App bar: Users of Yahoo’s TV platform can install a selection of apps accessed through a bar at the bottom of the screen.
Many unknowns remain, though, and only limited lessons can be drawn from the cell-phone app market. “One big difference is that the TV is a shared device, not a personal device; also, maybe 80 percent of phone apps are location-based, which doesn’t translate to TV,” says Schafer.
Kurt Sherf of Parks Associates, a digital entertainment and consumer electronics consultancy in Dallas, argues that consumers are ready for shared apps. When his firm asked people what apps they would use on a TV, many said they wanted a shared calendar that everyone in their household could update and view.
Yahoo is still working out how to serve up advertising using its TV platform, something that Dixon says is “absolutely essential” to any firm developing a connected TV platform. “These companies do not have the advertising part nailed down at all,” he says.
Yahoo’s large online advertising network could potentially supply the inventory, while the TV platform provides ample data with which to target and track the performance of ads, says Schafer. “It brings the Web metrics we’re used to onto the TV,” he says. “You can watch someone’s flow as they navigate inside widgets, you can track what they saw and what’s on and off the screen. Since our users are all logged in, we also have a good idea of their profiles.”
Schafer says Yahoo hasn’t started serving ads on TVs, “but we can get demographics and metrics and are testing out the inventory space internally.” One type of advertising placement being tested is a banner on the toolbar that provides access to installed apps. The producers of the cable TV show Weeds are testing an app that offers a free streaming episode to promote the new season.
Schafer claims that Yahoo’s platform should give advertisers metrics similar to those offered by Google TV. But Dixon points out that it will collect less information than Google TV. “The Yahoo engine doesn’t know what’s on the TV; Google TV devices can know,” he says.
A Google TV device could track whatever content is onscreen at any given moment by monitoring the station a person is tuned into and using the Internet to check TV schedules. However, that’s only possible if the cable, satellite or broadcast provider allows it, says Dixon, something that he expects only satellite operator and Google partner Dish Networks to have agreed to so far.
Yahoo’s hope is that by establishing an early–if relatively low-powered–beachhead in today’s TVs it will be able to ramp up the features of its platform when smarter chips and other hardware appear later. “Awareness of the signal will come over time,” says Schafer.