Are apps the future of TV?

In the past 18 months, Ottawa-based TV app-maker You.i TV has grown from 20 employees to 130, and the company expects that kind of expansion to continue in the next year, according to Matt Nelson, You.i TV’s director of marketing. “Basically, anyone who has a channel, anyone who has a TV brand or even a show itself, wants to build an app now,” he said. “You look at the number of channels and the number of shows in North America alone all trying to build an app, and they need to get it across 25 or 30 platforms. It gets incredibly complex.” That “appification” of TV got a boost last month when Apple Inc. CEO Tim Cook introduced a new version of Apple TV, which — unlike previous devices — will support third-party applications. The future of TV is apps, Cook told the audience. “Literally, you would have heard like a cheer across our office” at that moment, Nelson said in a phone interview, noting that meant Apple was opening up “the biggest developer ecosystem in the world.” The company, which has made apps for projects like Rogers Communications Inc. and Shaw Communications Inc.'s Shomi service, Corus Entertainment Inc.'s Treehouse channel and a Crackle app for Roku Inc. devices, announced recently it secured $15 million in funding, led by Los Angeles-based private-equity group Kayne Anderson Capital Advisors LP. Until now, the company has been making the apps for its customers directly. It plans to use the $15 million in funding to begin licensing its engine to other companies that will use it to develop apps themselves, Nelson said. Right now, there is a “mad race” by TV providers to create direct relationships with customers through initiatives like Shomi or HBO’s decision to offer an over-the-top (OTT) service without requiring customers to have a paid TV subscription. “As they’re trying to do that, they’re really wrestling with this notion of what we call a fragmented living room. Some of our customers are trying to build apps on 31 different platforms. It’s crazy,” he said. There are a lot of devices vying for customers’ attention, including game consoles, set-top boxes, streaming devices like Apple TV or Roku, and tablets and phones, he said, adding that “there’s literally roughly around 30 that are relevant.” Companies are creating video platforms for all of them, Nelson said. As traditional TV unbundles, it’s becoming more important for video providers to have a direct relationship with customers, he said. “We’re really in, it feels like, a land-grab moment for the TV space, basically saying, ‘Hey, we don’t know how the future will shake out, but we feel it changing, and we’re going to get really aggressive to go out and build a relationship with customers,' ” he said. Independent broadcast consultant Kelly Lynne Ashton said apps will work “for those people who are willing to take the time to find the specific content that they want,” but many viewers want something to curate their options for them. “They don’t want to spend time looking for things. That’s why broadcast television is still key, and your second choice tends to be Netflix because, again, that’s curated,” she said in a phone interview. She noted that on her iPad, there’s “a whole pile of broadcaster apps that I never use, because I don’t want to do the work of going through the various apps to find the one show, particularly if I can’t always remember which broadcaster is carrying a particular American show.” Ashton added: “I think it’s still, at this point, too much work for the average viewer, who wants to make one, maybe two clicks to find the content they want to watch.” She said having good content is more important than having an app and should be a priority. “If you have really good content, people find a way to access it,” she added. Where innovation is necessary, Ashton said, is in the area of discoverability. “Everybody’s saying, 'OK, there’s tons of stuff out there. How do I find it? How do I find the good stuff?' ” One solution would be a service that tells viewers where to find a show they want to watch, she said. Apple may agree. During the company’s September keynote, it announced that users will be able to issue voice commands through Apple TV about the content they want to watch, such as comedies or movies starring a particular actor. The device will then search through its iTunes database, as well as apps such as Netflix, Hulu, Showtime and HBO, to come up with a list of content available through the device matching the request. Troy Crandall, a telecom analyst at 3Macs, said in a phone interview that in the amount of time it takes for someone to find what they want to watch that way, “you may have been able to turn on the television and find what you wanted.” While the upside of apps is that they allow people to watch what they want when they want, the downside is it can take some time for people to familiarize themselves with how a new app works and how to navigate it, he said. In some cases, “suddenly, watching traditional television with a guide and just a push button seems like a much faster way to watch television. Especially if what you want to watch is actually on TV and being delivered through linear television at that current time.” For example, after an especially long and tiring day at work, sometimes people get home and “want to sit in front of a television and just veg,” he said. “Sometimes you do just want to turn on a TV and press the button twice … and just sit there staring dumbly at a box. So there is something to be said for just old-fashioned television, too.” At the same time, once people are familiar with a new app, it can be a faster way to get to the content they want to watch — such as when the Netflix app cues up the next episode of a show they are watching, Crandall said. Apps are less a revolution in the TV space than an evolution of video on demand, he added. “The end functionality is pretty much the same. You’re watching what you want to watch when you want to watch it, but you’re just doing it in a slightly different way than you did previously,” he said. “I think the revolution actually occurred when video-on-demand occurred.” — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

Are apps the future of TV?

Broadcast | October 14, 2015

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