Tags containing: "OTT"

Using content analyses to guide streaming business strategy

January 10, 2023 Rande Price, Research VP – DCN

There are over 300 streaming video services in the U.S. – and that number doesn’t include FAST channels. Consumers have a plethora of OTT services and access points across connected devices. So, how do media companies attract and retain viewers in such a large and fragmented marketplace? Parks Associates partnered with SymphonyAI Media to identify core analytics to help guide market strategies in the OTT ecosystem. Their new report, Optimizing Video: Enhancing Content Performance for OTT Success, looks at data solutions to best optimize content investment and performance.

Marketplace snapshot

According to Parks Associates, 87% of U.S. internet households now subscribe to one or more streaming video service, and 20% subscribe to eight or more OTT services. Consumers are adding new hybrid-model and FAST channels to their viewership mix. Netflix and Disney+ are two examples of media businesses launching ad-supported business models to attract new viewers to monetize content.

New niche streaming services are also popular among select audience segments. While appealing to a smaller audience, they offer unique and often obscure content. Sixty-one percent of consumers added other subscriptions in addition to the big three – Netflix, Amazon Prime, and Hulu. Interestingly, very few consumers have an exclusive single-service subscription.

Content continues to be a key driver of subscriptions, with 48% of consumers referencing content availability as the primary reason for subscribing to an additional service. However, while churn appeared to stabilize last year, nearly half of streaming subscribers leave one service for another multiple times within a year.

Content performance

Media companies continually invest in content to attract, engage, and retain viewers. Content analyses offer a direct link to profitability. They are essential to understand viewership and forecast the revenue generated by a specific property, series, or partnership. They also help assess workflow efficiencies and revenue opportunities across SVOD, AVOD, and FAST.

Internal data necessary:

Content data – genre, series, season, episode, asset I.D.
Distributor data – terms, avails, distributor I.D., distributor type
Revenue data – subscribers, transactions, units sold, forecast
Advertising data – impressions, CPM, fill rate, minutes streamed

Measuring content performance helps quantify consumer engagement. Each of the essential analyzes offer important metrics and insights to assess performance across business operations.

Content performance provides a foundation to assess spending on content. It allows objectivity when looking at program performance.
Assessing workflow metrics, from managing content libraries and editing ad breaks to costs associated with programming FAST channel schedules, offers insight into revenue optimization and deal terms.
Predictive content analytics are important to understanding what to charge or pay across the customer lifecycle. These analyzes assess the consumer value of the content investment and provides insight into pricing strategies.
Content ROI assesses content value across different business models ‒ subscription, ad-supported, and even transactional. It allows media organizations to understand and optimize the impact of business decisions on financial metrics.

Analytics are essential to evaluate content performance and optimize operations across revenue models ‒ ad-supported and subscription businesses. Investing in automating, standardizing, and normalizing data structures in an organization are important next steps to streamline the analytic processes.

Advertising | Perspectives | Supporter Spotlight | Video

Ad-supported streaming offers opportunities for media brands

December 5, 2022 Jay Kulkarni, CEO – Theorem Inc.

As the fight for attention and viewership intensifies, more media companies have diversified their strategies to include ad-supported models. This allows them to scale their advertising offerings and capabilities within the OTT streaming category.

What’s up with OTT?

OTT, short for “over-the-top”, refers to the streaming of media over the internet. According to a study by eMarketer, 1.88 billion people around the world will use sub OTT services like Netflix, Disney+, and Amazon Prime Video. However, that same report also mentions that fewer than 50% of internet users worldwide are watching programs via OTT, which proves that there is much opportunity for growth in the category.

Historically, OTT and streaming companies primarily focused on subscription-based models. However, as subscriptions plateaued, ad-supported revenue models have gained traction and become more mainstream. This broadens the reach of streaming to the many consumers who are unwilling to subscribe to content, but still want to view it.

OTT’s impact on advertising trends

OTT streaming models are impacting advertising trends in several ways. First, given the proliferation of offerings, there is increasing competition for ad dollars. We are starting to see this competition now, particularly as ad spend and targeting costs increase across the market.

As the market evolves, inventory quality is also quickly becoming a hot topic. From a pure supply basis, do providers have enough inventory to reach targeted audiences at scale? The irony of targeting is that as targeting specifications increase, addressable inventory starts to decrease.

Additionally, when it comes to scaling, it happens in two ways: one is through actual ad sales based on inventory and that inventory being sold directly by the OTT platform. The other way is though parent companies and alternate organizations selling premium inventory on behalf of the media or streaming platform. When this occurs, all that remains to be sold are the remnants, thus raising the question: what does one do with the remaining inventory? With this comes a deeper discussion of fragmentation of inventory and data, which will impact omnichannel planning and overall scalability for many teams.

Advertisers are leaning into OTT streaming as a critical part of their digital media mix to extend their marketing reach and increase ROI. As competition for ad space elevates across streaming and OTT channels, we will see agile media brands continue to develop new, unique ad products that will be sought out by advertisers to bolster their omnichannel strategies.

Opportunities for OTT advertising success

While all streaming media companies have their own content and audiences, not all can come up with new, innovative ways to appeal to advertisers. To succeed in an ever-evolving ad monetization market, media brands must develop new ways to package their content and reach audiences based on unique user data points like content consumption preferences, to avoid becoming commoditized.

Additionally, top OTT streaming companies are working to elevate their ad models to create non-intrusive and enhanced user experiences while also keeping their ability to scale advertising models and targeting capabilities, which helps ensure success for their advertisers.

