L to R: Fred Wright (Motorola) Geoff Roman (Motorola) Craig Cuttner (HBO) John Burke (Motorola)
I promised to write more on the Motorola set-top announcement with BT, and after just sitting through a panel session with several Motorola executives and Dan Marks, the CEO of BT Vision, I feel more than equipped to provide additional context.
Dan Marks started his part of the talk by discussing the importance of individual addressability in set-tops, and he gave a great analogy. Operators have gone from selling TV content to building a virtual retail store for the digital experience. Because of that, the abstraction of traditional television ratings is no longer enough. Operators need to know not just what programs are popular, but what happens when consumers “walk down the aisle.” In other words, how, when and where they’re watching TV.
This is where addressability – or true two-way communications – with set-tops comes into play. The long-term goal and opportunity (using set-tops like the Motorola IP set-tops BT will deploy) is targeted ad insertion. If you know how, when and where people are watching TV, you can sell to them more effectively. In the short-term, though, even just the subscriber data alone is valuable. For example, knowing how much bandwidth is being used for switched digital channels means operators can allocate overall bandwidth as necessary (virtually in real time) to meet subscriber demand.
The one issue, however, that we’ve yet to see play out is the impact of consumer privacy concerns. James McQuivey, the Forrester analyst who moderated the panel session, believes that consumers will make the same compromises between privacy and convenience that we all make every day. (For example, handing a credit card over to a waiter) There will be stutter steps as privacy issues are dealt with, but ultimately privacy concerns will not stop a trend of data collection (and the application of that data) that’s already begun. And that is probably a good thing – as long as data remains disassociated from individual identities.
One last note on this topic: I asked the panel how much service providers are concerned about the privacy issues related to two-way communications between individual set-tops and the operators distributing to those devices. Not surprisingly, the answer is operators are at many different points along a spectrum. Some are very concerned about a privacy backlash, and some believe that if they can see the technology works the way it’s supposed to, they’ll be able to sell it to content providers given the revenue potential of targeted ad insertion.
More to come later on this panel session on the topic of networking video in the home.