The real convergence

The real convergence.
The Claria Corporation reported this week that 31 percent of Internet users were online and watching the Academy Awards Sunday night. That’s up from 20 percent a year ago. According to their press release, Oscar.com experienced a 700% increase in traffic during the show vs. its average daily site traffic.

Internet users generally agreed with the academy: 71% of survey respondents thought Lord of the Rings: Return of the King would win Best Picture; 60% thought Charlize Theron would win Best Actress; and 36% thought Sean Penn would win Best Actor (38% thought Johnny Depp would win)
The idea that people are online while they watch TV is nothing new, but these numbers certainly suggest the practice is more widespread than first believed. It’s the type of convergence many predicted years ago, but the real convergence to come involves other forms of media as well.

Intel has announced plans for a combination personal computer-television.

Called the “Entertainment PC” (EPC), the device will connect with the TV and be controlled by a remote. It will surf the Web using a Wi-Fi connection and cruise TV channels, recording movies and shows onto its hard drive and downloading programs and music not broadcast on TV.

In short, the small amount of exercise that modern humans currently get — walking from the den to the living room — now can be eliminated altogether.

Intel plans to make the EPC available in the second half of this year, with no-frills units retailing for under US$1,000.

It gets better. Scientific-Atlanta — the people who make your cable box — says it is planning to develop television set-top boxes with high-performance video games capabilities, which could compete with game consoles such as Nintendo’s GameCube and Sony’s PlayStation 2. According to Reuters, the company is already working with software developers in Europe to create games.
Scientific-Atlanta’s game box would not likely compete directly at retail with those companies, but instead could be an alternative supplied by cable television providers, who buy the boxes and then place them in consumers’ homes.

Cable providers are using beefed-up set-top boxes and services like video-on-demand in their battle for customers against satellite TV providers EchoStar Communications Corp. (NasdaqNM:DISH — news) and DirecTV, which is a controlled by News Corp. Ltd. (NCP.AX).

American Technology Research analyst Rob Sanderson said Scientific-Atlanta’s strategy could allow it to sell set-top boxes that would let cable operators, in turn, offer game- related subscription services to consumers. But the games would have to pass muster in an already crowded market.

As technology manufacturers come up with innovative ways to combine this and that, they do so with an understanding that the real convergence is taking place in the minds of consumers, and this is a lesson television executives would do well to learn. As I’ve noted previously, the concept that evolved into the A.C. Nielsen company was that a television set in the home was used for watching television. Not so anymore. We watch DVDs. We play video games. We go online. We record items for future playback, sans commercials.

Sony released a study this week that bears mention here. According to USA Today, the study of online gaming habits showed that peak usage was between 5 p.m. to 11 p.m., a span that encompasses television’s prime time.

February is one of the television industry’s “sweeps” periods, when ratings are used to set local TV advertising rates, and Sony said that 65% of its online gaming audience during TV’s prime time — 8 p.m. to 11 p.m. week nights — were men aged 18 to 34.

Roughly 10%, or 2.6 million, of Sony’s PS2-installed user base in North America is online, the company said.

The folks at Starcom MediaVest Group call all of this “TV 2.0” — a combination of broadband, gaming, and television. The company says the ad industry must come up with better ways of measuring all of this to insure accountability. The problem, of course, is that TV 2.0 is user/viewer controlled, and they don’t have time for commercials.

Matthew Fordahl, a technology writer for The Associated Press, published an excellent review this week of SnapStream Media Inc.‘s latest software that enables a personal computer to improve on a TV set. This is must reading for anybody with a serious interest in the real convergence. His assessment that the software (Beyond TV) is better than a TiVo is significant, but one particular usage blows the Nielsen methodology out the window.

Once setup is complete, television programs can be viewed in the full screen or in a resizable window.

At home, I can keep a news channel running in a small window pushed to the corner of my screen. At the office, I’ve been monitoring the news by streaming it from home, about 60 miles away.

I simply punch in my home computer’s numeric Internet address and click “Watch Live TV.” Thanks to a robust DSL connection, the picture is very clear, though the remote viewing window isn’t resizable. (Visit SnapStream’s very active support forums for easy workarounds.)

In other words, he’s watching his home television set on his office PC. It’s unbelievable.

Technology isn’t leading people. It’s the other way around. The real convergence of media is taking place in the minds of consumers, who are very much in charge in a Postmodern world. Fighting this reality — often through denial — is the road many of my contemporaries have taken, one that will quickly lead to utter defeat.

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