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3 New Technologies Aiming to Redefine Television
Published Tuesday, September 10, 2013 by Ryan Allway
Television has been a constantly evolving medium since its introduction in the 1920s, moving from over-the-air broadcasts to IPTV content available on demand. Since its introduction, television has grown to reach 98% of households, with the average American watching nearly five hours each day, according to Nielson. But, with recent numbers slipping and increasing competition, broadcasters and content providers are looking for the next new thing more than ever, resulting in the growth of “over-the-top-content” and “second screen” technologies.

In this article, we’ll take a look at some of these new technologies, from safer large-cap offerings to riskier micro-cap opportunities in the space, that aim to redefine the television experience and how investors can take a stake in the industry’s future.

Verizon Insider’s Individualized Experience

Verizon Communications Inc. (NYSE: VZ) recently launched a new Verizon Insider service that provides viewers with unparalleled access to several sports. For instance, the company’s INDYCAR 13 service features live in-car cameras, streaming race controls, and driver-pit crew chatter to let viewers be part of the experience more than ever before.

This type of “second screen” or “over-the-top” content is designed to supplement traditional racing coverage on television. By making the television medium more interactive, companies hope to improve viewership and engagement to ultimately increase advertising revenues. Content producers, such as NASCAR or the NFL, benefit the most from these services, since they are effectively expanding their reach beyond television and onto mobile platforms.

While this service may not generate a meaningful amount of revenue quite yet, it could have a more robust impact on the company’s bottom-line given its higher profit margins. Core wireline and wireless services involve a significant amount of cost per subscriber, which generates lower profit margins than subscription services and licensing revenues that entail very little incremental costs for each subscriber that is added to the service.

AppleTV’s A La Carte Content Channels

Apple Inc. (NASDAQ: AAPL) may have quietly launched its Apple TV product, but it could still become a big part of its core strategy. With over 15 million units sold, the low-priced $99.00 television enables users to stream blockbuster movies, TV shows, sports, music and photos onto any widescreen TV in 1080p HD, making it an attractive alternative to many other products on the market.

While the company struck licensing deals with The Walt Disney Co. (NYSE: DIS), these stations still require a subscription to one of the seven supported cable companies to use. The reason is apparently that Disney still derives the majority of its income from these networks, remains under contract with them, and can’t negotiate for app support apart from its standard negotiations over programming – a problem that should be solved in the future.

For Apple, Apple TV represents a significant opportunity over the long-term when these programming issues are resolved. The company presumably would want to offer content or channels a la carte via their Apple TV service (similar to iTunes in terms of a business model), which could generate revenue on par with its iTunes service for music. Individual episodes and movies are available for now, but a la carte channels represent the long-term potential.

Guitammer Lets You Feel the Content

The Guitammer Co. (OTCBB: GTMM), a lesser-known micro-cap provider of low-frequency audio transducers that let users feel low-frequency sound, was originally founded to help musicians feel the low end of music without turning up stage monitors. Since then, the company has expanded to focus on the entertainment industry, where its ButtKicker technology is already installed in over 10,000 theater seats across 11 different countries around the world.

After building exposure in these theaters, the company expanded into the home theater market, with a line of “all-in-one” products. The firm’s wireless ButtKicker Kit, ButtKicker LFE Kit and ButtKicker Gamer2 enable movie enthusiasts and avid gamers alike to experience their content in a compelling and immersive way. And on Amazon.com, the products regularly achieve 4.5 to 5 star ratings across the board among consumers.

Guitammer’s real potential, however, lies in its patented ButtKicker Live broadcast technology designed for broadcasters (ESPN, NBC Sports, Fox Sports, etc.) as well as cable, satellite, FiOS, and IPTV providers. By licensing the technology and encoding their broadcasts, these cable and satellite companies can enable users to actually feel the hits or explosions seen on live television. Additional licensing and revenue generating opportunities may be possible for Guitammer if content providers and broadcasters add this tactile experience as part of their “second screen” or “over-the-top” offerings.

Conclusions

Television has always been a rapidly changing medium, ever since its introduction in the 1920s and its subsequent expansion around the world. With the rise of the Internet, these changes are occurring even more rapidly and enabling viewers to interact with the content in whole new ways. Investors in the space may want to pay attention to potential game-changers like these as they look for ways to capitalize on the ongoing growth in the industry.