High Definition TV has been good to TV manufacturers, program producers and consumers. HD helps sell more high-end TVs to consumers who like the Big Picture and richer viewing experience. Now new research suggests there might be good HD news for media buyers and sellers, too.

A comprehensive study of commercial viewing to a dozen of the largest network TV advertisers suggests that commercial tuneaway is lower in HD households. Higher audience retention means bigger commercial ratings which might translate into future cha-ching for broadcast and cable ad sales executives.

A new Kantar Media study reports that viewers tune away from commercials about half as often on HD channels compared to the standard definition (SD) feed for the same network. Ad supported HD channels have an average tuneaway of 3.73 percent of commercial seconds compared to 6.8 for SD viewing.

The analysis is based on nearly 124,000 thirty second spots for advertisers in the automotive, communications, retail, QSR, insurance and prepared foods categories. October 2009 data from 100,000 set top boxes in Kantar’s DIRECTView sample were used for the analysis. The complete results will be presented at the Advertising Research Foundation AMS 5.0 conference in NYC on June 22-23.

Broadcast also benefits from HD. High Def broadcast channels have 31 percent less tuneaway compared to the same commercials on SD channels  (2.2 vs. 3.2).

“This may be another measure of engagement,” says Leslie Wood, president of Media Trust and a study co-author. “If a person is watching on the HD channel, they care more about their TV experience.”

The finding could also be a win for set top box providers.  “Return path data can provide important insights into consumers’ digital viewing behavior,” says George Shababb, president of Kantar Media Audiences. “The ability to isolate the tuneaway effect of HD versus SD is unique to these data,” he says.
Wood notes that it isn’t clear if HD makes people spend more time with commercials or if the household characteristics of HD homes  — such as income, family size, etc. — differentiate SD and HD commercial viewing. Either way, it’s good news. “Greater audience retention and its implied higher commercial rating are a powerful rationale for networks considering adding a HD feed,” she says.

Breakthrough research is nice – but actionable findings are what matters most to media buyers. “These data suggest that HD channels reach a more engaged viewer which can have repercussions for our advertisers,” says Kevin Moeller, partner and Insights Director at MediaCom. “If HD programming results in a more engaged viewer it will encourage media communications planning and buying teams to rethink media plans.”

Although these preliminary data suggest an additional payoff to networks’ HD investment, one sales veteran is cautious about cashing in.

“I am not wild about centering a sales effort on the potential of this incremental gain,” says Harvey Ganot, a partner at New Markets Now and former President of Advertising Sales at MTV Networks. Ganot says charging more for HD is a double-edged sword: if HD is worth more, does that mean standard definition is worth less? “Advertisers are getting the HD advantage for free now. Why would they want to pay more?” Logistical issues would also make an HD-only sales effort difficult. “Segmentation and micro-placement of schedules in an HD environment are time consuming and labor intensive tasks,” Ganot adds.

Higher HD commercial ratings may not justify bigger ad sales rates down the road. But if it helps justify networks’ continued investment in high def distribution and technology, it’s bound to help broadcast and cable CFOs sleep better at night.

Dave Zornow is president of TNG Research, a media research and applications development company in Nyack, NY. He is also co-author of the study, “Using Return Path Data to Understand Contextual Advertising Engagement on TV,” which will be presented at the ARF AMS Conference in New York on June 22.

At the 1964 World’s Fair, AT&T introduced a new product that combined the telephone and television into a surefire hit for businesses and consumers. Three million Picturephones were predicted to be in use by the 1980’s. Instead of Picturephones, we now remember the 80’s by a different cultural failure: disco music.

AT&T is estimated to have spent up to $500 million developing the Picturephone. Why wouldn’t you want to see the person to whom you were speaking? If facial expressions weren’t important, why did those thoughtful Internet pioneers invent all of those emoticons to express what words alone couldn’t do? AT&T failed partially because they charged $21 a minute for the bandwidth hungry picture phone in a pre-fiber, barely satellite communications age. Today we can do it for free via iChat or Skype — but even free hasn’t made consumers want to be heard and be seen.

