More screens, different screens
By Roger Entner on October 13, 2016
By now a three screen strategy is a must for anyone in the business of media consumption. It’s certainly one of the ways broadband providers are participating in the market place. Some see three screens – TV, mobile, digital – as the objective, but they don’t realize that three screens is just an intermediary step to full market engagement. Ultimately, broadband providers are going to pursue a five-screen solution, and advertisers will pursue a six-screen solution (advertisers see outdoor signage as an additional screen).
The first additional screen – the 4th screen – is in the autonomous car. Once we have autonomous cars, in all likelihood autonomous electric cars, the up to 46 minutes per day[i] we spend in a car will be a new peak period of intense mobile data usage. Suddenly, mobile connectivity that was mostly about streaming video to keep the kids quiet in the backset will transmit and receive massive amounts of information to keep the car running smoothly, avoid traffic and accidents, adjust engine functions and more. It’s called datamotives. That it is the logic behind Apple’s electric vehicles (EV) initiative and its focus on autonomous driving. The Americans aren’t the only ones thinking like this. The Chinese company Le Eco is active with two EVs and likely enter the market with a more comprehensive vision than anyone else on how the five screens will fit together. While Tesla is the clear leader in EVs, it needs to partner to match the complete system integration for end-to-end solutions.
The second additional screen – the 5th screen – is Virtual Reality (VR) and even more importantly for mobile, Augmented Reality (AR.) While anyone who has tried VR with an Oculus Rift or HTC Vive gets it and appreciates who it transforms home entertainment, the use cases for the customer equipment are unclear outside of protected spaces. VR’s strength to replace reality with a virtual one is also its weakness as it makes the wearer oblivious to the real world. Good luck crossing that street with it. Augmented reality on the other hand is the perfect overlay of a virtual information canvas on the real world. Anyone how has a newer car with HUD display instinctively gets it. The HUD display superimposes automobile speed, directions and station names when you switch radio stations on the windschield reducing distractions while driving. There is no more need to take the eye off the road because all the car displays all the info on a single screen. Once you drive a car with HUD AR, it is quite noticeable when you drive a car without it and you have a little surge of joy when back in the car with the augmented reality. While we see a sputtering start with Google Glass, the success of Pokemon Go is lowering the barrier for other companies to enter the AR space. Google Glass was ahead of its time – especially socially – by being an engineer’s answer to the problem. Releasing it before it was ready was probably not a great idea, especially with how transformational such a product can be. The AR glasses dramatically raised awareness of the technology and, as with every revolutionary technology, there was both excitement at the prospect – and fear – of what we can do with it.
While interweaving what we see in the real world with a series of data sources to create positive outcomes ranging from restaurant reviews over city guides making you a native in any city to facial recognition overlays for law enforcement to capture a criminal on the run. At the same time we need to recognize the additional creepiness of someone with video recording capability in a public bathroom. I am a strong believer that we will overcome the creepiness through a combination of personal etiquette (yes, I still believe in it) to a significant endeavor to make, for example bathrooms, non-recordable areas through beacons.
The positive argument for AR is so overwhelming that it’s a miracle we needed Pokemon Go to raise awareness again. Augmented reality is a little bit (at least for people not growing up with one) like owning a cell phone. When you never had one, you ask yourself what the fuss is all about. Once you had it for a short while you wonder how you ever lived without it. The key is the hardware form factor: HUD display in a car? Awesome. Glasses (hopefully less intrusive)? Awesome. Holding your phone up like an aiming device? Not so awesome. Companies like Google, Facebook through Oculus, HTC, Samsung and Le Eco that have already made strides in VR are well positioned for AR success. Apple could enter the space using the same thought-process that lead them to make the Apple Watch.
The burgeoning trend of separating electronics from the screen has become a significant driver for the television ecosphere as it allows treating the screen and especially the sound bar as separately upgradable. The sound bar will evolve to become the home of all the intelligence around the TV, a Roku, Apple TV, or Chromecast with sound capability. Suddenly, the barrier of entry and success for non-screen companies has been lower and makes it easier to disrupt this space. While there will hardware differentiation around the speakers – as some want better speakers than others – and more or less powerful computing capabilities, the true differentiation comes through the software on the sound bar as we are entering a software centric world.
While the TV world is currently stuck in a 10- to 20-year replacement cycle, the dislocation of consumer equipment from electronics especially allows the evolved sound bar to be updated a lot more quickly. Companies such as Apple, with its integrated software, hardware and Beats audio capabilities or Le Eco through its acquisition of VIZIO, the number one player in sound bars in the United States, are especially well positioned, but we should also not forget Samsung.
The shift to five screens will expand and disrupt the traditional business model of advertising companies, consumer media/communications equipment, and content and network providers. Integrated content delivery companies of all sizes have an opportunity to participate in shaping this expanded but more integrated world. The emergence of the five screen world is a rebuke of the viewpoint that innovation has left the network provider universe. The market trend for engaging consumers in more broadband is unmistakably focused on pushing content to and from five screens. Companies that successfully serve all five screens across the consumer universe will see their businesses expand and revenues rise.
[i] AAA, American Driving Survey, April 2015. https://www.aaafoundation.org/sites/default/files/2015AmericanDrivingSurveyFS.pdf
Roger Entner and his analysts are known around the globe as some of the most respected telecom experts.Full bio →