Adoption of Internet connected devices in the living room is growing rapidly and, given the positive usage and awareness levels that we saw in the first phase of our study, it doesn’t look like the growth will slow anytime soon. With connected devices heading quickly to the mainstream, we really wanted to look deeper at consumer ad awareness and, importantly, how they interact with a variety of campaigns. The goal here was to move past the discovery phase and give our clients more of the information they need to hone their campaigns and drive real results.

In order to drive tangible results for our clients, the key is to drive ad awareness, so we were delighted by the fact that 80% of the respondents indicated they noticed the presence of ads, and about a third of those were compelled to click through.

Campaign interaction was promising and perhaps most evident in the statistics related to RFI. In one instance, a campaign managed to garner email addresses from 70% of those visiting, while another campaign motivated over half to call an associated 1-800 number for more information.

Also, a promising sign of the impact of interactive advertising on connected platforms is the fact that many respondents were driven to engage the brand further. In one instance, 85% chose to visit the brand’s Web site after viewing the campaign, while in another instance, 8 out of 10 chose to “Like” the brand on Facebook.

Perhaps the most positive findings of the study were those reflecting intent. In the case of products the intent was to purchase, while with entertainment, the intent was tied to viewing. As shown below, 75% of those visiting a product-related campaign indicated they intended to purchase, while in the case of a show advertisement, a staggering 97% said they intended to view the program.

Download the infographic (.pdf)

In addition to delivering realtime ad metrics, Rovi also commissioned Nielsen to conduct a two-part study on connected device owners. The first phase of the study, which is now available for download, looks at device awareness and usage. The second phase, to be released in early November, will be the first of its kind and will look at the effectiveness of specific interactive campaigns.

The results of phase one of the study serve as an exclamation point to the positive findings and bullish forecasts already released. For brands, the study reinforces the viability of connected devices as a unique vehicle to truly engage their customers. Here are a few of the findings:

Connected TV Platform Usage

• 83% of connected TV owners have used the connected platform, with 33% accessing it frequently
• More than 90% would recommend the Smart TV Platform to others
• 1/3 of users are watching more TV as a result of having access to the connected TV platform
• Consumers use the platform to find and discover content:
  • When I don’t know exactly what I want to watch (49%)
  • When I am looking for a specific program but don’t know exactly where to find it (43%)
• The top three reasons consumers use the connected TV platform are:
  1. It’s easy to use and navigate
  2. They like the convenience of accessing apps and widgets without needing a separate device like a tablet or smartphone
  3. Good for watching television on my own time

Consumer Awareness of Advertising

• 80% of users noticed the presence of ads on the connected TV platform
• About 1/3 of those who noticed the ad, clicked on it
• Overall click-through rates were between 10-17%

Stay tuned for the results of phase two, where we will be looking in detail at ad effectiveness for both entertainment and conventional brands.

I also discuss the data, measurement, and functionality offered by our Smart TV advertising network in a new episode of Radio [i]tvt, InteractiveTV Today’s radio show.

Rovi is particularly excited to be here as IFA.  We’ve made a number of announcements this week to show what we can do for the European market. Our white-label entertainment discovery solutions are popping up in many new places in Europe among consumer electronics manufacturers wanting to power higher quality, more engaging and personalized consumer entertainment experiences across multiple screens. At the show, we’re announcing new European customers including Panasonic who will be using Rovi TotalGuide to power their next-gen connected TVs; and Eutelsat, who is collaborating with Rovi on a new Hybrid Internet/TV service.

If you’re at IFA this week, you can find us in Hall 25 at Stand 146. In our booth, you’ll see:

• DivX Plus® Streaming – Announced today, this is  Rovi’s secure adaptive streaming solution that brings high-quality DivX streaming capabilities to a range of connected devices for the first time. HDTVs, Blu-ray players and even smartphones and game consoles will be able to stream DivX content through implementation of this SDK . We’re excited to bring this expanded capability to consumers who know and love the stunning quality of the DivX video format, and those that may not have experienced it before. Rovi will also showcase the extensive range of devices currently supported through the DivX Certification Program.
• Rovi TotalGuide™ for CE – This all media guide enables consumer electronics manufacturers to provide intuitive entertainment discovery and access across broadband and broadcast content services.  
• Rovi Entertainment Store – Formerly, RoxioNow, this white-label portal enables subscribers to instantly watch a broad range of premium entertainment. Rovi Entertainment Store is powering video-on-demand features of a new hybrid-TV offering for digital cable operator Eutelsat. This effort is part of a broader European expansion with new retail customers expected to be announced later this year, but can be seen via a demonstration in the Rovi booth at IFA starting today.

