During the past dozen years the percentage of American households with DVRs increased from zero to forty percent. Viewers became increasingly accustomed to skipping commercials and viewing shows on their own timetables as opposed to broadcast schedules. The growth intensifies apprehension among sponsors that TV advertising is losing effectiveness. While to date industry efforts to combat the trend have been unproductive, recent developments suggest the tendency can be mitigated, and even reversed. When combined with better ad targeting and commercials permitting viewers to segue into spontaneous online merchandise purchases, the TV industry could advance to a new era of prosperity.

The "trick" is to transform scripted shows into realtime events.

As the chief executive of CBS noted last month, "Every major (live) event over the last year – Academy Awards, Grammy's, etcetera – did exceedingly better than the previous year." While live performances such as athletic contests and awards ceremonies are classic examples of events, it's increasingly feasible to convert scripted programs into realtime shared experiences as well. The key is to involve audience members in silent chatter over social networks as they watch the TV shows at scheduled broadcast times. The two most important of such networks are Facebook and Twitter. Although viewers may actually be alone, they get a sense of congregating in the living room, watching the show together.

The phenomenon, known as "two screen behavior," is especially prevalent among youth. A recent survey in Great Britain of mobile Internet users under the age of 25 revealed that 80% used their portable devices to communicate with friends when watching television. Over 70% posted Twitter comments on shows they were watching and nearly 60% posted at Facebook. The survey manager concluded, "Up until twelve months ago TV was struggling to reach the younger market... but social TV has changed this completely by turning programs into online events where you have to watch them as they happen."

Since everyone ages, new habits among our youth tend to become mainstream in the future. Moreover, Deloitte's State of the Media Democracy released last month discovered that two screen behavior is not limited to younger viewers. Deloitte's survey of Americans aged 14 – 75 revealed that over 40% of us are online while watching TV and over one-fourth are sending instant messages. Perhaps more importantly, more than 60% of us have a social networking site, like a Facebook page, where constant update feeds make it nearly impossible for fans to remain unaware of TV show outcomes.

The survey revealed that one-third of American households now own a smartphone as compared to only 11% three years ago. Furthermore, 40% of respondents who do not yet possess a smartphone expect to buy one in the near future. Phil Asmundson who is a Vice Chairman of Deloitte's concluded, "The growth of the smartphone market over the past few years is having a bigger impact on our lives than anyone might have imagined."

The TV-multitasking effect of tablet computers like the iPad has failed to receive much attention from publicly available surveys simply because the products are too new. Nonetheless, there's little doubt that the tablets' bigger screen will both amplify and enhance two screen behavior for three reasons.

• First, the larger virtual keyboard facilitates texting, particularly for owners previously limited to iPhones.
• Second, many users shall discover that multitasking between a larger tablet screen and a TV is easier than shifting attention from a TV to a small smartphone screen.
• Third, owing to the two preceding points, TV show producers and sponsors will likely find it advantageous to create tablet apps that encourage viewers to engage in the program's scripted storyline.

The third point merits special attention because it is "actionable" by TV and advertising industry executives. Additionally such apps can be designed in a manner that encourages viewers to spontaneously purchase sponsor merchandise online, or to encourage audience members into similar calls-to-action. Consider an app developed for ABC's popular show Grey's Anatomy which is demonstrated in the one minute video below.

The Media-Sync technology enabling the app is a joint venture between TV ratings company, Nielsen, digital watermarking pioneer Digimarc. Following the pilot for another ABC show, Media-Sync was adapted for Grey's Anatomy. Known as Grey's Anatomy Sync at the iTunes app store, it's presently only available for iPads.

In order to improve TV audience measurement accuracy Nielsen persuaded producers to embed an imperceptible digital watermark in each show's audio track. It enabled Nielsen to install electronic meters capable of automatically detecting the watermark with audience panel members, thereby more reliably determining which shows were being played on the TV.

The process is theoretically capable of measuring commercials as well. Assuming advertiser cooperation, Nielsen hopes to offer such services later this year. Given the unique payload of each watermark, the technology could enable detection of viewers flipping channels during commercials, which commercials are being played, and how long they are played before channel switching.

The Grey's Anatomy app presents viewers with pertinent content relating to scenes presently showing. Examples include polls, comments relating to characters, reasons for background music selection, and other director commentary. Furthermore, the app easily enables postings to Facebook and Twitter. Significantly, app content can become the very subject of some Facebook and Twitter postings thereby stimulating a shared experience inducing more viewers to conform to broadcast schedules.

Similar apps that don't use watermarks have been introduced by others. One example is a trial for the Fox show, Bones. The Fox Companion app uses a smartphone's, or tablet computer's, internal clock to determine the applicable time zone. Essentially the Bones app first downloads content in advance and users manually activate a start-stop timer that "instructs" the portable device to displays content at predetermined times triggered by the internal clock. This "manual" approach requires users to match app content with shows they are watching. It can't detect when viewers change channels.

Ultimately, watermarking may prove to be the more valuable methodology for two reasons. First, it's more easily adapted to measuring the effectiveness of video commercials. For example, each commercial can be encoded with a unique watermark thereby facilitating the identification of ads viewers are actually watching and potentially interacting with. Should the ads evolve into online merchandise sales or other calls-to-action, sponsors would be able to credit the proper station, ad agency, and etc. Watermarks can also be placed in TV ads run by local businesses whereas a national database of such ads that would be required in the Fox Companion approach might be too complex to accurately maintain.

Second, watermarks identify content even when viewers fail to watch at scheduled broadcast times. By contrast, since the Fox app does not use watermarks, it is dependent upon the user to activate the start-stop clock when choosing to watch Bones on a DVR or from an Internet website.

In sum, tablet computers and smartphones can enable scripted TV shows to become realtime shared events thereby encouraging more viewers to conform to scheduled broadcast times. That change alone can improve the efficacy of TV commercials. When combined with better ad targeting and interactivity capable of inducing online merchandise sales, the TV industry ecosystem can move forward to even greater prosperity.