The Impact of Novel Technologies on Television: Manufacturers Vs

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Tais Tellaroli Universidade Federal de The impact of novel Mato Grosso do Sul technologies on television: manufacturers vs. broadcasters O impacto das novas tecnologias na televisão: fabricantes x emissoras

El impacto de las nuevas tecnologías en la televisión: fabricantes x emisoras

C&S – São Bernardo do Campo, v. 39, n. 3, p. 245-264, set./dez. 2017 245 ABSTRACT The present article aims to present the evolution that television is facing regarding the technological developments and the broadcasters challenging that have to adapt themselves to this new scenario, among them, the competition with the connected TVs. With the connected TV, the user has the power of choosing the content (on demand) that he desires to watch and when he wants to watch it, impacting directly on the open TV business mode, which its viewer has the obligation to watch TV commercial. The phenomenon of video distribution by broadband straight to the television set is called over the top and the main trend is in the revenue growth through the publicity. Broadcasters and TV manufacturers glimpse this new market and are accelerating their partnerships to ensure the sale of TV equipment with proper content onboard. Keywords: television, connected TV, technology, content.

RESUMO Este artigo tem como objetivo apresentar as evoluções que a televisão vem enfrentando devido ao avanço das tecnologias digitais e os desafios dos radiodifusores que estão tendo que se adaptar ao novo cenário, entre eles a concorrência com as TVs conectadas. Com a TV conectada, o usuário passa a ter nas mãos o poder de escolha do conteúdo (sob demanda) que quer ver e quando quer ver, impactando diretamente no modelo de negócios da TV aberta, onde o telespectador é obrigado a assistir ao intervalo comercial. O fenômeno de distribuição de vídeos por banda larga direto para o televisor é chamado de “over the top” e a principal tendência está no aumento do faturamento por meio de publicidade. Emissoras e fabricantes de TV já vislumbram este novo mercado e aceleram as parcerias para garantir a venda de equipamentos de TV com conteúdo próprio embarcado. Palavras-chave: televisão, tv conectada, tecnologia, conteúdo.

RESUMEN Este artículo tiene como objetivo presentar las evoluciones que la televisión viene enfrentando debido al avance de las tecnologías digitales y los desafíos de los radiodifusores que están teniendo que adaptarse al nuevo escenario, entre ellos la competencia con los televisores conectados. Con el televisor conectado, el usuario pasa a tener en las manos el poder de elección del contenido (bajo demanda) que quiere ver y cuando quiere ver, impactando directamente en el modelo de negocios de la TV abierta, donde el espectador está obligado a asistir al intervalo comercial . El fenómeno de distribución de vídeos por banda ancha directa para el televisor se llama “over the top” y la tendencia principal está en el aumento de la facturación a través de la publicidad. Emisoras y fabricantes de TV ya vislumbran este nuevo mercado y aceleran las alianzas para garantizar la venta de equipos de TV con contenido propio embarcado. Palabras clave: televisión, TV conectada, tecnología, contenido.

Submissão: 16-9-2017 Decisão editorial: 25-08-2017

246 C&S – São Bernardo do Campo, v. 39, n. 3, p. 245-264, set./dez. 2017 The Brazilian open TV The television is considered the major mass media when compared to other type of media, mostly because to its far-reaching and penetration. The open TV in Brazil depicts specificities in accordance to its cul- ture, politics and economy as presents Bolaño (2004, p.44) in the book Mercado Brasileiro de Televisão:

Whether the development of the Brazilian capitalism happened based on a distributive structure over-focused, the television, although, by its actual characteristics, it developed creating a substantial mass of viewers that tendentiously is formed by the whole Brazilian population. [...] In Brazil, the existence of two audiences clearly distinct from each other happens in accordance with the actual characteristics ‘concentrationist’ of the distribution of national wealth that relegates the most part of the population to low consumption levels.

The television in Brazil emerges in the 1950s at the same time it undergoes a significant industrial and economical development, this moment is ma- rked by optimism bursting with investments in different sectors, including the communication area with the advent of the television. Since its invention, it has adopted a commercial system, “endorsed by a State scheme of concessions to the private enterprises” (Bo-

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laño, 2004, p. 32). TVs organize themselves as private companies generating revenue throughout the sale of the advertising space. Other model of TV existent in Brazil is the state model, which system is financed by the State. After 1965 the TV starts a monopoly position with a concentrated market. Bolaño (idem, p.48) explains: `what happened [in the 1970s] was a networking expansion, led by Globo, through the integration of independent broadcasters and the im- plementation of retransmitter stations for all over the national territory`. The main business model of the television broadcasters is the television commercial sale over the program schedule.