Advertisers that want to target niche audiences at scale, when and where they spend their time, will be looking to streaming and OTT companies to fulfill their needs. Ad-supported OTT streaming models are becoming increasingly more mainstream as consumers take advantage of the lower-priced option. This results in a larger user base, which in turn provides a better opportunity for advertisers to reach their target audiences at scale.

Therefore, media executives need to remain agile and prepare to accommodate these shifting strategies of advertisers that will include an increased ad spend within the OTT streaming category. By implementing an ad-supported streaming model and developing new ways to reach segmented audiences and engaging content packaging, media companies will be able to do just this. And the result will be increased ad inventory and diversified revenue.

As OTT streaming media platforms enhance their capabilities with AI and automation of their workflows, their targeting and success rates will increase. This will make OTT the ideal platform for advertisers to leverage when expanding their omnichannel strategies. Ultimately OTT streaming ad-supported models present a prime opportunity for media brands to expand product offerings and diversify revenue through niche audience targeting, premiere ad space packages, and scalability for their advertisers.

Advertising | Perspectives | Supporter Spotlight

TV advertising has evolved. It’s time to think like a viewer

October 19, 2022 Stefanie Briec, Director, Head of Demand Sales UK & International AudienceXpress – FreeWheel

The advanced TV landscape—including video-on-demand (VOD), connected TV (CTV), OTT and addressable linear TV—has experienced rapid growth and change. We’re also seeing the rise of ad-supported video-on-demand (AVOD) and free ad-supported streaming services (FAST). As a result, more premium video inventory is becoming available to ad buyers. Luckily, innovation within the advertising ecosystem is beginning to make this more accessible. So, what’s up next for this evolving space?

Seven in 10 UK marketers believe their advanced TV budgets will increase in the coming 12 months, according to the latest survey from AudienceXpress, FreeWheel’s premium video sales house. What’s more, almost nine in 10 respondents intend to spend more on AVOD and FAST.

Ad buyers are investing in the channels where the eyeballs are. But now the industry must go a step further and truly think as audiences do. Content, quality, and connectivity appear to be front of mind for viewers. So, how can marketers also make these a priority?

Audiences only have eyes for content, so ad buyers should too

When viewers tune in to TV and premium video content, they can now access it through a diverse selection of platforms, channels, and devices. The fact that audiences have become more and more fragmented proves that what they watch is significantly more important than how they watch it.

If ad buyers plan to succeed in the TV advertising landscape, they need to adopt this attitude. By taking a unified approach to advanced TV and premium video, they can shift their focus away from fragmented endpoints and towards what matters most: the audience and what they enjoy watching. To help buyers achieve this, the advertising ecosystem is refining its tools for unified campaign planning, ad buying, and performance measurement.

New technologies and best practices, such as ad podding, are improving both efficiencies for buyers and the premium video experience for viewers. Advanced contextual advertising, meanwhile, is allowing buyers to connect with audiences through specific topics and genres, as well as combine semantic analysis and keyword targeting to maximize ad relevance.

While further collaboration is required to accelerate this progress, advanced TV is enabling advertisers to engage typically hard-to-reach audiences through quality content.

Why aggregation is the answer to precise ad targeting

The key drivers of advanced TV spend emphasize marketers’ goal of reaching the best viewers however they consume TV and premium video content. Our AudienceXpress survey found that respondents considered sophisticated audience targeting capabilities as the top growth accelerator for advanced TV, followed by the opportunity to reach viewers across screens.

Enabling precise ad targeting and allowing buyers to be agile as their audiences move between platforms and devices are therefore highly important for capturing investment. While it may seem paradoxical, aggregation is necessary for this to happen. By aggregating a bigger pool of premium video inventory, the advertising ecosystem can facilitate efficient, streamlined ad buying and deliver desired audiences at scale.

This again requires buyers and sellers to treat advanced TV channels as viewers do—that is, equally—as they unify their approach to TV advertising.

Joining the measurement dots

Consolidating measurement across endpoints is as critical to the future of TV advertising as consolidating inventory and audiences. Buyers need a single view of how impactful their ad campaigns are, both while they are running and after they are wrapped up, much like any great TV show.

Unfortunately, legacy measurement tools and newer alternatives currently struggle with capturing performance across screens and providing ad buyers with a full understanding of campaign impact. Buyers need this to pinpoint the elements of their strategies that are generating the best results and carry out informed campaign optimizations. Additionally, accurate measurement solutions are necessary for effective frequency management, which safeguards against ad fatigue and maintains the quality viewing experience for audiences.

Greater standardization of advertising metrics is a crucial next step towards unifying measurement. This provides clarity between buyers and sellers, allowing the former to plan, purchase, and optimize all forms of TV inventory and the latter to better communicate the value of their offerings.

Connectivity will solve complexity

Speaking the same language across the ecosystem also lays the foundation for better interconnectivity between all players. In turn, this will help tackle complexity, which has become a concern in the rapidly evolving advanced TV landscape.

Alongside building a shared language, interoperability must be a priority in the year ahead. Technological innovation is critical for overcoming the challenges buyers face with planning, executing, and monitoring advanced TV campaigns. But ensuring these innovative solutions are widely compatible will help make TV and premium video advertising available to all. This will drive growth and progress throughout the ecosystem, letting buyers purchase from bigger pools of aggregated inventory, increase efficiency, and extend their reach, while also allowing publishers to streamline their advertising business models and maximize yield.

Connectivity is enabling viewers to consume TV and premium video content how they want, when they want. It is also the key to enabling ad buyers to purchase the inventory they want, how they want. Not only is this beneficial to the future of advanced TV advertising, but also to audiences by ensuring they receive the most relevant ads and a quality viewing experience.

