Saatchi & Saatchi New Zealand Communications Director, Isobel Kerr-Newell, discusses the nature and impact of “digital cocooning” with Tom Eslinger, Worldwide Director of Digital and Social.
Isobel: What do you think are the key technological advances in home entertainment that have exacerbated this “cocooning”. What are some of the innovations coming up that may increase our cocooning?
Tom: It’s probably layered with your getting, cheaper faster more transportable connectivity. My Time Warner account that runs the house, the internet, the TV and the phone – it also lets us watch all of that content on our phones, we can programme our TV to record our favourite shows from our phone (and that’s all free) and we’ve got a package where you get all this premium content on top. So the delivery mechanism is cheap and simple. So the cost decreasing is one way.
The second thing is that devices are starting to stop existing. You have fewer and fewer people buying DVD players. VCRs are gone, you don’t even see them in garbage piles anymore. The services you can deliver on demand, broadband, iTunes, Amazon, all these subscription services are making it easier for us to have everything in one place so rather than having a bunch of devices, we have like, two.
So at the same time as the number of devices are going down, the quality of the devices is going up. Game consoles are becoming super advanced. What they’re doing is also connecting us to gaming, but also to content. So on top of gaming, you can watch your movies, listen to music and then all of that stuff layered together is connected to communities. The gamers are all connected on Xbox live. The people that watch the walking dead are all connected because they’re doing the two screen thing, because they’re all commenting on the show while it’s on and they’re interacting during the ad breaks. The super fast broadband, the faster delivery, the devices becoming more advanced (I don’t have to get up off the couch to change the DVD anymore which is a big deal, let alone go to the store). You layer on top of that all the social stuff and then the phenomenon of cocooning.
If it was just devices I don’t think you’d see the ‘super cocooning’ we do today, but I think with social media and these devices that now talk to each other and talk to communities has created the perfect conditions. Lay on top of that these really intelligent search engines and data delivery channels. For example, Time Warner – the more we watch HBO programming the more they show us HBO programming. If we rent five romantic comedy movies, then as soon as the romantic comedy movies come up then they show them to us first. So all these search engines, layered on top of this very personal space (watching movies, talking on social media, watching television with our loved ones) has now got advertising in it. The key technological advances – are not just in home entertainment – but is societal changes as well. You sit down to watch TV. You have your phone nearby, you have a computer nearby. No matter what you’re watching, you have a two screen experience. All of these services layered into it, it’s only going to increase cocooning. This trend for media companies is money in the bank. This is a massive growth opportunity growth.
More advertising is going to be baked into these experiences we have while cocooning. More and more advertisers will have sponsorships within the programming that allows you to buy or interact with the content or with the products. The really cool thing about it is that these networks can really efficiently deliver stuff that we want. And what’s a more comfortable place to get stuff than in your house. Where you can have a more intimate experience, you can save it to share with a family member. It naturally appeals to us as cocooning animals but also to the media companies, because we never shut these screens off.
I: Do you think we will continue to see an increase in this trend? Is “Hyper Cocooning” next and what do you think will drive this?
T: Absolutely. There’s a company I recently did an interview with Adweek on M Dialog. They are essentially a media distribution platform across every single screen you’ve got that is intelligent and knows what you’re doing on the internet and your TV an then marries up bespoke content and advertising for you. It’s exciting but kind of terrifying. The way that content is being distributed and the advancements behind it in analytics is just going to increase cocooning. We’ll be cocooning on the train. We’ll be cocooning in our car. It won’t just have to be in our house.
I: How can some of the affected industries fight back or what are some examples of brands understanding and reacting to this trend?
T: The HBO Go is a really good example. Every show they’ve ever made is on demand in every format you could imagine. If you want to you can watch it on your iPad or your phone. They’re making it really easy to move the content around. They’ve got all my favourite stuff and they bring it to where I am, so why would I want to go anywhere else. Netflix has moved lots of their business onto tablet and smart TV boxes. DC Comics and Marvel is another good example. Newsweek doesn’t publish a printed edition. All the magazine publishers are moving to this rich environment. Then you see things like Flip Board and Pulse, these content aggregators becoming really good ways for us to tailor all the content we do.
Companies are getting into the mindset of the way that we consumer content now. “Do you want to add this to your playlist? Do you want to add this to your list of favourites? Your wish list?” All these behaviours that we’ve been trained on for the last 10 years like “I bought this book on Amazon and so did 30 other women so it must be good”. All this behavior is moving into this really rich media environment. Overlay on that the advertising placement. Then wow. It’s unlimited. Everybody is going to have to get into this space really quickly because there just isn’t going to be the retail outlets. They’re not going to be opening more Barnes and Nobles. DC will eventually have comic book stores like Virgin mega stores. And you’ll see fewer specialized magazine stories. There will always be people who buy books and comics and magazines, because they like the intimacy of that, but not every business is going to be able to make that jump.
I: Are you a super-cocooner or do you have phases of “super cocooning”? At weekends or holidays or in times of crisis?
T: You definitely have phases of super-cocooning. Everybody does. And the thing about all these smart systems hooking everything together is that it makes it really easy to really tailor that experience. I went to see an art exhibition with my partner recently. He didn’t know much about the artist. By the time we got home I had ordered a documentary on demand, plus another movie that had been recommended and ordered food, in the time it took us to travel back from the gallery. For $15. The price point just keeps coming down. Unless it’s the opening of the new Batman movie I can wait a month and a half to see Life of Pi in my house at half the price it would cost. The value trade off is what I really think is going to drive this super cocooning.
In the financial crisis it’s awesome to go out for dinner, but for the same $50 you can completely customize the experience at your house for 10 people, rather than two. I think that the super cocooning could become super community cocooning. As the price point comes down I can include more people, and I would be able to find them more efficiently. I can send an alert, check what kind of food they want, send them my wishlist from Netflix and we can arrange the experience together so we can have a communal experience. I don’t think it’s ever going to replace anything, but I think that the easier and cheaper it is, the more people will do it. The genius around HBO, Netflix and Time Warner is that it totally plays into the behavior I already do, I don’t have to create a new behavior set. It uses all the paradigms we’re used to: alerts, wishlists, playlists. All stuff we’re doing already. And every time we do it, they’re getting another datapoint so they can customize our experience further.
The conflicts are going to come as we become a more merged global internet and there are more issues around copyright laws, talent, residuals. For example you sometimes till can’t watch an American film on YouTube in Germany. Businesses are going to have to figure out really quickly who pays for it, or its going to turn into the music industry where songs don’t have any value anymore. Look at Game of Thrones. Ten million people were watching it and at the same time, 3 million people were downloading it illegally.
I: When we’re outside of our homes, does mobile create a form of ‘on the road’ cocooning as we shut ourselves off from the rest of the world, transfixed with our mobile phones?
T: Yes. All these behaviours that we do that they’re collapsing into things that make it easy for us to use and consume. On the one hand it’s really cool and on the other, it’s easier for them to make a buck off us. We have “everything” for $30 a month. Do I consume everything – no way. We are oversubscribed to content. The places I think will survive are the ones with super quality who connects me to an audience, is easy for me to get and is something that plays on my interest.
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Source of feature image: flickr/CarlosPancheco