The Quest for the Living Room: Are Marketers Tilting At Windmills?
Apple, Microsoft, Comcast and Others Are Still Battling For the Box, but Viewers Have Moved On
When Steve Jobs passed away this month, he left one major technological goal unfilled: the quest to own the living room, and more notably, the $100 billion of advertising residing there. In reality, the range of devices he introduced to the world, coupled with the community created by social media, have forever changed the media landscape. Yet today most media dollars are still flowing to this mythic place, the living room.
Historically, more media has been consumed sitting in front of the television than any other device. Controlling this screen has been the goal of major technology, consumer electronic and telecommunications companies. When Apple announced iTV in 2006, the company joined a host of major corporations determined to conquer the 21st century living room. It took aim at Sony, Samsung, Time Warner and Comcast, and has recently warily eyeballed new entrants Hulu and Netflix. But while Apple and others continue in their attempt to stake out their turf in front of the sofa, each will soon realize that they are in fact, tilting at windmills—mostly thanks to Mr. Jobs.
With the release of the revamped Apple TV last year, Jobs again took the forefront of this illusive quest, as determined as Don Quixote, to reach the unreachable. Microsoft, longing to once again dominate a market --the way it did during the era of the personal computer-- is surely the Sancho Panza of this journey, a sidekick during Apple's domineering journey.
Years before Jobs entered the consumer electronics space, Microsoft sought to have its operating system dominate the television set of the "future." Microsoft first entered the living room with Ultimate TV way back in 2000 – a year before Apple's first iPod was announced. Ultimate TV offered consumers a DVR and supporting online services, including 14 days of programming and the ability to record 35 hours of programming. Microsoft's reach was then thwarted when Echostar acquired DIRECTV, and Ultimate TV lost its distribution. As a result of the Echostar development, cable and satellite providers wrote big checks to Hollywood and pushed back hard for control, but Microsoft remained undaunted.
As yet another way to plant a flag in the living room, Microsoft then entered the gaming system market with Xbox. Its strategy was simple: the best gaming system, Xbox, would be hooked up to the best television, Ultimate TV, within the home. This approach proved to be very effective and with the introduction of Xbox Live in 2002, and consumers could now download games, pay for subscriptions and purchase music and movies. With 23 million users, clearly owning the living room was within reach for Microsoft.
But something unexpected happened while the tech titans valiantly fought for control of the couch.
Like the ferocious giants of La Mancha, today's "living room" became nothing more than an illusion. "Everything is artifice or illusion," Quixote exclaimed, and no exception is made for the the 21st century living room. Families are no longer gathered around one, singular TV, sharing in a passive experience. Video is now consumed all the time—and everywhere. iPads in bed, iPhones on the go and DVRs delivering programming to sets throughout the household are more the norm than Homer, Marge, Bart, Lisa and Maggie gathered together on the couch. With 64% of Generation Y consuming content on multiple screens at the same time, where one consumes media has been replaced with how one consumes media.
Proof of this changing landscape can be found in who is cord-cutting, who is time-shifting, and who is demanding unbundled programming. Social media has also further impacted the shifting dynamics of content consumption, allowing friends to share the viewing experience with each other and their broader communities. Television programming is the number one topic on Twitter, and dozens of start-ups in the social space are linking second screen experiences. People no longer need to sit on the same couch to enjoy a show together. Moreover, the social aspects pioneered by music services such will soon expand to video and further enable advertisers to engage directly with viewers sharing video content. The majority of marketers, though, continue to cling to the living room to reach consumers despite innovation across every possible screen in the home.
So while broadcasters and cable networks cite increased demand at this year's Upfronts as proof that nothing has changed in the living room, I believe Steve Jobs recognized Quixote's wisdom that "facts are the enemy of truth." Jobs forged forward, pushed the front lines and created experiences for both consumers and advertisers that have forever changed the landscape of the battlefield. "Every man is the son of his own works" wrote Cervantes; as fitting a description of Steve Jobs quest as that of any knight.