Featured Post | Innovation | Perspectives

Streaming is for everyone: three strategic considerations

May 31, 2022 Christy Tanner, Founder – Coraly Partners and Senior Advisor Oaklins DeSilva & Phillips

2022 already has been a dramatic year for streaming. Even if you’re not trying to keep up with day-to-day industry developments, you’re probably aware that CNN+ launched and died, Netflix announced plans to launch an ad-supported tier, and IMDb TV was renamed “Freevee.” These rapid developments may seem daunting for many potential streaming players, considering that the ground will shift again soon.

But here’s the good news about these rapid changes: While the “Streaming Wars” narrative — referring primarily to competition among media giants’ SVOD strategies — remains the focus of many in the business and trade press, the reality is that there are wide-open opportunities for a variety of players. Whether it’s a paid app, a YouTube channel, or a free channel on a FAST service, streaming is definitely not confined to the players locked in the so-called streaming wars. Streaming is for everyone.

We’re just getting started

SVOD, AVOD, FAST, OTT, and CTV are not only competing, overlapping, and complementary acronyms — they represent multiple potential business models as well as multiple avenues to reach audiences looking for entertainment, news, and sports. Across devices, services, and platforms, there are more opportunities than ever before to develop content, products and business models contributing to the next evolution of the streaming industry.

Media players and startups — large and small — can compete and win the loyalty and trust of consumers. By the end of 2022, we will see new players on the streaming scene — growing, thriving, and innovating to capture audience attention and significant revenue opportunities.

Find your place in streaming

The fact is, it remains early days for streaming viewership, and we need bold players to bring expertise and creativity to the space. So let’s set aside the winners-take-most Streaming Wars narrative and consider these factors:

1. Focus on the right video strategy for your audience.

In the streaming space, many strategies and tactics are still in an experimental stage, so don’t assume that your traditional competitor’s widely-publicized strategy is going to work. And definitely do not copy their strategy without significant research and diligence, because you may find that your competitor doesn’t have a clue — and won’t provide significant competition at all in the streaming space. For instance, it may be that launching a solid AVOD or FAST strategy will give you much of the data you need to make a decision about an SVOD strategy.

2. It’s easier and less expensive than you think to get started.

There are new technologies and new tech companies that can support a variety of streaming strategies. Generally speaking, these options are less expensive, more standardized and faster to implement than many broadcast technologies. Additionally, trusted brands will be in a good place to negotiate with these vendors.

3. Creativity and innovation are badly needed in the streaming space.

Think about how hard it is — still — to navigate streaming interfaces. This space needs to improve the consumer experience, ASAP. With so many major media brands in flux, those who are focused on making streaming a great consumer experience have an incredible chance to jump in and create a successful strategy.

Focus on the consumer to improve what’s ahead

The complexity of the streaming landscape is enough to confound savvy media veterans and newcomers alike. But this complexity should not prevent most media players from crafting or revamping their streaming strategy – now. It’s a wide-open field for trusted brands and innovators, especially those who create content, products and services with viewers at the center. We all have a lot to learn from rapidly shifting consumer habits and preferences, and the timing has never been better to start learning.

About the author

Christy Tanner, President of Tanner Media LLC, is former EVP & GM of CBS Interactive, where she built CBS News Digital/CBSN into the #1 streaming news service, with more than 1 billion streams in 2020 and 2021.

Perspectives | Supporter Spotlight | Video

YouTube’s success is a great sign for CTV

April 27, 2022 Todd Krizelman, CEO – MediaRadar

Lately, there has been much investor handwringing over CTV investments. With Netflix’s latest results, some worry that if Netflix’s growth has stalled, the prospects for everyone else may be diminished as well. This is why the same day that Netflix stock came down 35+%, there were also (albeit much smaller) declines in other broadcast stocks too.

But the concerns may be misplaced. If YouTube can build a $28.8B annual revenue advertising business, without subscriptions, surely there’s hope that Netflix and other media brands with strong content catalogs can build and sustain ad-supported offerings.

The YouTube business

To better understand the YouTube business, MediaRadar took a look at the mix of YouTube’s current advertising. For this analysis we reviewed pre-roll, mid-roll and post-roll ads from the largest 3,000 YouTube channels across 33 content categories through a panel of over 2 million users.

What we found was a robust, growing business, with significant lift in advertising revenue the trailing year, but also the number of advertisers, across most product categories, was up. Alphabet Inc, which owns YouTube, recently released FY 2021 numbers. The economics look strong. The company grew revenue 47% in 2021, up to $28.8B. Almost all of this was from ad revenue, with very little from subscriptions. The implications for all broadcasters and publishers is meaningful.

Some view YouTube as a platform only, not as content creator. But this is not quite right. YouTube is a platform of course. But they also invest aggressively in their influencers and third-party content creators. While they don’t finance scripted shows, they don’t leave content creation to chance. They do this by providing physical space, the latest tech, upfront grants, and even assign a manager to advise creators once they hit a certain number of followers. As reported by the WSJ in October 2021 they note YouTube employs 1,000 full-time managers assigned to the top 12,000 creators. With this in mind, there are takeaways for others on how to build a hybrid approach to content creation.

YouTube advertising findings

The industry verticals with the most concentration of ad spend include entertainment, technology, retail, finance, and pharma. Altogether, these categories accounted for 60% of ad placement, and each segment increased > 30% YoY from 2020 to 2021.

Retail and ecommerce advertising are up significantly year-over-year. We observed an increase in ad spend within this category of 109% from 2020. Unlike in certain categories, in retail we continued to see steady growth throughout the year. The Retail Category increased advertising on YouTube by 60% in Q3 2021 and 91% during the Q4 2021 holiday rush.

