Apps World Europe: Will pay-TV operators and content owners co-operate or compete on second-screen apps?
Overall usage of these services is low, but there have been some early successes
Just over a year ago, we wrote about the emergence of companion services on second screens to complement TV viewing. Apps World Europe was an opportunity to see how these embryonic services are developing. So far, overall usage of such services remains low - UK incumbent telco BT stated that about 3% of its TV subscribers download these apps, of which only a third (equivalent to 1% of subscribers) actually use them, while UK broadcaster Channel 4 mentioned that, on average, less than 10% of its viewers used these apps. However, usage varies greatly by content genres: sports, game shows, live events and reality TV shows lend themselves particularly well to such apps, and most of the early companion apps have been developed for specific programmes - such as the following examples.
- 'Geordie Shore' app commissioned by MTV UK: MTV made available a social TV app that enables users to exchange Twitter messages and access exclusive content online related to the reality TV show Geordie Shore, which had an average of 1.5 million viewers per week. The show generated 2.5 million video views per season on MTV UK's website as well as peaks of more than 6000 'tweets' per minute. MTV believes that the second-screen activity contributed towards the show's ratings, which were the highest it has achieved for a series in the UK.
- 'Freshers' app commissioned by Dutch broadcaster BNN: BNN encouraged engagement in its TV series 'Freshers' ('Feuten' in Dutch) by making bonus video content and an exclusive story line available to viewers who had downloaded its app, as well as through gamification, by getting users to join a virtual fraternity in which they could earn rank by playing games, interacting and working with other members. As a result, up to third of those who had downloaded the app used it daily.
As the market evolves, content owners - notably broadcasters - are increasingly moving towards companion apps that encompass their entire range of content. In the UK, Channel 4 recently launched a beta version of '4Now', an app that is to become the destination for synchronised second-screen experiences among its viewers, while providing a platform for real-time, synchronised advertising.
The proliferation of apps could lead to tension between content owners and pay-TV operators
Pay TV operators have also been launching companion apps for their services, mostly focused so far on giving subscribers access to their content on unmanaged devices - such as tablets and smartphones - and additional functionality, such as the ability to remotely schedule DVR recordings. However, as they begin to introduce features such as content recommendation, it may cause tension between the pay-TV operators, which aim to promote any content that they feel is relevant to their subscribers, and content owners, which want consumers to access their content above anyone else's. The result could be similar to the situation on smartphones, where handset vendors, operating systems and operators are all trying to own the user experience, resulting in duplication of services and confusion among consumers.
If pay-TV operators and content owners choose to collaborate to overcome the organisational and technical challenges involved, both will benefit from monetising more-compelling consumer experiences. At Apps Word Europe, incumbent telco Portugal Telecom (PT) described how it had differentiated its pay-TV services from traditional cable services by partnering with broadcasters to bring exclusive interactive experiences on the TV to its subscribers, such as the ability to vote or gain access to additional content through the remote control. The next step for PT is to extend these experiences to additional screens, such as tablets and smartphones.
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