness") campaign that Yahoo! extended across multiple screens including PC's. Whenever the 2012 Mercedes C-Class television ads played, Yahoo! Connected TV delivered an interactive TV ad featuring information, photos and videos for the Mercedes-Benz C30 sedan and coupe. (Article and video:

In addition--and here's where Yahoo! starts to differentiate--Mercedes-Benz also sponsored the Yahoo! Sports TV app, utilizing Yahoo!'s in-app TV advertising. This enabled them to use the same Mercedes-Benz C-Class interactive TV ads on millions of TV's that have the standard Yahoo! Connected TV platform, but don't have Yahoo!'s new Broadcast Interactivity feature. In this case, the user downloads the Yahoo! Sports TV app from the Yahoo! Connected TV store to access Internet content that complements TV sporting events. For college basketball fans, Yahoo! provided Internet-delivered NCAA Basketball news, scores, schedules, videos and photos.

The Fidelity Investments campaign provides another good example of Yahoo!'s strategy of combining Yahoo! Broadcast Interactivity and in-app advertising. Yahoo! worked with Fidelity Investments to enable both Broadcast Interactivity advertising on their TV ads and a sponsorship of the Yahoo! Finance TV app.

Analytically, we tend to think of ACR TV as a standalone offering. It's new and structurally discrete. What Yahoo! is showing us is that it's really in many respects just another tool in the marketing mix and that, when time comes to sell, it will likely be part of a broader campaign strategy.   

In fact, Yahoo! is taking what might be called more of a 360 approach to consumer marketing services across its various consumer and advertising platforms. In practice, advertisers like Mercedes-Benz are getting a considerable amount of exposure across multiple screens on PC, mobile and smart TV.  

Yahoo! Broadcast Interactivity and in-app advertising are being sold separately and as part of multiscreen campaigns, but this ability to bundle Broadcast Interactivity with the larger campaigns is one of the main differentiators of Yahoo!'s strategy for ACR TV, when compared to most other proponents. This video presents Broadcast Interactivity as part of a multiscreen vision of the future:

Yahoo! has a large portfolio of offerings for advertisers. They deal directly and expansively with major brand advertisers. And they can bundle ACR-enabled Broadcast Interactivity advertising into their integrated offerings. Given the comparatively very small footprint that Broadcast Interactivity offers today, when compared to Yahoo!'s expansive Web audience, that bundling effect probably helps get it sold in many cases where it might otherwise not be.

All that seems pretty natural and sensible for Yahoo! Connected TV, but it is a bit different, generally speaking, from the strategy and plans of most other ACR TV programs that I've discussed with industry players. For many, the plan is for the TV manufacturer to make ACR functionality available to TV networks, which will then sell enhanced advertising inventory to their advertisers.   

That's not to say that Yahoo! doesn't work with TV networks. They do. Major TV broadcasters that have been working with the company in order to develop Broadcast Interactivity apps for their networks include Showtime and HSN.

However, the Yahoo! approach is different and worth thinking about. The recent demise of Canoe left some proponents with reduced enthusiasm for interactive TV, and there certainly is a camp in the executive ranks of the TV industry that thinks the TV should be left alone.    

It takes a long time to turn a great ship and those views will be with us for a while. Most that see the new capabilities on smart TV recognize the arrival of new medium. ITV on smart TV's is strategically quite different from all previous forms, and there are many reasons to believe that as smart ITV (a better name than ACR TV?) trends towards critical mass, the opportunity to bring fresh innovation to the medium will prove irresistible. Today, it is still small enough to ignore. Both Russ and I believe that will change over the course of this year.

In the meantime, Yahoo! Connected TV is in a unique position to leverage its broad access to advertisers and its ability to develop multiscreen campaigns that include Yahoo! Broadcast Interactivity and in-app advertising to drive experimentation and usage.

As we talked about implementation and market development, Russ emphasized the rather large backend requirements associated with delivery of a 360 campaign such as the one Yahoo! brought to market for Mercedes and Fidelity Investments. The campaigns featured apps on multiple devices--phone, tablet, PC, smart TV (both widget and ITV app)--and all those apps drew from a pretty robust set of content assets that all had to be ingested and prepared for consumption on those various devices. For Russ, this expansive backend is actually a big part of the value-add that Yahoo! has to offer.   

Yahoo! Broadcast Interactivity is currently available on certain 2011 and 2012 Sony TV models. It's difficult to know how Sony's decision to slash investment in the TV business will impact their commitment to smart TV and the Yahoo! partnership, but we can be sure that Yahoo! is looking to expand its footprint.   

In terms of overall market growth, Yahoo! has previously stated publicly that Yahoo! Connected TV has a universe of 8-10 million smart TV's and an active monthly user base of well over 1 million consumers. The company expects additional TV manufacturers will add Broadcast Interactivity to their 2012 models and they are anticipating that 500,000–1 million TV's will be Broadcast Interactivity-capable by the end of the 2012 model year.

Russ and I also talked for a bit about total market math. I've been digging around trying to figure out what portion of total flat panels shipped are actually smart TV's. Based on their publicly released products, Russ estimates that Vizio, Sony and Samsung lead the market in terms of percentage of models that are smart TV's (I did my own count a while ago, and I think LG is at about the same level). However, actual shipments of smart TV's from 2009 to 2011 ranged from 20-30% of inventory by unit volume on a manufacturer-by-manufacturer basis. 2012 may be the year of transition, with the expectation that actual unit volume will cross 50% for a number of manufacturers. This suggests that the smart TV will soon become a standard requirement for the American consumer.   

Will ACR provide smart TV with the killer apps that accelerate this trend? Hard to say, of course, but it does seem like the smart TV should be able to launch TV apps to actually be smart, doesn't it?

For more video examples of Yahoo! Broadcast Interactivity:



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.