In a week when US broadcasters debated with cable on just what is the right way to embrace the internet (see elsewhere in this issue), Microsoft has come out and put the cat among the pigeons saying that consumer time in front of the internet will soon overtake that in front of the TV, and it’s happening first in Europe.
This came in the form of a simple survey of Europeans which says that by June 2010 internet consumption will take up 2.5 days per month of the average internet connected consumer. At present Microsoft says that only 50% of Europeans have an internet connection, however in many of the more advanced countries, notably the Nordic countries and France and the UK, where that percentage is far higher.
In fact Microsoft says there’s a North South divide in Europe with Nordic countries have an internet penetration rate of 76% on average, compared to 45% in Southern Europe.
During 2008 those internet connected consumers used it for 9 hours a week, which Microsoft says was only up by 27% from 2004. Even in 2004 it had eclipsed reading print media, watching movies or playing video games in terms of consumer hours it used up. Now it’s within range of overtaking TV.
But Microsoft is at pains to point out that this shift in internet usage does not mean a decline in TV viewing, simply a shift in how it is consumed due to the recent addition of online video viewing.
Already more than 1 in 4 (28%) of Europeans and over 300 million people worldwide watch short or full-length videos on the internet so this is partly the PC and the handset growing in popularity as alternative screens on which to watch TV.
Users are also increasingly accessing the internet through IPTV, games consoles and mobile phones, so the time spent on the internet using a PC is set to drop from 95% of today’s internet activity to only 50% over the next 5 years. Here at Faultline we’re a little reluctant to go along with that statistic. The mobile web is in its infancy, and web on the TV is still hardly used at all. We think Microsoft is asking people what they expect and adding that to the sudden availability of many new technologies and just assuming that the handset will take up more and more internet video, whereas it is established on a PC.
The report is entitled ‘Europe logs on: Internet trends of today & tomorrow,’ and by just extending existing trends Microsoft reckons that Internet consumption in 2010 will average 14.2 hours a week, or 2.5 days a month, compared to 11.5 hours a week, or 2 days a month, for TV.
Already students and many people in the 18-24 year old segment are treating the PC as their ‘only’ TV screen, with one in seven 18-24 year-old now watching no live TV at all and around 42% of young adults regularly watching TV online.
We are assuming that as these people grow up, they will not sign up to pay TV services at all, instead they will become sophisticated at looking online for the content they want.
Of course it is the same age group that is already addicted to buying online gaming consoles and using placeshifting and timeshifting capabilities, and Blu-ray viewing is increasingly being included in a console and already Sony PlasyStation 3 can act in Europe as a DVR, and can placeshift both video and games to remote PSPs.
Microsoft has various interests here. It has its Mediaroom IPTV service, which is exceptionally well positioned for opening up the floodgates to internet viewing. Internet TV can come to a Mediaroom connected TV either through protocol conversion in the home (on the PC, or from an Xbox 360 or a new device) or can come through the IPTV VoD server links, with the heavy lifting carried out within the network. And of course the Xbox 360 network can serve video direct to the TV from the internet, as well as working as a Mediaroom set top. Microsoft also says that its MSN network is serving around 100 million video streams each month in Europe alone.
John Mangelaars, Vice President, Microsoft, Consumer and Online, EMEA, commented: ‘The three screens ‘ TV, mobile and PC will remain the most important media and technology in our lives. While today the experience is fragmented across multiple media devices and environments – from the living room television to the bedroom PC to the portable music player and mobile phone – in future, software from Microsoft and others will enable connected, integrated entertainment experiences.
‘Microsoft already enables people to see web based content on their TV, remotely set their DVR to record a TV show via a web connected PC, or sync recorded TV shows to their mobile device.’
Microsoft then went on to ruin the survey by making all sorts of predictions in its statement, none of which makes sense or stem from the research, saying that long-form video content and IPTV will become the norm, that the TV will become a PC, that consumers will read books, newspapers and magazines over Wi-Fi and that 3D experiences over the internet will become a reality. None of these came directly from the research, and they all just point to ‘clever’ futures that Microsoft might be able to leverage.
What we see as most striking is the way the internet has kind of paused for breath and then suddenly, as broadcasters have got their act together and sent video over the internet, it has re-accelerated in terms of eating up consumer hours.
Microsoft puts all this change at the door of broadband adoption, saying broadband has changed everything and has moved to centre stage in the kitchen and living room where it does not interfere in the family conversation or TV viewing, but is integrated into everything we do.
Microsoft does note that this connected and highly social, digital lifestyle is not nearly as accessible as it could be because it is fragmented over so many different networks
‘All the digital ‘stuff’ in our lives still doesn’t work together as well as it could ‘ we still find ourselves moving music and pictures around between our PCs, our phones, our game consoles and elsewhere. The software and services we rely on are too fragmented ‘ we have to keep track of multiple social networks, contact lists and photo collections, each with their own login and password, and a new interface to learn. All these walls are keeping us from enjoying the full power and promise of the Internet. Microsoft is focusing on doing away with the ‘walls’ that exist today between all the technology and media in our lives.’ And who’s fault is that exactly? Microsoft would have a lot to do with that.
It’s a shame really that someone from Microsoft can say all this but not realize that Microsoft, if it stopped trying to ‘own’ all the underlying operating systems and platforms, might be just the kind of company that might be able to create common platforms which pulled the digital lifestyle all together ‘ instead it’s too busy trying to win smaller wars at the operating system and software component level.
It goes on to talk about its Windows Live service, but if it had been quicker off the mark, this would be integrated into Symbian and iPhones as a key destination, instead of Ovi and Facebook being the natural place for these to link to.
It is right about one thing, this fragmented digital lifestyle presents marketers with huge challenges as increasingly they operate across the digital space. So when Microsoft says that advertising strategies must change, shifting from chasing ‘an audience of millions’, to discovering ‘millions of audiences’ where individual people will be targeted, it has highlighted another place where it still might make a significant contribution.
And that brings us to another small piece of news from Microsoft this week in which it has managed to land the ‘entire’ budget for the Discovery Channel’s ‘Deadliest Catch’ TV series spreading the campaign across MSN, MSN Mobile, Windows Live Hotmail, Microsoft Live Search and Xbox LIVE.
The main advertising push will be happening across Microsoft’s Media Network on April 14, 2009, when the new season debuts at 9 pm on the Discovery Channel. Discovery has purchased more than 90% of the advertising inventory owned on MSNBC, Fox Sports, MSN, MSN Mobile and Xbox LIVE for April 14 and will feature the first-ever home page takeover across both MSN and MSN Mobile. The campaign will also involve in-game advertising assets supported by Microsoft subsidiary Massive with in-game events in Ubisoft’s ‘Shaun White Snowboarding’ and ‘Rainbow Six Vegas 2,’ and Electronic Arts’ ‘Skate 2,’ Madden 09, ‘Mercenaries 2,’ ‘Need for Speed Undercover’ and ‘NHL 09,’ simultaneously.
This should all have the effect, in the US at least, of the digital world stopping for a few seconds and hearing the Discovery show message.
‘The doors to our one-stop shop are open,’ said Keith Lorizio, vice president of U.S. sales, Microsoft Advertising. ‘The Deadliest Catch campaign demonstrates how we are making it easier for customers to buy and integrate multiplatform digital campaigns. Discovery will reach around 550 million unique users worldwide on the home page takeover alone.
The campaign will accomplish several firsts on the MSN home page, such as setting DVR reminders for fans, updating their calendar, and sending text alerts and e-mails.