The Internet Gets Ready to Enter The Living Room (finally)

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Each day it becomes more apparent that we are entering a new era of multiple connected Internet devices.  As the gates to the living room fall, there will be great opportunities for smart marketers...and great disruption for incumbent agencies, marketing service organizations and marketing executives.

Remember WebTV?  In 1998, after graduating business school, I was oozing with passion for the potential of Internet and wanted to introduce this to my father.  So I set him up with WebTV.  I remember hooking it up, selecting the proper dial in number, testing it and showing him how to use that clunky keyboard to navigate the screen.  Boy, we've come a long way since in the last 12 years.  Here are a few recent announcements that illustrate the fundamental change we are all about to experience.
  • Tablets - Apple launched iPad in April and there are at least 7 tablets due to launch between now and Q1 2011.  Users are fascinated with the iPad for both personal and business use.  They have innovated around the iPad.  For example, some use Velcro to attach the iPad to walls and objects everywhere - creating their own connected screen experience.  As the market has voted, Tablets are great media consumption devices.  Tablets and their well designed apps will also function as remote controls for connected TVs in the near future.
  • Apple and Google TV - The latest version of AppleTV, due out later this year, now integrates with NetFlix, streams pay per episode TV shows with Disney and Fox among other upgrades for $99, down from $299.  Rumors are strong that Google is working on an Internet TV service.  We should expect this to be a bit more open than Apple, run on a version of Android and provide access to Android apps.
  • TV OEMs - Connected TV offerings are hitting the market in time for the holidays.  Expect to see offerings from all major players including Samsung, LG and Sony.
There have been many challenges to bringing a good Net experience to the TV.  I remember discussing some of these during my interviews with Microsoft's Digital TV group in 1997.  I lack of standards, bandwidth as well as a well-funded battle for the user interface between hardware, software, cable and satellite companies.  We had a bunch of closed platforms seeing big dollar signs if they could be into the living room on a large scale.  Today, thanks to a convergence of enabling technologies, new gaming platforms and Steve Jobs, we will see a robust Net experience on existing TVs as well as new connected screens. Here are some of the reasons we will see the Net enter the living room on a large scale in the next 18-36 months:
  • Bandwidth - ever increasing, we now have ample bandwidth to stream TV,  movies, live sports, etc.  I really enjoyed watching multiple March Madness NCAA games on my iPhone and TV.
  • Cloud Computing - technology, security, storage, bandwidth and other factors have come together to enable large scale Cloud computing.  We don't need to store our media (DVDs, PCs, servers, etc.) in our homes any longer - there is ample space in the Cloud.  From our TVs, we'll also be able to access all media we've created (photos, videos, etc.) from cloud-based websites and applications.
  • Wii - gesture-based natural user interface for TV was introduced.  This educated many consumers about what was possible beyond the remote, keyboard and mouse.
  • Apple - with iTunes, Apple cracked the music business model question.  With iTouch and iPhone, they've delivered a more intuitive experience.  With Apps, they've developed a new (closed) eco-system that they are sure to leverage accross all device types from iPod Nano to wide screens in your home (iScreen).
  • Social Networking - Social now has the reach of mainstream media and enables shared media experiences.  Verizon FIOS has integrated social feeds into their interactive TV offering.
  • Media Business Models - the networks and content producers are figuring out how to make money on the Internet.  Steve Jobs has showed them the way, and, albeit slowly, they are all coming to the party.   
  • Demographics - the habits of the younger demos diverge significantly from the Baby Boomer and Gen X generations.  They will welcome a new, connected TV experience.
What are the marketing implications of the arrival of the Net in our living rooms?  Here are a few thoughts, but I am sure there are many more and I welcome all comments below.
  • Marketing Competitive Advantage Up For Grabs - for marketers, the proliferation of multiple connected devices including in the living room and home is both a threat and opportunity.  Marketing competitive advantage will be up for grabs.  Each device platform becomes a new demand channel.  Those marketers that invest in optimizing the user experience on all devices as well as the digital media/advertising for all devices will reap the rewards.  
  • Agencies Have to Change - it remains to be seen if large agencies will be able to free themselves from their existing business models and comfort levels and build effective competencies around this new paradigm.  
  • Brand Advertising Finally Moves to Net - There will be great opportunity to move brand advertising dollars to the Net.  Imagine the impact of rich, interactive digital ad units on your TV.  iAd for Apple TV?  Who will profit from this?  
Do you see it as I do?  All thoughts are welcome and appreciated.  Please comment below.