In open TV, user access is free, and, the broadcaster business model is based on TV commercials (or program input, the called merchandising) to the product advertising or to third-party service, which pay for it directly to the broadcasters. As it is known, the users, normally, are obligated to watch these specific advertising during their favorite TV shows. (Ferraz, 2009, p. 16).

At the end of the 1960s, Brazil faced an economic boom, at that time a considerable sale of TV sets happened, promoting even more the largest audience (Rede Globo). According to Azevedo (2006, p.38) in 1965, with the creation of Embratel, there is a deployment of the telecommunications network, expansion of repeater station and the national expansion of the television networks, turning the Rede Globo the largest national network of TV. The author considers the expansion of the national network as the main characteristic of the Brazilian broadcasting market during this period and the defi-

248 C&S – São Bernardo do Campo, v. 39, n. 3, p. 245-264, set./dez. 2017 The impact of novel technologies on television: manufacturers vs. broadcasters nition of the Globo quality standard as a preponde- rant factor for its effective penetration and market domination. Priolli and Borelli (2000, p.87) attest that

throughout the 1970s and 1980s, TV Globo followed the model that gave it a considerable advantage over other broadcasters. Already in 1980, the signal of the Rede Globo reached 75% of the televising apparatuses existing in the country. In the 70’s no other broadcaster emerged that could shake the quasi-monopoly of Globo in acceptance of the general public.

At the same time Rede Globo dominated the national market, other broadcasters emerged and began to dispute small-scale audiences, first in the Southeast Region and then in the entire national territory. Bro- adcasters such as TV Cultura (1964), TV Bandeirantes (1967), TV Gazeta (1970), SBT (1981) and TV Manchete (1981) (idem) are created. The whole history of Brazilian television will not be detailed here, only some relevant facts for a better understanding of the studied object. The TV Globo, as an audience leader, is highlighted when talking about TV in Brazil, exercising cultural representation while dictating trends. According to Azevedo (2006, p.35), Brazilian broadcasters have as their main characteristic the family monopoly and their control lar- gely made by politicians. In Brazil, the strength of television is in the open commercial TV. It is through it that the values and ideals of society are exposed in television news, novels and general programs. In studying the representation of family structure on American television, Heintz-Kno- wles (2001, p. 177) shows aspects of television that can be widely adopted:

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Television is a cultural storyteller. Its programming reflects both the values and ideals of American society and the forms of attitudes and beliefs of those who attend it. More assiduous viewers tend to believe that representations about TV programming reflect the state of the outside world and thus develop perception about our world based on TV information.

The television, for being so present in the everyday life of Brazilians, reinforces its informational importance in all levels of society. Whoever watches television obeys the rules imposed by broadcasters, but with the possible change in their structures due to the digitization, what will be of their future? Who tries to answer this question is Nicholas Negroponte (1995, p.54), who even after more than 15 years since the publication of the book The Digital Life, already envisioned that with the irradiation of the bits, the television will become a totally different communication vehicle, as there will be numerous “new, creative and stimulating applications on the information superhi- ghway”. But the author warns that the development of this new media can be delayed by regulatory agen- cies, industries and politicians, which he called “the police of the bits.” With the advent of the Internet, consumers of television content come into contact with a new platform that offers the right to publish content, exchange information and be in contact with many people at the same time. This new form of communication transcends the linear communication model described by Shannon and Weaver (1949) in the Mathematical Theory of Communication as part of the communica- tional process: Information Source-Transmitter-Channel- -Receiver-Destination.

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Shannon and Weaver’s theory was widely used to reinforce point-to-point communication exchanges, presenting to the viewers in practice content developed by commercial interests. For the technologist David Weinberger (2008, p.451), broadcast is more than a simple industry, “it is a network topology, an economic model, and a social structure, with direct consequences for the political process”, the effects of the excessive consumption of television impact on the freedom of the people that is defined only by the channel switching. The author reflects on the power of the industry in human beings and the new possibilities with information technology, which being connected becomes a matter of survival in the corporate and personal world, becoming the biggest innovation for people to organize and reinvent ways of communicate. Considering the technological advances, television came to be captured in several ways, although it is still a TV. Nowadays there are possibilities to receive the content of satellite TV, the internet, cable and air. Open TV was the first to exist, its reception is made by electromagnetic waves emitted by the antenna of the transmitter and received through the TV sets. Currently, open TV can also be received on mobile devices that are capable of picking up the open signal.

The phenomenon of the Internet and impact on the media The digital age is enhanced by the Internet and the digitalization of information, when there is the transformation of atoms into bits. With its penetrability and networking, it offers users an environment capable of transmitting data, voice and video at high speed.