YouTube’s music content was the most popular in both 2020 and 2021 with advertisers. YouTube benefits from strong renewal rates, but also from new clients. 52% of advertisers in music YouTube channels were new in 2021.

Everyone knows Travel advertising would be up. YouTube did not disappoint. Advertising investment in the Travel vertical grew by 270% YoY from 2020. Some of the ad spend was from kid-friendly vacation destinations and theme parks like Disney World and Discovery Cove. Ad spend increased 8x year-over-year.

Content is key to advertising growth

Next, we looked into YouTube’s programming channels to see what content categories are helping to drive growth of the platform. Interestingly, the most popular among advertisers were the same in 2020 as 2021 – music, kids, society and culture, and gaming.

YouTube’s music content was the most popular both years among advertisers. Furthermore, 52% of the companies investing among YouTube’s music content were newcomers to the category.

Another trend we uncovered was within “kids” content. Advertising investment among travel vertical grew by 270% YoY from 2020. Most of the ad spend was from kid friendly vacation destinations and theme parks like Disney World and Discovery Cove. Ad spend increased 8x among this group.

What’s next?

As we move through 2022 and into 2023, we expect retail ad spend to continue growing on YouTube. YouTube will continue to be a hot-spot for advertising among retail brands.

While ecommerce has had an increasing presence for years, the pandemic likely accelerated this possess by uncovering new technology to help making digital buying easy. YouTube has had success with shoppable experiences, and we expect to see more of them.

Publishers have long understood the value of affiliate revenue and shoppable content. The opportunity here – as demonstrated through YouTube’s success – is to evolve this into video and CTV offerings as well.

It will be interesting to see how the “new normal” plays out post-pandemic. Obviously, the industry and buying behavior has been forever changed. The online video market is also becoming cluttered with numerous CTV and OTT options. Even Disney+ and Netflix are launching advertising-based models. The constantly evolving market will impact the way video is consumed and the methods advertisers need to use to promote their products.

The combination of content and commerce is a strong one. And, as we are seeing throughout the streaming space, content drives audience interest. And audience interest drives ad sales success. YouTube’s success illustrates the opportunity for ad-supported streaming success.

Industry-Research | Video

Audiences climb for OTT and mobile video viewing

April 22, 2022 Michelle Manafy, Editorial Director – DCN

March marked a new milestone for streaming, as audiences spent nearly 30% of their total TV time watching over-the-top video (OTT) content. The Gauge, the monthly total TV and streaming snapshot from Nielsen found that, despite a 0.7% decrease in time spent streaming from February, viewing share across all streaming platforms was either flat or gained slightly in March.

In a further boon for the sector, Sensor Tower Usage Intelligence’s Q1 Data Digest found that the top mobile subscription video on demand (SVOD) apps in the United States saw an average of nearly 18 million monthly active users in Q1 2022, up 14% compared to Q1 2020 and 49% from Q1 2019.

The release of new streaming platforms and the race to add more content has made the space more competitive ever in Q1 2022. According to Sensor Tower, six different apps had more than 10% of the download market among top apps, and four apps had more than 10% of the monthly active users.

While market competition continues to intensify, Sensor Tower believes that enthusiasm around new launches and the strength of the top players continues to drive mobile usage. “The addition of these new content providers, as well as increased content offerings by existing platforms, have led to a consistent upward trend in average MAUs even after the expected spike in usage during their launch months,” according to the analysis. Netflix, Hulu, and Disney+ led the cohort as the top three most-used mobile SVOD apps in the U.S. in 1Q22.

The Gauge reports that, as a whole, total television usage was down in March, decreasing by 4.2% versus February. Cable stood out as the only viewing category to see an increase in both share and volume, jumping 1.6 share points from last month. Cable news viewing was up 14% from February and accounted for 21% of the cable share, driven by continuing news coverage of the Russia-Ukraine war.

Gaining a full share point over February, The Gauge finds that streaming services benefited from the transition away from the finale of professional football and the Olympics, which bolstered fall and winter TV viewing across broadcast networks. Sensor Tower also finds that content drives download and viewing. According to their report, several big events in Q1 2022 helped boost adoption and give certain apps an edge in this competitive space. HBO Max’s season two of “Euphoria” was incredibly popular, and Peacock TV and Paramount+ benefited from major U.S. . sporting events.

Industry-Research

Streaming strategies are essential for publishers

March 15, 2022 Rande Price, Research VP – DCN

Consumers increasingly cut the cable cord and spend more of their TV time on connected televisions (CTV) enjoying over-the-top (OTT) streaming content. eMarketer forecasts this year’s cord-cutting population will climb to 55.1 million people in the United States. Further, according to the Leichtman Research Group, a connected TV is found in at least 80% of all TV households, and 60% of these viewers in the U.S. watch free ad-supported TV streaming (FAST) services.

Tubi, an ad-supported streaming service owned by Fox Corporation released new research, Audience Insights 2022, which explores what is driving the streaming market. According to the report, early adopters jumped to ad-supported streaming services as an alternative to cable subscriptions. Numerous content options also attract new audiences. Many streamers offer extensive libraries of TV hits, nostalgia, and familiarity. Others feature originals content that feels current, trendy, and innovative. While still others include new blockbuster films or breaking news.

If publishers haven’t already, now is the time to launch a streaming product that leverages their intellectual property (IP) to attract audiences and remain competitive. Options include AVOD (ad-supported video on demand), which provides audiences with a customized and on-demand experience. The marketplace is ripe, and the revenue opportunities are robust.