Last week Google announced a new service which will join two commonly used communications technologies. Google TV will marry TV with search to improve the consumer experience and, in Google’s words, “change the future of television.” Anyone who has ever tried to use a remote control to text search a TV interactive program guide can see the possibilities of searching “all of your channels, recorded shows,  YouTube and other Websites” in one place.

Long before the industry anointed  “convergence” as the holy grail of media synergy, AT&T learned that consumers can be a fickle bunch. Google, a dominant communications company of the 21st century, might want to take a history lesson from AT&T, which was the largest communications company of the 20th century.

Google and their technology partners hope to sell new TVs (from Sony) or new HDMI-connectible set top boxes (from Logitech) to merge your desktop and set top digital words. Google TV Product Lead Rishi Chandra says Google TV will let viewers use the voice search feature of Android phones to query Google TV. NewTeeVee.com provided a play-by-play of the new service as demoed at the Google I/O conference. First, Chandra searched for live TV content and scheduled TV programming to program a DVR.

Then he searched for House, and Google TV returned search results Hulu, Fox.com and Amazon. Clicking on the Amazon search result led to the website of Amazon’s VOD service. The search bar can also be used to directly input urls and search saved bookmarks. “It’s just as easy to go to any site on the web as it is to go to any channel on your television,” says Chandra.

Google’s business model is to make money by bringing search to TV and extending the reach of advertising through Adwords. In an interview on the Fox Business Channel, Google CEO Eric Schmidt says that because Google TV seamlessly combines TV and computers, “we know a lot more about what people are doing and can make more relevant television advertising  — which should be worth alot of money.”

Will Google succeed where AT&T once failed and Apple TV and Microsoft’s Media Center have stalled? There’s only one way to end an article that talks about almost 50 years of TV and technology: Stay tuned.

Sources: DavidZondy.com, Porticus.org, Google TV, NewTeeVee.com, Digital Daily, Fox Business Channel, BobLucky.com

See Also: Engadget, timeline.com, BusinessInsider.com

Back when HBO was new and before ad supported cable hit its stride, a handful of UHF stations in major markets offered a subscription over-the-air TV service to compete with cable. Now a Silicon Valley start-up wants to dust off that business plan with a digital twist. The San Jose MercuryNews says

Sezmi’s service differs from those of traditional pay-television operators. Its customers get local broadcast channels via the public airwaves. But the company also relies on those airwaves, via deals with local broadcasters, to send pay-TV channels to its customers. It also plans to send on-demand and Internet programming to consumers via customers’ broadband connections.

The startup promises an integrated media experience, delivering broadcast, cable and select Internet sites (READ AS: YouTube) in one place managed with a DVR. They also offer 6,000 VOD titles, too.

There’s a free three month trial in LA and the SF Bay area. Southern California testers will see Comedy Channel, TNT and CNN but deals haven’t been secured yet for Bay area viewers.

The secret sauce to Sezmi is a small digital antenna called the  “Smart Reception System.” The company says “for the first time, advanced techniques used in other applications such as wifi and wireless have been applied to TV reception.” Translation: it’s a digital antenna in an enclosure which should cover 85 percent of LA. Maybe.

These features will make cable and satellite subs yawn as most of this has been done before. Except the price:$4.99 for basic service and $24.99 for premium channels. The gotcha is paying $300 for Sezmi’s proprietary equipment. You also can’t Sezmi unless you have a broadband internet connection — which means you are still most likely tied to an MSO or a Telco.

In May, 2008, USA Today reported that Sezmi  “is counting on phone companies, and perhaps also wireless carriers, to market the service as a bundle with Internet service.” The California beta tests suggest that plan may not panned out as telcos have aggressively pushed services like FiOS and U-Verse.

