Thursday, December 12, 2013, 10:43 AM ET|Posted by Will Richmond
This holiday season, connected TV devices are among the hottest items on consumers' wish lists. For content providers eager for a foothold in the "digital living room," surging demand is very good news. The bad news, however, is that due to fragmentation and proprietary approaches among devices, content providers are forced to allocate their scarce resources in a one-by-one development model.
This is highly inefficient for content providers and sharply contrasts with how the web's standards helped to drive massive scale years ago. Beyond the inefficiency for content providers, the resulting fragmentation of content availability undermines the scale required for successful video advertising and also creates confusion among consumers about which device to buy. Unlike the web where you can bring home a computer and get access to ALL content, when you get a device you only get a narrower subsection.
As a result, these days, each new device-content pairing becomes a newsworthy event. Among the highlights from the past few weeks: Chromecast added 10 new apps (e.g. VEVO, Red Bull, Revision 3, etc.), Apple TV added 5 more (e.g. Bloomberg, Crackle, WatchABC), Xbox One added Fox and YouTube (among many others included in recent launch), and Roku gained news from AOL, the Watch apps from Disney/ESPN and Conde Nast's channels. There are many other devices and Smart TVs all vying for content as well. Meanwhile the most popular apps (e.g. Netflix, Hulu Plus, Pandora, HBO Go, etc.) have relatively broad availability.
From a consumer perspective, device-content fragmentation is dizzying. Putting price aside and focusing just on content selection, the consumer has to have a really specific idea of what content they want when deciding which device to buy.
This is where I believe Chromecast has a distinct advantage in enabling ALL of the web's video on TV via "tab-casting," even before content providers actually integrate Chromecast's casting feature. But even Chromecast has its downsides as I learned last week when setting one up for my parents who wanted to use their iPad 1 with Chromecast to watch Netflix on TV. Because Chromecast requires iOS 6 - which iPad 1 doesn't support - they were out of luck. It was back to Best Buy to return Chromecast and buy a Roku 1 instead.
Bottom line, it's another confusing holiday season for consumers. To the extent that each device maintains its own proprietary approach, there will be no such thing as ubiquitous delivery for content providers. Though connected TV devices are catching on with consumers, fragmentation is constraining their ultimate potential.