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In the 1990s, with the emergence of the World Wide Web, cost cutting and increased content, the Internet spread throughout the world; in 1996, was already widely used in developed countries. In the 1990s, according to Dizard (2000, p.24), the network expanded 50% each year with the connection of 300 million personal computers in more than 150 countries. According to a survey conducted by Cisco in 2015, 4.5 billion people were connected to the web by mobile devices, corresponding to 62% of the world’s population. In five years, this number will reach 5.5 billion, totaling 70% of the population, but it is only a matter of time before the entire population is reached and covered by the network. Since its popularization 20 years ago, the Internet has been gaining space all over the world, taking on commercial relations, disseminating information, becoming a channel for relationships between people from different locations and expanding communication. At the beginning of its expansion, the Internet distributed only printed data and some graphic information, but this limitation disappeared and has been intensified due to the multimedia resource capable of manipu- lating video, voice and print data (Dizard, p.27). With computer-mediated communication, there was a latent concern about the content available on the network. Newspapers, in general, were intimidated by the possibility of being swallowed up by the new technology and migrated to the digital media. The game changer between traditional and online media was the characteristics of information dissemination technology and media convergence, allowing online newspapers to add text, sound and image at instantaneous speed of access. Today, the largest and smallest newspapers in the world can be accessed virtually. 252 C&S – São Bernardo do Campo, v. 39, n. 3, p. 245-264, set./dez. 2017 The impact of novel technologies on television: manufacturers vs. broadcasters

Not only the printed media has been brought into the network, but also radio stations already broadcast their content online, television stations provide online content that has already been broadcast on TV. The traditional media also bet on the success of the Inter- net to guarantee another form of revenue and keep the audience. In the early days of the web few companies were available online, the options of links and interactivity were limited and there was no knowledge about their potentialities. As the number of users grew, there was an improvement in the use and exploitation of design and technology platform, creation of new services, the Internet gained a more participative character and came to be called social media or Web 2.0. Web 2.0 was characterized more by an attitude than by a technology. Tim O’Reilly (2005) defined Web 2.0, in his blog as:

Web 2.0 is the network as platform, spanning all connected devices; Web 2.0 applications are those that make the most of the intrinsic advantages of that platform: delivering software as a continually-updated service that gets better the more people use it, consuming and remixing data from multiple sources, including individual users, while providing their own data and services in a form that allows remixing by others, creating network effects through an ‘architecture of participation’.

The strength of Web 2.0 is the participation of users. As users interact, share content, exchange information, communicate and participate, the more the Internet develops. This new form of participation left users with the opportunity to choose the content they want to see, read or listen to, other than television and

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radio that dictate what, when and where people will receive content. Today, the Web has evolved to be called Web 3.0, intelligent web or semantic web that gives meaning to the contents of the web, making software and people interact better. The number of people in the network keeps gro- wing. According to the Digital, Social and Mobile 2016 report of We Are Social, the number of active Internet users in Brazil reached 58% (120.2 million users) of the country’s 208.7 million inhabitants. The trend of greater growth is in the use of the Internet by the mobile phone, that grew 13% in the period of one year, since January of 2015. Another segment that registers high ratings is So- cial Networks. These are now a phenomenon on the Internet and increasingly involve Internet users inte- rested in the exchange and diffusion of information, such networks represent relationships, both professional and affective among people who gather around common interests. According to Raquel Recuero (2009, p.102), So- cial Networking sites “are the spaces used for the ex- pression of social networks on the Internet”, software that brings together actors, that is, people involved in the network that establish connections formed from the interactions social policies. Social sites are systems that allow the construction of a persona through the profile, exchange of messages and public exposure of those who participate. According to data from the same Digital, Social and Mobile survey of 2016 We are social in the ranking of the most used social networks in the world, first is Fa- cebook with 1.59 billion users, in Brazil Facebook is the most accessed social network, second is WhatsApp.

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Figure 1 Ranking of the most used Social Networks in Brazil

Comparing the Internet to other media, Joseph Jaffe (2008, p.115) indicates that three quarters of Americans are connected and that the Internet is su- rely a media that is at the top with:

• more people; • doing more; • connecting more; • seeking more; • consuming more; • sharing more; • researching more; • buying more.

And the most important of all is that they are people from all over the world collectively participa-

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ting in the ambivalence of local and global space. The Internet brings together people who do not know each other, putting them in direct contact, making them share knowledge, thus becoming a different and engaging media.