Booming market

Consumers easily access their Smart TVs, or streaming devices offer simple shortcuts to OTT video. There are many services available in the U.S, and it’s common for a large company to have multiple services. Paramount Global has several paid and free services such as Paramount+, Showtime, BET+, CBS News, and Pluto TV. According to Tubi’s findings, Americans spend $65 a month on average on approximately 4.2 streaming subscriptions.

Tubi conducted its study among 6,000 U.S. adults who stream to understand the barriers to AVOD. Streamers look for an easy onboarding process and simple and intuitive navigation. However, one in four adults report that they don’t believe a service is free because upselling is involved. Further, 23% say that they think there are strings attached.

Given streaming’s audience growth, OTT is now the fastest-growing long-form video platform in advertising sales. Interestingly, upfront CTV advertising sales grew 50% in 2021 and is expected to grow another 32% this year.

Advertising value

Tubi also conducted a study with Advertiser Perceptions, showing that 56% of marketers rate the cost-effectiveness of streaming investment as a 9 or 10 on a ten-point scale. eMarketer predicts strong year-over-year advertising growth – citing $17.4 billion advertising spend on CTV in 2022.

Advertisers value streaming audiences and platforms:

Offer incremental reach of limited linear channels,
Ability to target hard-to-reach on linear like Gen Z and Millennials and Hispanic, Black, and multicultural audiences.
Relevant audiences for targeting higher income and core demographic targets.
Brand-safe environments in extensive content libraries.

Tubi expects older, more educated, and affluent households to continue adopting streaming options this year. The research names OTT as an essential strategy for 2022. It offers new digital distribution channels, instant access to potential viewers, and new opportunities to attract advertisers.

Industry-Research

Finding success in 2022’s competitive streaming market

December 15, 2021 Rande Price, Research VP – DCN

The pandemic influenced business and consumer ecosystems worldwide. New behaviors include wide spread adoption of cashless transactions, contactless shopping, Zoom calls, and virtual conferences. Today’s world differs significantly from the pre-pandemic norms of 2019. Deloitte’s new Technology, Media & Telecommunications (TMT) Report looks at our transformed landscape and offers insight into consumers’ TV viewing habits and video consumption and predictions for 2022.

TV evolves

While overall television viewing increased during the pandemic, that growth did not occur on linear TV. Deloitte’s report sees this year’s impact on TV broadcast as a tipping point. It attributes this to the changing television landscape to new platforms and rich content. The report cites declines in the U.K. and forecasts further decreases in 2022 across TV broadcast live, time-shifted, and on-demand. In all, the share of viewing in the U.K. for TV broadcasters will account for only 50% of video viewing on all screens.

As a result of declining viewership, broadcasters and cable networks are launching streaming businesses (i.e., Discovery+, Disney+, and Paramount+) to add reach and compete for viewers’ attention. Approximately 80% of U.S. households now have a paid streaming video-on-demand (SVOD)subscription, with roughly a 35% churn rate this year. Deloitte expects the younger European SVOD market to replicate the US model.

Managing SVOD

Consumers are price-sensitive and likely to find less expensive ad-supported offerings to manage their wallets. Deloitte estimates that at least 150 million paid subscriptions to SVOD services will cancel worldwide. However, Deloitte forecasts that consumers will add more subscriptions than cancel in markets with high churn. In fact, the average number of subscriptions per person will increase. Deloitte sees churn rates at 30% in the U.S. for 2022 compared to 35% in 2021.

Attracting and retaining audiences

Deloitte forewarns publishers that content development and acquisition costs are likely to increase. Therefore, the pressure to attract and retain audiences is a top priority. Their recommendations include:

Multiple tier offerings

Multiple pricing tiers will help protect against churn. Asia/Pacific offers multiple tiers from free, ad-supported video-on-demand (AVOD) to premium. They also provide service bundles with video, gaming, and music. Bundling different services allow providers to aggregate large audiences for advertising and helps prevent churn. Deloitte expects to see more multiple-tier and bundled offerings in the U.S. and European markets.

Partnerships

Partnering with telecom and cable TV operators offers access a sizeable mobile market. Partnerships can help SVOD providers with distribution, customer costs and offers a compelling bundled choice. Partnering with studios can help manage content development and attract a broader audience.

Better data usage

Use data to understand a customer’s lifetime value can develop more enduring relationships, especially with more-profitable age groups. Identify and track customer segments to create compelling content personalization, acquisition, and retention tactics. Establish a strong understanding of price sensitivity and content preference to find valuable subscriber segments.

Learn from the experts

Telcom and MVPDs spend years learning and managing churn. Leverage and learn from their expertise in maximizing customer lifetime value.

Manage a positive experience

Publisher SVOD services must deliver a valuable and positive user experience. It’s crucial to offer a good user experience from sign-up to cancellation.

Deloitte also reminds publishers to be flexible, be the prized alternative to the constraints of cable subscriptions and pay-TV. Churn is inevitable but controllable as competition grows in the marketplace.

Advertising | Perspectives | Revenue | Supporter Spotlight | Video

OTT monetization needs to adapt fast or die slow

October 5, 2021 Johan Liljelund, CTO and Executive Vice President － DanAds

Streaming TV may have killed cable － but where do we go from here? After the pandemic-induced streaming boom, consumers are cancelling subscriptions at record rates. As viewers grapple with rising prices and an explosion of subscription services, OTT players should embrace the potential of ad-supported streaming in order to survive an increasingly competitive market.