Sources: Sezmi, San Jose MercuryNews, Wikipedia, USA Today, 5/2008, Technologizer 11/16/09

See also: PC Magazine

Navic positions Admira as an “end-to-end solution for dynamically buying television media…providing aggregated, anonymous set-top viewership data to place ads based on audience segmentation and target criteria” offering planning, inventory management and accountability features. Microsoft Advertising Scott Ferris says it’s non-disruptive and offers premium advertising. That means it isn’t an auction (like Google or eBay’s TV offerings) and has offers buyers more than just remnant advertising.

Sources: WSJ, Navic, MediaPost

TNS will report 100,000 satellite television subscribers projectable to the entire DIRECTV subscriber base projectable to the 17 million DIRECTV subscriber base. DIRECTView is part of TNS’ InfoSys application that  provides analysis of live and time-shifted network program and commercial audiences on a second-by-second basis.

Discovery is the first announced client to the DIRECTView service. Two weeks ago, Nielsen announced National Geographic as its first client to its competitor,  DigitalPlus, which is limited to 300,000 Charter Communications households. Discovery Communications used the Charter data in 2007 through TNS Media Research to measure second-by-second viewing behavior of its HD Theater channel before signing on for DIRECTView.

Source: TNS, Nielsen

The turf battle between Cablevision and Verizon has opened another front. Specifically, in my front yard. Digging up my turf.

I noticed someone digging a hole by my front porch last week. And the Verizon truck parked across the street (incidentally, there’s no parking on that side of the street. These monopolies know no bounds!). Wanting to do my part for homeland security, I decided to question the infiltrator.

According to “Jim,” the FIoS installer (I’ll assume this was an assumed name he used in the event that he was taken prisoner by The Other Monopoly), says he was checking the ground for my FiOS connection. I remarked that although I was neither an installer, an engineer or a physics major, the ground looked perfectly fine to me, having been freshly installed only a year ago by Verizon. He shrugged his shoulders saying an inspector had recently been out to visit and had fingered my location as a trouble spot. According to Jim, Cablevision was behind all of this.

IMHO : Probably.  About three years ago, I was on a citizens review committee for a Northern New Jersey community which needed to approve Verizon’s application to provide TV services to the community. In the middle of the process, the NJ legislature made the process moot by giving Verizon a statewide OK to provide video services. But for a brief amount of time, I got to see some of the tactics that Cablevision lawyers employed to protect their franchises. It wasn’t pretty — but for those of you who appreciate what highly paid corporate lawyers can do when unleashed, it was probably high art.

So, is it likely that Cablevision sicked the PUC on FiOS? Yes.

It was at this point when my informant turned from possible fact to corporate fiction. “And if it wasn’t for all of the extra taxes Verizon has to pay, we would have put those bastards out of business already.” I found this to be a curious accusation at best, given that FiOS has offered no discernible discount in rates for video — a place where the marketplace is hungering for a price break.  But I wasn’t going to interrupt him quite yet. After all, he had the sharp tools and was holding the higher (electrical) ground.

“And their phone service sucks. The quality isn’t quite as good as the we provide, but people just put up with it.” As a dual Vonage and Verizon subscriber, I attempted to point out the fallacy and the irony of his statement. Vonage quality  *is* just as good as the phone company and it’s only that way because of the generous FiOS bandwidth. But this wasn’t a man who was going to be slowed down by facts. And he still was holding the sharp tools, so I decided to let him talk himself out and then show himself out.

Is there a digital turf war going on? Probably. But its nothing for us lowly consumers to concern ourselves with. Until it gets desperate enough for one of the two carriers to start using  price as a weapon to take away customers.

It makes sense for Verizon to take the lead in pricing. According to USA Today, the phone company spends about $900 per home with expectations of adding three million new video homes per year. Costs run about $715 more per home than Cablevision for the typical five-hour, two-person job for a new install. What’s a few dollars more for the Ivan Seidenberg if it will pay off in the long run?