Connected TV The first interaction initiative recorded on TV was in 1952, in the Winki Dink and You program, where the viewer was invited to paste a plastic on the screen and draw over the black-and-white image (Brittos R, 2009, p. 57). The next way of exchanging information between the broadcaster and his audience was via the phone, a game called Shotting Gallery in 1978, allowed the viewer to “shoot” when he spoke POW, the game arrived in Brazil through the SBT channel in 1984. However, the most famous form of interaction was in the program You decide, of Rede Globo. Pe- ople were offered the choice between two endings for the episode, phone voting provided the feeling of interactivity with the TV station that showed the end of the story more voted. The exchange of information between television viewer and broadcaster was incipient due to the lack of a return channel, but with the advent of digital TV, there is a possibility of adding the interactivity feature to TV. The development of the Ginga brought a lot of expectation in the academy, in the broadcasters, industry and in the population to turn the TV into a means of communication that could bring digital in- clusion and access and exchange of information.

Digital TV - with the use of midlleware Ginga, which has national technology incorporated into the converter box - allows great digital revolution. [...]. The use of the

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return channel stimulates the interactivity between the field of production and reception, radically changing the relationship between those who produce content and those who until then only received those contents. As if that were not enough, Ginga offers an interface with internet and also graphical interface. In other wor- ds, it is the most complete middleware among existing systems and works in open source (it is free) (Castro, 2008, p.73).

However, the proposal that could transform the TV set into an access terminal had no incentive from the Government, which seems to have given up the deployment of this technology. According to Gindre (2016),

in part, the bankruptcy of Ginga as Brazilian technology for interactivity in digital TV is due to the lack of competence of the Brazilian State to implement an industrial policy that would allow its adoption. The sub- ject has always been in the hands of people without the experience and power necessary to articulate the set of instances within the state machine to respond to a challenge of this magnitude.

In addition, the introduction of new technologies related to the broadcasting sector, such as Smart TVs, has been one of the reasons why Ginga-based interactivity has been impaired, becoming an immi- nent threat to its development and consolidation in the country. For TV manufacturers such as Samsung, LG and Sony, connected TVs or Broadband TVs are being developed with interactivity applications with their own operating systems and they define interactivity applications that can or may not be installed. If Ginga were deployed it would be a competitor to disrupt this market. C&S – São Bernardo do Campo, v. 39, n. 3, p. 245-264, set./dez. 2017 257 Tais Tellaroli

University of Toronto researcher David Weinberger (2008, p.445) stated that `we are not in the information age, we are not in the age of the Internet, we are in the age of connection`. For the author, the tendency is that everything is connected, just like the TV. The author points out that when society is connected, it becomes fairest and the greater the connection, the better, governments, the economy, education, and other services.

But we are on the verge of being able to connect to anyone and everyone, whenever and however we want. No gatekeepers. Ubiquitous connection. Con- nectedness that’s always there and always on. This isn’t about getting more TV channels. Change the way we’re connected and you’ve changed everything, from the economy to governance. This is how funda- mental transformation occurs (Weinberger, 2008, p.444).

Television sets that are currently being marketed, as well as offering high-definition images, offer connection to the internet, use of applications such as Netflix, YouTube and the possibility of watching online content while watching TV. Electronics manufacturers work with the idea of providing the consumer with maximum connectivity, making the TV a general entertainment terminal where the consumer will have the chance to perform all the tasks they want in one place. The phenomenon of distributing broadband videos straight to the television is called over the top (OTT). Connected TVs feature a model that adds va- lue to content providers alongside TV makers (which were previously not profitable for content generation). With the arrival of the connected TV is the user who decides what content he wants to watch, he now has the control and power of both what and when 258 C&S – São Bernardo do Campo, v. 39, n. 3, p. 245-264, set./dez. 2017 The impact of novel technologies on television: manufacturers vs. broadcasters to watch, this directly reflects on the business model of the open TV where the viewer is obliged to attend the commercial interval. TV broadcasters are attentive to the new market that is opening up and are already starting to look for alternative ways to follow the changes, such as Rede Bandeirantes and SBT, which are already starting to change the way of content distribution by partnering with Sony TV manufacturers. Now when buying a Sony TV, for example, the consumer can have access to broadcast content on demand, initiating a new era for broadcasting. Television manufacturers are looking towards a new market, now they also want to profit from the content producers. Sony has been investing in Smart TVs and since 2012 its slogan has already focused on ‘a new concept of fun’. The slogan was

Remember the time when you only watched what happened on TV? That was left behind. Sony is launching a new concept of fun. It’s not TV. Not even the internet. It is TV with internet in one product. From now on, you’ll have access to all the channels you already have and more than 40 channels of free content from Sony partners as Lance, UOL, Terra, IG, Wired.

