As MSOs Push Into New Services, Privacy Dangers Loom

The constant search for new revenue streams is pushing TV service providers to offer more targeted advertising to their customers, integrate social networking into their user experience and to explore “home help desk” services to consumers who are struggling to keep a growing array of devices connected to the network.

What these three angles have in common, beside the obvious upside potential, is that they tread a fine line on consumer privacy.

Consider: for each of the aforementioned services, pay TV providers will need to harvest more finely grained details about their customers, something that the migration of video to an all IP platform makes possible.

In one case, information is being collected to sell to advertisers who can in turn make more targeted pitches to potential customers. In the case of home help desk services, TV providers can leverage their insights into a consumer’s home network to help them troubleshoot problems that arise as they tie more and more devices into their networks. Finally, in the case of social TV, Facebook and Twitter streams can be integrated the user experience (either on the main screen or on the second screen) to drive consumer engagement and to turn individual viewers into mini, virtual billboards to advertise what they’re watching to their social circle.

Yet while all of these efforts are moving forward, some key players seem oblivious to the privacy ramifications.

On several occasions when I raised the question with executives at the NAB show (for instance, after a demo about how much information a service provider could clean from a consumer’s home network), I got, at best, a quizzical look or a shoulder shrug. It was clear that few people were thinking through the possible ramifications of collecting this kind of consumer data, the potential for misuse or even a regulatory backlash.

One executive at a major networking firm, who will remain nameless, indicated that the “politically correct” answer to these concerns is to insist that any consumer data is technically supposed to be tied only to an IP address (not a real person). Any data harvested by MSOs will treated mostly in aggregate and anonymously. The real answer, he said with somewhat rueful grin, was that “we have no privacy.”

However significant, these encroachments on a consumer’s privacy are likely to be slow, subtle and broadly consensual. Most consumers won’t read the fine print, for instance, about the potential for data collecting and will almost certainly be able to opt-out of social TV features. Many see the loss of privacy as simply a trade-off that we all must willingly make to enjoy the fruits of modern technology. One journalist evocatively described the lack of privacy as the “pollution” of the digital age (just as real pollution was the scourge of the industrial age). Clearly, TV providers are not letting privacy concerns get in the way of rolling out new services, and maybe they’re right not to.

But it would be unwise to be completely dismissive about the potential for public outcry.

Verizon, for instance, recently filed a patent for a set-top box complete with infrared camera and microphone to determine what a person is doing at a given moment, the better to serve up “appropriate ads.” As Steve Donohue describes it, “[i]f the detection system determines that a couple is arguing, a service provider would be able to send an ad for marriage counseling to a TV or mobile device in the room.”

Others had a more succinct description: “creepy.”