Also, you’ll see Rovi at the following IFA events:

• Thursday, September 1, 6:00 – 9:00 pm CEST: Rovi exhibited at ShowStoppers @ IFA, the official media showcase, held in Hall 15.2 of the Messe Berlin fairgrounds.
• Tuesday, September 6, 2:00 – 3:30 pm CEST: Medienwoche@IFA, the International Media Congress held in ICC Berlin, will feature Richard Bullwinkle, Chief Evangelist, Rovi, speaking in Room 6 on the topic of “Your Device – Your Digital Profiler: The Future of Connected Entertainment.” 

We look forward to seeing some of you out in Berlin. Don’t forget to stop by the Rovi booth to say Guten Tag!

Voting ends this Friday, Sept. 2, so get to it and get your vote on. See you at SXSW 2012!

1.  Power Shift: Gadgets Rock Entertainment Ecosystem�
   (Speaker: Richard Bullwinkle, Rovi)
2. The Dark Art of Digital Music Recommendations (Music)
3. The Dark Art of Digital Music Recommendations (Interactive)
   (Speaker: Michael Papish, Rovi)
4. Digital Musicologists: Online Music’s Tastemakers
   (Speaker: Tom Erlewine, Rovi)
5. Why the Future of TV has Four Screens
   (Speaker: Jeremy Toeman, Dijit Media)
6.  How Metadata Brings Multimedia to the Living Room
   (Speaker: Oren Nauman, AnyClip)
7.  Second Screen and Social TV: Which Way From Here?
   (Speakers: Carlton Cuse, Carlton Cuse Productions; Brad Pelo, i.TV; Lisa Hsia, Bravo Digital Media; Alex Iskold, GetGlue; Bill Gannon, Entertainment Weekly)
8.  Television is Dead. Long Live Television.
   (Speakers: Mark Rivis, TiVo; Billy Hogan, MLB; Matt Graves, Twitter; Nick Johnson, NBC; Mitch Oscar, MPG)
9. Why Digital May Alter Forever Alter TV as We Know It
   (Speakers: Michael Aragon, Sony Network Entertainment; Jason Spivak, Sony Pictures Home Entertainment)
10. Discovery: Driving Music, Friends, Brands & Beyond
    (Speakers: Stephen Bradley, Farmingville Capital; Alan McGlade, MediaNet)
11.  Music Biz Models: What Works & What Doesn’t
    (Speakers: Jim Cady, Slacker)

But Spotify isn’t the first to offer that service in the US.  Pandora is extremely popular, with its more radio-like music service.  Whereas in Spotify, you create playlists of the songs you want to hear, or your grab one of your friend’s playlists from Facebook, in Pandora you just tell it a few songs you’re in the mood for and Pandora will create a custom playlist of music just for you, filled with songs that match your mood.

That’s the magic.  Each of the online music services has a slightly different model for payment, and a slightly different model for discovering music.  Almost all of them offer a free service of some kind, usually with ads, and many of them offer premium services for money allowing you more control over what music plays, often eliminating the ads, and often letting you take the music service to your portable device like your tablet or smartphone.

One of my favorite services is Slacker. Slacker offers many ways to pay and many ways to discover music.  With the free service you have a streaming radio station with ads on your computer or connected device, almost exactly like Pandora.  With the premium service (about $10/month), you can play any song you like at any time, or even hear a favorite song over and over.  My son loves Turntable.fm.  There he and his friends can take turns playing DJ, and introduce each other to music while also getting to show off their eclectic taste.

None of the services have every song you’ve ever wanted to hear.  For example, none of them have The Beatles, and none has the latest two albums from Radiohead, and many are missing some random track that you really love.  In fact, here is an infographic of how many songs each services offers in their catalog, costs, and other key facts:

Courtesy of Mashable

 So what’s so cool about Spotify? Only Spotify offers a great way to fix the missing-tracks problem by letting you mix your personal collection — the songs you’ve spent a lifetime collecting — with their catalog.  Create a playlist with tracks you own and some new music you don’t yet own.  Discover new music from your Facebook friends, and yet still keep your playlist from iTunes all in the same interface.  For the person who already has a great collection of music, it’s very cool.

Each service offers some different way to enjoy music. Each service has different cost models.  But the thing I’m most proud of is that every service I’ve mentioned here (even iTunes) uses Rovi’s metadata to make their service more powerful, visually stimulating and fun to use.  Our talented staff of writers, editors and database wizards make our service the starting place for creating a great music service.  Check it out for yourself — at the bottom of a biography, or in the album listings, and sometimes in the credits for the app itself it will say “Powered by Rovi.”  We’re quite proud of that.

