Doug Garnett’s Blog


What We Learn Outside the Internet & TV Convergence Bubble

Today every new technology is accompanied by an information bubble – built by marketers, consultants, and investors. The bubbles reflect group think that might drive success. But all too often, firms live inside the bubble in blissful ignorance of market truth.

And inside the Convergence bubble is a deceptive logic that says: If people have trouble finding TV shows they want to watch, then more TV channels are the solution.

This logic leads companies to seek VC dollars since the web can offer billions of viewing options (i.e. Channels). And hence, the bubble decides that merging the web and TV will solve all our “what to watch” problems.

Seems obvious. So what’s the problem? Only that’s the first statement is wrong.

I did consumer research work in the 1990’s on TV network expansion. At the time, we presented consumers the opportunity to solve their “what to watch” problems by shifting from 75 to 250 channels. You know what we heard? Consumers were savvy enough to know that wouldn’t solve their problems. Here’s what I’ve come to understand.

A given consumer partakes of only a small portion of today’s programming – not because they can’t find it. But because their mental “consideration set” can’t hold more clutter.

The consideration set for most people seems to include a few groups of stations or networks. Sports networks are one group and news networks another. And each group tends to include a small set of networks.

These consideration sets shrink when we look at programming. Most individuals have only a small set of favorite programs at any time. Fortunately, DVRs have made it possible to time shift anyone’s favorite programs to the times they want to (or are able to) watch.

Somehow, there are many startups that wish people shouldn’t work this way. But I think it’s simply human that our brains are limited in our ability to hold large numbers of options and effectively choose from among them.

So despite grumbling, the vast majority of consumers are quite satisfied with TV today. And a simple set of things would thrill them for years to come:

1. The current set of channels with good DVR access (or unlimited “on demand”).
2. Access to movies without DVDs. Streaming or through advance downloads.
3. Access to web video like YouTube on the TV. (Although most consumers aren’t likely to spend more than 5% of their viewing time on web videos.)

This doesn’t mean there couldn’t be some exciting new things discovered. But if past experience is an indicator, the winning convergence company will be the one who steps outside the bubble and makes a simple product that delivers good consumer value. And it will be the one who doesn’t try to do it all at once.

Some tech companies will be put off because delivering this doesn’t require sexy new technology (sadly, it’s harder to raise money for real consumer solutions than for un-needed technology that’s new and sexy).

But Apple’s 2 million iPads in 2 months should teach us a lesson. Pundits were critical that the iPad wasn’t sexy technology. Two million units later, who cares? Consumers don’t.

Copyright 2010 – Doug Garnett

Categories:   Big Data and Technology, Communication, Direct Response, DR Television, Human Tech, Research & Attribution, Technology Advertising