OTT on the up

The OTT (over-the-top delivery of TV and film via the internet) industry is booming. In 2017, approximately a third of U.S. adults cited streaming services as their main means of consuming television. Double that for people aged 18-29. During the pandemic, streaming television has continued to display incredible growth. In 2020, screen time overall was up almost a third on the previous year. Viewers watched streaming services, such as Netflix, Amazon Prime Video, and Disney+, for one hour and 11 minutes per day. Also, 12 million people joined a service they had never used previously. Three million of those viewers had never previously subscribed to any TV streaming service at all.

A changing paradigm

The mass adoption of streamed OTT services coincides with a fundamental change in the television business model. While television has traditionally been funded largely by advertising, most streaming TV platforms have instead opted for a subscription-only model. For traditional TV providers transitioning to streaming, this choice is understandable, given the abundance of legacy technologies that cannot easily be switched towards an advertising-based SVoD. New players like Netflix, by contrast, have made a strategic decision not to offer an ad-supported subscription.

OTT overload

The subscription model appears to be working well enough for Netflix, the undisputed market leader. The problem lies in the explosion of alternative streaming platforms. In 2020, the average viewer was subscribed to nearly eight streaming services, compared to six in 2019.

Netflix raised the prices of their memberships in 2020 and may well do so again. The result is that the monthly cost for consumers of streaming tv is increasing, as both the prices and number of services go up. There is an inevitable tipping point where paying multiple subscriptions becomes too expensive for the viewer and they will choose to let some go. Many have already crossed that threshold: 36% of Americans plan to cancel streaming subscription services in the next 12 months. And the most common reason – by far – is the price of service.

Ad-supported gains ground

Although subscription dominates, ad-supported streaming services have seen substantial growth during the pandemic. Research by Deloitte found price to be a key factor in consumer streaming decisions. Most consumers (65%) want cheaper ad-supported streaming options (up from 62% pre-Covid). And, of those who did, more than 50% preferred ad-only streaming. Sixty three percent of respondents in a PwC survey said they would be willing to sit through more ads if it meant cheaper subscriptions. Providers offering ad-supported streaming now include The Roku Channel, IMDb TV, Discovery plus, CBS, and Hulu, to name a few.

Sell smarter ads

Part of the appeal of the subscription-only model lies in its apparent simplicity. For established television providers, transitioning their advertising model from cable to digital presents many technical challenges. For those providers who have embraced ad-supported, a combination of white-glove and programmatic ad sales are the norm.

However, a new approach is also gaining popularity: self-serve advertising platforms. Inspired by the walled gardens of Facebook and Google, self-serve ad platforms allow OTT providers to sell their ad inventory through a branded, automated marketplace. This allows them to tap into the massive SME ad spend that currently drives digital ad growth. SMEs increasingly favour self-serve solutions, and for OTT brands with their own platforms, less value is lost in the infamously murky “black box” programmatic supply chain.

Roku, for instance, sells home screen banner ads, Roku screensaver ads, and video ads via their self-serve platform Roku Ad Manager. Ad Manager is designed to be a smarter, simpler, and more cost-effective way of managing channel promotional campaigns within the Roku ecosystem. It is just one of an increasing number of self-serve platforms popping up among OTT brands.

The other important aspect of ad-supported streaming is that it’s not simply a return to the dark days of regular, irritating ad breaks (as still found on linear TV). OTT providers that adopt ad-supported models are innovating the user ad experience to make it more effective and less obnoxious. Hulu, for instance, runs pause ads. This non-disruptive, non-intrusive user-initiated ad experience appears only when viewer presses pause when watching content. That’s a far cry from the ad breaks of old, and an indicator that ad format innovation is an essential part of the new streaming experience.

Ad-supported is inevitable

As OTT prices and the number of platforms continue to rise, consumers are increasingly looking for flexible, low-cost alternatives to meet their streaming needs. For OTT providers, offering only subscription models means that they price themselves out of the market for cost-conscious cord cutters.

We are not likely to return to the days of constant ad breaks and linear TV. Rather, the future lies in the flexible middle ground where consumers can pick and choose from a selection of price models: subscription, ad-supported, or a hybrid of both. OTT providers need to embrace ad-supported streaming － the sooner, the better.

About the author

Johan Liljelund is the Executive Vice President at DanAds based in Sweden. Johan is an entrepreneur with more than 20 years of experience in developing technology towards the media industry and a pioneer in the digital advertising industry enabling publishers to streamline and efficient their internal processes on a global market.

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4 Media industry twists and turns you don’t want to miss

July 29, 2021 Jason Kint, CEO – DCN

The business of digital media is not dull. It can be a bit like the not-so-well-wish “may you live in interesting times,” though. Keeping up with it all is a big job for digital media executives tasked with keeping their organizations healthy and at the forefront of this industry. A clear-eyed look into what’s next is important in order to keep up with the pace of innovation in this industry. To help, I’ve outlined four trends I’m watching closely during the second half of 2021:

1. Pandemic-era rebound in advertising market

Big takeaway. Knocking on wood, but all digital revenue indicators are trending positive in 2021 through midyear for premium publishers. DCN distributed both its proprietary annual benchmark and first quarter revenue reports in the past month. The reports are only available to participating members. However, I can share the top-line good news: Year-over-year growth was strong. And that’s even prior to the favorable comparisons to the depressed market from the onset of Covid in the Spring of 2020. CPMs have also strengthened in the open market where advertisers are finally putting in more diligence to know where their money and brands are delivering.

Watch this. The largest challenge to the premium publisher business is keeping pace with the massive consumption in the back-half of 2020 due to a record convergence of captive audiences and riveting news cycles. Putting aside what is good for our business for a moment, it’s nice to see outdoor activities once again competing for attention! And for the booming digital audio market, that has some upside as well.