Now, I don’t have an MBA, an EE degree and the only advanced telecommunications term I know is POTS (Plain Old Telephone Service). But if I owned a phone company and my consumer base was in a cost-cutting mood in trying economic times, the first thing I would do is start discounting to steal share from my competitor while I could do it on the cheap.

Which is the common ground for both the consumers and the competitors.

See also: RemoveTheLabels, Verizon

• Lee Doyle, North American CEO of Mediaedge:cia: “Economically challenged people are pulling the plug on their cable TV subscriptons, choosing to view video online instead.” Good economical move for the less advantaged. But how poor could they be if they have a computer and a broadband connection? Has anyone noticed hordes of the homeless watching the Lost finale in the public library?
• Paul Donato, Executive Vice President and Chief Research Officer at Nielsen: “It may take as many as nine streams of data to measure the three screens of viewing.” To report usage on TV, computers and mobile devices, Donato’s list includes peoplemeter data; set top box info; out of home measurement; Internet panel, server and branding measurement metrics; mobile; bill panels; on device metering.
• George Shababb, COO of TNS Media Research North America on how STB data complement panel based audience measurement: “Over 90 percent of the channels in a digital environment have audience shares of less than one percent.”
• Todd Juenger, TiVO’s Vice President & General Manager, Audience Research and Measurement on why advertisers should want to study commercials skipped in TiVO homes: “If you are a doctor trying to cure cancer, you experiment with patients who have the disease. DVR (ad skipping) isn’t just another digital phenomenon. We need to study it before it becomes an epidemic.”
• Josh Chasin, Chief Research Officer, comScore: “70-75% of the US online audience watch one or videos online each month.”
• Tracy Patrick Chan, YouTube/Google: “Ten hours of content are uploaded to YouTube every minute. YouTube is the #1 Entertainment Web site and the #7 ranked Website in the world.”
• Martin Eichholz, VP of Research at Frank N. Magid Associates: “The average age of viewers at ABC.com is ten years less than the average age of viewers to ABC television.”

In the 1987 TV series Max Headroom, TV advertising prices are set by a live auction where continuously changing ratings let advertisers bid on commercial avails. The series, canceled by ABC after 11 episodes, aired 11 years before the Internet was commercialized and twenty years before last week’s deal between Google and Nielsen.

“We think that TV is becoming like the Web: content explosion, audience fragmentation, and a long tail of networks,” says Keval Desai, product management director for Google TV Ads. “Internet principles like accountability and measurement can be applied to the TV business to the benefit of users, advertisers and publishers.”

Google TV Ads leverages the online auction technology used by Google to sell search keywords on the Web. Through deals with EchoStar and Astound Cable, a system operator in the Bay Area, Google TV Ads offers second-by-second set-top box data from digital set-top boxes. Google has plans to increase TV Ads reach through additional cable distribution.

The Google-Nielsen relationship addresses challenges faced by both companies. Google TV Ads gets demo data that ad agencies need to plan and buy TV. Nielsen gets an opportunity to learn how people meter data can be credibly melded with a virtual TV viewing census – albeit a census limited to the TV sets in cable and satellite homes that have digital boxes.

Google will initially use demo data from Nielsen’s national people meter sample to target buys and report audience delivery on the Google TV Ads platform. Set top box data will be adjusted initially at the DMA level for satellite subscription. “We will apply algorithms to essentially take the satellite subs out of the Nielsen data,” says Desai.

Both companies have high hopes for shared learning. “In the future, the two engineering and product teams will collaborate to develop models that incorporate set top box data with the people meter data to see if we can take the Nielsen panel and fuse it with EchoStar to improve the reports that go back to advertisers and agencies.”

Desai thinks Google can bring the industry together so there’s something in it for both buyer and seller. “We are bringing the parties together instead of pitting them against each other,” he says. “We are hoping to be a catalyst for the TV business.” ##