The pool of digital content continues to swell on the Internet. Millions of songs are now available to us on-demand. For many, sorting through this vortex can be a daunting and intimidating exercise.

Developers have begun to recognize the need for better, more user-friendly tools to help us find that perfect song among the millions. Sites and applications like Pandora, iTunes Genius and even AllRovi.com have taken hold and are creating some big changes in how we find and discover new music.

These tools automate the music recommendation process, providing the consumer with personalized advice on what to listen to next. But are these recommendations as good as old-fashioned word-of-mouth? Are they better? We sat down with Michael Papish, Rovi product development director and expert in the field of digital music recommendations to get some insight.

Have we reached a golden age of music recommendations?

People have always been the primary vehicle by which music spread around the world – from the days of the wandering minstrels before music was recorded to the heyday of radio with DJs like Wolfman Jack and Vin Scelsa, and then on to hometown record stores and tight-knit circles of fans rallying together around photocopied ‘zines and basement venues.

However, over the past 10 years we’ve entered a new phase of music discovery – one powered by, like many facets of life these days, the wizardry of the internet. The internet has amplified the inherently social aspects of recommendation giving. For example, people can unite around the globe around any genre or musical interest with a few clicks of a button. This new type of musical exploration has no geographical boundaries the way your hometown music circle once did.

The internet has also allowed the birth of music recommendation engines and tools that help to automate the music recommendations process for users, making it that much easier to come in contact with new music. That said, we still have a way to go until this process and most importantly the consumer experience around internet-based recommendations is perfected. So while it may not be the golden age yet, it is certainly an exciting time for entertainment and how we share it with others.

What challenges still exist with internet-based recommendations?

It’s important to remember that not all listeners are looking for the same experience every time. Sometimes you might want to sit back, relax and let the music come to you, so a passive tool like Pandora would provide a good experience.

Other times you may be willing to put in extra effort to find that perfect song. In this instance you may turn to a tool like the Rovi Finder application on AllRovi.com, which requires more active input from the listener.

My point is, you can’t take a one-size-fits-all approach with building out music recommendations. Rovi is looking at ways to broaden the options for users, creating the right mix of experiences based on listener preference at any given time of the day and on different platforms from the TV, PC, smartphone or tablet. Each scenario should evoke a different experience for the user.

Are music recommendations an art or a science?

Good question.

Science is crucial, specifically because the space of music is so large (10M+ tracks). Well-determined methods are needed to figure out relationships between all that music. This can be considered the foundation for today’s recommendation engines. However, to make really good recommendations you must embrace the fact that recommendations are also very much an art.

I’ll argue that over the past 10 years, as an industry we’ve reached the stage where we understand how to eliminate the blatantly wrong recommendations. Our next challenge is to figure out how to make great recommendations and (as importantly) how to accurately measure our progress towards this goal. Critical to this argument is knowing that the goal of today’s music recommendations engines is not necessarily to make you click and buy more, but it’s to build trust between the listener and the system/tool/company making the recommendations – this is where artistry becomes critical.

Take the engine interface for example, the computer scientist responsible for building this interface must know how to code (science), but they also need to have a keen understanding of how people think or what motivates them to share information (art). They must then carefully blend this knowledge together to build a site or application that draws the listener in, engages them and builds that level of trust.

At Rovi, we are constantly looking for ways to perfect this delicate balance between the scientific and artistic elements that comprise an awesome recommendation – from the search algorithm down to the staff-written editorial reviews – each piece of the puzzle is essential.

Disney and French telecommunications company Free have collaborated on new services that allow consumers in France to purchase and instantly enjoy a range of Disney and ABC entertainment in their living rooms via the Freebox TV set-top device (Read Disney/Free press release). The initiative breaks new ground by permanently storing purchased entertainment in the cloud and allowing consumers to stream it as many times as they like.

Cool enough, but it gets even better. In addition to persistent cloud access in the living room, Disney and Free are enabling subscribers to download a digital copy of the entertainment they purchase. The digital copy can be viewed on PCs (Windows and Mac), and transferred via DVD, USB, memory card, or DLNA to a range of home and mobile electronics including digital TVs, Blu-ray Disc players, video game consoles, and mobile phones.

Making this magic happen and giving consumers the flexibility to enjoy their favourite entertainment virtually anywhere – whether they are connected to the Internet or not – is DivX technology.