Today the company already brings new concepts to attract consumers, such as this, for example a TV Smart Android 4K LED Ultra HD LED:

Try Sony’s 4K and forget about what’s left behind. Check out more realism with your favorite television entertainment with incredible detail and color. Explore next-generation 4K applications, games, and multiple streaming and internet content options.

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Sony’s TV advertising shows that image quality and content are the main attractions to entice consumers to purchase a Smart TV, as well as offering exclusive content from Sony Entertainment and the Opera Store with videos, social networks, games, among others. In a master dissertation, Fernando Si- queira (2011) analyzed the content made available by SBT on connected TVs from Sony, data collection was from December 12 to 25, 2011. The research no- ted that the SBT provided 30 programs in total, some of which were complete and others were just excerpts from programs. According to Siqueira,

SBT does not provide all of its recent content on the Sony Connected TV platform. Only a third of the programs available have full editions, which are available for a maximum of 30 days. At that point the broadcaster prioritizes the Internet as the main platform for the diffusion of its recent production (2011, page 63).

Samsung Smart TVs offer a large number of TV apps such as Globo Play (content on demand channels: GNT, SporTV, Multishow, Mais Globosat, BIS, VIVA, Off, Gloob, Telecine, Universal, Syfy, Globonews, Me- gapix and Combate. Live channel content: GNT, Mul- tishow, Viva, Globonews, Sportv, BIS, Gloob, Off, Brasil, Combate and Premiere). To access this content, you must make a registration on Globo.com and pay a monthly subscription of R$ 14.20. Samsung’s sets also offer Netflix apps, YouTube, BBC News, YuppTV. The Research and Market (2011) report points to some trends for the next few years related to the consumption of OTT content, the main one of which is the increase in billing revenues to three billion dollars in 2014, still points out that the initial form of generation

260 C&S – São Bernardo do Campo, v. 39, n. 3, p. 245-264, set./dez. 2017 The impact of novel technologies on television: manufacturers vs. broadcasters of revenue will be given through advertising, however, with the development of the OTT market, there will be a readjustment in the way the resources are captured, being able to migrate to the way cable TV is today: subscription charges. The market is promising, in Europe, for example, the year 2011 registered the mark of 340 million euros for the delivery of video on the internet for TV. In 2010, Google TV, based on Android, was laun- ched in the United States to unite the experience of TV with the Internet, but the price of the device of $299 did not attract consumers who preferred to in- vest $99 in the rival Apple TV. According to Francisco Machado (2011, p. 120)

Google TV is just a content distribution platform, because it itself produces nothing and once again makes money from advertising on content produced by other companies or the thousands of users who voluntarily supply the network with their amateur or professional productions. In August 2010, USA, ABC, NBC and CBS broadcasters denied Google TV’s license application to make broadcast content available on the new platform.

After the failure of Google TV, the company created the Chromecast that can be connected to the HDMI input of any television offering content on demand, in addition to being cheaper than the Apple TV that reaches more than a thousand Brazilian reais in the current version with 64GB of space. For consumers, both platforms offer advantages and a new way to consume content at any time without the rigidity of the programming grid.

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Final Considerations Technological innovations bring to the television market devices that allow access to open TV, content available on the internet, and in applications offered by TV manufacturers. Connected TVs offer the audience the experience of watching a show when and how they want through internet connectivity. As such, the viewer is no longer hostage to the open TV programming grid, having in hand a menu full of options to choose from at any time. And the broadcaster has the opportunity to offer exclusive content, such as SBT that prioritizes films and programs differentia- ted from open TV such as Globo Play, allow access to Internet channels such as Terra and UOL such as Sony or offer Netflix applications, YouTube, BBC News as do the Samsung sets. Another important feature of TV sets is the quality and resolution of the image, such as 4K technology. The high definition of image presents more realism, besides accelerating the transmission of content through the internet. The search for more and more image definition has been a constant pursuit by companies to offer an increasingly real image and a speed of data transmission and browsing. Already the applications and use of social networks by the public bring a new reconfiguration in the relations between sender and receiver, since it is through the facility of transmission and transmission of data that it is possible to identify by means of hashta- gs, for example, the opinion about a certain program. In this way, the connected TV starts to add a new component of the current era of television defined as hyper TV. Its features are greater interaction between broadcasters and receivers, offering on-demand

262 C&S – São Bernardo do Campo, v. 39, n. 3, p. 245-264, set./dez. 2017 The impact of novel technologies on television: manufacturers vs. broadcasters content ensuring the viewer’s choice of power, information sharing, convergence across multiple platforms and multi-screens, and various digital displays. And so, a new habit is established when watching television and new forms of market growth aimed at billing in a technologically expanding business.

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