How will media change with the emergence of new devices?

From mobile devices to personal devices. The rapid proliferation of smart devices has completely transformed individuals' media consumption environments. Moreover, smartphones and tablets aren't the only ones changing lifestyles. As the very nature of devices undergoes a metamorphosis, what transformations will media businesses and advertising communication businesses be forced to undergo?

The new viewing style is not simultaneous use, but "handover use"

Oku: Currently, the most notable devices are undoubtedly smartphones and tablets.

According to the annual "MCR" survey conducted by Video Research Ltd., targeting men and women within a 30-kilometer radius of Tokyo, smartphone ownership among men in their early 20s was around 60% last year, but it has risen to about 85% in 2013. The ownership rate for women is even higher, rising from about 65% last year to nearly 90% this year. Naturally, tablets will follow a similar trend without delay. What this trend signifies is the ease of creating a dual-screen environment, allowing simultaneous viewing of various media. Moreover, this can be done while on the move. It means a significant shift in users' media consumption environment.

A crucial point to note is that both smartphones and tablets are frequently used not only outside the home but also within it. They are used alongside TVs, serve as TV remotes, or display their screens on TVs. In other words, they are positioned more as personal devices than just mobile devices.

Uemura: So, within this changing environment, what kinds of media businesses and advertising communication businesses become possible?

Oku: Exactly. Beyond smartphones and tablets, TVs are likely to advance toward high-definition 4K and 8K. PCs are seeing increased focus on wearables, and new internet services could emerge. However, when considering business models, we must note that while smartphone ownership rates are 85-90% among early 20s in the Tokyo metropolitan area, conventional mobile phones still outnumber smartphones nationwide. We absolutely must consider how device penetration rates differ drastically between the metropolitan area and the national average. Both media business and advertising communication business unfold completely differently depending on where you target – regional characteristics, age groups, and so on.

Uemura: In my own digital business work, device adoption patterns vary by region, age, and target audience, so I can't offer the same solutions to every challenge from sponsors. It's challenging, yes, but that's also what makes it interesting. The smartphone becoming a remote control, as my wife mentioned earlier, is a key point. Smart devices and mobile devices have already absorbed all the functions of watches, cameras, and games. If remote control capabilities are added here, you can control the TV via Wi-Fi. You can also collect data. That means, as smart devices, they seem capable of increasingly interesting media integration.

Okuda: That brings up something I'm concerned about. Watching TV while constantly checking your personal device is pretty tough, right? On the other hand, having multiple layers of information constantly overlaying the big screen is also annoying. I have this basic question: how do you design for that? Even just the content business faces these issues, so for advertising communication, where exactly should ads be placed on the screen? When is the best timing to deliver messages? That kind of research will definitely need to be done extensively.

Uemura: I was talking with someone from a net media company recently. Their latest survey shows that instead of simultaneous use, "handover use" is more common. Meaning, people watch something on TV and then later check it on their smartphone, or vice versa. So, the idea of simultaneously looking up detailed information about what you're watching on TV on your device might actually be a bit off.

Oku: I think people will definitely gravitate toward simpler, easier options. Cross-device viewing fundamentally relies on cloud technology. For instance, watching part of something on TV, then seamlessly continuing on your smartphone during your commute using the same ID. This is nearly impossible without the cloud. Simultaneously, considering content rights issues, supporting multi-window and multi-screen viewing requires proper rights management. This is another major challenge.

Game consoles are a hidden market for advertising communication business

 

　

Uemura: From a device perspective, if everything moves to the cloud, there's no need to store content on hard drives anymore. So what happens to personal cloud servers? While they haven't been seen much as advertising media until now, if hard drives and game consoles move to the cloud, new contact points for the advertising business could emerge.

Oku: Home game consoles connect to TVs for gaming, but indirectly, they're actually the most common media connecting TVs to the internet. Fewer people connect their TVs directly to the internet. In the US, half of Netflix users access the video streaming service via game consoles.

Uemura: In Japan too, it seems many Hulu users watch via game consoles. So, from that perspective, game consoles represent a truly untapped market for the advertising communication business. And then there's cars, right? The integration between your smart devices and the car's navigation system. Actually, beyond just the navigation system, integration with the entire car will likely advance. As these trends accelerate, the nature of our advertising communication business will naturally change too.

Advertising ultimately competes for consumers' disposable time, right? How do you carve out time for people to engage with media like newspapers, magazines, radio, TV, and the internet within a 24-hour day? What used to be long phone calls to girlfriends is now replaced by LINE or Facebook, where ads now appear. During driving time, radio was once the only advertising touchpoint, but now ads are appearing in car navigation systems. Thinking about it this way, the amount of disposable time available for advertising communication business is actually increasing quite a bit.

Oku: There are now plenty of untapped areas, not just inside the home but outside it too.

Uemura: College lectures weren't previously advertising touchpoints, but now ads appear on students' smartphone screens (laughs). With new devices emerging, the battle is about how to increase contact points within that disposable time—whether through layering or sophistication. It feels like a contest of substitution.

Oku: Our battles are likely to get fiercer and fiercer.

[ To be continued ]