Surprise twist. The Delta variant looks like it may drive many Americans back to some of our early 2020 habits. Clearly, Covid continues to concern all of us personally and professionally. How it impacts economic and media consumption trends is to be determined as we approach the Fall.

2. Privacy and data protection

Big takeaway. 2021 will be the year that killed “tracking” – regardless of how successfully Google protects the soft underbelly of its surveillance business model. Apple will continue to distance itself from Google in an effort to position itself as the consumer champion by carrying the privacy torch. They pressed forward with iOS 14.5 in Q2 with installations now approaching 75% of the market. Why does this matter? It’s the first major operating platform to require consumers to grant companies permission to track them outside of the apps they’re choosing to interact with.

Watch this. This move better aligns iOS with the tracking prevention values long held by the Safari browser and those increasingly held by consumers. Given the market power of Apple, it has triggered a war with Facebook, the second largest tracker on the internet. In fact, Apple’s impact on Facebook’s future revenues was mentioned repeatedly on Facebook’s Q2 earnings call yesterday with future headwinds dominating the press headlines (despite their efforts to talk about the future “metaverse.”) As global regulators have frequently noted, a majority of Facebook’s data (and with that, their revenue) has long been derived from tracking users.

Surprise twist. The Attorney General of California also announced last week that their office had accelerated sending out warning letters to companies that weren’t properly honoring consumers’ opt-out of tracking requests via the Global Privacy Control. This should send fear through Google and Facebook as California law has defined tracking consumers as a “sale of data.” That definition will be mighty uncomfortable for two empires built on exactly that. And the California AG’s moves will accelerate pressure to create a federal law where Facebook and Google already have multiple regulatory issues to deal with. All of this has forced industry to accelerate its “reality check.”

3. Growing consumer revenues

Big takeaway. After a robust 2020, consumer direct revenues — including subscriptions — continue to grow, albeit at a slower pace. Overall, non-advertising revenues grew in the first quarter of this year. And they are trending up to 30% so far this year.

Watch this. Although “subscription fatigue” continues to be a topic of discussion, DCN’s prior research and industry trends have shown nothing short of an insatiable appetite for quality programming. Yes, even when it bears the price of subscription. It doesn’t hurt that making a purchase is now as easy as a thumbprint on mobile.

Surprise twist. Gen Z (yes, the kids who grew up with iOS) don’t seem to mind advertising. DCN will be releasing research in September that shows that Gen Z’ers (16-24) actually have something in common with Gen Y (25-40). Both groups are very open to advertising in their programming. Whether they pay or opt for a free service, the existence of advertising doesn’t seem to be a major factor for younger media consumers.

4. Strong streaming market

Big takeaway. No market has had more of a dichotomy between advertising and subscription-supported models than the red-hot video market. In fact, DCN broke out the “advanced video” segment for the first time in our most recent quarterly revenue report. And it nearly tripled in our first year-over-year comparison.

Watch this. Apropos to this heading, America can’t seem to get enough to watch from these trusted brands (and DCN members): Disney Plus, HBO Max, Peacock, Discovery Plus, Paramount Plus, and the many other services that have gone direct to the consumer and are reaping the rewards.

Surprise twist. The 10-ton giant of streaming video, Netflix, missed earnings in Q2. It lost hundreds of thousands of U.S. subscribers in Q2, with metrics that looked more like a traditional cable TV company. Maybe it’s a momentary lapse from last year’s stay-at-home streamers. But it could be a sign of migration to the newest competitors. Either way, I’ll be watching.

Trend watching and trendsetting

As someone whose job it is to promote the value of quality and trusted media brands and to call out those who seek to disintermediate them, monitoring trends can be one of the most fluid and head spinning parts of the job. The team at DCN will continue to champion the trusted providers of content that informs, entertains, and delights because that is what consumers expect and what we believe will ensure a healthy future for our industry.

Rounding up these current trends, I see a lot to be excited about – particularly with the next generation – as we continue to learn the lessons, both good and bad, from the pandemic. It’s never a dull business and I can’t wait to see what’s next.

Industry-Research

Meeting these consumer expectations is critical for streaming success

July 28, 2021 Rande Price, Research VP – DCN

Consumers have numerous entertainment options when it comes to video streaming. There are many choices to be made — from content and viewing device to whether to access the content from a film studio, a network provider, streaming network, and more. The options are endless and overwhelming. As an industry, we need to understand how consumers feel about these entertainment options and how they are navigating the marketplace.

PriceWaterhouseCoopers’s (PwC) new research shows that 83% of consumers are happy with their options. That’s up from 73% compared to a year ago. In fact, approximately 40% say they are “happy,” “excited” or “satisfied” with their video viewing experience.

PwC surveyed 1,000 consumers, ages 18-59, to better understand content choices and preferences. They used historical survey findings for data comparisons.

Supplying the ultimate user interface

Consumers report that they now use close to eight streaming services, up from six services the prior year. When asked what they like about their favorite services, key factors include “ease of use” (55%) followed by “being able to find something to watch on the service” (35%). Consumers expect an intuitive user interface (UI). The findings indicate that exceeding expectations in ease of use and finding content can act as key differentiators for streaming services.

Getting personal

Respondents like the idea of content recommendations getting more advanced and personal. This includes factors like viewing mood, co-viewing identification, length of the content and other data points.

Using advanced personalization can help the search and discovery process be even more customer centric. However, ensuring user privacy and maintaining consumer trust is non-negotiable in the process. With this in mind, directing subscribers to accessible content with ease and efficiently is a golden ticket.