For those of you not familiar with DivX technology, let me give you a little background. Some mistakenly think of DivX as simply a powerful video file format or codec. DivX may have begun as a file format renowned for its ability to compress video (for easy web delivery) while maintaining good visual quality; but it has evolved into so much more. Today, the DivX brand is synonymous with high- quality video entertainment.

DivX technology has developed into a comprehensive set of software tools and applications, combined with a broad device certification program that all work in harmony. The result is an interoperable ecosystem that provides consumers a consistently high-quality video experience across multiple platforms and screens.

How many screens? Well, DivX device reach recently topped half a billion and includes home and mobile devices from nearly every leading manufacturer.  Needless to say, consumers have a bevy of choices for playing back DivX content. DivX technology also supports HD (up to 1080p) to enable consumers move their favourite entertainment, in pristine quality, across devices and platforms. Last, but not least, DivX technology offers comprehensive digital rights management that’s built into content and into every DivX Certified device.

 All in, for Disney and Free, DivX technology offers a turnkey solution for securely delivering an entertainment experience that meets consumers’ expectations for quality and flexibility.

I hope that service providers and content owners here in the U.S. have taken note and will quickly follow suit. This would be great in a business sense for Rovi of course, but I’d also like to see this happen for my own personal reasons too. Device interoperability is fantastic and would certainly give me the control I crave; however, as a person with small children, a digital copy would also save me a lot of money.

To explain, my children really enjoy their entertainment. Unfortunately, as well as being a visual treat for my young ones, the shiny discs that some of our entertainment comes on seem to have equal appeal as all manner of plaything. They have been used as Frisbees, chew toys, musical instruments and so much more. These activities are great folly for the kids, but really bad for DVDs and Blu-ray Discs, which subsequently skip and freeze in protest. If you’ve ever experienced the meteoric meltdowns that occur when an animated classic is cut short, you too will be looking forward to the day when Rovi-backed services like Disney Free hit the U.S.

Whether you have kids or not though, you have to agree the promise of ‘buy once, play forever anywhere’ is a pretty attractive value proposition.

Rovi Total Guide Application for STBs, a new application, just launched this week, that can transform today’s static STB user experience into a multi-faceted platform for TV search and discovery. This app, which initially sits alongside the widely deployed Rovi iGuide IPG, delivers the cool features of Rovi TotalGuide – including a slick-looking UI,  dynamic recommendations, entertainment metadata and multi-device IP video distribution – without cable service providers having to deploy any new hardware. These new features can all be implemented via an easy software update to consumers’ existing STBs (thanks to Rovi Cloud Services technology on the backend.)

We’re excited about this application because not only is it the easiest way for cable service providers to bring cutting-edge TV navigation features into the home, but it stands to significantly expand the reach of our TotalGuide technology to millions of channel surfers. We think they’re going to love the new experience.  And the cable service providers have responded favorably — Rovi announced that it will be working with Cogeco, Suddenlink, BendBroadband and Armstrong to bring TotalGuide Applications to market.

The Rovi Video Distribution Solution, also launched this week, helps cable operators provide their subscribers with access to TV entertainment virtually anywhere through connected devices like tablets, smartphones and PCs.  When launched with Rovi TotalGuide xD, cable operators will be able to extend their brand to any number of web-connected devices.

If you’re out in the Windy City for the big event, don’t forget to drop by our booth #603, and say hello! We look forward to seeing you! If not, follow us on Twitter at @RoviMedia for updates from the show floor.

Now who else is excited for Thursday’s General Session with Oprah?

Here’s how I got there…

The industry is buzzing with questions about what Apple paid the music studios to make iCloud come to market, and what they will pay moving forward.  One thing is clear, the music industry is getting a cut from it.  The music industry hasn’t raised an eyebrow while Apple has announced a service that allows you to re-download to multiple devices music tracks, in some cases in much better quality than you currently have them, no matter where you got them.

That last bit is the kicker — no matter where you got them.

Apple politely suggests that they assume you got those tracks from ripping your CDs, but even CD ripping hasn’t been completely blessed by the music industry all along.  And while no one will say it out loud, Apple and the music industry aren’t asking users to clean out their music library to purge any dubiously acquired tracks before they turn on iCloud.

