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Cynopsis Media Presents: CES Wrap Up
01/13/14

by Chris Pursell

The proverbial age of innocence was over for media companies participating at the 2014 International CES, at least when it comes to 4K and second screen. With over 3,200 exhibitors gobbling up a record two million net square feet of exhibit space for more than 150,000 attendees, the storyline for the entertainment industry was “deeper, wider and richer” as experimentation now gives way to monetization.

Gary Shapiro, president and CEO of CEA, delivered the State of the Consumer Electronics (CE) Industry address on Tuesday morning, announcing that US consumer technology revenues are projected to hit 2.4% growth, hitting a cool $208 billion and a record high. “We are at the forefront of a momentous wave of innovation,” said Shapiro. “The incredible growth that emerging product categories such as Ultra HDTV, wearable electronics and 3D printers will experience this year underscores the significant role new technologies play in the total consumer electronics story.”

“The show is always a blast for us,” said Chris Wagner EVP and Co-Founder at NeuLion, which announced a deal with Microsoft to deliver live streaming to the next generation gaming console, the Xbox One, at 60 frames per second. “This year it was all about wearable tech, internet connected devices, and big, big curved TVs. Consumers want high quality video on any device and content that drives an interactive experience. It was a great show advancing both of these must haves.”

Driving the narrative, according to media executives, were early announcements surrounding 4K that included 100+ inch TVs and content deals from the likes of Netflix, which stated that it would carry series such as House of Cards in the format and Comcast, which is developing a 4K video streaming app.

“We’re seeing 4K everywhere,” said Tom Cosgrove, CEO of Sony/Discovery/IMAX venture 3net, which is focusing on 4K productions. “You are starting to see choice across the spectrum. If you go to the floor, they’ve now got a set for $999. It’s not a smart TV, but it’s 4K. Then you go over to Samsung, and they’ve got this huge, curved set for $140,000 so you are starting to see that next step of things that are coming that no one can quite afford yet as well as things that people can actually buy. As a result, all of these companies, like Netflix, are now coming out stating that they are in the 4k business. We’ll see how much content there actually is behind all of that, but it’s finally happening.” Cosgrove noted that everything they produce moving forward will be 4K, with a large portion being both 3D and 4k.

In addition to the forward progress seen with Ultra HD, second screen and mobile played its vital own role in the show, as developers looked to beef up new ways to access content, earn a headline and find ways to create a profitable experience.

In a study released last week from CEA and NATPE, nearly 80% of consumers reported that they were accessing a second device while watching TV programming, with almost all of those viewers accessing content related to programming before or after a show, or between episodes and seasons. More than half of those accessing synchronous second-screen content do so during commercial breaks.

“We know TV viewers are beginning to use the second screen because it has the potential to extend enjoyment of the viewing experience,” said NATPE President and CEO Rod Perth. “We believe this research study will illuminate new entertainment possibilities for consumers as well as content creators.”

Another study, conducted by Ipsos MediaCT and LinkedIn, found that, among affluents, 60% have their TV connected to a video game console, 40% to the Internet, and 18% to streaming media devices. The survey also found that 56% have watched video via phone/tablet or computer in the past seven days. In addition, 51% have engaged in social media about a TV program while watching that program.

Breaking news in the space included announcements such as the launch of Yahoo News Digest and Yahoo Magazines as well as a new Smart TV app. Yahoo CEO Marissa Mayer also announced the company’s acquisition of Aviate, which created a smartphone app that automatically brings up relevant information or other apps to suit a user’s activity.

“Imagine if your phone can deliver the right experience to you at the right time instead of you having to search for it,” Mayer said during her keynote. “What if your phone suggested music and map apps when you got in your car or fitness apps when you got into the gym?”

Sony grabbed its own headlines by announcing the launch of streaming game service PlayStation Now, which will reach non-console owners through mobile devices. He also shared that Sony will have a cloud-based in-home viewing service available through a single destination.

“We’ll use our unique combination of network services, innovative devices, content properties and network partnerships to usher in a new era of home entertainment,” Andrew House, President and CEO of Sony Home Entertainment, said of the innovation.

Global Eagle Entertainment announced another deal with an airline to bring the company’s film and television content, games and applications to more than 130 airlines worldwide, as the company moves to capitalize on gate-to-gate connectivity for consumers as well as Wi-Fi accessibility below 10,000 feet. John Guidon, CTO of Global Eagle, said his company is now offering close to 20 free channels of in-flight entertainment via DISH Network and more than 130 movies.

But, it was another announcement that generated the most social media activity. WWE formally unveiled WWE Network, which will launch live in the U.S. on Monday, February 24 and will feature all 12 WWE live pay-per-view events, including WrestleMania. The digital channel will cost fans $9.99 per month with a 6-month commitment and will also carry original programming as well as more than 1,500 hours of video on demand at launch. WWE Network will be available on desktops and laptops via WWE.com as well as via the WWE App. WWE collaborated with MLB Advanced Media to build the platform with MLBAM providing its technology services, including video streaming infrastructure, application development and operational support for reliable cross-platform distribution.

“Today is a historic day for WWE as we transform and reimagine how we deliver our premium live content and 24/7 programming directly to our fans around the world,” said Vince McMahon, WWE Chairman & Chief Executive Officer. “WWE Network will provide transformative growth for our company and unprecedented value for our fans.”

At the Second Screen Summit, panels paid particular attention to trends in mobile viewing with topics that honed in on advertising and apps that are affecting broadcasters. But, according to Andy Nobbs, Chief Marketing Officer at Civolution, now the gloves are off as companies evolve from adoption to monetization.

“One of the key takeaways from the Second Screen Summit was that, while the early events were about what does it all mean, now we are at the second stage where there are deployments, especially overseas, so we’ve got a nice sample to work with,” he said. “Now people are waiting for the next monetization phase. People are still looking at who is making money off of it. Unfortunately, the term second screen is now associated with a thousand different things; we are trying to truly define what the second screen is. We are lucky because we can show some of that.”

Innovation was also top of mind for FCC Chairman Tom Wheeler, who sat down for an interview with Shapiro to lay out his priorities, which included a push toward IP networks, educational initiatives and spectrum auctions, noting that broadcasters should be thinking of doubling up on channels.

“I think there has never been a more risk-free opportunity for an incumbent service provider to morph into the new digital reality than what the incentive auction offers,” he said.

The International CES will return to Las Vegas, January 6-9, 2015.

Later – Chris Pursell
01.13.14

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