Advertising context

Most consumers do not mind advertising. In fact, close to two-thirds (63%) of respondents are willing to see more ads if it means a lower cost of a streaming service. Not surprisingly, 72% of respondents report that they prefer to see fewer ads that are not of interest to them. In other words, context and relevancy matter.

Retaining subscribers

Positive consumer satisfaction supports a growing entertainment marketplace. Nearly half of all respondents (46%) report paying more for video content in 2020 than they did in 2019. Further, 59% of them expect to pay more a year from now. Even with high satisfaction and expectations of a growing market, retaining users is a top priority. Respondents report the top three retention vehicles: a price discount (64%), larger movie library (50%), and less ads (50%).

Significantly, PwC’s research shows that consumers are still adding services in their video service portfolios. In a crowded streaming marketplace, meeting and exceeding consumer expectations to easily find content drives stickiness. Further, new partnerships and tiered models may offer new opportunities to attract and retain users. However, it’s important that these new opportunities align with consumer benefits.

How NBCUniversal turned the Olympic postponement into multiplatform gold

July 1, 2021 Charlotte Ricca – Independent Media Reporter

Covering any Olympics is a monumental challenge. But broadcasters of the Toyko Games face challenges like no other in history. Few are feeling it more than NBCUniversal (NBCU) and its parent company Comcast, which hold rights to the Games. The announcement that Tokyo 2020 would be delayed until 2021 due to Covid-19, hit the media across the business – from advertising revenue to the launch of Peacock, its new streaming service.

However, just as the athletes are coming back stronger from a season off, NBC says this extra year has left them fully prepared for the challenge ahead. It recently announced plans to present 7,000 hours of Olympic coverage, making the 17-day affair the “biggest media event ever.”

“We have spent the better part of the last 14 months learning how to do things differently,” Pete Bevacqua, Chairman, NBC Sports Group, said in a recent press event on the network’s coverage plans. “Those skills … will absolutely apply themselves as we tackle what should be, I think, one of the most interesting and special Olympic Games ever.”

Olympics everywhere

Part of this new, improved package involved working up with other platforms to ensure that people can watch what they want, when they want. In addition to Comcast’s X1 pay-TV platform, partners like Roku and Apple TV will feature Olympic dashboards, which will guide viewers to the Games. NBCU has been working directly with a range of platforms to develop content that fits with the needs of their audience, given the specific delivery channel.

The network has also created strong partnerships with Google Search and Google OneBox. Many people will decide what to watch by going to Google, and NBCU is prominent in the Google OneBox with viewing information and highlights. And, significantly, NBCU will do a major programming push on Peacock, to help build audiences for the streamer. The company also recently announced that Peacock will launch on Amazon Fire TV and Fire tablets.

Peacock will feature new daily live shows and dedicated Olympics channels, as part of its Tokyo Olympics destination, which goes live on July 15. The streaming service currently has around 42 million subscribers. Matt Strauss, Comcast Chairman, Direct-to-Consumer and International, is “very optimistic” that the Olympic coverage will bring a new, larger audience. However, Strauss says the company is not prioritizing premium subscriptions as part of the Olympic push. Instead, the focus on ensuring that consumers check out the free, ad-supported, basic tier of Peacock.

The rights stuff

In addition to the 7,000 hours of content, across a plethora of platforms, NBCU will also flex the fact that it negotiated exclusive rights to the Olympics until 2032, which cuts out rival networks. The deal, which covers all media platforms, including free television, subscription TV, Internet and mobile rights, is valued at $7.65 billion.

What this means is, NBCU has rights across every platform – even those that have not yet been developed yet.

“We have the most complete set of rights of any sport that we have on any of our networks and that any network really has,” says Mark Lazarus, NBCU’s chairman of television and streaming. “Essentially, every technology known today or to be invented between now and 2032. That gives us the ability to try new things and to experiment. That’s what we’ll be doing across the platforms.”

“Our job is to pick the best platform for each piece of content, while trying to take the incredible reach that the Olympics have, the incredible reach that the NBC broadcast network has, and put it on the biggest stage.”

Twitch hit

One new partnership they are particularly excited about is Twitch. The collaboration will feature programming tailored to the Twitch community. This includes highlight studio shows, game-ified pre-Olympic activations, Olympic athlete interviews, and Olympic-themed gaming competitions.

“The way that people consume traditional sporting events is changing,” says Michael Aragon, Chief Content Officer at Twitch. “They no longer want to simply spectate. They want to be as close to the action and athletes as possible. We’ve seen this first-hand with the growth of our sports community on Twitch, as viewers tune in not only to watch their favorite athletes but to also take part in pre- and post-game interviews and virtually connect with other fans from around the world.”

Friends and family

Covid not only saw the Games postponed, 12 months, it has also put a stop to any international travel to Tokyo. This means friends and families of the athletes won’t be able to support in person. Plus, the audiences at big events will be capped at 10,000 people, or 50% capacity, whichever is smaller. This means there is even more pressure on the network to provide a ‘real’ experience for those that can’t be there.

This new challenge led to the creation of a new “Friends and Family” production unit, that will capture the reactions of loved ones back home.

According to Molly Solomon, Executive Producer, NBC Olympics and GOLF, the work and thought put into the Tokyo Games, during the pandemic, means they are going to be the “most meaningful Olympics of our lifetime.”

“After everything the world has gone through, as we begin to emerge from this pandemic, the world coming together is an incredibly impactful experience,” she says.

“We really have put together the most ambitious coverage plan ever. We’ve also adapted to the changing consumption habits. Our goal was to be everything for everyone. It’s our most coverage we’ve ever had.”