Why? Here are several reasons:

• They know users won’t delete stolen tracks anyway.  Why ask users to make sure they actually paid for every track they have in their library when most users can’t even remember when or how they paid for a track.  It’s too late.
• They know that most users aren’t thieves.  Sure I’ve had a friend send me an email with the title “check this out” and listened to the track, and I’m certain that there are some tracks in my library that got there the wrong way, but I pay for a great deal of music.  If most of us were thieves we’d steal CDs from stores.  We’d bash in car windows.  And we’d jump over the fence at concerts.  In fact most of us believe we’ve paid enough for our music, and we believe we are supporting the artists we so love.
• For the first time in history, music piracy is going down.  Several reports in 2011 suggest that piracy is on the decline.  It’s not by any means going away, but a decline is big news.  It turns out that it has become so easy to get content legitimately — through sources like iTunes, Pandora, Slacker, MOG, RDIO (all users of Rovi metadata, by the way) — that music fans are using those services instead of torrents and other nefarious tools for stealing stuff.
• The music industry will get on-going revenue from iCloud.  That $25/year many users will pay, because they didn’t buy tracks from iTunes, is the magic bullet.  Some portion of it will go to the music industry, and it is apparently enough money to keep the music folks quiet. The chances of the music industry every recovering a nickel from people who stole tracks in the past, or extracting money from people who ripped CDs was, until now, infinitesimal. iCloud at least gets the music industry some money, and they’ll get it year over year.

So there’s my math.  That’s how I came to the conclusion that the music industry was willing to grant amnesty for any stolen tracks to users of Apple’s $25/year iCloud service.

Afterthought: In October of 2007 Radiohead released the album In Rainbows on the internet.  In a wild marketing test, listeners were offered the choice to pay whatever they wanted for the album.  At the time I was pretty new to Radiohead.  A guy down the hall from me at work had brought in a bunch of CDs for me to check out, and I’d spent the summer listening to them.  I’d never, up to that point, paid for Radiohead.  So when I bought In Rainbows online from Radiohead’s site I offered 50 bucks.  I figured I owed it to them.  Today I’m a huge fan and have hundreds of Radiohead tracks in my library.  Most are from albums I’ve bought over time, but I also have a bunch of rare live tracks and “bootlegs” that I’ve “traded” with friends — I can’t really remember where I got what.  My latest favorite is a series of tracks under the title Jaydiohead.  A producer named Max Tannone mixed Jay-Z’s a capella albums with different Radiohead tracks to create something both hard-hitting and ethereal that makes your brain cry out — usually in ecstasy.  I don’t know who gets paid when you download Jaydiohead — probably no one.  You can easily find them for free with a quick internet search, but I can’t find a way to pay for them.  iTunes doesn’t have them, nor does anyone else.  I’d happily pay for them, but I wouldn’t voluntarily remove the tracks from my music library for love or money.

If you’re not deeply entrenched in the business of digital entertainment technology, you may not know what metadata is, but I’m going to go out on a limb and say this – metadata is the single most important ingredient in marketing and selling entertainment content today.

A common definition for metadata is: “data about data.” Although this is a catchy phrase, it doesn’t really help us understand what metadata is and why it is so critical. Even if you haven’t heard of the term metadata, chances are you interact with rely on it multiple times every day. If you use your on-screen TV program guide; shop for music or movies online; or stream content from cloud services like Pandora and Slacker, metadata is fueling the entire experience.

On one hand, enhanced metadata can be classified as the descriptive and visually-rich information that describes digital media from TV episodes to music albums. This includes cover art, content summaries, actor and artist bios, third-party reviews and more. This type of information makes it possible for consumers to search for and find content that is of interest to them no matter the digital platform, be it iTunes or Netflix. Without this data, the digital entertainment discovery process would essentially fall apart. Consumers would find themselves lost in the ever-growing vortex of digital content, unable to connect to new entertainment or familiar content they already know and love.

On the other hand, metadata can be the unique identifiers that assure today’s digital content actually finds its way through the supply chain correctly. For example, the Entertainment Identifier Registry (EIDR) , a nonprofit, global registry has developed a standardized unique identifier for entertainment assets – similar to a UPC or ISBN code for books. This further identifies content with metadata, such as title, director, lead actor, and genre. By more clearly defining entertainment assets through a standardized, systematic cataloguing system, EIDR strives to end the mix-up of content at the studio level, the production level, the post production level, the distribution level and ultimately for the consumer.

The combination of enhanced metadata and standardized content identifiers pack a powerful punch for the future of digital content distribution. As the amount of digital content continues to grow, metadata is going to be critical to consumers and entertainment marketers alike. It will be a key conduit in connecting consumers to the right content – that which they will ultimately want to consume, download and purchase.

Hopefully this helps demystify some of the uncertainty around the value of metadata in the entertainment industry. If you are a producer of digital entertainment content, I’d be interested to know what strategies you might be deploying around metadata that will ultimately describe your content out in the digital world.

(Image courtesy of Oliver Widder, Geek and Poke)