1. © 2012 Forrester Research, Inc. Reproduction Prohibited 1 © 2009 Forrester Research, Inc. Reproduction Prohibited Webinar The Tablet-TV Connection Sarah Rotman Epps, Senior Analyst Annie Corbett, Researcher March 8, 2012. Call in at 12:55 p.m. Eastern time

2. © 2012 Forrester Research, Inc. Reproduction Prohibited 2 How is tablet use complementary to the TV, and in what ways is it cannibalistic? How are product strategists designing products to exploit the tablet-TV connection? Where will tablet-TV innovation go next? Agenda

3. © 2012 Forrester Research, Inc. Reproduction Prohibited 3 Tablets and TVs are largely complementary 85% of tablet owners use their tablets while watching TV. 30% of total tablet usage time is spent while watching TV. 25% of tablet owners watch TV shows on their tablet; 53% watch any kind of video. 18% of tablet owners connect their tablets to their TVs via HDMI or VGA cables. Source: North American Technographics ® Telecom And Devices Online Recontact Survey, Q3 2011 (US) Base: 510 US online adults ages 18 and older (online monthly or more) who are tablet owners

4. © 2012 Forrester Research, Inc. Reproduction Prohibited 4 The living room is the most popular place for tablets Source: North American Technographics ® Telecom And Devices Online Recontact Survey, Q3 2011 (US) “Where do you use your tablet?” (Select all that apply) Only 38% of US tablet owners report having and using 3G on their tablet; an additional 9% have 3G but don’t use it. Base: 510 US online adults ages 18 and older (online monthly or more) who are tablet owners

5. © 2012 Forrester Research, Inc. Reproduction Prohibited 5 Browsing the Web is the most popular tablet activity Source: North American Technographics ® Telecom And Devices Online Recontact Survey, Q3 2011 (US) “What types of activities do you use your tablet for?” (Select all that apply) Base: 510 US online adults ages 18 and older (online monthly or more) who are tablet owners

6. © 2012 Forrester Research, Inc. Reproduction Prohibited 6 Tablet usage skews toward the evening compared with PCs and smartphones News category browsing by time of day and device type

7. © 2012 Forrester Research, Inc. Reproduction Prohibited 7 Tablet use erodes PC time more than TV time “How has your tablet use changed your use of... ?” Base: 510 US online adults ages 18 and older (online monthly or more) who are tablet owners Source: North American Technographics ® Telecom And Devices Online Recontact Survey, Q3 2011 (US)

8. © 2012 Forrester Research, Inc. Reproduction Prohibited 8 Tablets will cannibalize small TVs but not large ones “Since getting your tablet, how do you think your purchasing of the following will change, if at all?” Base: 510 US online adults ages 18 and older (online monthly or more) who are tablet owners Source: North American Technographics ® Telecom And Devices Online Recontact Survey, Q3 2011 (US)

9. © 2012 Forrester Research, Inc. Reproduction Prohibited 9 In other words...  Tablets complement the large screen in the living room — mostly for multitasking, sometimes plugged in to the actual TV.  Tablets replace small TVs elsewhere in the house (kitchen, bedroom).  Tablets enable “new place” TV scenarios (bathroom, airplane).

10. © 2012 Forrester Research, Inc. Reproduction Prohibited 10 How is tablet use complementary to the TV, and in what ways is it cannibalistic? How are product strategists designing products to exploit the tablet-TV connection? Where will tablet-TV innovation go next? Agenda

11. © 2012 Forrester Research, Inc. Reproduction Prohibited 11 Four areas of nascent innovation  TV everywhere  Real-time companion content  Transmedia storytelling  Tablet-TV commerce

12. © 2012 Forrester Research, Inc. Reproduction Prohibited 12 “TV everywhere” apps are a value-add, for now  Tablets, especially iPad, are accelerating development of “TV everywhere” apps.  “TV everywhere” apps like Watch ESPN enable remote viewing, generally with a free app and authenticated cable subscriber credentials.  This is a great value-add for subscribers, but cord-cutters want TV everywhere too!  This leaves MSOs and MVPDs open to disruption by the company that delivers what consumers want.

13. © 2012 Forrester Research, Inc. Reproduction Prohibited 13 Automated content recognition (ACR) vendors enable real-time, dual-screen engagement ACR vendorDifferentiatorsPartners ShazamFocused primarily on advertising (download song/content and links) Honda, Starbucks, P&G, Old Navy IntoNow (Yahoo!)Following conversations about a show; potential for new customer acquisition through content discovery Pepsi Max Miso (Khosla Ventures, Google Ventures, Hearst) Fans as well as producers can create their own “SideShows” content. DIRECTV, AT&T U- verse, HBO, USA Network, Fox GetGlue (Time Warner, Union Square Ventures, RRE) “Check in” app similar to IntoNow, with gamification/rewards element msnbc.com, Showtime, WB, ESPN, HBO, ABC, Fox, Disney, Sony Pictures Viggle (Function(x)/ Sillerman) Points-based rewards that users can redeem for merchandise Verizon, Gatorade, Burger King, Capital One

14. © 2012 Forrester Research, Inc. Reproduction Prohibited 14 One ACR drawback: App inconsistency may confuse or frustrate consumers

15. © 2012 Forrester Research, Inc. Reproduction Prohibited 15 USA Network + DC Comics team up for transmedia storytelling

16. © 2012 Forrester Research, Inc. Reproduction Prohibited 16 Tablet-TV commerce has huge potential  QVC and HSN, the pioneers of home shopping, both have great tablet apps.  But tablet-TV commerce has the potential to break out of the home shopping genre.  The Viggle app enables content sales in iTunes; ACTV8.me launches eBay and Amazon.com product pages. zeebox in the UK works similarly.  Apple, Google, Microsoft, and Amazon.com could all make a larger play here, but so far none of them do.

17. © 2012 Forrester Research, Inc. Reproduction Prohibited 17 How is tablet use complementary to the TV, and in what ways is it cannibalistic? How are product strategists designing products to exploit the tablet-TV connection? Where will tablet-TV innovation go next? Agenda

18. © 2012 Forrester Research, Inc. Reproduction Prohibited 18 Our predictions for the tablet-TV connection  MSOs will integrate ACR into set-top boxes and menu interfaces — increasing exposure and reach of “social TV” apps.  Apple will augment iPad’s AirPlay mirroring with an IR blaster remote.  Microsoft will release an API for transplatform gameplay across console and tablets (iPad and Win8).  Amazon.com will cultivate tablet commerce apps and launch the 10-inch Kindle Fire as an ACR-friendly device (with microphone).  Any predictions from the WebEx?

19. © 2009 Forrester Research, Inc. Reproduction Prohibited Thank you Sarah Rotman Epps +1 617.613.6249 srotman@forrester.com Twitter: @srepps www.forrester.com